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9 PM Daily NEWS Brief

9 PM Daily Brief – 26 January 2016

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

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National 


[1]. Rafale deal concluded, but no deal yet on price

The Hindu 

Context:-

India and France on Monday signed 14 agreements, including an intergovernmental agreement for the purchase of Rafale fighter jets, nuclear reactors, French railway locomotives and a major commitment to counter terror cooperation.

The financial component of the Rafale deal is yet to be finalised.

french

Counter Terror:-

The two sides said they would embark on new ways of cooperation on fighting terrorism, including intelligence-sharing and joint exercises along with the annual strategic dialogues and a joint working group on counterterrorism meetings.

They called for “decisive action to be taken against Lashkar-e-Tayibba, Jaish-e-Mohammad, Hizb-ul-Mujahideen, the Haqqani Network and other terrorist groups such as Al Qaeda,” urging Pakistan to bring to justice the perpetrators of the Pathankot and Gurdaspur attacks and the 2008 Mumbai attack, in which two French nationals were among those killed.

 

[2]. Decision draw flak from experts

The Hindu 

Arunachal Pradesh Crisis:-

As the chief minister of Arunachal Pradesh is losing support from members of his own party, both the governor and speaker of the house have stepped in to solve the crisis in their own ways leading to a tussle of power between them.

The case has been referred to a constitutional bench and the cabinet has recommended the president to impose president’s rule in the state.

http://indianexpress.com/article/explained/arunachal-making-of-the-crisis/

Critiques:-

Constitutional experts called the situation “grossly improper” and a “political mischief” to dismissing it as “mere impropriety,”

By making the recommendation, the Centre wants to present the Supreme Court with a fait accompli and make the entire judicial process infructuous

SR Bommai case:-

Referring to the historic S.R. Bommai judgment critiques said the Supreme Court should now seize the moment to judicially review the relevant material based on which the Cabinet advised President’s rule under Article 356(1).

The nine-judge Bench verdict in 1994 had held that the validity of a Proclamation for President’s Rule can be subjected to judicial review to find out if there was mala fide exercise of power.

This view was reiterated in the 2006 Bihar Assembly Dissolution case judgment involving the then State Governor Bhuta Singh.

Even after President’s rule kicks in, the Supreme Court can revive the Legislative Assembly, which will not be dissolved but kept in a state of suspended animation, if it finds the President’s proclamation unconstitutional.

Argument in favour of the centre:-

The Centre can argue that there is no working government in Arunachal Pradesh. There is no functional legislature to give instructions to the Executive. Thus, there has been a failure of the Constitutional machinery in the State

[3]. Operation begin to curb money laundering terror funding

The Hindu 

Context:-

Government agencies have launched a massive National Risk Assessment (NRA) exercise to identify the sectors that are susceptible to money laundering and terror funding, and plug the loopholes.

FATF Recommendations:-

This is in line with the Financial Action Task Force (FATF) recommendations.

While India has met its obligation of mutual evaluation with FATF, it is now required to make a risk assessment and put necessary mechanisms in place.

What is FATF?

FATF is an inter-government body that sets the standards for measures to counter terror financing, money laundering and other threats to international financial system.

Self Assessment Software tool:-

As part of the process, the World Bank had earlier this month made a customisable excel-based self assessment software tool available to Indian agencies.

It focuses on all vital aspects of money laundering, including terror financing risks, and helps identify threats and vulnerabilities in different sectors. Real-estate emerged as one of the sectors requiring urgent intervention.

NRA exercise:-

The NRA exercise generally takes about a year. It begins with the collection of data on sectors that are prone to money laundering in high, medium and lower categories at the national level.

The country then has to prepare an action plan based on the level of risk.


International


[1]. Ziku virus alert over rising birth defects

zikus

 


Economic Digest


[1]. Government mulls Shome panel suggestions on tax administration

The Hindu 

The government is considering the recommendations of the Parthasarathi Shome committee aimed at simplifying tax administration.

Key recommendations:-

The TARC, which was appointed by the UPA Government, submitted its report to Mr. Jaitley in June 2014.

Among the key proposals of the Tax Administration Reform Commission (TARC) was a suggestion that Income Tax Return forms should also include wealth tax details.

The panel had mooted that retrospective amendments to tax laws should be avoided as a principle and that the post of Revenue Secretary be abolished.

Other recommendations were for the CBDT and the CBEC to be merged and for the use of Permanent Account Number (PAN) to be widened.

Benefits of a simpler tax regime:-

A simpler tax system would ensure fewer appeals and said further efforts would be made to bring down arrears.

Having a large number of assessees and a large population, if laws are simple, the possibility of excessive litigation does not arise.

With all these changes, an improved performance in the tribunal the arrears will be low, our tax buoyancies will be higher and the harassment to the assessee would probably be least.

More and more returns are now online, the queries are being addressed online, the answers can come online, and therefore the human interaction in those assessments itself is coming down

Reducing the Oppression:-

The proposal for reducing corporate tax from 30 per cent to 25 per cent over 4 years along with removal of corresponding tax exemptions made in the last Budget would make the tax system cleaner and simpler and will ensure that reduced oppression by taxmen.

[2]. Government make it easier to set up companies, do business

The Hindu 

Context:-

The government unveiled two initiatives to expedite clearances and ensure greater ease of doing business in the country.

The Corporate Affairs Ministry announced Central Registration Centre (CRC) and Government Process Re-engineering (GPR) for ensuring faster clearances to incorporate companies and improve the ease of doing business.

Operations of the CRC will formally commence from January 27 and more services rolled out progressively.

Benefits:-

These initiatives are also meant for uniformity in application of rules and removing discretion.

It will be supplemented by intensive monitoring aimed at providing timely approvals. These services are in line with best international practices.

The GPR involves a three-pronged approach of further automating some of the approval processes by utilising advanced software tools, rationalising and modifying certain rules and engaging professionals to expedite the process of manual scrutiny.

In the first phase, the CRC will process applications for name availability (INC-1 e-forms), submitted online across the country and endeavour to process them by the end of the next working day.

Improvement in the ease of doing business:-

Last month following several measures taken by it as part of the government’s ‘ease-of-doing business’ initiative, the average number of days taken for incorporation of a company had come down significantly — by nearly 50 per cent — from 9.57 days in December 2014 to 4.51 days in November 2015.

Steps are being planned to further reduce the time taken for all approvals regarding a company’s incorporation to one-two days in normal cases.

The introduction of an integrated incorporation Form INC29 and tighter monitoring of Registrar of Companies’ performance had resulted in faster approvals and lower number of clarifications being sought from the stakeholders.

New Form INC29

A new version of Form INC29 will be introduced incorporating suggestions received from the stakeholders allowing up to five directors to be appointed and greater flexibility in proposing a name for a company.

This will allow a wider use of this integrated Form, which is already gaining popularity. The rules relating to reserving and approving names for companies are also being simplified.


Opinions & Editorials


[1]. Discrimination on the campus

The Hindu 

Context:-

There is a need to apply our minds in a calm manner to address the problems that Dalit students face in institutions of higher education and find a more durable solution.

Cause for concern:-

The student population on campuses of higher education has become increasingly diverse: according to 2008 data, of the total number of students in higher education in the country, 4 per cent were Scheduled Tribes, 13.5 per cent Scheduled Castes (SC), and 35 per cent Other Backward Classes (OBC). Hindus accounted for about 85 per cent of students, followed by Muslims (8 per cent) and Christians (3 per cent).

It cannot be a coincidence that out of 25 cases of suicide, 23 were of Dalits.

What researches show?

Research indicates that experiences of discrimination, exclusion and humiliation are the predominant reasons.

Separation of groups on the higher education campus is pervasive and ubiquitous. While some such separation may be for supportive reasons, at other times it is due to overt discrimination on the grounds of race, region, nationality, caste, class, religion, or gender.

Some university environment reinforces and maintains a divide between Dalit and non-Dalit. Dalit students do, indeed, experience overt and covert discrimination based on caste at this premier university.

It is this exclusionary social milieu that pushes Dalit students to the wall, and those who lack the capacity to deal with the psychological pressure of humiliation resort to suicide.

Coming out of the denial mode:-

There is constant denial and attempts are made to attribute the suicides to incident-specific situations with disregard for the links with the larger social milieu of exclusion.

True, there are incident-specific reasons, but it cannot be a coincidence that out of 25 cases of suicide, 23 were of Dalits. Thus, the first thing for policymakers is to come out of denial mode.

Tackling caste discrimination:-

The situation has improved but the legacy of caste continues in modified forms in many spheres of relations Dalit students have with other students and teachers and administrators.

Steps are needed on four fronts to address the problems of Dalit/OBC and other marginalised students.

These include legal safeguards against discrimination, civic education, academic assistance to students who need support, and participation of Dalits in all decision-making bodies of universities/colleges.

Legal Safeguards:-

Acknowledging the persistence of exclusionary practices associated with caste on higher education campuses, we need legal safeguards to act as a deterrent.

Currently some legal provisions exist such as the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Amendment Act, 2015, and the University Grants Commission (UGC) regulations. However, the provisions related to education in the Act are limited.

UGC regulations fall short in terms of effectiveness.

We need a separate law against discrimination in colleges/universities, to treat an act of discrimination as a punishable crime, in specific spheres, with detailed administrative guidelines as in the case of gender discrimination and ragging.

The legal route should help. For instance, when ragging was made a punishable offence, instances of ragging dropped dramatically. In fact, the near elimination of ragging is one of the most successful stories of the Ministry of Human Resource Development/UGC.

Civic education

While legal safeguards are essential, they need to be supplemented by civic learning.

Laws help to prevent, but not cure. Civic education in schools, colleges and universities can help students unlearn discriminatory and undemocratic values and behaviour that they pick up through socialisation and sensitise them to how the practice of discrimination associated with caste, ethnicity, gender, race, religion and other identities undermines the citizenship values of equity, freedom and brotherhood.

Unfortunately our education system has less to offer by way of civic learning that builds good citizens out of youth.

“Unlike liberty, civic knowledge, and capability are not bestowed at birth. They are hard won, though education at all levels. Democratic insights and competence are always in the making, always incomplete”.

Therefore, civic learning needs to be an integral component at every level of education. Many countries have proper civic education at school and in higher education. Some, like the United States, have special courses, while others have a civic learning component included in all courses with themes of diversity, inequality, racism, sexism, religious oppression, classism, anti-Semitism and heterosexism.

To develop individual capabilities and skill, the U.S. developed new educational methods, such as inter-group dialogue and mixed peer groups, where students from diverse groups come together and interact, thereby unlearning many prejudices and developing capacities to deal with diversity and difference.

Given the widening diversity in schools and higher education campuses in India, we badly need a similar structure for education for citizenship.

Academic Assistance:-

Another initiative relates to academic assistance.

Obviously, SC students need more support in language improvement and core subjects. Remedial coaching schemes are in place, but a majority of institutions lack the will to implement them in full. They need to be modelled on the pattern of the Jawaharlal Nehru University’s “personalised Academic Support System”, which has yielded good results.

Effective participation:-

The last suggestion is the provision to give representation to Dalit students and teachers on all bodies of the university and enable them to participate in governance.

Effective participation by Dalits in governance is a much better safeguard against the policies and rules detrimental to their interest.

The government can make a beginning by sending out a strong message by removing two symbols of inequality and exclusion.

[2]. RBI governor steps up to challenge

The Hindu 

Context:-

Where there is discrimination, there is sub-optimal use of talent, an unequal allocation of resources, and misuse of responsibility.

And if this takes place in a domain that deals with large public funds, we have to sit up and review the situation seriously, as it has been allowed to drift for far too long.

RBI Governor has spoken openly of punishing the wrongdoings of the big ones in business by stressing that“Defaulting promoters have no ‘divine right’ to remain in charge of their companies,”

Treatment of borrowers

Retail borrowers:-

Can a common borrower (one who takes retail loans) have the luxury of defaulting on a single Equated Monthly Installment (EMI) let alone not paying his/her debt? He or she would be bombarded with telephone calls. A common citizen needs to submit several documents of proof to be eligible for a bank loan.

With stricter Know Your Customer (KYC) norms, things have become much tougher for ordinary citizens to access bank funds.

Big borrowers:-

Often, big borrowers are given a royal treatment by the banking system. Banks go out of their way to accommodate the borrowers’ failures.

Class system in banking:-

The difference in the treatment of borrowers of different loan sizes has been prevalent for a long time, creating a new class system within the banking sphere.

NPA issue and Credit Information Bureau (India) Limited:-

Today, the banking industry is sitting on a mountain of non-performing assets (NPA)

The Credit Information Bureau (India) Limited. is effectively playing the watchdog role to ensure that defaulting retail borrowers don’t have access to fresh funds from the system.

Why can’t the same yardstick apply to big borrowers?

Often, subsidies are a subject of huge discussion among thinkers, economists, policy planners and the industry alike. If subsidies are bad for the economy, as has been suggested time and again, what about the accommodation of defaulting big borrowers?

Why is the transmission not happening?

In effect, the piled-up NPA has been a big constraint for banks to pass on the RBI-induced rate reductions.

Banks are using up the rate cuts to shore up their profits, rather than passing on the benefits to retail borrowers.

Conclusion:-

Not surprisingly, the RBI Governor has emphasised the need for cracking down on rule breakers so as to avoid a bigger catastrophe down the years.

PSU banks especially deal largely with public funds (deposits from the general public and capital infusion from the government).And these cannot be allowed to be squandered away by recalcitrant clients, however big they are.

[3]. A most exceptional friendship

The Indian Express

Context:-

The participation of French troops in the Republic Day parade on Tuesday — the first ever by a foreign contingent on Rajpath since Independence — is doubly significant.

It marks the end of India’s prolonged military isolationism and unveils the emergence of France as India’s most trusted international partner.

Beyond territorial defence:-

Although India’s joint military exercises and memorandums of understanding on defence cooperation multiplied since the early 1990s, New Delhi seemed incapable of imagining the role of India’s armed forces beyond territorial defence.

The ghosts of military isolationism seemed difficult to dislodge from the ministry of defence.

The potential of military partnerships in modernising India’s defence-industrial base and enhancing India’s strategic weight in the international system is gaining significance now. The marching of the French contingent down Rajpath suggests the effort has begun to pay off.

Indian Military at the global stage:-

Back in 2008, France had indeed invited India to send its troops to join the 2008 Bastille Day parade. That decision was an acknowledgement of India’s historic contribution to securing Western Europe in World War I and contributing to the Allied victory in World War II. It was also recognition of India’s new military possibilities on the global stage.

The French Interest:-

France became an early and valuable partner for India in building its nuclear and space programmes.

The French support to resolving the tangle with the US over fuel supplies for the Tarapur nuclear power station in the 1980s, limiting international sanctions against India in the wake of Pokhran 2, and conceiving a political carve-out for India from the global nuclear rules stand out as examples of exceptional French interest in India

Why France?

Free from Pakistan bias:-

One, India’s relations with America, Britain and China will always retain different degrees of difficulty given their dalliance with the Pakistan army.

Russia, which unambiguously backed India against China and Pakistan in the Cold War, has drawn closer to the former and is wooing the latter. France, in contrast, has made a clear choice in favour of India.

Credibility:-

As China rises, Russia asserts, Britain retrenches, Europe dithers, and America is torn by self-doubt, France becomes critical for India in promoting a measure of balance on the Eurasian landmass.

As the only credible military power with undiminished political will and a historic presence in the Indo-Pacific, France can be a privileged partner for India in strengthening peace and security in the maritime domain.

Constructing an equitable world order:-

While India’s quest for multi-polarity has often drawn it closer to China and Russia, Delhi is painfully aware of the dangers of jumping from the frying pan into the fire. Exchanging American global primacy for Chinese domination makes little sense for Delhi.

As a leading Western power with shared political values, France is a more credible partner for India in constructing a more equitable world order through a new concert of major powers.

[4]. India: The Storm Shelter

The Livemint 

Global Economic Scenario:-

Global markets have been in a free fall.

Oil, China and the US:-

Last week, oil prices dipped to their lowest in 12 years at below $27 a barrel. This is the sharpest decline (it began in mid-2014) since oil futures started trading in the mid-1980s.

The extent of decline appears to reflect not only a severe supply-demand mismatch in oil but also fears of a drastic global demand slowdown led by China.

The question is whether low economic growth in the world will drag the US into recession or whether pockets of growth in the US and elsewhere combined with policy action around the world will make this a “market correction” rather than a foreteller of global recession in 2016.

Quantitative Easing:-

The European Central Bank signalled its willingness to cut rates earlier than previously expected.

It seems rather likely that the US Federal Reserve will postpone rate hikes and quite possibly signal a reduction in the number of expected hikes (from four to two) in 2016.

The Bank of Japan will most likely increase the quantum of easing and the PBoC (China) will probably announce a slew of measures that add liquidity to the system.

True stability can only come from further deleveraging and significant structural reforms in Europe, China, Japan and the US.

Indian economy:-

India is a relatively normal economy. It remains a mildly inflationary, demand sensitive and balanced economy with positive real rates.

The low oil prices and relatively robust economic growth offers a great opportunity to undertake structural reforms at low (relative) cost and further cement the argument for India to be the most favoured large emerging market for investments.

Time for Reforms:-

The agenda for structural reforms is well known. It includes big ideas like (finally passing) the goods and services tax Bill, having access to reliable 24×7 power and fixing the bad loans problem in the banking sector.

It also means a host of workable small ideas that improve the ease of doing business and reduce the hassle of taxes.

India’s developmental focus must remain on job creation and productivity enhancement. This crisis should once again open our eyes to the need for a deep, long-term pool of domestic capital.

India imports a global recessionary contagion primarily through disproportionately large foreign institutional investment flows.

The much-needed pension reform will ensure domestic capital depth against this type of contagion. The basic structure and design in terms of a National Pension System has already been created. Its footprint needs to be dramatically increased.

Policymakers should get busy. It is a golden opportunity.


By: ForumIAS Editorial Team


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