9 PM Daily Brief – 12 May 2016

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

What is 9 PM brief?

• GS PAPER 1
  1. Thrift in education? {Social Issue}
• GS PAPER 2
  1. SC quashes TRAI’s call drop rules {Judiciary}
  2. A tale of two judgments {Judiciary}
  3. The cannabis dilemma {Bills and Laws}
  4. China, India and what a new ‘red telephone’ would mean for the world {Foreign Policy}
• GS PAPER 3
  1. It is disinvestment, not privatisation {Economy}
  2. Insure farmers against climate change {Agriculture}
  3. Hindustan Antibiotics to trial sick PSU closure policy {Economy}
  4. Govt. to define ‘new employees’ for EPS {Economy}
  5. Dual freight policy for iron ore goes {Economy}

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GS PAPER 1

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[1] Thrift in education?

Livemint

How much should India spend on education?

• The Education Policy of 1968, based on the recommendations of the Kothari commission (1964-66), decided that Indian public expenditure on education must be 6% of gross domestic product (GDP).
• This goal was reaffirmed in the New Education Policy of 1986 and its revision in 1992, with a suggestion that every attempt must be made to go beyond 6%.
• But there has been no comprehensive education policy articulated since then

Has any government ever felt of spending this much on education?

• India has never reached even near this goal.
• The closest it has come was in 2001, when this number hit 4.4%.
• The number has been over 4% only in three years since the goal was set
• it has hovered between 3.3% and 3.8% since the 1980s, and currently it is at 3.8%.

6% of GDP for public expenditure on education has become a commonly accepted norm across the world, with credibility drawn from actual experience across many countries.

• It is a directional and normative goal, not a precise measure for what may really be required for the educational well-being of any nation.

Let us look at just three key gaps:

1. Some well off countries have invested and built their systems while India is still in the investment and building phase.

• We are way short of our actual need of (e.g.) secondary schools, colleges and teachers.
• There are some critical parts of the education system where we have hardly invested, most notably in teacher education, physical & social sciences, humanities and vocational education.
• In this investment and build-up phase, we need more money than countries that are done with the build-up, but we are significantly short of them.
• This large cumulative investment gap stunts the system and its capacity structurally, i.e. this is a structural investment gap.

1. We cut corners and underfund almost everything by design, other than teacher salaries.

• Even on teachers, many states underfund the actual system requirement, by not appointing teachers and by hiring teachers at much lower salaries with short-term contracts.
• Almost every expenditure head is ludicrously underfunded, e.g. school budgets for teaching-learning material, training for teachers and principals, expenditure for basic things such as electricity bill and maintenance, research in colleges and universities.
• One shocking number that is emblematic of this underfunding: each child is supposed to get a nutritious mid-day meal at school for Rs.3.4. And this number has hardly been revised in the face of soaring food inflation.
• This operational funding gap makes ineffective, whatever we have built structurally, and eventually erodes it.

1. Proportion of population.

• Proportion of population in the age group of 6 to 21 is about 29% for India.
• With that high a proportion of the population to be educated, India needs proportionately more money, even if other things were to be equal.

Solution:

• It is clear that we need sustained public spending much in excess of what we have done, probably way over 6% of GDP.
• But this is not going to happen till India’s poor tax-to-GDP ratio, which stands at about 18%, which is very low if we compare to other developing countries.
• Education (and health) will suffer and so will India, till this matter of overarching governance and policy is addressed squarely.
• This is not a matter of finance, but of sustained political action over time, not merely by the professional and elected political class, but by the public, by all of us.

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GS PAPER 2

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[1] SC quashes TRAI’s call drop rules

The Hindu

What happened?

• Supreme Court has quashed the controversial Telecom Regulatory Authority of India’s (TRAI) call-drop regulations.
• This judgement has provided relief to the telecom sector.

Why?

• SC has termed these regulations “arbitrary” legislation whose actual intent is to penalise service providers rather than ensure quality service.
• As per these regulations, the assumption that  every call drop is a deficiency of service on the part of the service provider is plainly incorrect.

Road ahead

• The court has asked Parliament to frame a law on the lines of the U.S. Administrative Procedure Act.

Call drops

• Geographically cellphone towers cover areas in the form of a hexagon (this shape allows an equal coverage area to all points) and this area is called a zone.
• Calls placed within each zone are handled by the tower. Now obviously when your device moves from one zone to another, the call signals get handed off another tower.
• Call Drops happen when your device is no longer has the signal strength that the tower can detect. Another reason is that bandwidths allocated are being used elsewhere.

[2] A tale of two judgments

The Hindu

Context

• The author has shown the contrast between two judgements, one given by the Supreme Court and the Bombay High Court, related to “procedural established by law”.

Article 21 in The Constitution Of India

• Protection of life and personal liberty :- No person shall be deprived of his life or personal liberty except according to procedure established by law.

Difference between “Due process of law” and  “Procedure established by law”

Procedure established by law

• It means that a law that is duly enacted by legislature or the concerned body is valid if it has followed the correct procedure.
• In this the court would assess that whether there is law or not, whether the Legislature is competent to frame the law and whether it had followed the procedure laid down to legislate and would not assess the intent of the said law.
• This doctrine has a major flaw. It does not assess whether the laws made by Parliament is fair, just and not arbitrary.
• “Procedure established by law” means a law duly enacted is valid even if it’s contrary to principles of justice and equity.
• Strictly following procedure established by law may raise the risk of compromise to life and personal liberty of individuals due to unjust laws made by the law making authorities. Thus, Procedure established by law protect the individual against the arbitrary action of only the executive.

Due Process of Law

• Due process of law doctrine not only checks if there is a law to deprive the life and personal liberty of a person, but also see if the law made is fair, just and not arbitrary.
• If SC finds that any law as not fair, it will declare it as null and void. This doctrine provides for more fair treatment of individual rights.
• Under due process, it is the legal requirement that the state must respect all of the legal rights that are owed to a person and laws that states enact must confirm to the laws of the land like – fairness, fundamental rights, liberty etc.
• It also gives the judiciary to assess the fundamental fairness, justice, and liberty of any legislation.
• Thus Due process protect the individual against the arbitrary action of both executive and legislature.

The difference in layman’s terms is as below:

Due Process of Law = Procedure Established by Law + The procedure should be fair and just and not arbitrary.

What is practically followed in India?

• In India a liberal interpretation is made by judiciary after 1978 and it has tried to make the term ‘Procedure established by law’ as synonymous with ‘Due process’ when it comes to protect individual rights.
• In Maneka Gandhi vs Union of India case (1978) SC held that – ‘Procedure established by law’ within the meaning of article 21 must be ‘right and just and fair’ and ‘not arbitrary, fanciful or oppressive’ otherwise, it would be no procedure at all and the requirement of Article 21 would not be satisfied.
• Thus, the ‘procedure established by law’ has acquired the same significance in India as the ‘due process of law’ clause in America.

Why in news?

• In a recent case, Rajbala v. Haryana (2015), a two-judge bench of the Supreme Court of India strongly rejected the doctrine of substantive due process in India.
• In this case, the constitutional validity of the Haryana Panchayati Raj (Amendment) Act, 2015 was in question.
• The Act was challenged on the ground that it was “wholly unreasonable and arbitrary and therefore violative of Article 14 of the Constitution”.
• Though the Supreme Court rightly held that a statute cannot be invalidated merely because it is “arbitrary”, it also went on to reject the U.S. doctrine of substantive due process by holding that Indian courts “do not examine the wisdom of legislative choices unless the legislation is otherwise violative of some specific provision of the Constitution”, as “to undertake such an examination would amount to virtually importing the doctrine of ‘substantive due process’ employed by the American Supreme Court”, and under the Indian Constitution “the test of due process of law cannot be applied to statutes enacted by Parliament or the State Legislatures”.
• The Rajbala decision is particularly interesting because in  earlier cases,SC have repeatedly held that substantive due process and due process generally are a part of Indian constitutional law under Article 21 of the Constitution.

The other judgement

• In Shaikh Zahid Mukhtar v. State of Maharashtra, a Division Bench of the Bombay High Court was dealing with the constitutional validity of the Maharashtra Animal Preservation Act, 1976, as amended by the Maharashtra Animal Preservation.
• It was held that the “right of life and liberty under Article 21… clearly covers the [substantive] due process aspect envisaged in the American jurisprudence.”

Conclusion

Thus, interestingly, while the Supreme Court of India in the Rajbala case has strongly rejected the doctrine of substantive due process, the Bombay High Court has, following earlier Supreme Court pronouncements, applied and reiterated the doctrine in Indian constitutional law.

[3] The cannabis dilemma

Indian Express

In many countries, there is an ongoing debate on banning cannabis the drug not the plant (marijuana).

Indian Hemp Drugs Commission Report of 1893/94. Originally, the commission was set up to examine the use and abuse of cannabis in Bengal and the geographical mandate was later extended to entire India.

Rules:

• Moderate use of these drugs is the rule, and that the excessive use is comparatively exceptional.
• The moderate use practically produces no ill effects.
• In all but the most exceptional cases, the injury from habitual moderate use is not appreciable.
• The excessive use may certainly be accepted as very injurious, though it must be admitted that in many excessive consumers the injury is not clearly marked.
• The injury done by the excessive use is, however, confined almost exclusively to the consumer himself; the effect on society is rarely appreciable.”

Cannabis drug and Cannabis plant:

• Preparations from the plant are psychotropic drugs that can be used for the kind of recreational use I just mentioned, and these can also be used for medicinal purposes.

How to ensure medicinal use, while curbing or controlling recreational use?

• The plant has something called tetrahydrocannabinol (THC), a sub-category of what are called cannabinoids.
• There are 65 cannabinoids other than THC.
• THC gives the cannabis plant those recreational and medicinal qualities. For better or for worse, humans desire THC.

There are three main species —

1. Cannabis sativa,
2. Cannabis indica
3. Cannabis ruderalis.

Cannabis sativa and cannabis indica grow in India, often a function of the climatic zone. Cannabis sativa and cannabis ruderalis have lower levels of THC than cannabis indica.

What is hemp?

• Hemp is a commonly used term for high-growing industrial varieties of the Cannabis plant and its products, which include fiber, oil, and seed and less than 0.03% THC.
• For years and years, industrial hemp has been used for a variety of commercial purposes and has provided livelihood for people.
• It’s not that cannabis sativa has no THC, but levels are low, around 0.3 per cent.
• For any recreational or medicinal use, you need higher levels of THC, at least 2 per cent, closer to 20 per cent.
• Today, 95 per cent of the world’s hemp production is from France (71 per cent) and China (24 per cent).

Indian law for cannabis plant:

• Narcotics Drugs and Psychotropic Substances Act of 1985 defines: “cannabis plant as any plant of the genus cannabis”.
• Therefore, under Section 9(a), without differentiation across different varieties of the plant, the Central government can permit and/or regulate cultivation, gathering, production, possession, sale, purchase, transport and inter-state export and import.
• This doesn’t prevent industrial hemp being grown, but doesn’t free its cultivation, devoid of controls. Under Section 10(a), the state government has similar powers.
• Marijuana may be produced from cannabis indica.

According to this interpretation,   ganja, bhang, siddhi and charas can also come from cannabis sativa.

But states can make laws for its cultivation but under strict regulations.

[4] China, India and what a new ‘red telephone’ would mean for the world

Livemint 

Context

• The author has argued for establishing a military hotline between India and China.

‘Red Telephone’

• The Moscow–Washington hotline (formally known in the United States as the Washington-Moscow Direct Communications Link) is a system that allows direct communication between the leaders of the United States and the Russian Federation.
• This hotline was established in 1963 and links the Pentagon with the Kremlin (historically, with Soviet Communist Party leadership across the square from the Kremlin itself).
• Although in popular culture known as the “red telephone”, the hotline was never a telephone line, and no red phones were used.

Indo-China relations before colonial era

• For most of their history, geography was the primary reason that the two countries maintained a diplomatic distance, keeping their interests separate and avoiding substantial political and economic exchanges.
• Then, as the modern era dawned, China descended into domestic chaos and India found itself a direct colony of Britain, precluding any deeper ties as long as those conditions persisted.
• Only in the early 1950s did China and India begin to interact as modern governments in a sustained way, bonding over their shared former status as the exploited and downtrodden of Western Imperialism and the newly-emancipated developing world.

Indo-China relations in last few decades

• Lack of deep between two countries ties allowed disputes to escalate, culminating in the 1962 Sino-Indian War, which left them with diplomatic differences until the early 1990s.
• Sino-Indian relationship has expanded and matured in recent years but much distance still remains.
• The last decade has seen a flurry of Sino-Indian diplomacy, trade and exchange, even as military tensions between the two remain substantial.

Diplomacy between the two nations

Pakistan:- Both countries have their their divergent views on relations with Pakistan, it is still-archrival of India and an increasingly close ally of China.

USA:-  Closeness between Beijing and Islamabad, coupled with a deepening skepticism in Washington over the wisdom of its own relationship with Pakistan, has pushed India and the United States closer to each other, overcoming decades of mutual suspicion as the regional dynamics change underfoot.

Proxy struggle is going between both the countries around the Indian Ocean and Arabian Sea:-

• Both China and India recently signed deals with the Maldives, for investment and defence cooperation, and India has been expanding its diplomacy in Iran, traditionally an outpost of Chinese influence in the Middle East.
• And there is no indication that either one plans to do anything but intensify this competition in the years ahead; each has already begun to draw in other powers, from Japan to Russia to the US.

Trade and defence ties between the two nations

Trade:-  India runs a considerable and growing deficit in the trade relationship and it is worried about  the effects of cheap Chinese manufactured goods on India’s own efforts at industrialization, where China currently maintains a gigantic advantage.

Defence:- On military matters, India is also substantially outclassed by China at the moment. But India has been making considerable advances of late, especially in its aircraft carrier programme, where it has deeper experience than China, and importantly, in its submarine program, where it has reportedly successfully tested nuclear-capable Submarine-Launched Ballistic Missiles (SLBMs) from its nuclear-powered INS Arihant.

Case for Military Hotline

• In all of these areas, then, diplomacy, trade and defence, China and India are bumping up against each other around the world and in their own backyards as never before.
• China and India are now both independent, prosperous and mostly at peace at the same time as each other, in a regional environment that is mostly secure, for the first time since the late 18th century.
• No one, even in Beijing or Delhi, yet knows exactly what a fully-developed relationship between China and India will look like when complete, because they’ve never seen it before.
• Which brings us back to the discussions currently underway to establish a military hotline between Beijing and Delhi.
• The fact that the Sino-Indian relationship now has enough of a foundation of cooperation that this project could be conceived is itself a measure of progress.
• But the fact that both countries see it as necessary underscores how much tension remains in the relationship.

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GS PAPER 3

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[1] It is disinvestment, not privatisation

The Hindu

New disinvestment policy:

• The intention of the policy is not to shrink the public sector but assets, including land and cash balances, of government companies can be hived off and used for investment in new projects.
• And to increase efficiency.
• The renaming of the Department of Disinvestment as the “Department of Investment and Public Asset Management” reflects the new thinking.

To increase efficiency:

• The BJP-led NDA government is pursuing disinvestment, not to vacate the public sector, but to increase its efficiency.
• If a government company is profitable without subsidies while competing with private firms, then why should government exit.
• The new disinvestment mantra is to reduce interference, allow public sector enterprises to function along commercial principles by granting managerial independence in decision-making, such as in appointments.
• The government did not give up its control over a single public sector company.
• It merely offloaded a few shares in a handful of companies, mainly through the stock market, where many of the buyers picking up the divested shares were from the public sector — public sector banks, the Life Insurance Corporation of India or other government companies.
• The divested companies remain state-owned and government control over them undiluted.

NITI Aayog is set to bring out fresh recommendations about loss-making units that can be sold, their assets valued and disposed of, and possible strategic sales.

Fiscal pressures

• The disinvestment targets too suggest that it is a government caught between caution and the pressures of fiscal goals; not one striving to exit business. Of the disinvestment target of Rs.56,500 crore for this year, Rs.36,000 crore is to be raised from small sales, which are safer, but which do not dilute government control.

• Financial parameters of government companies, such as borrowings and operating profits, are being closely monitored to identify possibilities of share buybacks, a new kind of disinvestment officials have recently come up with.
• Money changed hands — it went from the two public sector units to the government. The government companies bought some of their shares from their owner, the government. The only effective change is that money which was on the company’s’ books is now in the government’s account under the head “Disinvestment Receipts”.
• According to one estimate, the top 30 public sector companies hold more than Rs.1.5 lakh crore in cash and bank balances, which the government has realised is sitting idle. Government companies are being prodded to dip into their reserves — either to invest in growth-generating projects or to float shares buybacks.
• The buybacks are a bit like the left hand buying what the right hand is selling.
• The government is taking money out of one pocket and putting it in another—and getting richer. It’s not magic. It’s not privatisation. It’s disinvestment.

[2] Insure farmers against climate change

The Hindu

Issue

• How India’s agricultural policy has made us structurally vulnerable to climate change?

India, a climate change hotspot

• India is uniquely vulnerable to rising temperatures — it ranks in the top 20 in the Climate Change Vulnerability Index.
• Our average surface temperature, over the past four decades, has risen by 0.3° Celsius, accompanied by a rising incidence of floods, droughts and cyclones.

How does climate change impact agriculture?

• Climate change would impact soil health, with increasing surface temperatures leading to higher CO emissions and reducing natural nitrogen availability.
• Mitigating this by increasing chemical fertilizer usage could impact long-term soil fertility, leaving the soil open to greater erosion and desertification.
• Meanwhile, migration patterns, farmer suicides and stagnating rural incomes, along with increasingly ad hoc land acquisition in the name of public goods, have politicised the idea of climate mitigation.
• Marginal farmland will increasingly be useless for agriculture.
• Our regional crop patterns assume a specific range of weather variability, failing to cope with the recent high periods of heavy rainfall with long dry intervals.
• India’s flood-affected area has doubled since Independence, despite generous state spending on flood protection schemes.
• Climate change will impact the entire food production chain, affecting our food security.
• Livestock production, often considered to be a substitute to farming for marginal farmers, would face reduced fodder supplies given a decline in crop area or production
• Research has highlighted the deleterious impact of climate change on crop production.

What should be done?

• Indian agricultural policy has made us structurally vulnerable to climate change.
• A rural spending plan, focussed on investments in agriculture infrastructure, particularly in irrigation, rainwater harvesting and a national network of soil-testing laboratories is needed.
• Simple water harvesting and conservation measures (micro-irrigation, watershed management and insurance coverage) can reduce the majority of the potential loss due to drought.
• Drought strategies should be extended to the village level — for example, each village should have a village pond, created under the Mahatma Gandhi National Rural Employment Guarantee Scheme.
• Conservation farming and dryland agriculture should be promoted.
• Each village should be provided timely rainfall forecasts along with weather-based forewarnings regarding crop pests and epidemics in various seasons.
• Afforestation, in a biodiverse manner, should be encouraged to help modify regional climates and prevent soil erosion.
• Our agricultural research programmes need to be retooled towards dryland research.
• Changing planting dates could have a significant impact; research highlights that planting wheat earlier than usual can help reduce climate change-induced damage.
• Zero tillage and laser-based levelling can also help conserve water and land resources.
• Crop planning can be conducted as per the climatic zones of different regions, while utilising better genotypes for rain-fed conditions.
• We should focus on expanding our formal credit system to reach all marginal farmers.
• Insurance coverage should be expanded to all crops while reducing the rate of interest to nominal levels, with government support and an expanded Rural Insurance Development Fund.
• A debt moratorium policy on drought-distressed hotspots and areas facing climate change calamities should be announced, waiving interest on loans till farming incomes are restored.
• The Centre and States should launch an integrated crop, livestock and family health insurance package while instituting an Agriculture Credit Risk Fund to provide relief in the aftermath of successive natural disasters.

Conclusion

• With India’s population rising, demand for diversified crops will be hard to square with diminishing yields.
• Agricultural investments in food crops, along with systemic support for irrigation, infrastructure and rural institutions can help move India beyond climate change-induced food insecurity, strengthening our stressed food production systems.
• Through adaptation and mitigation measures, we can overcome this gigantic crisis.

[3] Hindustan Antibiotics to trial sick PSU closure policy

The Hindu

Government is planning to shut sick PSU:

• Hindustan Antibiotics Ltd. is set to become the test case for the closure policy.
• It hold several acres of land in Mumbai and Delhi and have on their payrolls thousands of employees.
• The Union Cabinet has set up a Group of Ministers under Finance Minister to recommend if the drug maker can be shut down.

• The decision was taken last week, after the Minister in-charge of the Department of Pharmaceuticals, the company’s administrative department, Ananth Kumar floated a Cabinet note proposing to revive the loss-making public sector unit (PSU) mainly with funds to be raised through the sale of its land holdings.

Opposition

• The proposal was opposed by “some senior ministers” at the Cabinet meeting, who argued, that sale of land cannot be taken to be a business plan.
• Regarding the PSU’s proposal to extend its manufacture of active pharmaceutical ingredients (APIs) to include some more antibiotics, it was pointed out that most large markets for these APIs import them from China and there is no pressing need for a government-owned company to be in this business.
• The decision of the group of ministers is expected to become the guiding principle for the closure of the remaining loss-making/ sick PSUs, a politically sensitive issue as it involves golden handshakes for employees and the sale of land.
• Sales of land by previous governments led to adverse observations by the Comptroller and Auditor-General.

[4] Govt. to define ‘new employees’ for EPS

The Hindu

News

• The government is likely to come out with a definition for the term ‘new employees’ for implementing its Budget promise of footing the bill for pension scheme contribution in a bid to create more formal sector jobs.
• Accordingly, ‘new employees’ may be defined as those in excess of the average employee base of a firm for the previous three years.

Criteria

• The payment of the EPS contribution will be in the form of reimbursements to employers. The scheme will be applicable for the new employees, earning Rs.15,000 a month, who have worked for 240 days during a year in an establishment.
• About 3.5 lakh establishments, which hire more than 20 workers, will be covered under the scheme.

Government had decided to pay 8.33 per cent of wages to Employees Pension Scheme (EPS):

• On behalf of employers for workers during first three years of employment for which an allocation of Rs.1,000 crore had been made in the Budget under the scheme, Pradhan Mantri Rojgar Protsahan Yojana.
• The scheme looks good but it will increase regulation in the labour market which firms would not prefer as there will be increased scrutiny of their books.

[5] Dual freight policy for iron ore goes

The Hindu

What happened?

• In a bid to boost freight traffic volumes, the Indian Railways has abolished its dual freight policy for carrying iron ore.

Response from the industry

• It was  a long-pending demand from industry players.
• Industry representatives said the freight rationalisation will help both Railways and the iron ore sector.

Why this has been done?

• According to a 2008 policy, the tariff for transportation of iron ore to ports for the purpose of exports is three times the rate charged for transporting the same commodity for domestic use in steel and cement industries.
• According to a CAG report, it was  found that iron ore was carried at lower domestic rates but was diverted for exports resulting in huge losses to the exchequer.