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1. Getting drunk, on homoeopathy
Background and Context:
- Alcoholic Tinctures as Homoeopathic Remedies: Liquid extracts of herbs dissolved in alcohol, marketed as homoeopathic remedies, pose significant public health risks in India.
- Supreme Court Judgment: In Bhagwati Medical Hall vs Central Drugs Standard Control Organization & Ors., the Supreme Court highlighted regulatory challenges faced by State governments in addressing the hazards of alcoholic tinctures.
Regulatory Framework:
- Constitutional Provisions:
- States regulate public health and alcohol taxation under Schedule VII.
- Alcohol meant for medicinal purposes falls under the Union’s jurisdiction for taxation (Entry 84 of List I).
- Taxation Issues:
- Pre-GST, alcohol for medicinal preparations was taxed at 4% under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.
- Post-GST, an 18% tax applies, significantly lower than State taxes on alcoholic beverages.
- Concurrent List: Drugs are on the Concurrent List, allowing both Union and States to legislate, but State-specific amendments to the Drugs and Cosmetics Act, 1940 require presidential assent.
Public Health Concerns:
- Health Risks:
- High alcohol content (up to 12% by volume) in homoeopathic tinctures poses health hazards, including alcoholic hepatitis in unsuspecting users.
- States like Gujarat and Bihar, with alcohol prohibition laws, have reported deaths due to spurious homoeopathic tinctures.
- Consumer Misunderstanding: Many consumers are unaware of the high alcoholic content, leading to harmful health effects.
Industry Lawfare:
- Litigation Against Regulation:
- Rule 106B (introduced in 1994) limits the sale of tinctures to 30 ml bottles with 12% alcohol content for retail and 100 ml for hospitals.
- The homoeopathy industry has continuously challenged this rule, delaying its enforcement through litigation.
- In 2017, the Supreme Court consolidated cases but left them unresolved, causing regulatory paralysis.
Administrative Challenges:
- Revenue Loss for States: Citizens often consume homoeopathic tinctures as substitutes for heavily taxed alcoholic beverages, leading to State revenue losses.
- Bureaucratic Delays: Despite knowing the procedural flaw in Rule 106B (not placed before Parliament), the Union government pursued further litigation instead of resolving the issue by following due process.
Broader Implications:
- Public Health vs Industry Interests: Regulatory delays and industry resistance undermine public health objectives.
- Need for Reform: A critical review of the use of alcohol in both homoeopathic and ayurvedic products is necessary, especially when other countries are considering stricter warnings on alcoholic beverages.
Recommendations:
- Simplify the regulatory framework to empower States to regulate homoeopathic tinctures.
- Amend laws to align with public health objectives and ensure quality control.
- Address procedural gaps, such as placing rules before Parliament, to avoid unnecessary litigation.
- Enhance public awareness about the risks of consuming alcoholic tinctures marketed as remedies.
This issue underscores the importance of balancing regulatory enforcement, public health, and industry practices in India’s drug regulation landscape.
2. First resort: On Donald Trump’s mass deportation drive
Background:
- Mass Deportation Drive by Donald Trump: Controversial initiative targeting undocumented migrants from South America, leading to diplomatic tensions.
- Incident with Colombia: Colombian President Gustavo Petro initially refused U.S. military planes carrying migrants to land, triggering a trade dispute.
Key Developments:
- U.S. Response:
- Announced a 25% tariff on Colombian goods, with plans to raise it to 50%.
- Threatened banking and financial sanctions and travel bans on Colombian officials.
- Colombia’s Reaction:
- Countered with plans for reciprocal tariffs on U.S. goods.
- Eventually accepted deported migrants after intense U.S. pressure.
Economic Implications:
- Bilateral Trade:
- U.S.-Colombia trade stood at $53.5 billion in 2022, with a $4 billion surplus for the U.S.
- High tariffs could severely harm Colombia’s economy, given its dependency on U.S. trade.
- Potential Destabilization:
- Economic coercion by the U.S. could destabilize Colombia, especially amidst its ongoing conflict with guerrillas.
Diplomatic and Human Rights Concerns:
- Treatment of Migrants:
- Complaints from Brazil and Colombia about degrading treatment during deportation (e.g., handcuffing, denial of water, restricted access to restrooms).
- Migrants are being deported under inhumane conditions, tarnishing America’s human rights image.
- Geopolitical Risks:
- Coercive actions risk alienating South American countries and could undermine America’s influence in the region.
Alternatives and Recommendations:
- Diplomatic Approach:
- Engage countries through dialogue and consensus rather than threats and sanctions.
- Address human rights concerns to avoid backlash and maintain global credibility.
- Long-term Strategy:
- Foster cooperative frameworks with South American nations for handling migration issues.
- Avoid economic and political coercion, which may have long-term geopolitical consequences.
Conclusion:
Donald Trump’s reliance on economic threats and coercion in handling mass deportations is counterproductive, potentially destabilizing the region and harming U.S. interests. Diplomacy and humane practices offer a more sustainable and ethical path to addressing the migration crisis.
3. The Union Budget as a turning point for climate action
As India gears up for the Union Budget FY26, the focus must shift towards integrating climate action into fiscal priorities. With extreme weather events becoming frequent and the nation’s interim Net-Zero targets looming, the Budget presents an opportunity to recalibrate policies for climate adaptation and mitigation.
Key Climate Initiatives in Previous Budgets:
- PM Surya Ghar Muft Bijlee Yojana: Aimed at residential solar installations but hindered by low completion rates.
- National Green Hydrogen Mission: A strategic initiative to promote green hydrogen production.
- Offshore Wind Energy and EV Infrastructure: Investments to boost renewable energy and electric mobility.
Despite these efforts, the current renewable energy capacity of 203.18 GW is far below the 2030 target of 500 GW. Accelerated policy support is essential.
Budgetary Priorities for Strengthening Climate Action:
- Accelerating the Green Energy Transition:
- Enhance the PM Surya Ghar Muft Bijlee Yojana: Address implementation gaps by adopting the RESCO model, which reduces upfront costs for low-income households through innovative financing.
- Expand Solar PLI Scheme: Strengthen the domestic solar module supply chain to reduce import dependency and lower costs.
- Utilize Railway Land for Renewables: Encourage public-private partnerships to generate 5 GW of renewable energy using the extensive railway network.
- Safeguarding Export Competitiveness:
- Responding to CBAM (Carbon Border Adjustment Mechanism): India’s MSMEs, contributing 45% to exports, face challenges under the EU’s CBAM. A dedicated Climate Action Fund can support industrial decarbonization and capacity-building for compliance.
- Promoting a Circular Economy:
- Fiscal Incentives: Provide weighted deductions on investments in recycling technologies and accelerated depreciation benefits for circular assets.
- Green Bonds for Infrastructure: Establish a sovereign green bond framework to finance circular economy initiatives.
- Enhancing Climate Resilience:
- Increase Insurance Penetration: Offer tax incentives for climate-linked insurance policies and reduce GST on premiums for disaster protection products.
- Standardizing Green Finance:
- Green Finance Taxonomy: Allocate resources for building institutional and technical frameworks to attract investment for climate goals.
- Differential Tax Treatment: Incentivize taxonomy-aligned investments through favorable tax policies.
The Need for Urgency:
Climate competitiveness is critical for India’s global trade and investment appeal. Rising international demand for low-carbon goods and the alignment of capital markets with sustainability underscore the need for fiscal reforms.
The FY26 Budget must signal a strong commitment to integrating climate priorities, ensuring India remains resilient, competitive, and sustainable in the face of a rapidly changing climate landscape.
4. Navigating growth challenges in Sri Lanka
Background:
- Sri Lanka’s Economic Crisis:
- Defaulted on external debt in April 2022.
- Experienced its worst economic crisis post-independence (2022-2023).
- Stabilisation supported by a $3 billion IMF programme, $4 billion Indian aid, and a $17.5 billion debt restructuring deal with private bondholders and China.
- Government Transition:
- National Peoples Power (NPP) government, led by Anura Kumara Dissanayake, assumed office in late 2024.
Current Economic Outlook:
- Growth and Recovery:
- Economic stabilisation visible with inflows from tourism and improved foreign exchange reserves.
- World Bank forecast: Growth to slow from 4.4% in 2024 to 3.5% in 2025.
Internal Challenges:
- Brain Drain:
- Loss of 3,00,000 professionals in 2024, including skilled individuals from IT, medical, and banking sectors.
- Solution: Policies to retain talent and improve career opportunities.
- Inexperienced Parliament:
- 150 of 225 MPs are first-time representatives.
- Need for public sector reforms, digitisation, and training for MPs to ensure effective governance.
- Tourism Development:
- Over 2 million tourists in 2024, a 38% rise over 2023.
- Challenges: Promote lesser-visited regions, support local businesses, and address gang-related violence.
- Sustainable tourism practices and decentralisation needed.
- State-Owned Enterprises (SOEs):
- Large SOEs like SriLankan Airlines and Ceylon Petroleum Corporation are a fiscal burden.
- Consideration of privatisation or restructuring essential for fiscal stability.
External Challenges:
- Geopolitical Factors:
- Changing Indo-Pacific dynamics under U.S. President Donald Trump.
- Strengthening economic and strategic ties with India is vital.
- India-Sri Lanka Relations:
- Collaboration on trade, energy, digital systems, and a free trade agreement.
- Sensitivity to India’s security concerns, such as halting Chinese spy ship visits.
- Debt Repayments:
- External debt repayments resume in mid-2027.
- Trade-led growth and foreign exchange generation critical to avoid another default.
Recommendations for Growth:
- Immediate Priorities:
- Develop a comprehensive growth strategy addressing fiscal sustainability and internal governance.
- Focus on pragmatic leadership and effective policy implementation.
- Long-Term Strategies:
- Strengthen partnerships with the IMF, World Bank, and India.
- Expand trade and investment opportunities while ensuring equitable development.
- Key Opportunities:
- February’s National Budget as a platform to introduce bold economic reforms and chart a sustainable growth path.
Conclusion:
Sri Lanka stands at a crossroads. Addressing immediate challenges like brain drain, SOE inefficiencies, and external debt while leveraging opportunities in tourism and India-Sri Lanka relations will require visionary leadership and bold reforms. Pragmatic policies now can secure the country’s long-term prosperity and stability.
Disclaimer:
This analysis is based on the editorial content published in The Hindu and is intended solely for informational and educational purposes. The views, opinions, and interpretations expressed herein are those of the author of original article. Readers are encouraged to refer to the original article for complete context and to exercise their own judgment while interpreting the analysis. The analysis does not constitute professional advice or endorsement of any political, economic, or social perspective.
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