9 PM Daily NEWS Brief

9 PM Daily Brief – 22 January 2016

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

What is 9 PM brief?



[1]. Tax elite to reduce inequality/ Rich must open up their wallet to remove inequality

The Hindu | The Hindu


A new research — based on the World Bank’s poverty data show that the burden of cutting global inequality now rests largely on India.

For India to meet its huge challenges of inequalities the elite would have to start paying more taxes.

Tax to GDP ratio:-

The current tax-to-GDP ratio — of between 10 per cent and 11 per cent — is insufficient for meeting India’s huge challenges of inequalities.

The aim should be to evolve the ratio toward the 30 per cent to 50 per cent levels now seen in the U.S. and some of the West European countries.

True reforms are yet to come in the public funding of the education system and improvement in the transparency in the tax collection system has not happened yet.

Communist China Better than India:-

Communist China has fared better than India at collecting taxes from the elite which is evident from the stark difference in the public spending between the two countries for instance, on health, he said.

The public health system in India has a budget of less than one per cent of GDP as compared with almost three per cent in China.

The Chinese Communist Party has been much more successful than the democratic and parliamentary Indian elites in mobilising resources to finance social investment and public services.

World Trend:-

Since the 1970s both wealth and income gaps were rising toward their pre-20th-century norms.

Between 1980 and 2007, 70 per cent of the addition to gross domestic product, especially in the rich countries, went to the top 10 per cent of the “elite” population.

In contrast, the per capita incomes rose just about 1.5 per cent a year.

Indian Scenario:-

Income and wealth concentration in India today is probably very high by international and historical standards.

It is probably close to Brazil and South Africa (top 10 per cent income share = 50-60 percent of total income) than to U.S. (top income share = 45-50 per cent of total income) or Europe (top 10 per cent income share = 30-35 per cent).

The government has also announced its intention of reducing the rate of taxation of corporate incomes to 25 per cent (with corresponding withdrawals of exemptions), which is lower than in rich countries.


One of the factors that explain this concentration of wealth is that inherited wealth and invested capital — in the stock market, in real estate — will grow faster than income.

Transparency issues:-

India is “unique” as far as transparency is concerned.

India used to publish income tax statistics but discontinued in 2000 after publishing for decades… transparency is a problem in every country but only in India it is falling.

In the absence of data it is not possible to show the evolution of wealth in India as a result of which “we could be vastly underestimating inequality.”

The data is needed to limit the concentration of wealth, fight corruption and assess the efficacy of India’s tax policy choices.

Tackling Inequalities:-

Inequality, however, needs not just economic but also social and political strategies. It’s a matter of policies and institutions.

In India, the preferential admission policies of caste-based quota and reservation systems in education which in the long-run should be gradually transformed into rules founded on universal social criteria such as parental income or place of residence.

Surge in CEO incomes

The sharp surge in the incomes of top CEOs in rich countries cannot all be explained by increased productivities for which there is no evidence at all.

It can, however, be explained by falling taxation rates and issues of corporate governance.

[2]. Food Security Act to cover all states by April

The Hindu


By April the National Food Security Act (NFSA) was likely to cover all States and Union Territories.

Till July 2014 the implementation of the Act had started in 11 States and Union Territories and since then, 14 more have joined the NFSA.

Government Reforms:-

The government had reformed the Public Distribution System by making it more transparent. Digitisation of ration cards is one of the important components for making PDS leak-proof; 97 per cent of the cards have been digitised.

Concerns on khesari dal

If ‘khesari dal’ was found fit for consumption then lifting of the ban on it should not be a concern as allowing its cultivation would help reduce imports of pulses.

What is Khesari Dal?

Also known as lakholi dal, it was earlier used as fodder, but that stopped after its harmful effects were made known by government agencies, forcing farmers to stop cultivation

According to medical research, consumption of the dal could lead to lathyrism – paralysis of the lower body as well as numbness in the spine. This is because it contains di-amino-pro-pionic acid.

For More: –

[3]. India may cease to be “Pharmacy of the world”

The Hindu


The government has expressed concern that India will no more be the “pharmacy of the world” if generic companies “gave up” the fight for access to affordable drugs.

Why so?

Voluntary Licence (VL) agreements have been signed between 11 Indian generic drug makers and Gilead Science to bring the blockbuster Hepatitis C drug Sovaldi (salt name sofosbuvir ) to Indian markets.

As part of the VL, the Indian companies pay a royalty to the innovator company (Gilead, in this case) and are allowed make copy-cat versions of blockbuster drug.

The VL includes provisions such as limited geographic scope, restrictions on the production and export of active pharmaceutical ingredient, and the inclusion of an ethically and medically controversial and problematic anti-diversion clause.

Under the VL agreement on Sovaldi, Indian made generic versions of the drug could not be exported to 50 middle-income, high burden countries, or any high income nations including much of Western Europe, and the U.S.

Over 49 million Hepatitis C patients live in middle income countries excluded under the VL’s anti-diversion programme.


The Indian government needs to once again step up and respond to the crisis in the industry. India is increasingly now reliant on imported expensive medicines and equally disturbing is the fact that India is shutting down as the pharmacy of the developing world.

Back Ground:-

Indian Action to make generic medicines available:-

India issued its first compulsory licence to an Indian generic pharmacy company to make the  lung and kidney cancer drug Nexavar at one-tenth the price.

What is Compulsory Licensing:-

Compulsory licensing allows a drug to be produced cheaply by a rival, typically a domestic generic manufacturer, because it’s been deemed to be too costly or inaccessible to patients who need it.

Voluntary Licensing to counter Compulsory Licensing:-

Voluntary licensing to a local partner under mutually agreed terms will not only help drug makers expand the market but also avoid compulsory licensing action.

While government intervention will lead to a drastic reduction in price as it’s typically without the consent of the patent owner, voluntary licensing will still ensure the companies make a profit, although at a lower price.

Through this the patent owners make sure that the drugs are sold at a price that is at least one-third of the original price.

This is considered as a wiser option to avoid a likely invocation of the compulsory licensing Act.

More importantly, it helps counter one of the most common reasons for issuing compulsory licences—patient access.

Although this means having to split the profit with the local partner, this will help minimise the loss and also ensure better access of the patented drug to domestic patients.


Voluntary License Agreement is a part of a company’s business strategy, and the government cannot have a policy dictating what a company’s business strategy should be.

[4]. Panel to review of military security bases

The Hindu

Key points:-

In the aftermath of the terrorist attack on the Pathankot Air Force station, the government is setting up a committee to review security preparedness of important defence installations across the country.

It will visit [the bases] and look into priorities like the risk factor, sensitivity and assets.

Marketing Tejas:-

Full-scale production of the indigenously developed Light Combat Aircraft (LCA) Tejas would begin next year and several countries had expressed interest in the aircraft.

The Defence Research Development Organisation, which developed the aircraft, is hoping to market the aircraft globally as Tejas made its international debut at the ongoing Bahrain International Airshow.

The development of Tejas, a single engine, multi-role supersonic fighter, began in the 1980s to replace the MiG-21s in service but has been delayed due to a series of technological hurdles.

[5]. SSA to develop ‘model’ schools

The Hindu


A total of 3,843 elementary schools in Andhra Pradesh have been identified for development as ‘model schools’ by upgrading the facilities in the institutions.

Upgrading Facilities:-

Strengthening the existing infrastructure through provision of additional classrooms, toilets, drinking water, computers, and maintaining healthy teacher- student ratio are among the initiatives to be taken up in the model schools.

The target is to develop all the model schools by March-end.

Sarva shiksha Abhiyan:-

The objective of the SSA is to provide free education in the 6-14 age group as guaranteed by the 86th amendment of the Constitution as a Fundamental Right.

Kasturba Gandhi Balika Vidyalayas (KGBVs):-

One of the focus areas of the SSA was ensuring education of girls and bringing down the dropout rate.

Girls education is being taken care of through the Kasturba Gandhi Balika Vidyalayas (KGBVs).

These are residential schools where food and accommodation needs of the students are met.

Most of the girls studying in these schools hail from poor families, or are orphaned and socially backward, but they are competing with their counterparts in private schools.

Supply of uniforms

A decision was taken to go for global tenders for supply of quality uniforms to students of elementary schools. They were unable to supply uniforms in time.

[6]. J & K gets Nai Manzil

The Hindu


The ‘Nai Manzil’ scheme for minority youths has been launched for the first time in Jammu and Kashmir.

The scheme was launched for girls in Srinagar

Under the scheme, girls from minority communities would be imparted a three-month skill development training in seven identified sectors relevant to the region.

These include training in saffron processing, food processing, embroidery, IT (both software and hardware), tourism/hospitality, electronics and plumbing.

[7]. Asia’s cleanest village clings to its serenity

The Hindu


In the tiny hamlet of Mawlynnong in the northeast, plastic is banned and spotless paths are lined with flowers — but its reputation as Asia’s cleanest village has proved a mixed blessing.

Home to the Khasi tribal people, Mawlynnong is famous for its exceptional cleanliness, far removed from the noise and dirt of other big cities.

Bamboo dustbins stand at every corner, volunteers sweep the streets at regular intervals and large signboards order visitors to throw away plastic packaging: littering is sternly frowned upon.

Mawlynnong’s concern for hygiene emerged about 130 years ago when an outbreak of cholera struck.

With no medical facilities in the village, cleanliness was seen as vital to prevent the spread of disease.

Surge In tourists:-

Until 2003 no tourists visited the remote community of 500 inhabitants high in the mountains of Meghalaya, which had no roads and was accessible only by foot.

After the village built its first road 12 years ago, a journalist from Discover India travel magazine wrote an article about the village.

The trickle of tourists became a flood, with visitors now reaching 250 a day in high season, swelling the village’s population by 50 per cent.

Downsides of increasing Tourists:-

Now there is noise pollution.

There’s no more privacy. Social bond which binds the village together is disintegrating


While the pristine village is proud of its achievements, some believe it must limit visitor numbers to protect the well-being of its inhabitants.

Environment & Ecology 


[1]. New thrush species found in eastern Himalayas


A new species of the thrush is found  in northeastern India and adjacent parts of China. The species was distinguished by its musical song.

The Himalayan Forest Thrush (Zoothera salimalii ) is common in the eastern Himalaya range but was overlooked till now because of its similarity in appearance to the plain-backed thrush, now renamed as Alpine thrush.

The ones found in forests (Himalayan forest thrush) had a rather musical song, whereas those found in the same region on bare rocky habitats above the tree-line (Alpine thrush) had a much harsher, scratchier and unmusical song

A third species called Sichuan forest thrush is present in China

Reason behind Name:-

This is the first Indian bird to be named after late Dr. Salim Ali, who was closely associated with Bombay Natural History Society

The bird has been named after him in recognition of his huge contribution to the development of modern Indian ornithology and wildlife conservation

Shrinking Habitats:-

New bird species are rarely discovered to science nowadays, when most natural habitats are shrinking. Since 2000, an average of five new species has been discovered globally every year, mostly from South America.

The Himalayan Forest Thrush is only the fourth new bird species described from India by modern ornithologists since Independence

Economic Digest

[1]. Davos leaders look beyond 2016’s early market mayhem

The Hindu

The World Economic Forum’s annual meeting in Switzerland wrestled with topics ranging from the impact of robots on jobs to gender and wealth inequality, but the Blood-letting in global markets is dominating corridor talk.


The International Monetary Fund (IMF) cut its global growth forecasts for the third time in less than a year to 3.4 per cent as new figures showed that the Chinese economy grew at its slowest rate in a quarter of a century in 2015.

The China’s rapid slowdown, combined with a dramatic fall in the price of oil, has spooked investors around the globe

Not a Financial Crisis:-

Most economists believe that there would be no return to an international financial crisis.

Market turmoil can be a harbinger that something is wrong and even if it is irrational, can have real consequences.

Mixed Reactions:-

Economists were confident that the world’s central banks have the ammunition to revive the global economy after years of record low interest rates and quantitative easing.

But some feel that Central banks are often more out of tune with reality than markets after the Fed and Brazil raised their interest rates

Short term volatility:-

The slowdown in Chinese growth was a “healthy correction” which, while serious, was needed.

This is only short-term volatility… People are focusing on the short term too much. We should be looking at the next five years, not the next two months

Adapting to the change in oil prices:-

In many of the markets the oil price is clearly a major factor of the health of the economy. We’re expecting governments to adapt to this new current order of oil prices, whether they’re at $30 or lower or higher.

[2]. International Solar alliance to be operational in 6 months

The Hindu


International Solar Alliance (ISA) is likely to be operational by the middle of 2016.


The international alliance is expected to have 121 members.

It comprises of countries with land between the Tropic of Capricorn and the Tropic of Cancer which typically have 300 or more days of sunshine a year.


One of the objectives of the alliance is to get $1 trillion investments in the solar sector worldwide by 2030.

Another objective is to get solar sector-specific human resources development in all member countries and ensure that any research and development in a country becomes available to all.

First Time:-

This will be the first time that India will have the headquarters of an international agency.

The government of India will host the ISA’s Secretariat for five years, following which it is expected to generate its own resources and become truly independent.

Corpus and legal entity:-

India has already offered Rs. 100 crore for an ISA corpus, which is expected to grow to $1 billion when all the member countries contribute.

Following the signing of the statute, each member country will have to send the document to their Cabinets or Parliaments for ratification within three months. The International Solar Alliance will become a legal entity after a minimum of 25 countries ratify it.

While only countries between the two Tropics will be eligible as members, others can join as partners. Around 30 countries were present at each of the two Steering Committee meetings held so far.

The Business Standard

Key points:-

Solar tariffs touched a new record low of Rs 4.34 per unit ($0.06) at an auction in Rajasthan.

With the panels being built more cheaply, and lower financing costs, tariffs in India could reach or breach the Rs 4 per unit mark.

The power minister has already indicated that the government was targeting that number.

Tariffs are sliding in the rest of the world too. China, the world’s largest clean energy investor, reduced solar feed-in tariffs from January 1.

[4]. Demographic dividend down, standard of living up

The Business Standard


A part of India’s touted demographic dividend — the population below age 15 years — has decreased in the past 10 years.

 Our standard of living — households with clean water, electricity, etc — has shown a rise during the same period, in 11 states covered by the latest National Family Health Survey (NFHS-4).

[5]. Potential High for technical textiles

The Hindu


Technical textiles industry is projected to grow at 20 per cent year-on-year and the segment’s potential is largely untapped in the country.

Capital subsidy:-

The government had announced 15 per cent capital subsidy for investments in technical textiles under the Amended Technology Upgradation Fund Scheme.

Incubation Centres:-

The Centre of Excellence for Industrial Textiles/Home Textiles at PSG College of Technology would have plug-and-play facilities (focus incubation centre) for potential entrepreneurs in technical textiles.

Huge potential:-

A country’s economic growth was determined by industrial growth and the Centre of Excellence here for industrial textiles would provide textile solutions required for all the industries.

From domestic growth to export to import substitution, the segment had huge potential in the country. The industry should harness the facilities created through the Centres of Excellence for technical textiles.

The industry should leverage on the focus incubation facilities and the centres should continuously update, make cost effective products and develop prototypes.

The Centre of Excellence at the institute had state-of-the-art facilities and production lines for wet wipes and coir mats.

What are Technical Textiles?

Technical Textiles are defined as Textile material and products manufactured primarily for their Technical performance and functional properties rather than aesthetic and decorative characteristics.

For more:-

[6]. 400 railway stations to get airport like facilities

The Hindu


Rail passengers may soon get to see airport-like facilities such as separate entry and exit points, connectivity with local transportation, pick up or drop off points and access to Internet at 400 stations across the country.

World Class Facilities:-

The Ministry of Railways has identified 15 key parameters on which the 400 railway stations will be redeveloped with “world-class” facilities. The government plans to invite bids from private developers by March-end, sources at the Ministry of Railways said.

Will have separate arrival and departure terminals, easy connectivity with local transportation such as bus or metro and will be accessible from both sides of the city.

Parcel movement across the platforms will be restricted and facilities such as food courts, retail outlets and medical facilities will be provided at the railway stations. Helipads near railway stations may also be built.

Focus is on passenger convenience. The railway stations should have seamless connectivity. Not only this, the developer will also have to take care of the traffic circulation around the stations

Mode of Development:-

The government plans to adopt the ‘Swiss Challenge’ mode to invite bids for redeveloping the stations.

The railway stations will be built on ‘design, build, finance, operate and transfer’ model and the developer will meet the entire cost of redevelopment by commercial development of land and air space in and around station which will be leased for a period of 45 years.

Also, the onus of securing approvals such as environment clearance, heritage clearance, archaeological clearance and others will be on the developers.

[7].Ninety seven per cent of retail transactions still cash-based, says USAID report

The Hindu


An overwhelming 97 per cent of retail transactions are still cash-based and only 29 per cent of bank accounts have been used in the last three months, as per a new report by the United States Agency for International Development.

Aiming for a cashless economy:-

The report’s findings assume significance in the backdrop of the government’s stated commitment to promote a cashless economy and switch all government transactions to electronic payments by the end of 2016.

Current Scenario:-

Only 29 per cent of bank accounts in India have been used in the last three months. The use of electronic payment methods, such as debit cards and mobile wallets, is even lower.

Behavioural change is a challenge:-

While the benefits of digitising payments are clear, what is less obvious is how we can change the everyday behaviour of consumers and merchants in a cash-based economy like India

Fighting black money:-

One way to curb the flow of black money is to discourage transactions in cash.

Promising measures to incentivise credit or debit card transactions and discourage cash transactions will be announced in the budget.

Steps to bring about behavioural change:-

The report recommends several steps the government can take to incentivise electronic payments both on the consumer side as well as from the merchant’s point of view.

Digitising Benefit Transfers:-

Research shows that consumers who are paid digitally are more likely to transact digitally. To support this effort, the Indian government should continue digitising benefit transfers, and also consider providing incentives for organisations to pay their employees digitally,

This ties into the government’s ongoing push to provide an increasing share of its subsidy payments directly to bank accounts.

Digital Payments for Mass transport:-

Another recommendation involves the government implementing digital payments for mass transport, in much the same way as private taxi services like Ola and Uber accept payments from digital wallets.

Tax Incentives:-

The report also recommends that the government implement tax incentives for consumers who transact electronically and also for banks to develop flexible and convenient micro-savings products for low-income consumers, since it found that those who save digitally are more likely to spend digitally.

Reducing the upfront costs:-

The up-front cost of trial is a major barrier to merchant acceptance. To encourage acceptance of digital payments, banks and payment players can consider removing upfront fees and device installation charges and move towards pay-per-use models.

Digital transfers between merchants and vendors:-

Setting up systems via which merchants can pay vendors electronically, is key since the report finds that the major hindrances to merchants adopting electronic payment systems are that vendors need to be paid in cash and the merchants themselves don’t know how to go about obtaining the electronic payment infrastructure.

Opinions & Editorials 

[1]. The road from pathankot

The Hindu


The article speaks about the future approach in Indo Pak Bilateral Relations so as to avoid Pathankot attack like incidents.

Failures behind Pathankot attack:-

The airbase was so poorly guarded, and the intelligence was not acted upon.

The gaping holes in the security architecture of a military installation situated so close to the border.

No unified command and control once the attack commenced.

Pattern of Indo-Pak Talks:-

The pattern is as follows

First, the announcement of holding talks

Next, the collapse of the initiative

Third, renewal of the initiative after an interval

Not in harmony:-

India tends to work towards the longer-term goal of restoring the strategic unity of the subcontinent, enlarge its strategic space, and enhance its security options.

On the other hand, Pakistan’s identity is often defined by its opposition to and rejection of India. It has shorter-term goals and sees talks and negotiations as a mere trick.

Pakistan’s policy towards India has always been a bundle of inconsistent and irrational policies.

This is further reinforced by the image of Pakistan as a dysfunctional state.

The question, hence, is whether it is wise in the circumstances to embark upon major policy initiatives and risk further embarrassment in the future.

Revamping the existing Pakistan Policy:-

The current Pakistan policy lacks both depth and vision.

Care has to be taken, hence, not to arouse undue expectations. Moreover, while dealing with Pakistan, processes are often as important as the outcomes.

Terror attacks from Pakistan keep happening at regular intervals.

Putting Talks on hold:-

India has to desist from embarking upon talks merely for the sake of it, or due to external pressure.

An extended period of disengagement at this point might prove worthwhile.

Minimalist approach:-

New thinking should begin by reviewing and revising the current code of conduct for relations with Pakistan.

This must involve adoption of a ‘minimalist’ approach, including limiting trade relations and restricting movement of people between the two countries.

Counter Force Doctrine:-

More importantly, India must evolve a new ‘Counter Force Doctrine’.

Alongside a ‘Counter Force Doctrine’, the Army must convert many of its static formations on the border into more mobile and leaner units.

These should be capable of sudden and swift retaliation in the event of an attack, especially when directed against military installations, key facilities and critical infrastructure.

It would send the right message to the Pakistani deep state that they cannot exploit our democratic freedoms without facing retaliation.

Step by step Normalisation Process:-

Once the situation improves, India could consider resorting to a step-by-step normalisation process, beginning with the resumption of Track II and Track 1 1/2 dialogues, followed by a resumption of backchannel negotiations, before proceeding to full-scale talks.

[2]. And diplomacy won

The Indian Express


The article analyses the success and failures of diplomacy in the international arena.


The successes that stand out: The adoption of the 2030 Sustainable Development Agenda, the conference of parties (COP 21) climate change agreement and the US-Iran nuclear deal, which passed despite stiff domestic and Israeli opposition.

A closer look at some of these successes indicates that 2015 has reinforced the need for multilateralism.


The 2030 agenda, for example, unlike the Millennium Development Goals of 2000, reflect a bottom-up negotiation process by the entire UN membership.

Their impact could well prove to be transformational, even as issues relating to their financing and implementation need to be resolved.

COP 21 in Paris:-

It represents a decisive victory against the irresponsible, particularly the climate sceptics. For the first time, every country in the world has pledged to curb their emissions, strengthen resilience and act internationally and domestically to address climate change.

But, here again, follow-up action to ensure that global warming can be limited to meet the ambitious targets will need to be demonstrated.

Role of women and gender equality issues:-

At the multilateral level, 2015 also marked the 15th anniversary of Resolution 1325 on women, peace and security.

Resolution 2242, passed in September 2015, affirms the essential role of women in conflict prevention, peacemaking, and peace-building.

Along with the establishment of UN Women in 2010, this has firmly entrenched the centrality of women’s empowerment and gender equality in the international discourse, a big plus for diplomacy in 2015.

Successful bilateral diplomacies:-

Among the major bilateral diplomatic successes of the year was the decision for the normalisation of relations between the US and Cuba.

The apology by Japan and the offer of $8 million to Korean “comfort women” during World War II were widely welcomed as an initiative designed to deal with a troublesome past.


The continued stalemate on Syria with devastating humanitarian consequences, the inability to deal with the Islamic State (IS) adequately, the situation in Yemen, where there has been more physical destruction in five months than in Syria in five years.

The roadmap for collective action against the IS produced by the UN Security Council provides just that glimmer of hope.

The template for assessing Successes:-

Assessments of diplomatic successes, in the real world, are best judged against a template. That template is, in fact, enshrined in the UN Charter.

The guidance is contained in the Charter, titled “Pacific Settlement of Disputes”.

Without use of Force:-

Instead of seeking conciliation, mediation, and judicial settlement, as provided for in Article 33, the previous decade and a half has been marked by the desire to use force with or without the UNSC’s authorisation under Chapter VII.


Iraq 2003 witnessed military action when a sceptical UNSC refused to be persuaded by the slender evidence of the existence of weapons of mass destruction.

In Libya 2011, council authorisation was forthcoming in what later turned out to be a barely disguised attempt at regime change.

The horrific consequences of the civil war in Syria are still playing out.

Consequences of using force:-

Clearly, Iraq 2003, Libya 2011, and Syria now, provide the most eloquent testimony on the failure of diplomacy. When diplomacy fails or is abandoned, the wheels of war start to grind.

The consequences of military action in Iraq, Libya and Syria laid the basis for the emergence of the IS.

Reversion to the charter:-

We would be lucky to see in 2016, a reversion to the Charter and an acknowledgement that conflict-prevention is the best diplomacy.

2016- Not a normal year:-

2016 will not be like any other normal year. The US will elect its 45th president. The UN will elect its ninth secretary general.

Both will be expected to play an important role in determining the contours of peace and security and economic and social development, impacting large parts of the world.

Equally, occupants of these high offices invariably turn to issues that will define their legacy in the years ahead.

It is, however, necessary to distinguish between developments that just make news and diplomatic initiatives that will alter the course of history for the better.

[3]. Act local

The Indian Express


The article cites the need to bring about domestic economic reforms to strengthen the Indian Economy during the current global economic slowdown.

Global Factors affecting Markets and Rupee:-

The over $2.7 billion worth of net sales in Indian stocks by foreign portfolio investors (FPI) since November due to  global factors, especially a deepening Chinese slowdown and collapse in commodity prices.

These have led to a pullout of funds from all emerging markets, including India, made worse by the US Federal Reserve embarking on a “normalisation” of its monetary policy that would mean higher interest rates.

A significant part of FPI flows originates from sovereign wealth funds of oil and other commodity exporting nations — whose own finances are now under pressure.

The role of “global” factors is also borne out by the rupee. The weakening of rupee against the dollar is, thus, more a result of the latter’s strengthening in an uncertain global environment, where the dollar has become every investor’s safe-haven asset.

Improving Domestic Environment:-

The best way for India to deal with such unfavourable global headwinds is to focus on improving the domestic investment environment and preserving macroeconomic stability.

Better than 2013:-

As far as Macroeconomic stability, there is no doubt that the country is today much better placed than in August 2013, when the combination of runaway inflation and twin deficits made it most vulnerable to speculative capital outflows.

More favourable than other emerging economies:-

While India is feeling the jitters from the bloodletting in global markets, there is no reason not to expect investors to view it more favourably than other emerging economies once the present, hopefully temporary, period of volatility subsides.


The coming Union budget offers an opportunity for the government to demonstrate its intent beyond incremental reforms.

It is to be noted that this is the time for policymakers to concentrate on “fundamentals” and “do all the good things”.

[4]. Agricultural Research: The way forward



One of the key conditions for the rejuvenation of Indian agriculture is a significant increase in crop yields.  In  this context the article speaks about the low levels of research and development in agriculture , which should be ramped up to see any visible results in crop yield.

India lags in crop yield:-

Data show that India was on a par or even ahead of countries like China or those in South-East Asia in terms of yields till the 1960s.

It now lags behind by a large margin in many important crops. Research and development in agriculture is a crucial requirement for meeting these future challenges.

Reason behind failing R&D:-

A paper published on the basis of work done by the task force on agricultural development constituted by NITI Aayog suggests that the existing system of agriculture research and development is failing to live up to the task because it has spread scarce resources thinly.

NITI Aayog’s claim about the proliferation of SAUs and a subsequent thin spread of resources being the main reasons for diminishing agriculture research and development returns does not seem credible.

Instead looking at the reason for the resource crunch and comparing India’s agriculture research and development spending—which is less than 0.5% of its agricultural gross domestic product (GDP)—with other countries would be useful.


In 2008, high-income countries accounted for 51% of public expenditure on agriculture research and development. China accounted for 13%, while India’s share was 7%.

Importance of Extension services:-

It needs to be kept in mind that extension services are more important in agriculture than anywhere else. The soil health card mission is a classic example.

Paucity of funds and human resources are key factors affecting the successful implementation of the scheme.

One hopes that those advocating a top-down model of agriculture research and development do not expect expert farm scientists to issue soil health cards to millions of Indian farmers

By: ForumIAS Editorial Team

Join the learning revolution. Get 9 PM Brief in your mailbox.

Print Friendly