Morning Brief: Mumbai On High Alert; MPC Members Appointed; Constitutional Crisis In Karnataka

MPC

The Centre on Thursday appointed three members to the Monetary Policy Committee: Chetan Ghate, a professor at Indian Statistical Institute; Pami Dua, director at Delhi School of Economics (DSE); and Ravindra Dholakia, a professor at IIM, Ahmedabad.

Under the new regime, the responsibility of maintaining inflation targets will shift from the RBI governor to a six-member panel, with the governor getting a casting vote in case of a tie.

The six-member MPC—the other three members are from RBI—will conduct its first monetary policy review on 4 October.

Uran Terror Alert

The government has deployed NSG teams at three locations in Mumbai after two school children in Maharashtra’s Uran claimed they saw suspicious looking men near a naval base. Uran is a fishing town in Maharashtra located across the eastern waterfront of Mumbai. The marine commandos (MARCOS) of the Indian Navy have also been deployed to the Karanja naval base on account of this terror alert.

Mumbai Police assured the citizens of the city yesterday tweeting that adequate arrangements are in place and ‘Mumbaikars need not panic and start their day tomorrow as any normal day.’

GST Council Met

Yesterday was the first meeting of the GST council and members resolved to roll out the GST tax by 1 April 2017. Finance Minister estimates the council has nearly two months to resolve all outstanding issues.

It agreed on a compounding scheme for small traders with revenues of up to Rs 50 lakh wherein they can pay a flat tax to be decided at a future date. However, the members couldn’t reach a consensus on the revenue threshold. While 11 BJP ruled states were in favour of Rs 10 lakh limit, others proposed a higher limit of Rs 25 lakh.

Today the council will meet again and discuss administrative control arrangements between the centre and states and the mechanism for deciding on the compensation mechanism, law and formula for states.

Constitutional Crisis

The Karnataka government slipped into contempt of court when it defied the Supreme Court’s order on the release of Cauvery waters to Tamil Nadu. But to escape the wrath of the apex court, the state government thinks it has found an innovative way out.

Today the state legislature will vote on the emotive issue. The government thinks that the SC can’t haul up the executive for defying its order as a decision by the legislature against the release of Cauvery waters would also be binding on it, like the Supreme Court.

However, some legal experts points towards such an attempt made by the then Bangarappa government in 1991 to nullify the interim award passed by the Cauvery Water Disputes Tribunal which was struck down by the SC holding that States have no right to make law on inter-State rivers.

Retaliatory Option

India has sent out strong hints that it plans to revisit the Indus Waters Treaty as its answer to Pakistan sponsoring terrorism. External Affairs spokesperson pointed out yesterday that “For any such treaty to work, it is important there must be mutual trust and cooperation. It can’t be a one-sided affair.”

The treaty negotiated by the World Bank five decades ago is very generous to Pakistan and states that water from the rivers Indus, Jhelum and Chenab will be used exclusively by Pakistan, while water from the rivers Ravi, Sutlej and Beas will be used by India.

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Why SC Orders Are Increasingly Defied By Many: If the courts don’t stay out of areas that are beyond their competence or jurisdiction there is little chance that politicians or bureaucrats or even the police will comply with their orders in spirit.

We hope you enjoyed reading our morning brief. Have a great day ahead!

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