NATIONAL AFFAIRS
RBI paves way for financial holding company
The Reserve Bank of India (RBI) has paved the way for a holding company structure for financial entities. But it was done with an important caveat—the apex bank has sought to be the sole regulator of financial holding companies (FHCs), irrespective of a bank’s presence in the holding company. In addition, it has called for a separate regulatory framework and a new Act for regulation of FHCs.
A working group headed by RBI Deputy Governor Shyamala Gopinath has recommended that the FHC model can be extended to all large financial groups, irrespective of whether they have a bank or not.
RBI feels that the implicit mandate of the central banks to ensure financial stability and monitor systemic risks makes it imperative to vest the responsibility of regulating FHCs with RBI. A holding company structure would ring-fence a bank or any other financial entity from the downside risks of its subsidiaries.
It has been suggested that a separate unit within RBI should undertake the function of FHC regulation, with staff drawn from both RBI as well as other regulators.
Till the time a new law is enacted and existing regulations are amended, the panel wants the FHCs to be registered with RBI as non-banking financial companies, while financial conglomerates having a bank within the group will need to convert to the FHC model in a time bound manner.
In cases the business conglomerates do not want to convert to FHCs, the panel wants such entities to confine to only banking activities.
For all other banking groups, conversion to the FHC model may be optional till the enactment of the FHC Act.
However, all new banks and insurance companies, as and when licensed, will be mandatory to operate under the FHC framework.
In case the holding company wishes to function as an anchor for capital support for all its subsidiaries, the panel proposes either to have the holding company listed with the subsidiaries unlisted or some of subsidiaries listed along with the holding company.
Since the transition to the FHC model would involve de-merger of various bank subsidiaries and transfer of ownership from bank to the holding company, the panel has suggested suitable amendments to various taxation provisions to make the transition tax and stamp duty neutral. In addition, the working group proposes exemption of dividend distribution tax for dividends paid by subsidiaries to the FHC if the dividends are used by the FHC for investment in other subsidiaries.
State Elections, 2011
The results of Assembly elections declared on May 13, 2011 signaled a vote for change and a vote against corruption and poor governance. The spectacular rout of the Left in West Bengal and of the DMK in Tamil Nadu, however, overshadowed an equally spectacular vote for continuity in Assam.
Four of the five governments seeking renewed mandate in the States were tossed out by the electorate, with only the Congress government in Assam returning to power for the third consecutive term. And barring a photo-finish in Kerala, where the Congress-led United Democratic Front barely secured a majority, the voters dished out clear and decisive mandates in West Bengal, Tamil Nadu, Assam and Puducherry.
West Bengal: The Mamata juggernaut steamrolled the Left Front in West Bengal, dislodging the longest communist government in a democratic country after 34 long years. With her call for ‘Poribartan’ (change), Mamata (56) swept everything before her, ensuring the victory of even political greenhorns like Anup Ghoshal (singer), Bratya Basu (playwright) , Amit Mitra (economist and FICCI secretary general), Upen Biswas (former Joint Director of the CBI), Debashree Roy and Chiranjeet (cine stars), Sultan Singh and Rachpal Singh (retired IPS officers) and even Manish Gupta, a retired IAS officer and Chief Secretary, who defeated Chief Minister Buddhadeb Bhattacharjee.
Buddhadeb Bhattacharjee became the first Chief Minister since 1967 to lose his seat in the Assembly. Other CPM stalwarts who lost included industry minister Nirupam Sen, who spearheaded the land acquisition for Tata Nano at Singur, Housing minister Gautam Deb, IT minister Debesh Das and urban development minister Ashok Bhattacharya.
The TMC-Congress combine won 225 of the 294 Assembly seats, up from 52 in the last Assembly. The CPM+ could manage only 63 seats against 229 in the out-going Assembly.
Tamil Nadu: The J. Jayalalithaa-led AIADMK front struck the DMK-Congress combine like a tsunami and won a landslide victory in Tamil Nadu Assembly elections, sweeping everything on its way, including the freebies, cash-for-votes and caste politics.
The AIADMK, which contested 160 seats in the 234-member Assembly, won 151 seats.
As the Jaya juggernaut rolled throughout Tamil Nadu, most of the DMK ministers, including Deputy Chief Minister M.K. Stalin, bit the dust, while Chief Minister M. Karunanidhi was elected to the Assembly for the 12th time from his native town of Tiruvarur.
The DMK government’s free colour TVs, Re 1 a kg rice, medical insurance, marriage assistance and other populist schemes failed to bring it back.
The ruling DMK, which won 96 seats last time, was routed this time, winning only 23 seats in the 234-member Assembly. AIADMK’s ally and actor Vijaykanth’s DMDK came out with flying colours, winning 28 of the 41 seats it contested. The other allies of the AIADMK, the CPM, which contested 12 seats, won 10 and the CPI, which fielded candidates in 10 constituencies, emerged successful in eight.
The Congress was decimated, winning only five of the 63 constituencies it contested.
Kerala: In a photo finish, the Congress-led United Democratic Front (UDF) unseated the CPM-led Left Democratic Front (LDF), winning 72 seats in the 140-member Assembly, the thinnest majority margin in the last four decades.
The UDF, which had won 16 of the 20 Lok Sabha seats two years ago and over 50 per cent local bodies in the civic body polls held six months ago, had hoped to sweep the election by cashing in on the disenchantment of the people against the incumbent government. The UDF, however, lost the political momentum after Chief Minister V.S. Achuthanandan raked up old scandals involving several senior UDF leaders.
The scandals put the UDF on the defensive. Instead of focusing on the failures of the government, the Opposition tried to attack the Chief Minister and his family members. However, the campaign did not click in the face of massive corruption scams emanating from the UPA dispensation.
The determined effort made by the BJP to prove its strength in the State also affected the UDF to a great extent. Though the BJP was not been able to achieve its objective of opening its account in the Assembly, the party considerably improved its vote share in several seats. This affected the UDF all the more.
Political observers feel that the victory of the UDF by a slender margin will plunge the State into political uncertainty. They believe that the Congress, which has won only 38 seats, may not be able to withstand the political pressures from small parties, especially those with one or two seats in the Assembly.
Assam: It was a hat trick for the Congress in Assam and that too in the form of a landslide victory, thanks to leadership of Tarun Gogoi who has become the Chief Minister for the third consecutive term at the age of 75.
The Congress government’s policy to take the party closer to the common people, especially those from rural areas and from the lower income bracket, apparently paid rich dividends to the party in the election though the opposition parties had sounded skeptical about those schemes, terming those as “sops only meant for Congress members”.
Some of these included laptops to all students who have passed Class X Board exams in the first division, bicycles for girl students, cash incentives against every girl child born in government hospitals, cash incentives to pregnant women, working capital to unmarried women and young widows, free thread to BPL weavers, mosquito nets and blankets to BPL families and umbrellas to students from BPL families.
Moreover, massive improvement in healthcare system in the State during the last 10 years, successful implementation of mobile health clinics to take health care to far flung areas and introduction of emergency healthcare scheme were instrumental in endearing the Congress to the common man.
The Gogoi government’s achievement in tackling insurgency in the State by bringing in many insurgents groups to the negotiation table, coupled with firm initiatives in improving infrastructure development in the State during the last 10 years also paid dividends for the party.
The AGP and the BJP failed to make any impact in the election because the entire Opposition failed to forge an alliance to present a viable alternative before the people. To make matters worse for the Opposition, the regional AGP was dogged by internal squabbles. The regional party instead of giving chances to young leaders preferred to field old horses, who had already been rejected by the people in the 2001 and 2006 elections.
Congress has won 76 Assembly seats in the 126-member Assam Assembly. AGP got 10 and BJP only 4. Independents and others together got 36 seats.
Puducherry: Making a spectacular electoral debut, the All India NR Congress in alliance with AIADMK secured a two-third majority in the 30-member Puducherry Assembly, ending the DMK-supported Congress rule.
Former chief minister N. Rangasamy led the AINRC he formed on the eve of the polls to power with the party winning 15 seats and its ally AIADMK five.
The Congress ended with a tally of seven and DMK two. DMK rebel VMC Shivakumar won the Neravi TR Pattinam segment.
It was a sweet revenge for Rangasamy who floated his own outfit after resigning from the Congress about two years after he was removed as Chief Minister in the face of revolt against his leadership.
SC quashes Speaker’s decision to disqualify Karnataka MLAs
On May 13, 2011, the Supreme Court of India set aside Karnataka Speaker K.G. Bopaiah’s decision to disqualify 16 MLAs, including 11 rebel BJP and five Independent MLAs, ahead of the no confidence motion in 201 that had ensured survival of the Yeddyurappa government.
A Bench, comprising Justices Altamas Kabir and Cyriac Joseph, ruled out that the Speaker had failed to observe the basic constitutional values and principles of natural justice, while disqualifying the MLAs under the Anti-Defection Act.
The MLAs were disqualified as it was apprehended that they would support the no-trust motion against the government during the voting. The 16 MLAs had withdrawn their support to the government on October 6, 2010 and were suspended on October 11.
In their appeal, the MLAs had contended that their disqualification had raised substantial questions of constitutional and administrative laws of public importance having serious implications for the democratic representative government and involving an interpretation of the provisions of the Tenth Schedule and the rules made there under.
The legislators had submitted that they had made a categorical statement in their replies to the show-cause notice issued by the Speaker before their suspension that they had no intention at all to leave BJP or the membership of its legislature party and that their letter to the Governor was aimed at "cleansing the image of the party by getting rid of Yeddyurappa as Chief Minister."
According to the petition, democratic dissent, without any intention of leaving the party but in the hope of saving its image and reputation by getting rid of a "corrupt" Chief Minister, cannot be regarded as voluntarily giving up the party membership as such.
It was submitted that they were disqualified before the voting actually took place in the Assembly apprehending that they would vote against the Chief Minister on the specious ground that they had voluntarily given up BJP membership.
The SC also held that the Independents had not “sacrificed their independent identity” by extending support to Yeddyurappa or by joining the Council of Ministers.
Rising food prices and poverty line
For a country that has been reeling under the impact of higher food prices, here are some chilling numbers. Food prices single-handedly seem to have considerable power to reverse our progress as an economy. The price rise in food staples between June and December 2010 could have pushed as many as 10 million more Indians into poverty.
In its recent report “Estimating the short-run poverty impacts of the 2010-11 surge in food prices”, the World Bank estimates that the price increases in the second half of 2010 have increased the poverty head count in India by 0.8 percentage points. We infer the increase in the number of poor from their data measure on total population (1.19 billion) and the poverty rate used for their analysis (43.8%). Typically, given that poor households spend a majority of their income on food, rising food prices hit them the hardest.
Sugar, rice and wheat price increases have also resulted in a rise in the poverty headcount in India. And this is despite the fact that price hikes in India are nowhere near global levels. However rising import prices of food will compound the inflation situation further.
The prices of sugar, rice and wheat globally have increased between 20-75%, but in India price increases for all three are at sub-10% levels.
This is an alarming wake-up call for a country that has not seen abatement in food price increases even now. Food inflation jumped to a two-month high of 9% in terms of annual growth recently.
Seems like anti-poverty schemes also increase the levels of poverty when they push prices up. The key number to look for is how much they reduce poverty and how much they increase it through wage-price inflation.
Panel recommends FDI in retail
On May 27, 2011, the Inter-Ministerial Group (IMG) suggested two major steps to control inflation including opening up multi-brand retail to foreign companies and changes in agriculture marketing laws to bridge the margin between farm gate prices and retail price.
The IMG warned that though it was important to allow the entry of FDI into this sector in a properly regulated fashion and there is a need to guard against the risk of these new corporations becoming monopolistic and charging high prices.
“We are taking a clear position on FDI in multi-brand retail. Of course, it is a recommendation, not policy,” chief economic advisor and IMG chairman Kaushik Basu said.
The debate on opening up the retail sector has been going on for a while now but is being strongly opposed by the domestic lobby that says that large MNC retail formats like Walmart coming in will wipe out the neighbourhood kiryana stores, which are huge in numbers and form an important constituency.
The IMG said that the APMC Act ought to be amended so as to enable farmers to bring their products to retail outlets and also allow retailers to directly purchase from the farmers, without facing blockades by incumbent traders. The APMC system has abetted monopolistic behaviour and reduced the choices available to small farmers. The well-intentioned APMC law helped cartelisation and collusion amongst incumbent traders, the group said.
The group IMG recommended that the government consider this at the earliest. Its logic is that India’s retail sector continues to be primitive and there is evidence that there are large losses that occur as products pass through the supply chain from farm to the retail customer.
This will get new technology and expand organised retail and provide remunerative prices for farmers and fair prices for consumers especially during the peak marketing season.
Once large corporations begin to source their products from Indian outlets it is very likely that they will gradually take these products to sell in their outlets in other countries, opening up exports.
The IMG said that correcting the margin between the price that farmers get and price that consumers pay is not going to solve the problem of inflation for all times to come but it can have a sharp desirable effect in the short run of bringing down food inflation.
Visit of President of Uzbekistan
On May 18, 2011, during the visit of Mr Islam Karimov, President of Uzbekistan, India and Uzbekistan entered into a long-term and strategic partnership based on equality and mutual understanding and concluded as many as 34 agreements in diverse fields, including pharmaceuticals and hydrocarbons.
The two countries also agreed to cooperate closely in stabilising the situation in Afghanistan and condemned terrorism in all its forms and manifestations.
Uzbekistan reaffirmed its support for India’s candidature for a permanent seat on the UN Security Council. The two sides also resolved to expand their cooperation within the framework of the Shanghai Cooperation Organisation (SCO). India is currently an observer at the SCO and is keen to become a member of the six-nation Central Asian organisation.
Great importance is being attached to the establishment of the strategic partnership which envisages active cooperation in a wide spectrum on areas, including political, counter-terrorism, economic, education, health, human resource development, energy, science and technology, tourism and culture.
Prime Minister Manmohan Singh’s Afghanistan visit
Prime Minister Manmohan Singh visited Afghanistan on May 12, 2011, on a two-day trip to reassure the Hamid Karzai government of New Delhi’s commitment to help stabilise the situation there.
In a statement on the eve of his departure, the PM asserted that India could not remain unaffected by developments in Afghanistan, emphasizing that New Delhi took a long-term view of its partnership with the embattled country.
“The quest of the Afghan people for peace, stability and reconciliation needs the full support of all countries in the region and the international community,” he said.
The PM held wide-ranging discussions with the Afghan leadership on ways to advance India’s partnership to a new level in the coming years. “We will also exchange views on developments in the region and our common fight against the scourge of terrorism.”
The visit took place three days after Manmohan Singh discussed with US President Barack Obama on phone the situation in the region in the aftermath of the killing of the Al-Qaida chief deep inside Pakistan. The visit was initially scheduled to take place in the first week of May but the American side had apparently advised New Delhi to postpone it without disclosing anything about the impending action by US forces in Abbottabad (Pakistan) in which bin Laden was killed.
India has become a key ally of the Afghan government since the fall of the Taliban regime, spending more than $ 1.3 billion in Afghanistan to help build highways, hospitals and the electricity grid. It is now the sixth largest contributor to Afghanistan’s reconstruction programme.
During the visit Prime Minister Manmohan Singh announced a fresh aid package of $500 million for Afghanistan with focus on social sector, agriculture, capacity building and infrastructure projects.
Second Africa-India Summit
On May 24-25, 2011, Prime Minister Manmohan Singh attended the second Africa-India Forum Summit in Addis Ababa, Ethiopia. A ministerial meeting, in which Anand Sharma, Minister for Commerce & Industry, led the Indian side, preceded it.
Addressing the meet, Prime Minister Manmohan Singh made a strong call to African countries to work collectively with India to combat the scourge of terrorism.
"Apart from bilateral cooperation, India and Africa can and should work together on regional and international issues," he said at the retreat attended by leaders from 15 African countries.
Mr Singh also highlighted the need to chart new pathways of engagement, take stock of the global economic and political situation and review the progress the two sides have made in their cooperation in the last three years.
Singh noted that the current international economic and political situation was far from easy, particularly for developing countries and spoke about "new challenges" confronting the world in meeting the requirements of food and energy security.
Manmohan Singh announced a mammoth $5 billion credit line to Africa for various development projects, reflecting India’s growing ties with the resource-rich continent.
He also declared an additional $700 million package to establish new institutions and training programmes across the continent.
Major sops offered during the Summit meeting were:
- $5 billion line of credit for 3 years
- Additional $700 million for new institutions, training programmes
- $300 million for Ethio-Djibouti rail line
- India-Africa virtual university with 10,000 new scholarships
- India-Africa business council
- $2 million for African Union mission in Somalia
- Increased access of African airlines to India in next 3 years
- India-Africa food processing and textiles clusters
- More than 22,000 scholarships to African students
- An India-Africa centre for medium-range weather forecasting, university for life and earth sciences, institute of agriculture and rural development
- Soil, water and tissue-testing laboratories, regional farm science centres, seed production-cum-demonstration centres, material testing laboratories for highways
- Institutes for English language training, information technology, entrepreneurship development and vocational training
- Rural technology parks, food testing laboratories, food processing business incubation centres and centres on geo-informatics applications and rural development.
The joint declaration also expressed support for an International Convention prohibiting the development, production, stockpiling and use of nuclear weapons, leading to their destruction. It called for negotiating specific steps to reduce and finally eliminate nuclear weapons, leading to a world free from all weapons of mass destruction as envisaged in the Rajiv Gandhi Action Plan of 1988.
The first India-Africa Forum Summit in New Delhi in April 2008 produced a ‘Framework of Cooperation’. However, bureaucratic procedures in the African Union and in India slowed down the momentum. It took the two sides two years to finalize the joint ‘Plan of Action,’ overshooting the deadline by a year. But thereafter, more concerted efforts have been evident. Throughout 2010, New Delhi played host to Presidents and Prime Ministers from Africa. India’s Vice-President as well as key ministers also travelled to several African capitals.
With Africa’s rise no longer in doubt, India is concentrating on building partnerships at bilateral, regional and continental levels and not seeking a role in internal affairs of African States or intra-African conflicts. It reacted cautiously during the recent troubles in Tunisia, Egypt, Libya and the Ivory Coast.
Africa is host to 90% of world’s Cobalt, 50% of Gold, 98% of Chromium, 64% of Manganese & 34% of Uranium. Trade between India and Africa crossed US $ 46 billion in 2010 and is expected to reach US $ 70 billion by 2015.
Indian private sector entrepreneurs have already made investments in excess of US $ 25 billion in a wide range of sectors from telecom, automobiles, IT, pharmaceuticals and agriculture. Bharti’s $ 8.5 billion acquisition of Zain in Africa is one of the largest outbound investments by India. According to a FICCI study, Africa is on the brink of an economic take off.
At present India’s OFDI is the 9th largest source of FDI into Africa. Among the Indian groups that have substantial presence in Africa include Bharti Airtel, Karuturi Global, the world’s largest producer of cut-roses, Tata Africa Holdings also has a strong presence in over 10 African countries with investments exceeding US$ 100 million. Essar has steel, oil and gas and telecom assets across Africa. The other players include M&M, Larsen & Toubro (L&T) and Shapoorji Pallonji.
Visit of German Chancellor Angela Merkel
On a 24-hour visit to New Delhi on May 31, 2011, German Chancellor Angela Merkel tried to hard sell the Eurofighter Typhoon jets to India as she discussed a whole range of issues with Prime Minister Manmohan Singh, including the situation in Afghanistan and Pakistan in the wake of the killing of Osama bin Laden.
Four accords were signed during her visit to expand cooperation in the fields of education, research and nuclear physics between India and Germany.
The meeting between the two leaders also marked the launching of the first inter-governmental consultations between the countries on the entire gamut of bilateral relations—from security, defence policy, trade, vocational training, education and research to infrastructure and sustainable energy and environment technologies.
Chancellor Merkel also received the prestigious Jawaharlal Nehru Award for International understanding for 2009. “I accept this award not only as an honour to the Chancellor, but especially as a tribute to the achievements of my fellow citizens in fulfilling the values of friendship and international understanding that the award recognises,” said Merkel.
She also formally launched the ‘Year of Germany in India’ with Lok Sabha Speaker Meira Kumar.
The leaders of the two countries agreed to boost trade between the two countries to 20 billion Euros by 2020 from the present volume of 15 billion Euros.
The meeting came a day after Germany announced it would phase out all its 17 nuclear plants by 2022. Merkel agreed to help India in areas related to nuclear safety and pledged support for the development of renewable energy.
Chancellor Merkel was also appreciative of the role being played by India in the reconstruction programme under way in Afghanistan. She said a military solution was not an option in Afghanistan. Ultimately, Afghanistan would have to develop its own independent security architecture.
Indo-Pak defence talks
In the month of May 2011, India and Pakistan began their first attempt in three years to demilitarize the Siachen glacier, the world's highest battlefield in the Himalayan region, that has claimed the lives of hundreds of soldiers.
Here are some main facts about the Siachen glacier region:
- Siachen is in the northern part of Kashmir. Muslim-majority Kashmir is at the heart of hostility between India and Pakistan and was the cause of two of their three wars (the third was over the founding of Bangladesh).
- Indian and Pakistani forces, estimated to number between 10,000 and 20,000 troops combined, have faced off against each other in mountains above the Siachen glacier in the Karakoram range since 1984.
- The no-man's-land of Siachen is 20,000 feet (6,000 metres) above sea level. Military experts say the inhospitable climate and avalanche-prone terrain have claimed more lives than gunfire.
- The strategic importance of the glacier is debatable, military experts say. Until 1984, neither side had troops there.
- Both countries agree on a need to demilitarize the glacier, but neither side wants to take the first step.
- India controls the heights and is loath to withdraw for fear Pakistan might walk in. India says it is unwilling to bring its forces down until Pakistan officially authenticates the positions they hold.
- Pakistan has said it is willing to do so on the condition that it is not a final endorsement of India's claim over the glacier, a source of melt water for Pakistan's rivers.
Prime Minister Manmohan Singh’s Tanzania visit
On May 27, 2011, during the three-day visit of Prime Minister Manmohan Singh to Tanzania, India announced a new line of credit of $180 million for Tanzania and signed a pact on avoidance of double taxation as the two countries agreed to intensify cooperation to combat terrorism and piracy and work closely for comprehensive UN reforms.
Prime Minister Manmohan Singh said after wide-ranging discussions with Tanzanian President Jakaya Kikwete that the new line of credit will be for water supply projects in country's capital Dar-e- Salaam.
Addressing a joint press conference with Kikwete, Prime Minister voiced concern over the two major problems of terrorism and piracy both countries faced and said they have decided to intensify consultations and coordination to combat such threats.
Kikwete felt that threats from piracy had never abated in the region and said it was agreed that there should be stronger collaboration through intelligence-sharing and other mechanisms.
On the issue of UN reforms, Kikwete reaffirmed Tanzania's support for India's candidature for permanent membership.
2-G Scam: Kanimozhi lands in jail
On May 20, 2011, the CBI Special court hearing into the 2G Spectrum allocation scam dismissed the bail application of DMK MP Kanimozhi. She was arrested and sent to Tihar jail. Denying her bail, the judge said there was a possibility of witnesses being influenced considering the "magnitude" of the crime.
43-year-old Kanimozhi is daughter of former Chief Minister of Tamil Nadu Karunanidhi's second wife Rajathi.
The judge also rejected the bail plea of Sharad Kumar, MD and CEO of Kalaignar TV Private Ltd, who along with Kanimozhi, faces the charge of conspiracy and bribery in accepting Rs.200 crore from DB Realty ordering their arrest “forthwith”.
Kanimozhi and Kumar, both of whom are 20 per cent stake holders in Chennai-based Kalaignar TV have been charge sheeted by the CBI of having received Rs. 214 crore in “illegal gratifications” from Dynamix Balwa (DB) Realty, a company promoted by Shahid Usman Balwa and Vinod Goenka, one of the beneficiaries of 2G Spectrum allocation. As per CBI, DB Group’s Swan Telecom was ineligible for a 2G Spectrum licence and Rs. 214 crore was paid to Kalaignar TV in lieu of the licence granted by the then Telecom Minister A. Raja, who is also a DMK member and close to Kanimozhi.
India ratifies UN protocol against human trafficking
India has ratified the United Nations Convention against Transnational Organized Crime and its three protocols, including one to combat trafficking in persons.
The Convention remains, by far, the most potent international instrument in the fight against trans-national organised crime. Currently, human trafficking is the third largest organised crime in the world after the narcotics trade and illicit arms trading. Together, these crimes generate annual revenue of $ 9.5 billion, with the share of human trafficking gradually rising.
For India, the development is significant considering it took 12 years to ratify the Convention, which is supplemented by protocols to combat human trafficking; migrant smuggling and illicit trafficking in firearms. The fact that India has ratified the ‘Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children’ means the country would now have to evolve a comprehensive anti-trafficking legislation that conforms to international standards and provisions. Right now, the laws are unclear.
It would also have to find ways to train law enforcers who continue to book trafficked women under the provisions of Immoral Traffic Prevention Act, rather than booking them under provisions of the law which would see them as “victims” and not “offenders”. The National Human Rights Commission says only 6.6 per cent of the country’s law enforcers have any kind of training in trafficking issues.
Most rescued victims currently have little access to rehabilitation and care, which means even after being freed, they run the risk of getting back to brothels. A woman caught under the ITPA for example is required to pay a fine to walk free. Because she has no money, her brothel owner walks in again promising to rescue her from jail provided she agrees to return to sex work.
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