9 PM Daily Brief – 3 May 2016

Brief of newspaper articles for the day bearing
relevance to Civil Services preparation

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GS PAPER 2


[1] Italian marine may go home

The Hindu

What happened?

  • The lone Italian marine, Salvatore Girone, facing a murder charge in India could return home soon in the wake of a decision of an international tribunal at The Hague.
  • The verdict is the first big pronouncement of the PCA (Permanent Court of Arbitration, The Hague), after Italy approached it in June 2015.

Background

  • Two Italian marines — Massimiliano Latorre and Mr. Girone are facing the charge of murdering two Indian fishermen in 2012 off the Kerala coast. The fishermen were killed when the marines on duty aboard MV Enrica Lexie, an Italian-flagged oil tanker, fired at them.

Difference of opinion

  • Differences have cropped up between Italy and India over the details of the verdict which will govern the marine’s return.
  • While India has claimed that the verdict upholds the Supreme Court’s authority, Italian officials have said it is a vindication of their position that India has no jurisdiction.

Details of the judgement

  • The Tribunal left it to the Supreme Court of India to fix the precise conditions of Sergeant Girone’s bail.
  • This could include him reporting to an authority in Italy designated by our Supreme Court, surrendering his passport to Italian authorities and not leaving Italy without the permission of our Supreme Court.
  • Italy shall apprise our Supreme Court of his situation every three months
  • It  highlights that India’s arguments in this case have been “recognised” and the authority of the Supreme Court has been upheld.

[2] Supreme Court panel to monitor MCI

The Hindu

Supreme Court used its rare and extraordinary powers under the Constitution to set up a three-member committee, headed by former Chief Justice of India R.M. Lodha, to oversee the functioning of the Medical Council of India (MCI) for at least a year.

Why?

  • Because Parliamentary Standing Committee report one month back states that medical education and profession in the country is at its “lowest ebb” and suffering from “total system failure” due to corruption and decay.
  • And MCI is an “ossified and opaque body” unable to cope with the “humongous” task of managing medical education in over 400 colleges across the country.

What are the views of the court related to MCI and Medical education?

  • “Quality of medical education is at its lowest ebb, the right type of health professionals were not able to meet the basic health needs of the country. Products coming out of medical colleges are ill-prepared to serve in poor resource settings like Primary Health Centres. Graduates lacked competence in performing basic health care tasks. Unethical practices continued to grow. The MCI was not able to spearhead any serious reforms in medical education,” the judgment said.
  • “The MCI neither represented the professional excellence nor its ethos under the MCI Act,”

What will Lodha committee will do?

  • Will have the authority to oversee all statutory functions under the MCI Act.
  • All policy decisions of the MCI will require approval of the Committee.
  • Will be free to issue appropriate remedial directions.
  • Will function till the Central Government puts in place any other appropriate mechanism after due consideration of the Expert Committee Report.

Unethical practices

  • Medical professionals indulge in unethical practices
    • Like unnecessary diagnostics tests
    • Surgical procedures in order to extract money from hapless patients.

Conclusion:

  • Medical Council of India is unable to cope with task of managing medical education in over 400 colleges.
  • Game changer reforms of transformational nature are needed and three member committee set up by supreme court is the first step.

[3] Everybody loves a good quota

The Hindu

Issue

  • Reservation policy needs a revision.

Why in news?

  • Governments of Gujarat, Haryana and Rajasthan, are plagued by demands for reservation from powerful and aggressive communities.

An ‘innovative’ way to address these demands by the Gujarat Government

  • A 10 per cent quota for the economically backward among upper castes— that is, those with family incomes of less than Rs.6 lakh per annum (p.a.) .
  • It spreads the net so wide that the excluded group is minuscule. It is so inclusive that hardly anyone is left to protest.
  • But the problem still lingers on. Nobody would be an actual beneficiary from this policy and the poor will still not get the benefit of this quota (as everyone is included in the net).

Why we cannot rely on income as the basis for reservation?

Data on income can be obtained by following sources:-

  1. India Human Development Survey (IHDS)
    2. National Sample Survey Organisation (NSSO)  data
    3. Data on income tax
  • Whatever statistics we use, a Rs.6 lakh p.a. cut-off will exclude less than 5 per cent of the population from being eligible for reservations if the Gujarat example is followed nationwide.
  • Identifying the poor is a difficult task resulting in errors of both inclusion and exclusion.
  • This is particularly the case when incomes are growing rapidly and a household that is poor in one year may well climb out of poverty the following year.
  • So focussing on just the poor among the general category may be more difficult than we anticipate.
    Moreover, the demands for expansion of reservation have little to do with the poor among the so-called “general” category.
  • Most of these demands are emerging from angry young men — many of them with college education — among agriculturalist communities that have historically held considerable political clout.

Future of Reservation

  • Competition for government jobs is fierce.
  • Frustrated young men try to beat this insane competition by demanding inclusion in the reserved category.
  • The government salaries are increasingly becoming more lucrative,more so, with the Seventh Pay Commission around the corner.
  • If current initiatives for increasing employability and creating more manufacturing jobs succeed, this will reduce the pressure.

Long-term solution

  • It  requires re-evaluation of the fundamental nature of India’s reservation regime.
  • Affirmative action to make space for communities that have historically been subject to discrimination fits well with the Indian ethos of creating a level playing field and is part of the Indian Constitution.
  • But the patchwork implementation, particularly for the OBC classification that is currently in place, makes little sense and leaves room for powerful lobbies to unite around demands for inclusion.
  • One of the ways of dismantling the quota raj is to ensure that the reserved category certificate is not a currency that is hoarded by groups who no longer need it.
  • This involves periodic recertification/review into the reserved category.

For any revision, we need reliable data

  • Unfortunately, the current system has an established, if imperfect, procedure for notification of new groups into the reserved category but not for moving groups out of the reserved category.
  • A first step towards establishing such a process may be to ensure that we collect data on caste/tribe affiliation along with data on basic demographic and housing characteristics in the 2021 population census.
  • This would allow us to move past the exclusive reliance on the 1931 census and obtain information on the current socio-economic conditions of all castes and communities in India.
  • Without timely and accurate data we have no way of developing a rational system for responding to irrational  demands.

[4] Arms and the middleman

The Hindu

Allegations of wrongdoings in military procurements are as old as independent India.

  • No one gets punished whether it was the case in the jeep scandal, and that was the case in Bofors, HDW scandals and after the Tehelka exposé.
  • One of the least discussed aspects of military scams in recent years is how most of the allegations against major middlemen and companies that emerged in Operation West End have all disappeared.
  • Atlast CBI closed the case saying there was no evidence to nail the accused.
  • And what next? There is no public scrutiny when CBI and other agencies finally give up.

All defence scandals have an international dimension to them.

  • Money paid originates from the government exchequer but it is paid abroad.
  • Commissions are distributed across secretive tax havens.

Investigation agencies does not have skills:

  • These cases are so complex because it involves global financial transactions, especially when it involves tax havens, shell companies and proxy directors.
  • But our agencies does not devised any significant skills in tracking global financial transactions of these kind.

What is the role of politics?

  • Arms deals continue to be a key source of such illegal funding. Some other joined this race like money from real estate, land deals, mining, etc.
  • Black money, including that from arms deals, has a powerful role in Indian politics.
  • Most of the Political parties, suck in massive amounts of black money to sustain their operations and their lavish election-time spending.

If India wants to come out of this vicious cycle of scams she needs to:

  • Stop being the world’s largest importer of arms and take a strategic turn towards indigenous procurement.
    • And to create a robust military-industrial complex in India, a restructuring of its engineering curriculum, its procurement procedures, military research systems, etc. are required.
    • ‘Make in India’ is a good first step, but for now it is a mere slogan.
    • Should abandon ongoing expensive procurements from abroad, this will push Indian private sector into the procurement cycle.
    • If India is making procurements from abroad, she will end up paying high commissions to middlemen to grease their palms

Conclusion

  • India keeps learning the wrong lessons from defence scams.
  • It must first stop being the world’s largest importer of arms and take a strategic turn towards indigenous procurement.

[5] Beijing unveils doctrine to counter U.S. ‘Pivot’

The Hindu

What happened?

  • Foreign ministerial Conference on Interaction and Confidence Building Measures in Asia (CICA) held in Beijing.

Doctrine to counter U.S. ‘Pivot’

  • China has announced the failure of the “Rebalance” strategy of the United States, and has invited Asian countries to join Beijing
  • And it has formally invited its  neighbours to pursue a regional security doctrine that is led by Beijing, to  frame a security governance model with “Asian features”.
  • Asian features’ include openness and inclusiveness, and China strongly opposes exclusivity.
  • According to China, the launch of the Asia-Pacific Rebalance strategy by the U.S. in recent years did not bring Asia peace, but only uncertainty.
  • It proved that a U.S.-led alliance system is not the right option to safeguard the peace and stability of Asia.

Why this doctrine

  • Tensions between the U.S and China have spiked, after the Chinese responded to the “Pivot to Asia” with fresh activism in the South China Sea (SCS), including construction of artificial islands within waters claimed and controlled by Beijing.

“Brighter future for Asia”

  • China’s regional security model, will continue to strive for the integration of the Chinese Dream — China’s aspirational goal for energising “national rejuvenation” — and the Asian Dream “to create a brighter future for Asia.”

“Internal Matter”

  • China have asserted that an Asian homegrown solution was the best way to resolve SCS disputes, rather than interference by “outside” powers.
  • Russia, has stressed in Beijing that the SCS issue should not be “internationalized.”

[6] Farm sector hitch in FTA talks with New Zealand

The Hindu

News

  • President Pranab Mukherjee visited new zealand.

Issue

  • Free trade agreement

Why FTA between India and New Zealand is taking time

President Pranab Mukherjee said the government was not maintaining silence on the issue of FTA with NZ, but was carefully considering the issues involved.

  • Differences were mainly in regard to agricultural products.
  • There are some problems about agricultural products.
  • Although,he mentioned that Indian agriculture sector now does not need full protection.

Other takeaways from the visit

  • Even though diplomatic ties with New Zealand were established soon after independence, there had not been many visits. Hence, this visit assumes greater importance.
  • Also, New Zealand though geographically distant, had come forward to support India’s “legitimate claim to permanent membership of the Security Council.” In such a scenario such visits that boost the relationship are extremely significant.

Pranab Mukherjee on benefits that can accrue to India from expanding ties with New Zealand.

  • If India develops the cooperation in agriculture, in maintaining cold chain management with New Zealand, it can learn much and greatly benefit from their experience and expertise.
  • He expressed the hope that the third summit of the Forum for India-Pacific Island Cooperation, to be held in Papua New Guinea, would have high level political representation. The centre of gravity in economic affairs in the world, he said, was shifting away from the G-8 countries, and even the European Union and North America, and was moving towards emerging economies.
  • These facts can’t be ignored. The economic scenario is changing and we cannot be left behind.

Other peripheral initiatives took during the visit:

  • Mr. Mukherjee addressed students and faculty members of the Auckland University of Technology.
  • A memorandum of understanding on an ICCR Chair of Indian Studies in the University of Victoria was signed on the occasion.

[7] Lipstick on a pig

Livemint

  • Context
    The author has praised  Indian policymakers as they have steadfastly refused to kiss the pig called “software patents”, despite it being dressed up in the lipstick of “innovation”. This gives Indian software developers the freedom to innovate without worrying about patent lawsuits.Lipstick on a pig” is a popular Americanism for making superficial or cosmetic changes that disguise the true nature of a product.

Lobbying by the MNCs

Ever since the Indian Patent Office (IPO) issued the revised Computer Related Inventions Guidelines, a host of MNCs has been busy trying to lobby the Indian government to overturn these guidelines.

Information Technology

  • Information Technology has gained special significance in the past two decades.
  • It has emerged as a vital tool for scientific development.
  • The term “Information Technology” encompasses the whole gamut of inputting, storing, retrieving, transmitting and managing data through the use of computers and various other networks, hardware, software, electronics and telecommunication equipment.
  • Industry has witnessed rapid growth due to the computerization of activities which were hitherto carried out manually or mechanically.
  • The advent of the internet and the World Wide Web (www) coupled with the exponential growth of processing and storage power has led to capabilities previously unheard of.
  • The core elements in the application of Information Technology are computers and their peripherals.

Computer Related Inventions (CRIs)

  • Computer Related Inventions (CRIs) comprises inventions which involve the use of computers, computer networks or other programmable apparatus and include such inventions having one or more features of which are realized wholly or partially by means of a computer programme or programmes.
  • Creators of knowledge in the domain of Computer Related Inventions (CRIs) have consistently endeavored for appropriate protection of their IPRs.
  • The patent regimes have to cope up with the challenges of processing of patent applications in the field of computer related inventions and related technologies.
  • This has been a subject of international attention in the recent past.
  • Major patent offices across the world are confronted with the issue of patentability of CRIs.
  • They have developed examination guidelines/ manuals for examination of patent applications from these areas of technology so as to achieve uniform examination practices.  

Legal Provisions relating to CRIs

The Patents (Amendment) Act 2002 (No. 38 of 2002) came into effect on 20th May, 2003.

  1. It amended the definition of invention under section 2(1)(j) as “Invention” means a new product or process involving an inventive step and capable of industrial application;

 

and as per section 2(1)(ja)2 “inventive step” means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art;

Further, section 2(1)(ac)3 states that “”capable of industrial application”, in relation to an invention, means that the invention is capable of being made or used in an industry;”

  1.       The Patents (Amendment) Act, 2002 also introduced explicit exclusions from patentability under section 3 for Computer Related Inventions (CRIs) as under:

(k) a mathematical or business method or a computer programme per se or algorithms;

(l) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions;

(m) a mere scheme or rule or method of performing mental act or method of playing game;

(n) a presentation of information;

Patents are not suitable for software

  • Software developers, and researchers who study innovation, contend that the US, which has the most permissive patenting system in the world, made a huge mistake by bringing software under the ambit of patentability.
  • Software falls within the realm of abstract ideas, and  it is impossible to draw boundaries around abstract ideas.
  • Patent seekers have turned into “clients” and not applicants at United States Patent and Trademark Office (USPTO) and USPTO (much like IPO) has been chronically strained for resources, with patent examiners often having just a dozen hours to assess a patent application.
  • The flood of poor quality patents in the US has led to a surge in lawsuits, and the rise of patent trolls—organizations that make nothing, and whose sole business is to acquire patents and use them to extract royalty payments from unsuspecting users.
  • Under the Patent Cooperation Treaty, if India allows software patents, it will have to give priority to the existing patents that have been filed in other countries.

India should not make the same mistake

  • If these patents are granted in India, MNCs will have the right to exclude Indian companies from using their claimed inventions.
  • This will slow down the pace of innovation, and nip India’s growing software product ecosystem in the bud.
  • It is to the credit of Indian policymakers that they have steadfastly refused to kiss this pig called “software patents”, despite it being dressed up in the lipstick of “innovation”.
  • This gives Indian software developers the freedom to innovate without worrying about patent lawsuits.

GS PAPER 3


[1]  Core sector output accelerates to 16-month high of 6.4 %

The Hindu

News

  • India’s infrastructure sectors has their highest growth in 16 months in March 2016, the story is same for core industries climbing 6.4 per cent, mainly by the output of cement, electricity, fertilisers and refinery products.
  • Index in March followed a growth of 5.7 per cent in February, leading economists to cautiously consider it a sign of likely recovery in the economy.

Now the question arises: Is this is a sustained trend?

  • This is clearly a sign of recovery setting in the economy. The reforms that took place in both coal and power sectors will start to bear fruit now.

The pickup in the cement and refinery products sectors implies demand is picking up, is possibly due to the infrastructure demand being pushed by the Central government.

Poor performance of the Manufacturing Purchasing Managers’ Index (PMI) in April as being inconsistent with the seemingly sustained growth in the core sectors.

PMI in manufacturing

  • It is unusual that the core sector numbers are up, but PMI in manufacturing has gone down.
  • The data is most unreliable, there is no consistency.
  • Even this growth, of 6.4 per cent, is not very strong, historically.
  • The growth should be in the double digits. But it is showing a pickup, and this is good news.

Growth in the coal sector slowed to 1.7 per cent in March compared to 3.8 per cent in February, while the crude oil sector contracted sharply by 5.1 per cent in March compared to a growth of 0.8 per cent in February.

  • These numbers are throwing up results that are not in tune with what is happening in the economy.
  • So, one can’t say conclusively that the economy is on the mend.
  • Investment is happening, activity is happening on government-led capital expenditure (capex) in road, rail and defence.
  • But private capex is not really happening.

Another reason why recovery might be premature is that:

  • The strong growth in March 2016 could likely be a result of a base effect brought on by the contraction seen in the index in March 2015.
  • The index of eight core industries contracted 0.7 per cent in March 2015.
  • This data needs to be seen keeping the base effect in sight.
  • To get a more accurate picture, we need to compare March 2016 with March 2014.
  • This comparison shows that the index grew 5.6 per cent in March 2016 over its level two years previously.

Conclusion

  • Sharp rise in cement, electricity, fertiliser and refinery products output
  • The growth should be in the double digits.
  • And one should be careful in using base year.
  • Still it is a good news for economy.
  • All are hoping for sustained increase in growth.

The Hindu

Context

  • Concerns of developing nations in WTO.

Double Disadvantage

  • Developing nations, including India, are facing a double disadvantage at the World Trade Organisation’s (WTO) Dispute Settlement Body (DSB). These are:

1. Lack of legal experts

  • There is  lack of a sufficient pool of trade law experts to represent India  effectively at the DSB.
  • There are only a few Indian law firms in trade law practice.
  • There  should be an increase in the number of Indian experts  so that the government can rely entirely on local firms to deal with such issues.
  • Commerce ministry is  trying to build capacity to comprehensively track the trade restrictive measures taken by other countries, especially those that hurt India’s exports.

2. Non-trade issues at WTO

  • There  have been efforts by the developed world  to include within the DSB, the disputes arising out of decisions in other forums, specifically labour and environment issues.
  • India has been advocating that certain issues, including labour and environment, must be kept out of the WTO’s purview and instead be dealt with by the global bodies concerned such as the International Labour Organisation and the United Nations Framework Convention on Climate Change.
  • Such cases would pose a great challenge for developing nations because very often these are conditions that add as restrictions in the freedom of trade particularly for developing countries.
  • With the global trade slowdown and the consequent rise in trade restrictive measures taken by many countries, the world is witnessing increasing use of trade remedies (such as anti-dumping duty, safeguard duty and countervailing duty).
  • Many of these measures are also ending up as disputes at the DSB.

Stand of the Developed world

  • The developed world, however, is keen that the WTO addresses, what they call, global trade’s “new challenges”, including labour and environment.

[3] Divestment: More than just revenue

Livemint

Financial return cannot be the sole reason for investing in PSUs. They have to serve social/strategic purposes: NITI Aayog

 

  • NITI Aayog, will place its recommendations on divesting the government’s stake in public sector units (PSU), and strategic sale of sick units by April-end.

Importance

  • It will play an integral role in changing the Union government’s perspective towards PSUs.
  • Will hopefully clarify the role of the government versus market on the one hand and government ownership versus regulation on the other.

Government is consider it a tool to raise resources to cover the fiscal deficit with little focus on market discipline or strategic objective.

  • Keeping with the tradition, this year’s budget has set the total target for divestment for 2016-17 atRs.56,500 crore.

Divestment is an important aspect for improving the structure of incentives and accountability of PSUs in India.

  • It is the approach towards divestment that defines the incentive for any PSU to run efficiently.
  • An ad-hoc approach towards divestment only reduces the incentive for the firm’s managers to make significant investment in the enterprise.
  • Fourteenth Finance Commission also suggest various measures to modify the divestment policy in its report.

How to go beyond this?

  • First thing is to define the priority sectors for the government based on its strategic interests.
  • Considering the limited resources with the government and its diverse role, it is evident that the government has a low capacity to manage PSUs.
  • Use of scarce resources, including land and financial capital, has high opportunity cost and the justification for investment in PSUs has to be in terms of generation of adequate social and strategic returns.
  • Furthermore, financial return cannot be the sole reason for investment in PSUs. They have to serve social/strategic purposes.

Role of PSU:

  • To maintain competition in the sector and limit excessive monopoly.

 

  • Government ownership is required for sectors with strategic relevance such as defence, natural resources, etc.
  • Therefore government should, exit non-strategic sectors such as hotels, soaps, airlines, travel agencies and the manufacture and sale of alcohol.

 

The outlook towards strategic divestment should move from the current policy of emphasizing on public ownership and retaining majority shareholding to looking at the strategic interest.

What is the current divestment policy?

  • Government has to retain majority shareholding, i.e., at least 51% and management control of the PSUs.
  • This type of policy limits the scope to create divestments that would allow easy exit for the government from non-strategic sectors.
  • Even strategic investment as per the department for divestment is limited to less than 50% shares and management control. Merely allowing ownership of less than 51% will be the first step in the right direction. Eventually, the objective of divestment should be to limit the government ownership to strategic sectors.

It is important to realize that ownership is not a substitute for regulation.

  • Therefore, instead of creating PSUs in non-priority sectors,
  • the government should look into strengthening the regulatory framework that ensures efficient market conditions.
  • In fact, regulation should be extended to both public and private entities. For instance, Air India, India’s flag carrier airline, was a monopoly for long.
  • However, with a number of new entrants in the market after the sector was liberalized, there is no longer a need for the government to run the airline and spend taxpayers’ money in bailing it out year after year.
  • Hence, the government should consider exiting the airline business and instead create regulations that would ease the entry of new players.
  • The regulations should also ensure that the basic necessities of the consumers are met.

Conclusion

  • It is time that divestment is not seen as an option to cover for short-term fiscal gains; instead, it should be part of a strategic plan to improve the production of goods and services in India.

What is Disinvestment?

  • “Investment refers to the conversion of money or cash into securities, debentures, bonds or any other claims on money. As follows, disinvestment involves the conversion of money claims or securities into money or cash.”
  • Disinvestment can also be defined as the action of an organisation (or government) selling or liquidating an asset or subsidiary. It is also referred to as ‘divestment’ or ‘divestiture.’
  • In most contexts, disinvestment typically refers to sale from the government, partly or fully, of a government-owned enterprise.
  • A company or a government organisation will typically disinvest an asset either as a strategic move for the company, or for raising resources to meet general/specific needs.

1. The lead article of the day is covered under Editorial Today. Click here to read.

2. Science and Technology and Environment articles has been left out, they will be covered in weekly compilation for next week.

BY: ForumIAS Editorial Team 


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