The economic impact of COVID-19 is felt on the personal finance of people across the world who are looking for ways to tide over the situation. In Kenya, people are lapping the short-term credit in the form of digital loans by mobile money operators. The number of people taking digital loans has doubled during the COVId-19 induced lockdown period.
Boston Consulting Group's Consumer Sentiments Survey conducted in April and May 2020 reported that "In May, 29 percent responded that they had taken out a short-term loan, compared to 16 percent in April. Mobile money operators were the most common sources of this credit”
Kenya is a pioneer in using mobile money transfer services as the key tool for providing financial inclusion to its citizens. A simple money transfer service, M-PESA launched in 2007 has transformed the financial service industry in Kenya. Today mobile money operators are providing multiple services like digital loans, marketplace for small businesses and farmers.
Digital loans are easy to process and disbursed but there are concerns of shaming the defaulters and compromising the data security of clients. The Digital Lenders Association of Kenya (DLAK)which is a body representing the digital lenders of Kenya has distanced from two of their members, Okash and Opesa over unethical practices. These mobile apps have shared the details of defaulting customers with the moneylenders and asking them to recover the money.
DLAK also stated that Opesa and Okash are known for attacking a client's data privacy which is against the Kenyan data protection laws and has additionally spoiled the reputation of digital leaders in Kenya.
In April 2020, Central Bank of Kenya barred unregulated digital mobile lenders from forwarding the names of loan defaulters to credit reference bureaus. A huge number of Kenyans have been recorded on Credit Reference Bureaus by digital money lenders for loans as little as $5.
Central Bank of Kenya governor Patrick Njoroge told during a press conference in May 2020 that the central bank in consultation with the mobile money operators and digital lenders is presently working to develop a model where the borrowers are protected from mistreatment of online moneylenders.
The borrowers are looking up to the regulatory authorities and the industry bodies to come up with a mechanism which will protect their interest in times of such a health and economic emergency.
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Does giving the Lieutenant Governor more authoritative power have an impact on India's Federal structure?
On 3rd of February 2021, the NCT bill cleared by cabinet along with 20 other bills proposed to be introduced in the parliamentary session. The amendment was passed on 9th of February in the Rajya Sabha.
“The Bill proposed to amend the Government of National Capital Territory of Delhi Act, 1991, in the context of judgment dated 14.02.2019 of Hon’ble Supreme Court (Division bench) in Civil Appeal No 2357 of 2017 and other connected matters.”
The article explains the timeline and the practical implications of the NCT Amendment Act 2021 on the federal structure.
The Centre's amendments to the NCT of Delhi Act, gives more powers to the Lieutenant Governor and Delhi’s Kejriwal government were totally against the amendment as due to their bitter experience with the previous and current LG.
The Arvind Kejriwal government described the NCT Bill, as a murder of constitutional democracy and accused BJP of secretively drafting the amendments so as to govern Delhi in an unconstitutional manner using the LG's office.
The new amendment is expected to now clearly define the powers and functions of the Lieutenant Governor and the Delhi Government based on the 2019 judgement. The amendments add a category of bills, which fall outside the ambit of Delhi legislative assembly and which the Lieutenant Governor must reserve for consideration of the President. This category is supposedly added for the sake of “better governance” and to reduce potential conflicts. The amendments also specify that the elected government needs to send legislative proposals to Lieutenant-Governor (LG) at least 14 days in advance to seek his opinion and avoid any delays.
The tussle between the Delhi government and the Centre reached the Supreme Court 2017. The honourable Supreme court defined the role of the LG in Delhi and ruled that the LG cannot interfere in every decision of the Delhi Government. The tussle between the Union and Delhi government has that Article 239 AA of the Constitution at its core. The Article 239 AA gives Delhi the special recognition of a Union Territory with a Legislative Assembly that has a lieutenant governor as its administrative head.
In July 2018, a five-judge Constitution bench of the Supreme Court led by Chief Justice Dipak Misra stated that the lieutenant governor’s powers in the National Capital were only limited to land, police and public order.
“The lieutenant governor must work harmoniously with the elected government. The LG is the administrative head but can’t act as an obstructionist”, the bench stated. The supreme court also stressed upon the fact that the power and status of the LG was different from the state governors. They mentioned that the Lieutenant Governor must not be an obstructionist and must work harmoniously with the Delhi government. “There is no room for absolutism and no room for anarchy,” the bench stated. The verdict is not complete yet as the issue of services divided the bench that delivered the order and the matter is now addressed by a three-judge bench on the Supreme Court which has not concluded the hearing yet.
So far, the AAP has argued that former LG Najeeb Jung and the current LG Anil Baijal are undermining the federal structure of the Republic of India by objecting the decisions made by the Delhi government and overruling their authority in bureaucratic matters.
Former LG of Delhi with Prime Minister Modi | Source: Wikimedia
In July 2013, Najeeb Jung took charge as the LG of Delhi and Arvind Kejriwal swore in as the Chief Minister (CM) of Delhi in December 2013. After 49 days of governance, Arvind Kejriwal stepped down as his minority government was unable to pass the anti-corruption legislation due to lack of support provided by other political parties. In February 2015, the Aam Aadmi Party came back to power by a staggering majority of 67 out of 70 seats. However, the party faced a higher veto obstruction while making several decisions. In May 2015, LG Jung annulled all the bureaucratic postings by Delhi government and stated that power to appoint and transfer rests with him.
In June 2015, five officers of Bihar Police joined Delhi Government’s Anti-Corruption Branch (ACB). Jung rejected their employment at the ACB claiming that he was the person in charge even before the new amendment. In the same month, the Delhi government replaced the Home Secretary Dharam Pal and Jung obstructed the decision by vetoing the order. When the AAP government decided to hike circle rates in Delhi for agricultural land, the former LG Jung objected to the decision although the State government has the complete authority to take such decisions. In another instance in 2016, Jung set up a panel to probe over 400 files related to decisions taken by Delhi government. The CM of Delhi deemed it to be illegal.
Kejriwal and the AAP government blamed the former LG and Prime Minister Narendra Modi for the CBI raids of his office, FIRs filed by ACB against Arvind Kejriwal and former Delhi CM Late Sheila Dikshit in water tanker scam, restriction of control on appointing state bureaucrats and general obstruction of decisions.
Anil Baijal, the now LG of Delhi with Defence Minister Rajnath Singh | Source: Wikimedia
On 31st December 2016, Anil Baijal swore in as the Lieutenant Governor of Delhi. While the tussle between AAP and the LG continued, the alleged assault of Chief Secretary Anshu Prakash by AAP leaders at CM Arvind Kejriwal’s residence in February 2018 gave a new momentum to the tug of war.
Following the incident, the IAS association reportedly skipped routine meetings with ministers as a mark of protest but claimed that they have not suspended work. Before that, on December 2017, the turf war between Kejriwal and Baijal reached Parliament, with a Rajya Sabha member claiming that the CM was being treated like a “peon”.
In 2018, the AAP government demanded LG’s approval for the proposal for doorstep delivery of rations and also demanded grant of complete statehood for Delhi and installation of CCTVs. Baijal did not approve both the demands directly and further complicated the process. Kejriwal stated that the LG rejected the demands over “petty-politics”.
In June 2018,Delhi CM Arvind Kejriwal sat in a nine-day long hunger strike at the Lieutenant Governor’s office against the “strike” by IAS officers and Kejriwal wrote to Prime Minister Narendra Modi, requesting him, “with folded hands”, to intervene and end the agitation of the IAS officers.
The Aam Aadmi Party argues that the BJP is hell bent on ruining efficient governance of Delhi through the LG. Critics believe that the tussle has failed the federal system of our Democracy.
Chief Justice Dipak Misra, Justice Sikri and Justice Khanwilkar, in their written opinion devoted a significant portion to explain the understanding of federalism, and its fusion with democracy to achieve an “egalitarian social order”. According to our Constitutional scheme neither the States isolated islands, with their distinct vision, nor the Union government can make decisions that are meant to affect the interests of the States. The Chief Justice highlighted that there should be a sincere effort to avoid conflict and not encroach on each other spheres in a collaborative framework of federalism. To exercise authority, “there should be perception of mature statesmanship so that the constitutionally bestowed responsibilities are shared by them.” To attain the ideal balance in a federal structure, the Chief Justice suggested the Union and the States to have “mutual respect and deference to actualise the workability of a constitutional provision.”
Collaborative federalism involves healthy negotiation and coordination between the Union and State governments to ensure that the governance works within the circumference of the Constitution and in harmony.
