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Sri Lanka has reached a preliminary agreement with the International Monetary Fund (IMF) for a loan of about $2.9 billion, the global lender, as the country seeks a way out its worst economic crisis in decades.
The agreement, which Reuters first reported on Wednesday, is subject to approval by IMF management and its executive board, and is contingent on Sri Lankan authorities following through with previously agreed measures.
The staff level agreement is only the beginning of a long road for Sri Lanka. Authorities have already begun the reform process and it must continue with determination.
The IMF requires receiving financing assurances from Sri Lanka’s official creditors, besides ensuring efforts are made to reach a collaborative agreement with private creditors.
Debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps.
The IMF programme, spread over 48 months, will aim to raise government revenue to support fiscal consolidation, introduce new pricing for fuel and electricity, hike social spending, bolster central bank autonomy and rebuild depleted foreign reserves.
Starting from one of the lowest revenue levels in the world, the programme will implement major tax reforms. These reforms include making personal income tax more progressive and broadening the tax base for corporate income tax and VAT.
The programme aims to reach a primary surplus of 2.3 percent of GDP by 2024.Udeeshan Jonas, chief strategist at Sri Lankan investment bank CAL Group, said that the IMF’s comments were largely positive. They said the revenue measures that we’ve taken have been substantial (and) they’re happy with what we’ve done from a fiscal perspective.
And although welfare budgets for Sri Lanka’s poorest would be protected, Jonas said he expected significant austerity measures and job cuts at loss-making state-owned enterprises.
President RanilWickremesinghe, who also serves as the country’s finance minister, presented an interim budget aimed at clinching the deal with the IMF.
The budget revised Sri Lanka’s deficit projection for 2022 to 9.8% of the gross domestic product from 8.8% earlier, while outlining fiscal reforms, including a hike in value-added taxes.
Sri Lanka needs to restructure nearly $30 billion of debt, and Japan has offered to lead talks with the other main creditors, including regional rivals India and China.
Indigenous Cervical cancer vaccine ready, set to be part of govt’simmunisationprogramme (Page no. 1)
(GS Paper 2, Health)
An affordable and indigenously developed HPV (human papillomavirus) vaccine to prevent cervical cancer is now ready and will likely be included by the Union government in its universal immunisation programme.
The vaccine, Cervavac, was developed by Serum Institute of India with the support of the Department of Biotechnology and will likely be priced between Rs 200 and Rs 400 per dose.
Serum Institute of India CEO Adar Poonawalla, on the sidelines of an event to celebrate the “scientific completion” of the vaccine, said: “The government of India will induct it in a few months in the national programme. It will be affordable.”
HPV is a common sexually transmitted infection. Cervical cancer, caused by persistence of certain high-risk strains of the HPV virus, continues to be the only type of cancer preventable by vaccines. Two vaccine doses are supposed to be administered to teenage girls before they are sexually active.
The government was working on rolling out an HPV vaccination drive, which would be part of the universal immunisation programme, for girls between the ages of nine and 14.
The National Technical Advisory Group on Immunisation had said in a June 28 meeting. The indigenously developed qHPV vaccine may be considered for introduction in the UIP as a two-dose regimen… once the HPV WG satisfactorily reviews the requested data.”
India accounts for about a fifth of the global burden of cervical cancer, seeing 1.25 lakh cases and 75,000 deaths a year. The SII vaccine is quadrivalent, meaning it protects against the four most common strains of the virus known to cause cancers — HPV 16, 18, 6, and 11. Around 83 per cent of invasive cervical cancers are attributed to HPV 16 or 18 in India.
The country’s drug regulator approved the vaccine in July after examining data of its immunogenicity trials conducted across thirteen centres. At the trials, the response of the SII vaccine was compared to Merck’s Gardasil quadrivalent vaccine.
Poonawalla said that the vaccine is likely to be priced between Rs 200 and Rs 400 per dose, but added that discussions for finalising the prices are on with the government.
To compare, the vaccines available in the market are priced between Rs 2,500 and Rs 3,300 per dose. The SII vaccine will be provided to the government first, followed by the market, and then globally, with the company aiming to manufacture 200 million doses over the next two years.
Govt. and Politics
PM to commission Vikrant, unveil Naval Ensign ‘Nishaan’ today (Page no. 6)
(GS Paper 3, Defence)
FRIDAY morning will witness two defining moments for the Indian Navy — the country’s first Indigenous Aircraft Carrier, Vikrant, will be commissioned as INS Vikrant, along with the unveiling of the new Naval Ensign ‘Nishaan’. The ceremony, at Cochin Shipyard in Kerala’s Kochi will be presided over by Prime Minister Narendra Modi.
It is a landmark day for India’s efforts to become aatmanirbhar (self-reliant) in the defence sector,” PM Modi, who’s on a two-day tour of Kerala and Karnataka, tweeted Thursday. “The first indigenously designed and built aircraft carrier INS Vikrant will be commissioned. The new Naval Ensign (Nishaan) will also be unveiled.
A press statement from the Prime Minister’s Office issued on Tuesday said that in unveiling the new Naval Ensign, the PM will be “doing away with the colonial past…befitting the rich Indian maritime heritage.
Naval Ensigns are flags that naval ships or formations bear to denote nationality. The current Indian Naval Ensign consists of a St. George’s Cross — a red cross with white background — with the Tricolor in one of its corners.
Vikrant, also known as Indigenous Aircraft Carrier (IAC)-1, has been designed by the Warship Design Bureau (previously known as Directorate of Naval Design), the Navy’s in-house design organisation.
It was constructed by Cochin Shipyard Limited (CSL), a public sector shipyard under the Ministry of Ports, Shipping and Waterways.
It is named after India’s first aircraft carrier, which played a vital role in the 1971 war and was decommissioned in 1997, after more than 35 years in service. Vikrant will also retain its predecessor’s motto — ‘Jayema Sam YudhiSprudhah’, a phrase from the Rigveda meaning ‘we conquer those who fight with us in the war’, and also its pennant number, ‘R11’, too.
One fully operational, which is expected towards the end of 2023, INS Vikrant will be capable of utilising its 30-aircraft air wing, comprising the Russian-origin multirole, carrier-capable MiG-29K fighter jets, airborne early warning control helicopter Kamov-31, and the US-origin MH-60R multi-role helicopters.
In addition, it will have two indigenously manufactured aircraft — the Advanced Light Helicopters (ALH) and the Naval version of the Light Combat Aircraft (LCA).
Express Network
Enrolment dip to go on, in keeping with fall in child population growth rate: NCERT study (Page no. 9)
(GS Paper 2, Education)
School enrolment in primary classes — grades I-V — started declining in India in 2011, a trend which is set to continue until 2025, according to a “projection and trends” report prepared by the National Council of Educational Research and Training (NCERT).
The Council has attributed this dip in enrolment to a fall in growth rate of India’s child population.Similarly, the upper primary (classes VI-VIII) and secondary stages (IX-X) started witnessing a decline in enrolment in 2016 and 2019, respectively, the report stated.
The NCERT report had studied trends since 1950, when the country had 2,171 schools with 2.38 crore students.While an overall growth of more than 900 per cent has been recorded in enrolment in the school system in classes I to X between 1950 and 2016, the share of girl students rose “precipitously” , registering an increase of over 1,000 per cent, according to the report.
The NCERT, which had commissioned the study to estimate the school enrolment of children up to 2025, feels that insights on the future trends of enrolment will help in planning and policy-making, as such projections form the basis for investment decisions such as opening of new schools or upgrading existing one, as also employment and deployment of teachers.
Prepared by NCERT’s educational survey division, the report stated: “The growth in enrolment at the primary stage continued up to 2011. Since 2011, enrolment has been declining and it will continue till 2025.
During the period from 2011 to 2025, total enrolment decreased about 14.37 per cent, of which boys’ enrolment decreased by 13.28 per cent and girls enrolment by 15.54 per cent.”
At the upper primary stage, the enrolment of boys, girls and the total started to decline from 2016. During the period, enrolment is projected to decrease by 9.47 per cent (in total) — 8.07 per cent among boys and 10.94 per cent among girls.
The report made it clear that enrolment is a function of population — thus, if population of an age group falls, enrolment will also decrease. Citing census data, it pointed out that between 1991 and 2011, the proportion of child population in the age group 0-6 years in the total population decreased from 18 per cent to 13.12 per cent.
According to the researchers, it will help policymakers frame appropriate policies and programmes. “For example, the number of new schools to be opened or upgraded and the number of teachers required are decided on the basis of the number of children to be potentially enrolled in the system,” it stated. “Hence this study was proposed before NCERT’s Programme Advisory Committee…”
Idea Page
Mindings of Language of Justice (Page no. 11)
(GS Paper 2, Judiciary)
“The purpose of judicial writing is not to confuse or confound the reader behind the veneer of complex language,” wrote Supreme Court Justice D Y Chandrachud recently, adding that judicial decisions “must make sense to those whose lives and affairs are affected by the outcome of the case”.
He was disposing of an appeal against a Himachal Pradesh High Court judgment about which he remarked that even he “found it difficult to navigate through the maze of incomprehensible language” and that “a litigant for whom the judgment is primarily meant would be placed in an even more difficult position”.
In Ajit Mohan vs NCR Legislative Assembly, decided in July last year, another brilliant judge of the court, Sanjay KishanKaul, had said more or less the same things about counsels’ written submissions in appeals.
Such submissions serve as feeders for extraneous material in court judgments which incorporate long abstracts from them. This practice makes the judges’ work easier but leaves the litigants in the lurch, sometimes leading to frivolous litigation which, in the words of the new Chief Justice of India, U ULalit, puts “additional burden on an already burdened judiciary”.
Some learned judges have been known for their oratorical skills, expressed through the use of deeply philosophical or literary expressions in their judgments. Most well-known for this phenomenon was the late V R Krishna Iyer.
The opening paragraph of his judgment in the Fuzlunbi case (1980) begins with the words “Twixt Tweedledum and Tweedledee (characters in an old nursery rhyme)” and talks of “karuna and samata (compassion and equality) of the law.” An Australian judge Michael Kirby said about him:
The power of his oratory is likened to the hypnotic capacity of music to capture the attention of the cobra, transfixing us by the majesty of language and the manifest sincerity of his ideas.
An Indian judge Yatindra Singh wrote: “Many a time Justice Iyer’s contribution to jurisprudence has been lost due to his language.” Trying to imitate Iyer’s inimitable style some judges of our times make their judgments awfully irritating.
Victorian English beyond law students’ understanding is not the only phenomenon impairing court judgments. Shakespeare had said in The Tragedy of Hamlet that “brevity is the soul of wit” but the observation eminently applies also to court judgments. This sine qua non for the effective dispensation of justice is often overlooked by judges.
There is an inexplicable tendency to stuff judgments with obiter dicta, unnecessary and sometimes irrelevant, which makes them unduly long and even unintelligible. Judgments are written as if the writer-judge has to prepare a doctoral or postdoctoral thesis on the legal issue involved in the case.
Higher courts of the country which, under our constitutional and judicial system, have to provide precedents to be followed by the lower judiciary often seek precedents for their decisions in foreign judgments by copying longish extracts from them.
Pursuit of great powerhood (Page no. 11)
(GS Paper 2, International Relations)
While the purists are still in denial, not only does Cold War 2.0 seem to be intensifying, it is well nigh possible that the two principal protagonists may come to a military head.
What makes matters particularly volatile is the fact that unlike in the preceding version, in this edition of the Cold War, the two protagonists are technological and economic near peers, even though in the military domain the Americans, perhaps, still steal a march.
It does seem that while China’s reservoir of power is growing, the American reservoir is declining. American strategic influence is no longer decisive.
Two metrics undergird the reality: By 2035, while the Chinese economy will account for 24 per cent of global GDP, the American economy will account for a mere 14 per cent; the PLA has grown 44-fold since 1995, to include a sharp digital makeover.
While there are several reasons to infer that China’s problems may not be over — they may in fact be growing (a slowing economy, the zero Covid policy, killing of the animal spirits in technology and business, the common prosperity programme, the real estate crisis, adverse demographics) — there are other indicators to suggest that Beijing believes it has arrived and is now strong enough to contest American primacy, at least in its near abroad in the Western Pacific.
More than anytime in the past, we may be in for a high-order hegemonic contest in Asia that could lead to war.
A certain power elite in China is of the view that the time has come for Beijing to convert its considerable wealth into great powerhood. Hide and bide, after all, cannot be a perpetual state.
There is also a chronological logic of sorts to China’s going loud and proud: Mao Zedong gave China the revolution, Deng Xiaoping gave them wealth, and it is axiomatic now for Xi Jinping to restore greatness.
The Chinese also never fail to point out that if the Americans can have a Western Hemisphere of their own strategic making, why can’t there be an Eastern Hemisphere in the Chinese mould? So “legitimate territories” in the Chinese sphere of influence must be got back.
Other nations in the Eastern Hemisphere must acknowledge the reality of the new power hierarchy and offer tributes to the new hegemon. Xi and his cohorts also sense a unique moment in history that must not be lost — hence, the repeated references to the phrase “great changes not seen in a century”, pointing to a time of great opportunity for the Chinese nation in view of unprecedented technological and geopolitical shifts.
Deep down, the Americans realise, perhaps, that they were laggardly in waking up to the Chinese genie and that it is now a trifle late to put it back into the bottle.
Compromise is also difficult because both sides firmly believe in the superiority of their respective political brands and are unwilling to give in — Western freedom and values versus a unique (Chinese) civilisation whose delivery in terms of poverty alleviation and other indices of development has been quite extraordinary.
That should explain the recent ideological reassertion in the Chinese political calculus. China and America also know that in the ultimate analysis, if you have the power your values rule; if you don’t, you submit.
Explained Page
Coming today Vikrant, the courageous (Page no. 13)
(GS Paper 3, Defence)
The commissioning of India’s first Indigenous Aircraft Carrier (IAC-1) into the Navy as INS Vikrant marks a defining moment. The first ever aircraft carrier to be indigenously designed and constructed, INS Vikrant will strengthen the country’s standing as a ‘Blue Water Navy’ — a maritime force with global reach and capability to operate over deep seas.
With it, India also joins the elite group of nations – the US, Russia, France, the UK and China – who are capable of designing and constructing aircraft carriers.
Also, with a displacement of 43,000 tonnes when fully loaded, INS Vikrant is set to be the seventh largest among the carriers or carrier classes in the world.
INS Vikrant, with pennant number R11, was the first-ever aircraft carrier that was operated by the Indian Navy.The ship was officially laid down in 1943, and was being built for the Royal Navy as HMS (Her Majesty’s Ship) Hercules when the constitution was put on hold after World War II ended.
Like many other ships at the time, the under-construction HMS Hercules was put up for sale by the United Kingdom, and was purchased by India in 1957. The construction work was completed and the ship was commissioned in the Indian Navy as INS Vikrant in 1961.
The ship operated its aircraft fleet with a catapult assisted system and ski-jump during its service.Compared to the new INS Vikrant, the old one had less than half its displacement and was over 210 metres in length against 260 metres of the present one.
R11 saw significant action during the 1971 war with Pakistan when it led the Naval blockade of East Pakistan. The ship was decommissioned in 1997 after 36 years of service. Over the next 15 years, it was preserved as a museum ship before being finally sold to be dismantled.
The Sanskrit word Vikrant, which means courageous, finds its origins in various scriptures including the Bhagwad Gita. The sixth shloka in the first chapter of the Gita, while describing the valour of some Generals from the army of Pandavas, uses the adjective ‘Vikrant’.
As far as the origin of the word goes, the ‘Vi’ prefix in the Sanskrit word denotes something that is distinctive or extraordinary, and the ‘krant’ suffix means to move or advance in a direction.
The word Viraatwhich means magnanimous, can also be found in the same chapter of Gita in a later verse and is the name of the now decommissioned and dismantled British-origin Centaur-class aircraft carrier of the Indian Navy.
“The induction and reincarnation of Vikrant is not only another step towards strengthening our defence preparedness, but also our humble tribute to the sacrifices made by our freedom fighters for the Independence of the nation and our brave soldiers during the 1971 war.” the Indian Navy has said.
Along with the pennant number R11, the newly commissioned INS Vikrant also carries forward the motto of its predecessor – “Jayema Sam YudhiSprudhah” – from the Rigveda which means: “I conquer those who fight against me”.
IMF clears package; with belt tightening budget ,Srilanka begins long walk to economic recovery (Page no. 13)
(GS Paper 2, International Institutions)
The announcement by the International Monetary Fund (IMF) in Colombo that it has reached a staff-level provisional agreement for a $2.9 billion package to bail Sri Lanka out of its worst economic crisis is the first step in the country’s long and painful road to recovery.
The package must be approved by the IMF’s board of directors. The approval is contingent on Sri Lanka’s international creditors — commercial lenders such as banks and asset managers, multilateral agencies, as well as bilateral creditors including China, Japan, and India — agreeing to restructure its debt. Japan has offered to organise a creditors’ meeting for Sri Lanka, but China has yet to agree to the proposal.
Ahead of opening negotiations with the IMF in April, Sri Lanka pre-emptively declared it would default on its $51 bn debt, of which $ 2 billion is due this year, and the rest over the next six years.
The IMF package, to be paid in tranches over the next four years, is less than what India provided to Sri Lanka over four months.
But the expectation is that an IMF loan can boost the receiving country’s credit ratings, and the confidence of international creditors and investors, who may then chip in to provide bridge financing to close the gaps between the tranches.
In an interview to the Economist, President RanilWickremesinghe — he has been in charge of the Finance Ministry since June when he was appointed Prime Minister — has said it will be 2024 before the country returns to its 2018 levels of prosperity.
In the period between now and then, the government will need to take several belt-tightening measures — higher prices for utilities including electricity and fuel, and higher taxes.
Wickremesinghe presented a slew of measures in the country’s budget aimed at increasing revenue to 15 per cent of GDP by 2025 from the 8.2 per cent at the end of 2021, reduce public debt, and a surplus of more than 2 per cent of GDP.
An increase in VAT from 12 to 15 per cent, and compulsory tax registration for everyone aged 18 years and older in order to widen personal income tax collections are among the measures.
Some 50 state-owned enterprises are up for privatisation, apart from the big three — Ceylon Electricity Board, Ceylon Petroleum Corporation, and Sri Lankan Airlines — that are already in restructuring talks. The restructuring could yield up to $3 bn.
The age of retirement in government and semi-government organisations has been brought down to 60 from 65 and 62 respectively. Those beyond the age of 60 and still working are to be let go at the end of the year. Wickremesinghe told Parliament that this would address the unrest and the unemployment in the youth.
The World
UN accuses Beijing of Uighur rights abuses (Page no. 15)
(GS Paper 2, International Relations)
The United Nations (UN) accused China of serious human rights violations that may amount to “crimes against humanity” in a long-delayed report examining a crackdown on Uyghurs and other mostly Muslim ethnic groups.Beijing denounced the assessment as a fabrication cooked up by Western nations.
Human rights groups have accused China of sweeping a million or more people from the minority groups into detention camps where many have said they were tortured, sexually assaulted, and forced to abandon their language and religion.
The camps were just one part of what the rights organizations have called a ruthless campaign against extremism in the far western province of Xinjiang that also included draconian birth control policies and all-encompassing restrictions on people’s movement.
The assessment from the Geneva-based UN human rights office largely corroborated earlier reporting by researchers, advocacy groups and the news media, and it added the weight of the world body to the conclusions. But it was not clear what impact it would have.
Still, among Uyghurs who have fled overseas, there was a palpable sense of relief that the report had finally seen the light of day since many worried that it would never be published. Several saw it as a vindication of their cause and of years of advocacy work.
“The report is pretty damning, and a strong indictment on China’s crimes against humanity,” said RayhanAsat, a Uyghur lawyer whose brother is imprisoned in Xinjiang. “For years, the Chinese government has said the Uyghurs are terrorists. Now, we can point to them and say, you’re the terrorists.”
Human rights groups, Japan and Germany also quickly welcomed the report, which had become caught up in a tug-of-war between China and major Western nations as well as human rights groups that have criticized the repeated delays in releasing the document. Many Geneva diplomats believe it was nearly complete a year ago.
The assessment released late Wednesday concluded that China has committed serious human rights violations under its anti-terrorism and anti-extremism policies and calls for “urgent attention” from the UN, the world community and China itself to address them.
Human rights groups renewed calls for the UN Human Rights Council, which meets next month, to set up an independent international body to investigate the allegations. But China showed no sign of backing off its blanket denials or portraying the criticism as a politicized smear campaign.
Economy
Buoyancy in direct tax collections … if it continues, could cross Budget targets: (Page no. 17)
(GS Paper 3, Economy)
Direct tax collections are showing “good buoyancy” so far till the end of August, with net collections at Rs 4.8 lakh crore having achieved one-third of the Budget target for financial year 2022-23, Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta said. In an interview with Aanchal Magazine, Gupta said that out of the overall collections, about Rs 10,000 crore has been collected as securities transaction tax and going ahead, if this trend continues, tax collections may exceed Budget targets. Edited excerpts:
The Budget collection targets laid down Rs 14.20 lakh crore. As against that, we have a very healthy net collections as of now of around Rs 4.8 lakh crore, up from Rs 3.6 lakh crore (in corresponding period last year), after accounting for the higher refund outgo of about 80 per cent vis-à-vis last year.
So there is a good buoyancy of tax collections so far. And if this trend continues in the second instalment as well, we do expect a fairly good tax collection over and above the Budget targets laid down in the Finance Bill.
For the corporate, the new companies which are being registered, we don’t have separate data maintained for that. So I can’t say how many have opted for that. That data is not available per se but I think there is an encouraging trend with an overall growth rate of 26 per cent.
So far, it’s quite encouraging. For personal income tax, we don’t have separate data for the people opting for the new regime. We are looking into what has been the outcome of the new regime. We’ll examine that.
For crypto, we have already taken note of at the stage of the Finance Bill and legislation for the deduction at tax at source has been introduced.
New sections have been introduced to define what are virtual digital assets and the necessary regime for their effective taxation.
So, TDS provisions are applicable as of now and we will get the quarterly return from the relevant players in the month of October. So, we will know that real trend from crypto at that point in time.
These probes are continuing, they are never closed except when everything is explained or the person concerned has been non-resident at that point in time when he made the investment abroad.
So these are continuing, it takes a lot of time to obtain information from the foreign jurisdictions. So, we keep on adding into whatever data we get. It’s a work in progress. They do culminate into orders as well.