BREAKSPACE Season 8 Issue 21

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A Titan has left the world: Siddaganga Seer passes away
Shivakumara Swami, the 111 year-old seer of the Siddaganga Mutt of Tumakuru
district (Karnataka) passed away on Monday (the 21st of January). The
Government of Karnataka declared a state-wide holiday on the 22nd of January
and 3 days of mourning. Known as the ‘God who walked among the people’, the
Seer was known for his effort towards humanitarian causes. He was awarded the
Padma Bhushan by the Government of India and the Karnataka Ratna, the highest
civilian honour in the state.

Though an ardent follower of the Virakta Lingayat tradition, his work was known to
cut across the lines of religion and caste. During the course of his life, he has
founded over 125 educational institutions across all levels of education from
nursery to engineering. He assumed full responsibility of the Mutt at the age of 33,
in 1941. At the time, he was known to have set out on foot to nearby villages to to
collect grain and vegetables to feed the homeless. His work inspired farmers from
all nearby villages to donate generously, a tradition followed faithfully even to this
day. More than 8000 students are given food, education and shelter, irrespective of
their religion or caste at the Mutt. Pilgrims and the poor are given food free of cost
at the Mutt.

His advice was sought by leaders and politicians from all parties and ideologies.
This was evident in the press conference where the major leaders of the ruling
Congress-JDS alliance and the opposition BJP coming together to announce his
death. This is in a stark contrast to the pall of horse-trading and political instability
that hangs over Karnataka.

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Gadkari: Steel pipes to link the Godavari and the Kaveri

Union Minister for Road Transport and Highways, Shipping and Water Resources
Nitin Gadkari has revealed plans to take the backwaters of the Godavari up to the
Cauvery river in Tamil Nadu through Krishna and Penna using steel pipes instead of
developing canals en route as suggested by a non-resident engineer from Andhra
Pradesh. According to Gadkari, such a measure will prevent the wastage of water
from canals while also reducing the overall cost.
Mr. Gadkari said that 1,100 tmcft of the backwater of the Godavari river was going
into the sea and there was a dispute between Karnataka and Tamil Nadu over 45
tmcft of it.

He has claimed that the Centre has promised to link the Godavari and Kaveri rivers.
Once the required Cabinet approval is obtained, funds shall be raised from either
the World Bank or the Asian Development Bank for this landmark project. The
major benefit of this project is to combat the water scarcity that is being faced by
the southern states of Karnataka, Andhra Pradesh and Tamil Nadu.

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Distressing news: Plastic waste imports to India go up

In spite of a ban on the import of plastic waste into India, the influx of PET bottles
has quadrupled from 2017 to 2018 thanks to legal loophole, says a Delhi-based
environmentalist organisation, Pandit Deendayal Upadhyay Smriti Manch
(PDUSM). He goes on to add that “Indian firms are importing plastic scraps from
China, Italy, Japan and Malawi for recycling and the imports of PET bottle scrap &
flakes has increased from 12,000 tonnes in FY 16-17 to 48,000 tonnes in FY 17-18
growing @ 290%. India has already imported 25,000 MT in the first 3 months of FY
18-19.”

Government and industry estimates suggest that India consumes about 13 million
tonnes of plastic and recycles only about 4 million tonnes. A lack of an efficient
waste segregation system and inadequate collection is the root cause, according to
experts, for much of the plastic not making its way to recycling centres.

To incentivise domestic plastic recycling units, the government had banned the
import of plastic waste, particularly PET bottles in 2015. In 2016, an amendment
allowed such imports as long as they were carried out by agencies situated in
Special Economic Zones. It’s this loophole that’s been exploited.

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A strong argument: Why EVMs must go

The recent Assembly elections — the last major polling exercise before the 2019
Lok Sabha polls — were not devoid of Electronic Voting Machine (EVM)
malfunctions. Though the discourse at present makes no distinction between a
‘malfunction’ (which suggests a technical defect) and ‘tampering’ (manipulation
aimed at fraud), there were several reports of misbehaving EVMs. Alarmingly, in
Madhya Pradesh alone, the number of votes polled did not match the number of
votes counted in 204 out of the 230 constituencies. The Election Commission’s
(EC) explanation is that the votes counted is the actual number of votes polled — a
circular logic that precludes cross-verification.

A discrepancy of even one vote between votes polled and votes counted is
unacceptable. This is not an unreasonably high standard but one followed by
democracies worldwide. It might therefore be helpful to briefly look beyond the
question that has hijacked the EVM debate — of how easy or tough it is to hack
these machines — and consider the first principles of a free and fair election.

The recording and counting process must be accessible to, and verifiable by, the
public. So transparency, verifiability, and secrecy are the three pillars of a free and
fair election. Regardless of whether one is for or against EVMs, there is no getting
away from the fact that any polling method must pass these three tests to claim
legitimacy. Paper ballots obviously do. The voter can visually confirm that her
selection has been registered, the voting happens in secret, and the counting
happens in front of her representative’s eyes.
EVMs, however, fail on all three, as established by a definitive judgment of the
German constitutional court in 2009. The court’s ruling forced the country to scrap
EVMs and return to paper ballot. Other European nations such as the Netherlands
and Ireland have also abandoned EVMs.

VVPATs (Voter Verifiable Paper Audit Trail) solve only one-half of the EVMs’
transparency/verifiability problem: the voting part. The counting part remains an
opaque operation. If anyone suspects a counting error, there is no recourse, for an
electronic recount is, by definition, absurd. Some believe the VVPATs can solve this
problem too, through statistics.

At present, the EC’s VVPAT auditing is restricted to one randomly chosen polling
booth per constituency. In a recent essay, K. Ashok Vardhan Shetty, a former IAS
officer, demonstrates that this sample size will fail to detect faulty EVMs 98-99% of
the time. He also shows that VVPATs can be an effective deterrent to fraud only on
the condition that the detection of even one faulty EVM in a constituency must
entail the VVPAT hand-counting of all the EVMs in that constituency. Without this
proviso, VVPATs would merely provide the sheen of integrity without its substance.
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Despite these issues, EVMs continue to enjoy the confidence of the EC, which
insists that Indian EVMs, unlike the Western ones, are tamper-proof. But this is a
matter of trust. Even if the software has been burnt into the microchip, neither the
EC nor the voter knows for sure what software is running in a particular EVM. One
has to simply trust the manufacturer and the EC. But as the German court
observed, the precondition of this trust is the verifiability of election events, whereas
in the case of EVMs, “the calculation of the election result is based on a calculation
act which cannot be examined from outside”.

While it is true that the results come quicker and the process is cheaper with EVMs
as compared to paper ballot, both these considerations are undeniably secondary
to the integrity of the election. Another argument made in favour of the EVM is that
it eliminates malpractices such as booth-capturing and ballot-box stuffing. In the
age of the smartphone, however, the opportunity costs of ballot-box-stuffing and the
risk of exposure are prohibitively high. In contrast, tampering with code could
accomplish rigging on a scale unimaginable for booth-capturers. Moreover, it is
nearly impossible to detect EVM-tampering.

Yet there doesn’t have to be incontrovertible evidence of EVM-tampering for a

nation to return to paper ballot. Suspicion is enough, and there is enough of it
already. As the German court put it, “The democratic legitimacy of the election
demands that the election events be controllable so that... unjustified suspicion can
be refuted.”

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Bihar leads other states in terms of FY18 GDP

Bihar and Andhra Pradesh led the pack among States in terms of GDP growth in
financial year 2017-18, clocking 11.3% and 11.2% growth, respectively, compared
with the national GDP growth of 6.7% for the year, according to a report by Crisil.

“In fiscal 2018, Bihar, Andhra Pradesh, and Gujarat were top-rankers in terms of
GSDP growth among the 17 non-special States considered in our analysis,” the
report said. “Jharkhand, Kerala, and Punjab were at the bottom.”

The analysis found that between the financial years 2012-13 and 2016-17, Gujarat,
Madhya Pradesh and Karnataka were the fastest growing states, on average. While
all three managed to maintain their GSDP growth higher than the all-India GDP
growth in 2018, only Gujarat remained in the top three. Madhya Pradesh and
Karnataka both saw their rankings slip to 9 and 4, respectively.

The States at the bottom, similarly, saw a reversal of fortunes. West Bengal,
Jharkhand and Bihar had ranked at the bottom in the past five years. In financial
year 2017-18, however, Bihar rose to the top spot and West Bengal rose to the
sixth rank, with a growth of 9.1%, significantly stronger than the national GDP
growth rate. Jharkhand, however, remained at the bottom.

Rajasthan, Jharkhand and Uttar Pradesh topped the tally in proportion of capex in
state spending in the past three years. But most states are not spending as they
ought to, in areas such as health, irrigation, and education.

“States must also be wary of their debt profiles,” Dipti Deshpande, senior economist
at Crisil, said. “While the FRBM Act had helped states recover their fiscal health
considerably, recent trends show they are slipping. Debt ratios have risen in many
States—with the assimilation of Ujwal Discom Assurance Yojana (UDAY), farm loan
waivers, and Pay Commission hikes.”The combined fiscal deficit of States crossed
the 3% of GSDP threshold, in both fiscals 2016 and 2017. This improved in fiscal
2018 to 3.1%, but this was still higher than the FRBM limit, and also the 2.7% of
GSDP budgeted for the year, the report noted.
Looking ahead, in a separate report, India Ratings and Research (Ind-Ra) said that
it expected the aggregate fiscal deficit of the States to come in at 3.2% in financial
year 2019-20, which is higher than what it forecast in its FY19 Mid-Year Outlook.

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A shocker: China’s 2018 growth slows down to 28-year low

China’s 2018 economic growth fell to a three-decade low, adding to pressure on

Beijing to settle a tariff war with Washington.The world’s second-largest economy
expanded by 6.6% over a year earlier, down from 2017’s 6.9%, official data showed
on January 21. Growth in the three months ending in December dipped to 6.4% the
lowest quarterly level since the 2008 global crisis from the previous quarter’s 6.5%.

Communist leaders are trying to steer China to slower, more self-sustaining growth
based on consumer spending instead of trade and investment. But the deceleration
has been sharper than expected, prompting Beijing to step up government
spending and order banks to lend more to shore up growth and avoid politically
dangerous job losses.

Economic growth in 2018 was the lowest since the 1990s 3.9% in the aftermath of
the violent crackdown on pro-democracy protests centered on Beijing’s Tiananmen
Square. Growth in investment, retail spending and factory activity all declined, the
National Bureau of Statistics reported.
The impact of U.S. tariffs was limited, but China faces pressure from growing global
support for import controls, volatile financial markets, and declining investment
spending, said the bureau commissioner, Ning Jizhe.
“Downward pressure on the economy is increasing,” said Ning at a news
conference. Still, he added later, “the Chinese economy’s resilience and ability to
resist shocks and the long-term trend of stability will not change.”
The slowdown is adding to pressure on President Xi Jinping’s government to settle
its costly dispute with Washington.

The two sides have imposed tariff hikes of up to 25% on tens of billions of dollars of
each other’s goods in the fight over U.S. complaints Beijing steals or pressures
companies to hand over technology. Washington is pressing China to roll back
plans for state-led industry development that its trading partners say violate its
market-opening obligations.

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Opposing forecasts: Weak Europe prompts IMF to cut
global growth forecast while predicting an increase in
growth in India
The International Monetary Fund (IMF) cut its world economic growth forecast for
the years 2019 and 2020. The IMF predicted that the global economy shall grow at
3.5 % in 2019 and 3.6 % in 2020, with a reduction of 0.2 % and 0.1 % in the
respective two years.

This is due to the weakness in the Eurozone combined with a sharp slowdown
expected from the global trade war between the US and China. In its second
downgrade in three months, the IMF also attributed its action to a larger than
expected slowdown in China’s economy and a possible “no-deal” scenario in the
Brexit saga. The downgrade also reflected signs of weakness in the Eurozone’s
strongest performer, Germany, that is hit by new fuel emission standards for its cars
and in Italy with Rome’s latest budget standoff with the rest of the leaders of the
EU.

In contrast, India is expected to grow at 7.5 per cent in 2019 and 7.7 per cent in
2020, an impressive over one percentage point ahead of China’s estimated growth
of 6.2 per cent in these two years, the International Monetary Fund (IMF) said on
Monday attributing the pick up to the lower oil prices and a slower pace of monetary
tightening. The IMF in its January World Economy Outlook update on Monday said
India would remain the fastest growing major economies of the world.

Growth in emerging and developing Asia will dip from 6.5 per cent in 2018 to 6.3
per cent in 2019 and 6.4 per cent in 2020, it said. While, the Chinese growth rate
has been on a downward slope, according to IMF, India has experienced an upward
trajectory in these years. The IMF report comes days after the PwC’s Global
Economy Watch said that India is likely to surpass the United Kingdom in the
world’s largest economy rankings in 2019.

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Sports Update:

• Australian Open: Serena Williams (US), Novak Djokovic (Serbia), Milos Raonic
(Canada) progress to the quarterfinals, Alexander Zverev (Germany) crashes out
• India and Indian skipper Virat Kohli maintain top rankings as the number 1 test
team and test batsman
• Vishwanathan Anand keeps pace with leader Magnus Carlsen in the Tata Steel
Masters (being held at Wijk Aan Zee, Netherlands) with 5 more games
remaining. The two players are ahead of the pack by 1 point

Variation in prices of important, well, things:

• Cost of 1 gm of 24 carat gold reduces from INR 3337 yesterday to INR 3332
today, a decrease of 0.15 %
• BSE Sensex dipped 0.37 % to INR 36,444.64 at the close of business today
• NSE Nifty also dipped 0.36 % to INR 10,922.75 at the close of business today
• The cost of 1 USD rose to INR 71.24

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