9 PM Daily Brief – 20 May 2016

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

What is 9 PM brief?

• GS PAPER 1
  1. Centuries-old palace to get a makeover {Art and Culture}
• GS PAPER 2
  1. India lauded for Red Line Campaign on antibiotics {Governance}
  2. India planning ‘yoga’ visa {Foreign Policy}
  3. Obama’s Asia trip to reiterate ‘pivot’ doctrine {Foreign Policy}
• GS PAPER 3
  1. Indian firms may have to abide by strict global standards: EY {Economy}
  2. Hybrid annuity model for highways draws bidders {Economy}

---

GS PAPER 1

---

 [1] Centuries-old palace to get a makeover

The Hindu

News

• The restoration of a part of the 500-year-old ‘mud’ palace in Sural village, about 30 km from Udupi, Karnataka is about to be completed. Work on it began three years ago.

About the palace

• The palace,  which belongs to the House of Tulu Jain Tholahars, the Jain chieftains, who ruled parts of Udupi district, is said to be have been built in 1511.
• One unique feature of the palace is that it has no foundation.
• Hopea-wood, jack-wood and wild jack-wood were used in its construction.
• Wooden pillars support the roof, using the inter-locking method. Not a single nail was used.
• The palace has ‘angalas’ (courtyards) and a ‘Pattada Chavadi’ (royal durbar room), and a small shrine of Padmavati Amma.
• The 5,000 sq. ft Chavady has a ground floor and a first floor.
• Its walls are being built using laterite stones cemented together using a mixture of slaked lime, sugarcane molasses and extract from leaves of Slow Match Tree ( Careya arborea ) as was done in the original construction.
• These materials bring down the room temperature.

About the dynasty

• The Tholahars were prominent till 1691 as per a copper plate inscription of Queen Madanadevi Tholaharti.
• They ruled from Sural for 400 years and co-operated with the Alupa and Vijayanagara dynasties.

---

GS PAPER 2

---

[1] India lauded for Red Line Campaign on antibiotics

The Hindu

India’s idea of putting a red line on antibiotic packages to curb their over-the-counter sale is now being cited as a model that can be used globally to counter the rising threat of superbugs.

Final report on tackling drug resistant infection released on May 19, the global Review on Antimicrobial Resistance:

• Common labelling standards of this type could become a condition of sale of antibiotics around the world, convincing people to stop using antibiotics would not be effective unless they recognise antibiotics.
• Labelling of antimicrobials, especially antibiotics, is crucial. We call on governments and international health organisations to agree on global labelling standards.

India’s Red Line campaign:

• Launched in February this year, began marking prescription-only antibiotics with a red line to curb their irrational use and create awareness on the dangers of taking antibiotics without being prescribed.
• The report says laws prevent sale of antibiotics and other antimicrobials over-the-counter, but these may be weakly enforced in some countries and non-existent in many.
• It says 20-30 per cent of antibiotics are consumed without prescription in south and east Europe, and up to 100 per cent in parts of Africa.
• It is still early in India to map the impact of the Red Line initiative, but experts see better awareness.
• The government has backed it up with a communication campaign that says a Red Line medicine should not be taken without prescription.
• The campaign must continue and have hard-hitting messages like those used for tobacco, and side-effects of over-prescribing should also be highlighted.

Conclusion:

 

• India’s Red Line campaign to curb over-the-counter use of antibiotics is finding recognition, and could be adopted on a world scale

 

[2] India planning ‘yoga’ visa

The Hindu

News:

• The government is planning to introduce a new category of visa to promote yoga, to help make India the world destination for yoga enthusiasts.
• Currently, there are 18 types of visas which include diplomatic, mountaineering, employment, tourist, medical, student, research and conference, among others.
• The government is planning a ‘yoga’ visa ahead of the 2{+n}{+d}International Day of Yoga on June 21.
• On India’s request, the United Nations had designated June 21 as the International Day of Yoga in 2014.
• Last year, the government accorded special status to yoga by categorising its promotion as a charitable activity, giving its promoters tax exemption benefits.
• Since the U.N. has also designated a day for yoga, India decided to promote it.
• To attract people to India, government is planning to create a special type of visa.

[3] Obama’s Asia trip to reiterate ‘pivot’ doctrine

The Hindu

News

• Barack Obama’s visit to Vietnam and Japan next week will reiterate the “rebalance to Asia” policy that many critics say has faltered after the initial push.

Key Points

• Mr. Obama will be the first serving U.S. President to visit Hiroshima, one of the two Japanese cities on which the U.S. dropped atomic bombs in 1945.
• Jimmy Carter visited Hiroshima in 1984, after he had left the White House
• The visit will also underscore the significance the Obama administration attaches to the Trans Pacific Partnership (TPP), a trade agreement that is the cornerstone of the U.S.’s Asia-Pacific policy.
• Maritimes disputes on the South China Sea will be part of the discussions at the G-7 meeting in Japan.
• The U.S. opened full diplomatic ties with Vietnam in 1995 but the relationship is far from smooth.

---

GS PAPER 3

---

 [1] Indian firms may have to abide by strict global standards: EY

The Hindu

Indian companies will have to comply with stricter international norms following a rise in foreign investments in the country, according to a report.

• The organisations would have to meet the requirements of foreign laws like U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, according to the report by EY.

Forensic Outlook 2016:

• Active measures are being progressively included to identify and seal any gaps within organisations’ compliance frameworks.
• These include, introducing or re-evaluating the company’s code of conduct and anti-bribery and corruption compliance framework, setting up whistleblowing frameworks to enhance transparency, conducting awareness trainings and implementing thorough fraud, bribery and corruption monitoring systems.
• The risk scenarios for the retail sector include bribery and corruption, supply chain leakage such as thefts or any dubious movement of inventory and counterfeiting, which will not only results in a loss of revenue but also expose companies to increased reputation and litigation risks.
• Similarly, the report points out to a number of risks facing the auto sector, including violation of emission norms through the manipulation of prototype test norms and test results, bribery and corruption, and dealer frauds.
• These include monetary and non-monetary benefits extended to government officials for managing emission test results, negotiating fleet sale contracts, obtaining bulk sale orders, managing non-compliance to various government licenses and regulatory requirements.
• It highlights the benefit of Bankruptcy, Black Money and Benami Transactions Bills in enabling transparent business dynamics

[2] Hybrid annuity model for highways draws bidders

The Hindu

News

• The hybrid annuity model for awarding highway contracts introduced by the government last year, is beginning to find some traction after an initial lukewarm response from infrastructure players.

Models of PPP (Public Private Partnership) in highway construction.

• The government has decided to introduce Hybrid Annuity Model (HAM) to revive PPP (Public Private Partnership) in highway construction.
• At present, three different models –PPP Annuity, PPP Toll and EPC were followed by the government while adopting private sector participation.
• Launch of the new model is due to the many problems with the existing ones.
• Large number of stalled projects are blocking infrastructure projects and at the same time adding to NPAs of the banking system.
• In this context, the government has introduced Hybrid Annuity Model (HAM) to rejuvenate PPP.

By features the HAM is a mix between the existing two models – BOT Annuity and EPC. Hence to understand the HAM, we should know the basic features of the existing PPP models.

1. The Build Operate and Transfer (BOT) Annuity Model

• Under BOT annuity, a developer builds the highway, operates it for a specified duration and transfers it back to the government.
• The government starts payment to the developer after the launch of commercial operation of the project.
• Payment will be made on a six month basis.

2. BOT Toll Model

• In this toll based BOT model, a road developer constructs the road and he is allowed to recover his investment through toll collection.
• This toll collection will be over a period of nearly 30 years in most cases.
• There is no government payment to the developer as he earns his money invested from tolls.

3. Engineering, Procurement and Construction (EPC) Model

• Under this model, the cost is completely borne by the government. Government invites bids for engineering knowledge from the private players.  
• Procurement of raw material and construction costs are met by the government.
• The private sector’s participation is minimum and is limited to the provision of engineering expertise.
• A difficulty of the model is the high financial burden for the government.

What is hybrid annuity?

• In financial terminology hybrid annuity means that payment is made in a fixed amount for a considerable period and then in a variable amount in the remaining period.
• This hybrid type of payment method is attached under the HAM.

The Hybrid Annuity Model (HAM)

• In India, the new HAM is a mix of BOT Annuity and EPC models.
• As per the design, the government will contribute to 40% of the project cost in the first five years through annual payments (annuity).
• The remaining payment will be made on the basis of the assets created and the performance of the developer.
• Here, hybrid annuity means the first 40% payment is made as fixed amount in five equal installments whereas the remaining 60% is paid as variable annuity amount after the completion of the project depending upon the value of assets created.
• As the government pays only 40%, during the construction stage, the developer should find money for the remaining amount. Here, he has to raise the remaining 60% in the form of equity or loans.
• The private developer will recover his investment from the government by receiving annuity payments over a period of 15 years.
• The government also offers 80 per cent of prior land acquisition and forest clearance in such projects to the developers.
• There is no toll right for the developer.
• Under HAM, Revenue collection would be the responsibility of the National Highways Authority of India (NHAI).

Advantage of HAM

• Advantage of HAM is that it gives enough liquidity to the developer and the financial risk is shared by the government.
• While the private partner continues to bear the construction and maintenance risks as in the case of BOT (toll) model, he is required only to partly bear the financing risk.
• Government’s policy is that the HAM will be used in stalled projects where other models are not applicable.