Brief of newspaper articles for the day bearing
relevance to Civil Services preparation
- GS PAPER 2
- Finding the centre {Foreign Policy}
- Eastern Promise {Governance}
- Why we need to change how elections are held {Polity}
- GS PAPER 3
- Textiles get tax sops in output impetus {Economy}
- Cabinet extends UDAY scheme deadline {Economy}
- Why rail budget {Economy}
- DGCA to get more punitive powers {Economy}
- Army comes out against road work on China border {Security}
- ‘NPAs dragging down credit growth, not rates’ {Economy}
GS PAPER 2
[1]Finding the centre
Issue
- Role of Non-Alignment Movement (NAM) in current times.
About Non-Alignment Movement (NAM)
- NAM was originated by 25 nations(newly independent) at Belgrade conference. India was among the founding member of NAM.
- Non alignment movement was started by the Third world nations or the newly independent nation who don’t want to join any of the existing power blocs. Non-alignment movement in this context emerged as most desirable platform which provided these nation independence to follow its own foreign policy.
- It was adopted by Asian, African, and Latin American countries.
- For the newly independent countries NAM became a protector to escape from race of militarization promoted by two world power at that time i.e. USSR and USA.
Current tilt of India
- Today, India stands a bit closer to the right than the left.
- It has close defence exchanges like Operation Malabar with the U.S. and Japan on one side, and on the other, joining Shanghai Cooperation Organisation (SCO) that has Russia and China at the helm.
- The Logistics Exchange Memorandum of Agreement (LEMOA) on defence with USA has been finalised, and India has been declared the U.S.’s major defence partner.
Crisscrossing
- The stated aim of SCO is “jointly preserving and safeguarding regional peace, security and stability; and establishing a democratic, fair and rational new international political and economic order”. Analysts have always believed that the reference to the “new order” juxtaposes the Eurasian SCO as a counterpoint to the transatlantic North Atlantic Treaty Organisation.
- On the other hand, India has showed its cooperation with US led alliances, specially in the South China region.
- Clearly, adherence to the terms spelt out in both the western and eastern alliances would be absurd, as they could conceivably see the Indian Navy in joint patrol with the U.S. and its allies, challenging China in the South China Sea, even as it cooperates with China and Russia to counter U.S.-backed forces.
- Imagine this:-India discussing nuclear safety and non-proliferation on an equal footing with known proliferator Pakistan at the NSG, and also sharing counter-terror operations with it as part of the SCO’s Regional Anti-Terrorist Structure (RATS).
So, what India should do?
- Given the stormy waters and multiple criss-crossing alignments India now envisions, NAM may be a safer shore for India’s future as well.
- If India seeks membership of Nuclear Suppliers Group (NSG), then it should abide by the principles of NAM.
[2]Eastern Promise
Issue
- Lessons for India in Thailand’s experience on universal healthcare.
Achievement of Thailand
- Despite being a middle-income country, Thailand provide healthcare cover to its almost entire population in a relatively short period of time.
- Thailand achieved this in 2002, when its per-capita national income was almost the same as that of India today.
What were the crucial reforms that made this happen?
Thailand initiated two key measures :-
- Firstly,in 2001, it established the National Health Security Act, which entitled the Thai population to health services of certain standard and efficiency as given in the Act,
- Secondly,it created National Health Security Office (NHSO), an autonomous state agency that administered healthcare fund received from the government and was responsible for registration of beneficiaries and healthcare providers and making payments as per the regulations.
What difference this reforms made?
- The second reform led to a separation of the role of purchaser of care from provider of care, which was earlier vested with the same agency, that is, the Ministry of Public Health (MOPH) that allocated budget to healthcare providers based on facility size, staff numbers, and historical performance.
- This separation brought explicit focus on what the NHSO was getting for the money it was giving to the contractors.
- The method adopted by the NHSO to pay healthcare providers incentivised healthcare providers and hospitals to be efficient and cost conscious.
Basic infrastructure
- At the time of these reforms, Thailand already had a strong healthcare infrastructure even in rural areas, where two-third of its 70 million population live.
- The public health delivery system was already available.
- As a result, high immunisation coverage and availability of essential drugs were already being observed, with a strong culture of public service among the health workforce.
- Further, determinants of health such as nutritional status of children, accessibility to clean water were addressed to a great extent.
What India can learn from this?
- India needs to prioritised healthcare.
- Indian states could try out the twin reforms of purchaser-provider split and performance-based payment system in districts that have decent health infrastructure and manpower.
- It will enable states to understand the possible impact of such reforms as well as what it would take to scale up.
[3] Why we need to change how elections are held
Issue
- Feasibility of the coterminous polls.
- For arguments regarding non-feasibility of coterminous polls, refer to (1) Coterminous LS, State polls not feasible (2) Polls apart
Elections and governance
- Elections affects the governance and the policymaking as it has become a continuous process.
- Political parties with stakes in various states are constantly preparing for one election or the other.
- Elections have become an expensive phenomenon for the exchequer as well as political parties, especially smaller ones.
Problems that we might incur when we adopt coterminous polls and their respective solutions
Problem:-
- If elections are brought in sync, the cycle might once again get interrupted.
- As it happened originally, when the premature dissolution of state assemblies in subsequent years disturbed the cycle.
Solution:-
- The possibility of dismissal of state governments and premature dissolution of assemblies has diminished significantly after the passage of the anti-defection law and the Supreme Court’s landmark Bommai judgement.
- And if Lok Sabha is dissolved by a no-confidence motion, then a confidence motion should also be moved for an alternative formation.
Problem:-
- As per suggestion of a department-related parliamentary standing committee, elections for assemblies with term ending six months before or after the Lok Sabha election could be clubbed with general elections.
- If implemented, the analysis suggests that this would mean assembly elections can be held in 12 states in 2019 along with the Lok Sabha polls.
- But the problem with this suggestion is that the term of a state assembly (or Lok Sabha) cannot be extended unless the country is in a situation of emergency.
Solution:–
- A constitutional amendment which allows the curtailing or extending of the term of state assemblies for a predetermined period can solve this problem.
- Or, elections for assemblies can be conducted in two phases—one with the Lok Sabha and the other midway through the Lok Sabha’s term. This will significantly reduce the time and energy spent on polls.
Conclusion
- There are multiple issues that will need to be addressed if the country intends to move in this direction.
- The concerns and suggestions of different stakeholders will have to be debated in order to build political consensus around this idea.
- Coterminous polls will not only help save public money, but will also be a big relief for political parties that are always in campaign mode.
- It will allow political parties to focus more on policy and governance.
- It will also help in taking forward the process of economic reforms as decisions will not always be hostage to assembly elections.
GS PAPER 3
[1]Textiles get tax sops in output impetus
What happened?
- Union Government has announced a Rs.6,000-crore special package for the textile and apparel sector to enable domestic firms to compete globally.
Key provisions in the package
- The package includes several tax and production incentives.
- The government has also suggested bringing in flexibility in labour laws to increase productivity. These initiatives are expected to lead to an increase in exports by $30 billion and help attract investments worth Rs.74,000 crore in three years.
- It aims to help in creating one crore jobs, mostly for women, in the next three years.
- The package breaks new ground in moving from input-based to outcome-based incentives; a unique feature of the scheme will be to disburse subsidy only after expected jobs have been created.
- To ensure increased earnings for workers, the package specifies that overtime hours for workers shall not to exceed eight hours per week — in line with International Labour Organisation norms.
- Taking note of the seasonal nature of the garment industry, fixed term employment will be introduced for the sector and a fixed term workman will be considered at par with permanent workman in terms of working hours, wages, allowances and other statutory dues.
- Of the Rs.6,000 crore package, Rs.5,500 crore is for an additional five per cent duty drawback for garments.
- In a first-of-its-kind move, a new scheme will be introduced to refund the state levies which were not refunded so far.
- Drawback at ‘all industries rate’ would be given for domestic duty paid inputs even when fabrics are imported under ‘Advance Authorization Scheme.
An opportune moment
- Because of the vacuum provided by the decline in the apparel market of China due to its rising wages and production shifting to high technology sectors, this policy has come at a right time.
- This has led to garment sector firms shifting to countries including Bangladesh and Vietnam. Through changes in schemes and regulations, the government is ensuring that the garment sector realises its full potential in India.
- The package would strengthen the Indian textile and apparel sector by improving its cost competitiveness in the global market.
[2]Cabinet extends UDAY scheme deadline
News
- The Government has approved an extension in the deadline for implementing the Ujjwal Discom Assurance Yojana (UDAY) to March 31, 2017 from the earlier deadline of March 31, 2016.
UDAY Scheme
- Allows power DISCOMs in selected states to convert their debt into state bonds as well as roll out number of measures to improve efficiency at power plants.
- Seeks to ensure that struggling DISCOMs can shake off years of losses and start on a path to profitability. Assures the rise of vibrant and efficient DISCOMs: through four initiatives (i) Improve operational efficiencies of DISCOMs (ii) Reduce of cost of power (iii) Reduce interest cost of DISCOMs (iv) Enforce financial discipline on DISCOMs through alignment with State finances.
- Debt Burden: Shifts 75 per cent of power DISCOMs debt burden to states’ balance sheets. This step would result in interest cost savings to the tune of 3-5 per cent.
- State Power Bonds or loans: Selected states would be able to sell the balance 25 per cent as state-backed power bonds or loans which will carry interest rates of g-sec plus 50 basis points.
- Improve operational efficiency: by implementing steps like (i) swapping of coal linkages (ii) monitoring aggregate technical and commercial (AT&C) losses (iii) Focus on smart metering and feeder separation in states.
Why the extension has been provided?
- It would allow states, which could not participate in UDAY earlier to join the scheme.
- The extension of the timeline is also to give states that have given their in-principle approval a little more time to order their finances before signing the official document.
[3]Why rail budget
Context
NITI Aayog in its recent report has recommended to the PM to stop the convention of having a separate rail budget.
What does the report say?
- The report says that the separate rail budget has not been of use to the railway sector and has only become a mechanism to announce the popular measures.
- Railways minister have been using it to announce populist measures like new trains, stopping the existing trains and giving freebies.
- Seldom has the budget touched upon the matters related to making the fairs more viable or the need to augment the capacity.
- Separate railway budget brings along media and public visibility and hence, the ministry tries to make the budget populist.
- Also, a lot of resources are being wasted in creating a separate budget and the relation between the finance ministry and railways has become complicated due to this separation.
Is ending the separation of railways budget a solution?
- Assuming that merging the railway budget with Annual Financial Statement (Union Budget) will end populism is wrong.Railways is the lifeline of the people and no matter if the budget is separated or merged it will be looked upon by the citizens with a keen eye.
- Also blaming the media and people for populism and completely ignoring the politicians who use the budget themselves to gain popular support is also no correct.
However, merging the railway budget with Union budget has its own advantages:
- A railway budget within the Union Budget would not decrease the importance of railways as many believe. In fact the budget would become more streamlined and consensual with the involvement of the govt right from the start.
- As already said the process of a separate budget consumes a lot of resources. So a merged budget will cater to this problem.
- Railways should focus on better accounting practices and better tab on finances rather than focusing on an yearly separate budget.
When did this practice started?
- The East India Railway Committee, chaired by Sir William Acworth, hence also known as the Acworth Committee, pointed out the need for unified management of the entire railway system.
- On the recommendations of this committee and ratification of the resolution for separation in 1924, the government took over the actual management of all the railways, and also separated the railway finances from the general governmental finances, leading to the practice of presenting the Railway Budget separately from the general budget of India every year.
[4]DGCA to get more punitive powers
Context
- Directorate General of Civil Aviation (DGCA) will be allowed to impose fines and penalties on airlines and airports if the fail to comply with the air regulations.
- Civil Aviation ministry will send a proposal for amending Aircraft Law, 1937 to law ministry to give this authority to DGCA
Analysis
As of now DGCA is empowered to suspend airlines/airport operations or seize their licences. There is no power with the DGCA to impose fines and penalties.
Since the power of imposing fines has not been there with DGCA, in many cases of offence or non compliance they would not take any action since suspending operations and licences is an extreme step which hurts not only the airlines but also the customers in a big way.
Also, even for a minor violation the case had to be filed in the court by DGCA to take any action.
What are the various violations?
- Operating aircraft without the minimum crew, flying without valid pilot licence/medical fitness, not maintaining airports.
- Many of these violations can be dealt with by imposing a fine.
- However, it must be noted that the commercial disputes i.e between airlines and consumer cannot be dealt by imposition of fine. There are separate regulations for that.
Financial autonomy also on the cards
DGCA will be made financially autonomous, which means that it would be able to spend money without the approval of civil aviation ministry.
Conclusion
Although, empowering DGCA is a welcome step but many experts feel that DGCA need to be totally revamped before it can be given such wide ranging powers. DGCA has always been perceived as a non transparent body which churn out decision based on individual discretions. Thus, a change in the philosophy is first required before a change in the power.
[5]Army comes out against road work on China border
Context
Army has opposed the construction of 1500 km India- China frontier highway along the MacMahon line in Arunachal Pradesh.
Analysis
- This highway project with the cost of Rs 30,000 – Rs 40,000 crores has received a disapproval from the army.
- The Director General of Military Operation (DGMO) has cited that the road alignments proposed in the project have a serious implication from security point of view.
- DGMO has also opposed the state govt. Demand of opening all 8 advance landing ground for civilian use.
About the highway
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Conclusion
A meeting of all the stakeholders is expected to be scheduled soon to weed out all the apprehensions and problems pertaining to the project.
[6]‘NPAs dragging down credit growth, not rates’
Context
RBI governor said that the reason for slow credit growth is that the banks have constrained their lending due to their rising NPAs and not because they are charging high interest rates which makes people borrow less from banks.
Analysis
- Had the reason for slow credit growth been the higher interest rates, the credits disbursed by private banks should also have been less but that is not the case and in fact their loan books have been speedily growing.
- When compared to the private sector the non-food credit increase of Public sector banks (PSBs) is less.
- Steps must be taken to bring bank the PSBs into lending at a higher scale than present as private sector banks will not be able to compensate for the short of credit created by PSBs.
As silver lining in the yellow cloud
There is also a slight relief that the banks now are not lending indiscriminately which will ofcourse be helpful in case of the mounting NPAs.
Also, the recommendation in Economic Survey that the RBI should capitalize PSBs is not a right step forward as RBIs mandate is not that of owning the banks.
Conclusion
Often the blame on slow credit growth is put on the monetary policy. But it must be realized that monetary policy is not always the culprit, there are other serious problems which need to be rectified and put the credit growth in line with the expectations.
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