9 PM Daily Brief – 11 May 2016

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

What is 9 PM brief?

• GS PAPER 1
  1. Why India loves to vote {Society}
  2. Miscounting the poor {Social Issue}
  3. Online voices of offline people {Social Issue}
• GS PAPER 2
  1. ‘SC cannot review Speaker’s actions’ {Polity}
  2. Freedom to map India {Bills and Laws}
  3. The meaning of Pokhran and Chagai {Foreign Policy}
• GS PAPER 3
  1. Centre may cut 5 in 5/20 airline rule {Economy}
  2. Railways may go Amtrak way sans funds: Prabhu {Economy}
  3. MPC to be set up once Finance Bill is notified: Das {Economy}
  4. Bankruptcy code: Will the govt be able to achieve its objective? {Economy}

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GS PAPER 1

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 [1] Why India loves to vote

The Hindu

Voters:

• Indians clearly like to vote.
• Evidence from the ongoing Assembly elections shows that turnouts are above 80 per cent.
• Statistics show a steady rise in the turnout figures over the last three decades in several parts of India.
• The gap between women and men voters has also steadily reduced and in some States female voters outnumbered males.

Some reasons for this increasing turnout

• One popular theory proposes that poor people vote because they are intimidated into doing so.
• Another theory is that people vote in return for inducements.
• But recent research across India has shown that those who spend the most do not always win elections and voters do not feel any obligation to vote for those handing out freebies.
  • In fact, they often accept the goodies from all parties but vote for only one.

These, however can not be the only reasons otherwise, how would one explain the huge amount of NOTA votes whereby a voter does not vote for any political party. So, when a voter is pressing NOTA button, there is no question of intimidation and expectation of inducements etc.

What could then be the plausible reasons for increase in voter turnout?

• As a current three-year study by scholar shows, more and more people vote for development interests rather than merely to support the party that projects their ethnic or caste identity.

Also, research has shown that historically high percentages in voting do not provide any indication of results and dramatic upsets have been caused both by low turnouts and high ones.

• Research revealed that the act of voting itself holds enormous significance for people because on election days the most important actors are not the politicians but the voters. While politicians seemingly dominate campaigns, people point out the irony of even the most arrogant heads being bowed to beg for votes and the most corrupt of them being unable to buy a victory — thereby conceding that it is ordinary people who hold power at least during elections.
• Many noted that it is also the only time they see the administration doing their work free from political interference, thanks to the Model Code of Conduct imposed on the political establishment.
• Being able to vote gives people self-respect and dignity. For the vast majority of the impoverished and ostracised population of India, being able to cast a vote freely is an affirmation of their status as human above all and as equal citizens of India.

Voting process fosters equality

• A polling station in India is the only public space of its kind where there is genuine social diversity, where women are unafraid, where there are no VIPs and no caste, class, colour or religion gets a preference in the voting queue.
• No sense of entitlement or privilege works. Given India’s pernicious and vicious inequality, this is a radical arena.
• The procedure inside the polling booth reinforces the dignity of the voter further where she is treated politely and efficiently by officials, has her name called out without mention of her father or husband, sees her name on an official record, proving she is an individual in her own right.
• Each of these actions reaffirms the identity of ordinary people as equal citizens of India, each of whom counts and is worthy of respect — and this alone for many was a good reason to vote.
• In fulfilling their duty to vote, people noted they had claimed their most fundamental right as citizens.
• It should not surprise us therefore that people proudly display their inked fingers after voting, for it is a material manifestation of a bundle of emotions that entering the polling booth brings with it.

Conclusion:

• So in India, elections are the most important constitutionally radical moment in public life. By exercising their franchise, voters are able to reacquaint themselves with the values that democracy promises — equality, dignity and civility — values that sadly only manifest themselves on election days. We need to preserve their integrity at all cost.

[2] Miscounting the poor

Indian Express

Context

• The author has given response to the conclusion of  an earlier article ‘A higher well-being’

Brief of ‘A higher well-being’

• Actual well-being of the household will be higher than what is indicated by the poverty line
• Methods used by India to conclude poverty line does not take into account many aspects.
• Aspects such as the expenditure on health education, sewage drainage, cleanliness etc.

• Editor gives stats that studies have shown that inclusion of social schemes into account will reduce the amount of poverty.
• Since most schemes are targeting poor. Cases like PDS clearly shows variation in poverty ratio.

Author does not agree with this, according to him

• Poverty lines were meant to serve essentially two purposes:
• Identifying those who are deemed poor according to some social norms,
• And given the norms, estimating their proportion in the population.
• In other words, calculating the so-called head count ratio (HCR) and indicators of the depth of poverty;
• And, given the social objective of eradication of poverty as soon as feasible, devising policies towards poverty eradication, and monitoring their performance in achieving the social objective.

Conclusion

• The concepts of well-being and happiness had no role in setting the norms.

[3] Online voices of offline people

Livemint

Data released:

• Only 36% of news on the Internet is about women in India.
• Social networking platforms such as Twitter are male-dominated, with men taking up 64% of news space.
• However, when it comes to online reporters, India outnumbers most countries with 59% women, while neighbouring Bangladesh does not have a single woman involved in reporting news online.
• Across Asia, only 9% of the news on the Internet concerns women.

The data clearly shows that age-old discriminatory practices against women in the mainstream media are now being passed on to online media as well. And this discrimination in the media comes from the discrimination practised in our society.

If one will go to establish digital infrastructure or impart digital literacy in rural areas, more often than not, he will find that:

• Most mobile users in a community or village are men, and not women.
• Women, if they have access to a phone, usually get a second-hand instrument.
• And often have to share it with other women in the household.
• In fact, according to a report titled Connected Women by GSMA, 72% of women do not have access to mobiles in India.

Now the question arises:

Is access to media only related to gender discrimination or does the discrimination go beyond gender? What role does being economically weaker, caste, place of residence, and religion play?

• It seems that the discrimination practised in our daily lives is gradually becoming a part of the digital medium.
• According to an article in the March issue of Caravanmagazine: “Its (mainstream media’s) coverage of scheduled castes and adivasis, who constitute over a quarter of India’s population, has historically been inadequate.
• Mostly, it appears only after heinous atrocities, when dalit children are burnt alive, when a panchayat orders a low-caste rape victim’s nose chopped off, or when an entire family is hacked to pieces.
• According to the same Caravan article, “In 1996, Kenneth J. Cooper, a reporter for the Washington Post, wrote about not being able to find a single dalit journalist in India.”

Dalits, tribals, socially backward, financially weak, and communities that are geographically remote are always ignored over other news.Also, environment hardly ever makes it to the front page.

The need for printing, publishing and distribution means high cost. Alternative media houses, alternative journals and even alternative voices in the digital space, on the other hand, have managed to significantly reduce the cost of production and still reach out.

The digital medium has also become an agent for the dissemination of news and information from the ground. Take, for example,

• Right To Information Act exposés
• Raiot that raises issues in the hardly-in-the-mainstream-news northeastern state of Meghalaya
• even India Resists that throws light on people’s struggles and democratic movements

Conclusion:

• These days, while scrolling through my Twitter feed, I see a lot of people questioning the way news is reported in the mainstream media.
• It is a sign that we will see more alternative media voices in the digital space in the time to come.
• Whether or not digital media (read alternative media) will become the voice of the unheard, it must avoid becoming party to the discriminatory approach that is seen in mainstream media.
• The challenge is to make this digital media perpetually democratic and universally accessible, without discrimination.

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GS PAPER 2

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[1] ‘SC cannot review Speaker’s actions’

The Hindu

News:

• The Centre on Tuesday challenged the Supreme Court’s jurisdiction to examine the Speaker’s authority to declare the Aadhaar law as a ‘Money Bill’.
• It is based on a plea filed by Rajya Sabha MP and former Union Minister Jairam Ramesh that the passage of the law is a ‘constitutional fraud.’

In a preliminary hearing before a Bench led by Chief Justice of India T.S. Thakur, Attorney-General Mukul Rohatgi,

Representing Mr. Ramesh, senior advocate P. Chidambaram said:

• The passage of the Aadhaar law as a Money Bill in a “brazen and malafide” manner, bypassing the approval of the Rajya Sabha, was a violation of the Basic Rule of Law enshrined in the Constitution, and thus seeking a rare remedy under Article 32 is perfectly justifiable.
• Centre was Countering Mr. Rohatgi’s argument that Article 32 could then be invoked for every transgression by citing it as a violation of the Rule of Law.
• Mr. Chidambaram replied that “passing a non-Money Bill as a Money Bill is not ‘everything’.”
• “One House of the Parliament has been deprived of its constitutional authority.”
• “Please do not make a caricature of my arguments by saying that a Speaker certifying a non-Money Bill as a Money Bill is ‘everything’.”

[2] Freedom to map India

The Hindu

Issue

• Criticism of the controversial draft  Geospatial Information Regulation Bill.

Already discussed, refer A license to kill Innovation.

Additional Points:-

Applications of Geospatial maps

• They allow us to capture the extent and nature of air pollutants around us.
• Plot the unsustainable plundering of our groundwater.
• Gauge the spread of a new flu outbreak to confirm if official estimates of, say, a malaria outbreak are understated.
• Simply plot restaurant options in a neighbourhood.

Conclusion

• Much like telecom spectrum, geospatial imagery too is a resource that is only beginning to be valued.
• It would be better mined — to the profit of the public and the government — with a transparent policy that values information more than fines.

[3] The meaning of Pokhran and Chagai

The Hindu

Why in news?

• Exchanging information on nuclear doctrines and discussing confidence-building measures could be the best scenario for India and Pakistan on the 18th anniversary of Pokhran-II

Pokhran

Pokhran is a city and a municipality located in the Jaisalmer district of the Indian state of Rajasthan. It is a remote location in the Thar Desert region and served as the test site for India’s first underground nuclear weapon detonation.

Chagai

Chagai-I is the code name of five simultaneous underground nuclear tests conducted by Pakistan on 28 May 1998.The tests were performed at Ras Koh Hills in the Chagai District of Balochistan Province.

Key points:

• The clear and present danger to the subcontinent stems from the intent behind Pakistan’s piling up of nuclear weapons.
• These weapons are not for show, and key functionaries in Pakistan have threatened their use against India. Equally, an extremist mindset in India in taking national security decisions must be eschewed.
• India’s hawks naively believe that Pakistan intends its nuclear arsenal merely as a deterrent.
• If a Kargil-type scenario happens in reverse and the conflict escalates to new fronts, India and the world would not want to test the rationality of Pakistan’s nuclear decision-makers.
• Exchanging information on each other’s nuclear doctrines and a robust, consistent discussion on possible nuclear confidence-building measures, and quiet attempts to arrest the tide of sliding bilateral relations could be the best scenario on the 18th anniversary of Pokhran-II.

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GS PAPER 3

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[1] Centre may cut 5 in 5/20 airline rule

The Hindu

News:

• The government is planning to allow domestic airlines with 20 aircraft to fly international routes.
• And is thinking to remove restriction of five years of local operations.
• Airlines would also be required to deploy at least 20 per cent of their total aircraft capacity on domestic sectors in order to secure international flight permits.
• However domestic carriers may still be required to comply with the present fleet norms of having at least twenty planes.

Present 5/20 rule:

• Airlines in India are permitted to fly abroad only if it has five years of domestic flying experience
• And at least 20 aircraft in its fleet.

Some airlines are in favour of the new rules proposed because they do not want to wait for international operation.  And they are in view that these present rules dent their market share and yield an unfair advantage for new players.

The proposal to replace the 5/20 norms with a ‘20/20 rule’ appears to be a compromise between logic, global precedence and domestic compulsions.

Negative side of new 20/20 rule:

• It defies the logic of identifying an airline’s financially sustainability and ability of operating international flights.

Conclusion:

• Airlines and people have to wait for new international airlines on board, till the government passes the new aviation policy of 20/20.

[2] Railways may go Amtrak way sans funds: Prabhu

The Hindu

News:

• The Indian Railways needs massive investments to remain sustainable or it risks meeting the same fate as beleaguered American rail utility Amtrak, Union Railways Minister Suresh Prabhu said.

There is a need for investment in railways in India.

• In China, the investment in railways is about Rs. 9 to 10 lakh crore whereas here it is Rs. 40,000 crore a year. As a result, rail traffic is going to the other sectors.
• Government have decided to enhance investment into the rail sector and it will go up in the coming years

Concern:

• Indian Railways may suffer a similar fate as the U.S. railroad service Amtrak, which suffered due to lack of timely investment.
• The Railways market share in freight has eroded over the years.
• The share of railways in the total transportation of freight traffic has declined from 89 per cent in 1950-51 to 36 per cent in 2007-08.

India should learn from Amtrak.

Additional information:

• Railway minister Mr. Prabhu inaugurated the Late Comrade Umraomal Purohit Memorial Research Centre.
• The centre will conduct research related to trade union movement in India and abroad.

[3] MPC to be set up once Finance Bill is notified: Das

The Hindu

Context

• Monetary Policy Committee (MPC).

Already discussed, refer earlier article LS clears decks for MPC

Additional points

• Process to constitute Monetary Policy Committee will be initiated after passage of Finance Bill and its notification as an Act.
• MPC is important in the context of the government pushing for lower interest rates to spur the sluggish demand in the economy.

[4] Bankruptcy code: Will the govt be able to achieve its objective?

Livemint

Issue

• Analysis of Insolvency and Bankruptcy Code (IBC) which has been passed by the Lok Sabha.

Highlights of the Code

• The Code creates time-bound processes for insolvency resolution of companies and individuals.  These processes will be completed within 180 days.  If insolvency cannot be resolved, the assets of the borrowers may be sold to repay creditors.

• The resolution processes will be conducted by licensed insolvency professionals (IPs).  These IPs will be members of insolvency professional agencies (IPAs).  IPAs will also furnish performance bonds equal to the assets of a company under insolvency resolution.

• Information utilities (IUs) will be established to collect, collate and disseminate financial information to facilitate insolvency resolution.

• The National Company Law Tribunal (NCLT) will adjudicate insolvency resolution for companies.  The Debt Recovery Tribunal (DRT) will adjudicate insolvency resolution for individuals.

• The Insolvency and Bankruptcy Board of India will be set up to regulate functioning of IPs, IPAs and IUs.

Key Issues and Analysis

• Time-bound insolvency resolution will require establishment of several new entities.  Also, given the pendency and disposal rate of DRTs, their current capacity may be inadequate to take up the additional role.

• IPAs, regulated by the Board, will be created for regulating the functioning of IPs.  This approach of having regulated entities further regulate professionals may be contrary to the current practice of regulating licensed professionals.  Further, requiring a high value of performance bond may deter the formation of IPAs.

• The Code provides an order of priority to distribute assets during liquidation.  It is unclear why: (i) secured creditors will receive their entire outstanding amount, rather than up to their collateral value, (ii) unsecured creditors have priority over trade creditors, and (iii) government dues will be repaid after unsecured creditors.

• The Code provides for the creation of multiple IUs. However, it does not specify that full information about a company will be accessible through a single query from any IU.  This may lead to financial information being scattered across these IUs.

• The Code creates an Insolvency and Bankruptcy Fund.  However, it does not specify the manner in which the Fund will be used.

What else government needs to do?

• The government now needs to create state capacity for the four pillars of institutional infrastructure required for the Code to work.
• And it needs to plan a transition from existing provisions of laws, pending cases and financial regulations.
• The IBC is a complex procedural law which prescribes what must happen after default. The prescribed procedure assumes that the four pillars of institutional infrastructure exist:

(i) Insolvency and Bankruptcy Board of India,

(ii) insolvency professionals,

(iii) insolvency professional agencies

(iv) information utilities.

Unless these four pillars are in place, the Code will fail.

Insolvency and Bankruptcy Board (IBB)

• The new regulator is the Insolvency and Bankruptcy Board (IBB), the focal point of the IBC. Many elements of the insolvency process are specified in regulations that the IBB will issue.
• The IBB will need to establish a feedback loop of identifying gaps in the bankruptcy process, and use a sound regulation-making process to revise the regulations.
• IBB will also be the regulator for the two new regulated industries—information utilities and insolvency professionals.
• On day one, these industries do not exist.

Insolvency Professionals and Agencies

• Under the Code, the Bankruptcy Board will regulate insolvency professional agencies (IPAs). The primary function of the IPAs will be to regulate insolvency professionals (IPs) by conducting examinations to enrol them, and enforcing a code of conduct.
• The IPs will be responsible for carrying out the resolution process and managing the company during insolvency resolution.

What else is in the Code?

• It also requires adjudication by two agencies:

(a) National Company Law Tribunal under Companies Act, 2013, which has not yet been set up, and

(b) Debt Recovery Tribunals (DRT) which are overloaded with pending cases.

Government must have a transition plan

• Multiple cases dealing with recovery actions by lenders, resolution and winding up are pending at present.
• A transition plan must be created ahead of time, put up for public inputs and finalised.
• New institutions, arrangements and funds must be put into place before the new law comes into force.
• Without this, the transition process will be chaotic.

Ensuring interoperability with existing laws

• The IBC interacts with numerous laws. For example, the Code visualises rapid closure of firms in liquidation.
• However, earlier attempts to do the same have run into conflict with labour laws and the Industrial Disputes Act, 1947.
• These conflicts must be examined, analysed and steps must be taken to ensure that this conflict does not reappear as case law to bedevil the implementation of liquidation under the IBC.

Modifying financial sector regulations

• Sector regulators such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi) and for Insurance Regulatory Development Authority (Irda) will need to review and revise their regulations to ensure rapid resolution of default under the IBC.

Summary

Enacting the IBC will be a great step forward for Indian economic reforms. But the gains for the economy will come only after an exercise in complex project management covering eight areas:

1. Creation of the regulator
2. Creation of an adequate National Company Law Tribunal
3. Creation of an adequate Debt Recovery Tribunal
4. Creation of Information Utilities
5. Creation of Insolvency Professionals
6. Drafting a transition process for existing cases
7. Ensuring interoperability with existing laws
8. Modifying financial sector regulations

Failure on any of these could mean failure to achieve the objective of the Code—a sound bankruptcy process.