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9 PM Daily Brief -19 July 2016

19-july

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

What is 9 PM brief?


GS PAPER 2


 [1]SC stands by Lodha panel report to revamp cricket

The Hindu

Context

Supreme Court has upheld all the recommendations of Lodha Committee to overhaul the cricket administration.

Analysis

  • This ruling by SC is comes after hearings lasting for 2 years.
  • Many recommendations by Lodha committee were opposed by BCCI.
  • Amongst many important recommendations one of the recommendation is to bring BCCI under the RTI act which is a welcome step.
  • Supreme court noted that the resistance to these recommendations have been there because of state associations and BCCIs preference over status-quo than change.
  • But such changes will definitely bring the much needed reforms in the cash rich sport of cricket.

[2]Indian federalism needs the Inter-state Council

Livemint

Issue

  • Importance of Inter-state Council

About Inter-State Council

  • Based on the Sarkaria Commission’s recommendations, it was constituted under Article 263 of the Constitution in 1990.
  • Just as importantly, the council helped bridge the trust deficit between the centre and the states. If not always a problem solver, it at least acted as a safety valve.

Article 263 in The Constitution Of India

  1. Provisions with respect to an inter State Council If any any time it appears to the President that the public interests would be served by the establishment of a Council charged with the duty of

(a) inquiring into and advising upon disputes which may have arisen between States;

(b) investigating and discussing subjects in which some or all of the States, or the Union and one or more of the States, have a common interest; or

(c) making recommendations upon any such subject and, in particular, recommendations for the better co ordination of policy and action with respect to that subject, in shall be lawful for the President by order to establish such a Council, and to define the nature of the duties to be performed by it and its organisation and procedure

Inter-state Council vs NITI Aayog’s Governing Council

  • NITI Aayog’s Governing Council—it has a similar composition, including the prime minister, chosen cabinet ministers and chief ministers—that could address centre-state issues.
  • But the ISC has constitutional backing, as against the NITI Aayog which only has an executive mandate.
  • This puts the states on more solid footing—an essential ingredient in building the atmosphere of cooperation needed for calibrating centre-state relations.

Issue over the Role of Governor

  • Over the decades, the role of governors and, by extension, the relationship between the centre and states headed by rival parties have both come into prominence on occasion.
  • The recent crises in Uttarakhand and Arunachal Pradesh show that we are in the midst of one such phase again
  • Expectedly, a number of chief ministers had much to say about adventurism by governors at the ISC meeting.
  • And the Punchhi Commission has recommendations here as well—from fixing governors’ tenures to mandatory consultation of chief ministers before the appointment of governors and choosing individuals who have been outside active politics for at least a couple of years.

Road ahead

  • The challenges of maintaining a federation are many, but the solution is no mystery: healthy debate and discussion. This is easier said than done, of course.
  • In past decades, the centralized nature of the Indian economy—even after liberalization—made papering over the cracks possible.
  • But the current government has a very different federalist vision—one with an emphasis on decentralizing decision making and encouraging state competition.
  • If that vision is to succeed, the ISC must be a core component of the new cooperative federalism.

[3]Erdogan continues post-coup purge

The Hindu

Issue

  • President Recep Tayyip Erdogan has launched a large scale operation to purge the civil and military institutions of his perceived opponents, while Turkey’s Western allies that Mr. Erdogan is abandoning the rule of law and using the coup attempt as a pretext to cleanse the country’s institutions of his enemies.

Key points

  • Very recently Turkey has faced a failed coup attempt to topple the present government of President Recep Tayyip Erdogan.
  • Several civil and military officers were believed to be involved in the coup attempt. Now Government has launched a large crackdown on the possible perpetrators.
  • Following the coup, Mr. Erdogan has pointed the finger at his former ally-turned-rival Fethullah Gulen, a Muslim cleric who has been in self-imposed exile in Pennsylvania since 1999 and who is known to have a vast following in the police and judiciary.
  • Interior Ministry fired nearly 9,000 police officers on Monday. That followed the arrests of 7,500 military personnel and 103 generals and admirals, and the suspension of nearly 3,000 judges.

Response of western countries

  • Magnitude of the purges has raised concerns among Turkey’s Western allies that Mr. Erdogan is abandoning the rule of law and using the coup attempt as a pretext to cleanse the country’s institutions of his enemies.
  • Western diplomats said on Monday that Turkey’s response to the coup attempt suggested that the government had prepared lists of those they believed to be linked to Gulen’s followers, before the unrest.
  • Some people have demanded reintroduction of the death penalty. Some top western diplomats have warned Turkey that any reintroduction of the death penalty would be a nonstarter in talks about Turkey’s eventually joining the 28-nation bloc.
  • While Turkish officials have justified the crackdown saying it is necessary to prevent another wave of attacks against civilians and government buildings.

 

 


GS PAPER 3


[1]De-register 10-year-old diesel vehicles in Delhi, says NGT

The Hindu

Context

National Green Tribunal has ordered Road transport offices (RTOs) in Delhi to deregister all diesel vehicles which are more than 10 years old and also at the same time share the data of such de-registered vehicles.

Analysis

  • This move by NGT has been made so as to improve the air quality of the region as the schemes like odd-even have not proven enough.
  • NGT had already banned diesel vehicles more than 10 years old in August, 2015 but it was becoming extremely difficult for the police to check such vehicles from plying on the road.
  • The recent move from NGT would supplement the ban by deregistering all such vehicles.
  • Diesel in itself is a major pollutant and on top of that such old vehicles which have large scale emissions compound the problem.

Implications of the order

  • This decision will affect the re-sale price of the vehicle and vehicle owners will be affected.
  • Not only this, it will also lower the demand of new/old diesel cars which will impact the automobile makers.
  • At the face of it this ruling might be unfair to the consumers who brought the car without any such regulation in force at that time.

Conclusion

Such steps are definitely a good step towards lessening the pollution levels. But they need to be supplemented with other strong laws and policies so that the pollution can be controlled. Also interest of the various stakeholder must be aligned with such laws.

[2]One India, one market

The Hindu

Issue

  • The GST will decisively alter the economy for the better besides symbolising Indian politics at its cooperative, consensual best. Parliament should seize this historic opportunity

Benefits of Goods and Services Tax (GST) Bill

GST will increase the resources available for poverty alleviation and development

  • This will happen indirectly as the tax base becomes more buoyant and as the overall resources of the Central and State governments increase.
  • But it will also happen directly because the resources of the poorest States — for example, Uttar Pradesh, Bihar, and Madhya Pradesh — who happen to be large consumers will increase substantially.

GST will facilitate ‘Make in India’ by making one India

  • The current tax structure unmakes India, by fragmenting Indian markets along State lines. These distortions are caused by three features of the current system: the Central Sales Tax (CST) on inter-State sales of goods; numerous intra-State taxes; and the extensive nature of countervailing duty exemptions that favours imports over domestic production.
  • In one fell swoop, the GST would rectify all these distortions: the CST would be eliminated; most of the other taxes would be subsumed into the GST; and because the GST would be applied on imports, the negative protection favouring imports and disfavouring domestic manufacturing would be eliminated.

GST would improve tax governance in two ways

  • The first relates to the self-policing incentive inherent to a valued-added tax.
  • To claim input tax credit, each dealer has an incentive to request documentation from the dealer behind him in the value-added/tax chain.
  • Provided the chain is not broken through wide-ranging exemptions, especially on intermediate goods, this self-policing feature can work very powerfully in the GST.
  • The second relates to the dual monitoring structure of the GST — one by the States and one by the Centre.

The fewest flaws at inception

  • Some have levelled the charge that the design of the GST is flawed. But the “flawed GST” charge fails to appreciate how reforms actually occur.
  • In no country is the GST — even today after many years of implementation — perfect, and was therefore quite flawed at inception.
  • In complex systems, change is introduced, learning from implementation takes place, leading to further and better change.
  • That is what happened with the implementation of the value-added tax by the States and that is what will happen with the GST.
  • It is far better to start and allow the process of endogenous change to unfold over time than to wait Godot-like for the best time and the best design before it is introduced.

Road ahead

  • The time is ripe to collectively seize this historic opportunity; not just because the GST will decisively alter the Indian economy for the better but also because the GST symbolises Indian politics and democracy at its cooperative, consensual best.
  • The Indian GST will be a leap forward in creating a much cleaner dual VAT which would minimise the disadvantages of completely independent and completely centralised systems. A common base and common rates (across goods and services) and very similar rates (across States and between Centre and States) will facilitate administration and improve compliance while also rendering manageable the collection of taxes on inter-State sales.
  • At the same time, the exceptions — in the form of permissible additional excise taxes on special goods (petroleum and tobacco for the Centre, petroleum and alcohol for the States) — will provide the requisite fiscal autonomy to the States.
  • Indeed, even if they are brought within the scope of the GST, the States will retain autonomy in being able to levy top-up taxes on these goods.

[3]Payment system to fix last mile will roll out this month

The Hindu

Context

Unified Payment Interface (UPI) will become operational this month.

Analysis

  • UPI is being developed by National Payment Corporation of India.
  • It is touted as one of the major tools to improve access to banking.
  • Through UPI, money can be transferred through a mobile app from one account to another without divulging the account details of either party in the transaction. Only aliases given by their banks need to be shared.
  • People from rural areas would not have to go to a bank every time to withdraw their money and shopkeepers would not have to keep a Point of sale device with them.

Conclusion

With the falling prices and increasing coverage of smartphones, UPI can definitely be a game changer in how India banks. It is bound to increae the access and ease of banking.

[4]Current value of rupee is ‘pretty reasonable’: Rajan

The Hindu

Context

RBI Governor warns against devaluation of rupee.

Analysis

  • RBI Governor has advised against any devaluation of rupee citing that such a move can lead to inflation.
  • Many experts in the past have said that the rupee could be devalued to shore up exports, however, Raghuram Rajan does not hold the same view.
  • A per him, any benefits due to increase in exports (after devaluation) would be offset by the high inflation.

[5]‘Incubator hubs soon to spur Start-up India’    

The Hindu

Introduction

  • Government is planning a 2 level approach by setting up incubators to help start-ups, after the lukewarm response towards its Start-up Policy.

Start-up India’ initiative

  • In January, Start-up India’ initiative along with an ‘action plan’ was launched.
  • Government unveiled a Start-up India portal, a Start-up India Hub and a mobile app, besides setting up a panel to verify the eligibility of start-ups to avail of benefits.
  • But response received was not satisfactory.

Poor response

  • 571 applications were received as on June 30 to be recognized as start-ups. Of these, only 106 had the required documents.
  • Only 12 applications could be considered for tax benefits.
  • Only seven applicants had furnished all the required documents. The remaining applicants would be given guidance and support by the Start-up India Hub.
  • Hence Department of Industrial Policy and Promotion (DIPP), have urged States and Union Territories to set up start-up hubs and incubators.

2 pronged approach

  • Now government is planning a twin-pronged approach to speed up the initiative.
  • Though the existing, big centres like IITs and major science and technology centres have all been given ‘incubator’ status, there is demand for more, hence colleges would be clubbed to form an incubator hub.  
  • Second aspect was to ensure that incubators did not reject applications from entrepreneurs, for that incubators facing the capacity constraints will be asked to co-opt experts from outsides so that now application is rejected.

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