Topic 1 : Striking fear: On hit-and-run accident cases and Section 106 of the Bharatiya Nyaya Sanhita
Context: Drivers’ strike is a test for severity of hit-and-run clause in new penal code
Introduction
- The provision in the Bharatiya Nyaya Sanhita (BNS) that treats hit-and-run accident cases as an aggravated form of the offence of causing death by rashness or negligence will be the first in the new, yet-to-be implemented code to be scrutinised for its severity.
| Bharatiya Nyaya SanhitaThe Bharatiya Nyaya Sanhita, is the criminal code in the Republic of India. The Bharatiya Nyaya Sanhita (BNS) is a new criminal code for India that was passed by the Parliament in 2023.It replaces the Indian Penal Code (IPC), which was enacted in 1860.The BNS is a comprehensive code that covers all aspects of criminal law, including offenses, punishments, defenses, and procedures. |
Worried truck drivers
- With truck drivers worried about the implications of Section 106 of the BNS abstaining from work, the government has promised to bring it into play only after consultations with the All India Motor Transport Congress.
- However, with the transporters’ body taking the stand that the strike was primarily resorted to by the drivers who feared additional criminal liability, the issue will require tactful handling.
What is the issue?
- It has now become an issue that concerns transport workers than those running the business of transportation.
- It may appear that a strike against a law that makes penal provisions concerning hit-and-run accidents more stringent is unjustified, especially in the context of road accidents becoming a leading source of fatalities in the country.
- However, it has also drawn attention to the question whether there was a case for increasing the jail term for accidents from two to five years in all cases, and to 10, in the case of failure to report them to the authorities.
Section 106 of BNS
- Section 106 of the BNS will replace Section 304A of the IPC, which punished the causing of death by rash and negligent act that does not amount to culpable homicide.
- The existing section provides for a two-year jail term. There are three components to Section 106: first, it prescribes a prison term of up to five years, besides a fine, for causing death due to rash or negligent acts; second, it provides for reduced criminal liability for registered medical doctors of two years in jail, if death occurred in the course of a medical procedure.
- The second clause concerns road accidents in which, if the person involved in rash and negligent driving “escapes without reporting it to a police officer or a Magistrate soon after the incident”, the imprisonment may extend to 10 years and a fine.
- Drivers flee an accident scene out of fear of lynching. In such cases, the authorities seem to believe that such drivers can move away from the scene of crime and then report to the police. The term ‘hit-and-run’ is one in which the offending vehicle is not identified.
- It must be emphasised that once the person causing a fatal accident is identified, the onus on the police to prove culpability for rashness or negligence remains the same.
Conclusion
Given that many accidents are caused due to poor road conditions too, a relevant question is whether the law should focus on raising prison terms or on a comprehensive accident prevention policy package covering imprisonment, compensation and safety.
Topic 2 : The dispute on India’s debt burden
Context: To avoid worst-case scenarios, the need for fiscal correction is all the more vital this election year
Introduction
- Two recent observations by the International Monetary Fund (IMF) sparked reactions from the Indian Government. First, the IMF has raised concerns about the long-term sustainability of India’s debts. Second, it reclassified India’s exchange rate regime, terming it a “stabilised arrangement” instead of “floating”.
| International Monetary Fund (IMF)The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 190 member countries, with headquarters in Washington, D.C.It is regarded as the global lender of last resort to national governments, and a leading supporter of exchange-rate stability.Its stated mission is “working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.”Established on December 27, 1945 at the Bretton Woods Conference, primarily according to the ideas of Harry Dexter and John Maynard Keynes, it started with 29 member countries and the goal of reconstructing the international monetary system after World War II.It now plays a central role in the management of balance of payments difficulties and international financial crises.Through a quota system, countries contribute funds to a pool from which countries can borrow if they experience balance of payments problems. As of 2016, the fund had SDR 477 billion (about US$667 billion). |
Annual Article IV consultation report
- These emerged from the annual Article IV consultation report, which is part of the Fund’s surveillance function under the Articles of Agreement with member countries.
- The report also acknowledged India’s effective inflation management and projected a balanced outlook for India’s economic growth.
- While the remark on the exchange rate can be viewed as comments on ‘excessive management’, as the rupee moved in a narrow band due to Central Bank interventions, the concerns on debt sustainability can be construed as a call for more prudent management of debt in the medium term.
- The IMF, in the report, states that India’s general government debt, including the Centre and States, could be 100% of GDP under adverse circumstances by fiscal 2028.
- According to them, “Long-term risks are high because considerable investment is required to reach India’s climate change mitigation targets and improve resilience to climate stresses and natural disasters. This suggests that new and preferably concessional sources of financing are needed, as well as greater private sector investment and carbon pricing or equivalent mechanism.”
- The Finance Ministry refutes IMF projections as this is “a worst-case scenario and is not fait accompli”.
Worrying global trends
- There are no two arguments on the fact that government borrowings can play a vital role in accelerating development, as governments can use it to finance their expenditures and invest in people to pave the way for a better future.
- However, the weight of debt can act as a drag on development due to limited access to financing, rising borrowing costs, currency devaluations and sluggish growth.
- Global public debt has increased more than fourfold since 2000, outpacing global GDP, which tripled over the same period. In 2022, global public debt reached a record USD 92 trillion.
- Developing countries accounted for almost 30% of the total, of which roughly 70% is attributable to China, India and Brazil. Public debt has increased faster in developing countries compared to developed countries over the last decade.
- The rise of debt in developing countries is due to growing development financing needs — exacerbated by the COVID-19 pandemic, the cost-of-living crisis, and climate change. As a result, the number of countries facing high levels of debt increased from 22 in 2011 to 59 in 2022.
Burden of debt between developing and developed countries!
- Further, the burden of debt is asymmetric between developed and developing countries as the latter — even without considering the costs of exchange rate fluctuations — have to pay higher interest rates than the former.
- It has been well documented that countries in Africa borrow on average at rates that are four times higher than those of the United States and even eight times higher than those of Germany.
- This higher borrowing costs undermines debt sustainability of developing countries, as the number of countries where interest spending represents 10% or more of public revenues increased from 29 in 2010 to 55 in 2020.
The challenge for India
- Apart from managing public debt deftly to ensure that it does not breach sustainable levels, India faces challenges in enhancing its credit ratings.
- As elucidated by S&P Global Ratings, ”Credit ratings are forward-looking opinions about the ability and willingness of debt issuers, like corporations or governments, to meet their financial obligations on time and in full. They provide a common and transparent global language for investors and other market participants, corporations and governments, and are one of many inputs they can consider as part of their decision-making processes”.
- Elevated debt levels and substantial costs associated with servicing debt impact credit rating.
- Even with the tag of being the fastest-growing major economy and being called a ‘bright spot’ in the global economy, sovereign investment ratings for India have remained the same for a long time.
- Both Fitch Ratings and S&P Global Ratings have kept India’s credit rating unchanged at ‘BBB- with stable outlook’. It should be noted that BBB- is the lowest investment grade rating and India has been on that scale since August 2006.
- Though one could raise methodological issues and biases on the rating process, rating agencies believe that India’s stronger fundamentals are undermined by the government’s weak fiscal performance and burdensome debt stock.
- Further, India’s low per capita income is a major factor that pulls down score in the sovereign rating.
| Important data points!The central government’s debt was ₹155.6 trillion, or 57.1% of GDP, at the end of March 2023 and the debt of State governments was about 28% of GDP.As stated by the Finance Ministry, India’s public debt-to-GDP ratio has barely increased from 81% in 2005-06 to 84% in 2021-22, and is back to 81% in 2022-23.This, however, is way higher than the levels specified by the Fiscal Responsibility and Budget Management Act (FRBMA).The 2018 amendment to the Union government’s FRBMA specified debt-GDP targets for the Centre, States and their combined accounts at 40%, 20% and 60%, respectively. |
Emerging worrying signs!
- Adding to this are the emerging worrying signs on the fiscal front. Despite handsome growth in tax collections, there is the possibility of a fiscal slippage in FY24, according to a report by India Ratings and Research (IR&R).
- IR&R attributes this to higher expenditure on employment guarantee schemes and subsidies. They state that budgeted fertilizer subsidy of ₹44,000 crore was almost over by end-October 2023 and the Union government has now increased fertilizer subsidy to ₹57,360 crore.
- Similarly, due to sustained demand for employment under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a sum of ₹79,770 crore has already been spent till December 19, 2023, as against the budgeted ₹60,000 crore and an additional sum of ₹14,520 crore has been allocated through the first supplementary demand for grants.
- Increased subsidies do not come as a surprise as the country is heading for general elections next year, but the MNREGA outlay increase raises questions about employment growth and livelihoods in rural areas.
Conclusion
- Though the IMF’s debt projections could be viewed as worst-case scenarios of the medium term, the short-term challenge of sticking to the fiscal correction path in an election year might go a long way towards avoiding worst-case scenarios.
- IMF’s worst-case scenario projections for India need to be viewed in this context of persistent debt conundrum in developing countries.
