9 PM Daily Brief – 28 May 2016

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

What is 9 PM brief?

• GS PAPER 2
  1. U.S. Senate to vote on pro-India defence law {Foreign Policy}
  2. Panel submits report on new education policy {Governance}
  3. The new game changer in Pakistan {Foreign Policy}
  4. Landing a quick-fix {Governance}
• GS PAPER 3
  1. Tejas to replace MiG as key fighter {Defence}
  2. FDI inflows rise 29 % {Indian Economy}
  3. Norms soon to weed out fraud in staffing industry { Economy}
  4. Against the grain {Agriculture}

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GS PAPER 2

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[1] U.S. Senate to vote on pro-India defence law

The Hindu

Issue

• The U.S. Senate is likely to pass an amendment to the 2017 National Defence Authorisation Act (NDAA) that seeks to ease defence trade with India.

Analysis

• This easement of defence trade will be equivalent to the level of ease with which US does defence trade with its close partners like NATO, Israel, Australia, etc.
• The House of Representatives has already passed amendments similar to the proposed Senate Bill, but the details vary between the two. U.S. legislative process requires both Chambers to reconcile their individual versions of similar Bills, and pass a combined version before sending for the approval of the President.
• Once the President signs them into law, the amendments will enable defence trade between the U.S. and India on automatic route for a range of equipment, bypassing the bureaucratic and legislative hurdles in the existing case by case approval process.

[2] Panel submits report on new education policy

The Hindu

Issue

• A committee headed by the former Cabinet secretary T.S.R. Subramanian for the evolution of the soon-to-be-announced national education policy submitted its report to the Human Resource Development Ministry.

Recommendations

• Government should reinstate detention of students beyond Class V. As of now, under the Right to Education, all children are ensured promotion each year up to Class VIII.
• Set up an all-India cadre of educational services on the lines of the Indian Administrative Service (IAS).
• Drastic overhaul of regulators such as the UGC and AICTE.
• Allowing foreign universities to set up campuses in India under a strict regulatory framework Compulsory quality audit of all higher education institutions, both private and public, in three years.
• The panel, reportedly, hasn’t recommended any changes to the three-language formula followed in schools.

Way forward

• The government will now study the report and prepare a draft education policy, which will be put in the public domain for feedback.

[3] The new game changer in Pakistan

The Hindu

Issue

• The term Game Changer here refers to the $46 billion China-Pakistan Economic Corridor (CPEC) project, a highway which is to run from Kashgar in China to Gwadar in Balochistan, on the edge of the Persian Gulf, in Pakistan.

Fate Changer

• It is said that this $46 billion Chinese investment over the next decade-and-a-half will make Pakistan the next Asian Tiger.
• It is expected that such projects will give rise to jobs (particularly unskilled ones), will allow local businesses to benefit, and might open the way to development.
• But some in Pakistan have questioned whether the Chinese investment represents Chinese strategic and economic interests solely focussed on what will benefit China.
• The Chinese President’s visit gave rise to the signing of 51 Memoranda of Understanding and projects worth $46 billion in sectors which include energy, infrastructure, security, and broader economic development.
• Most of the money is expected to be spent on the construction of the corridor itself.
• One of the key externalities to the Chinese investment is the fact that a “Special Security Division” of the Pakistan Army, consisting of perhaps 10,000 Pakistani troops and headed by a Major General, would be set up to guard the Chinese workers and their investment, particularly in Balochistan, given the militancy and insurgency in the province.

[4] Landing a quick-fix

The Hindu

Issue

• Land Policy

Context

• Recently, the Centre Government has decided  to identify surplus land held by government departments and public sector undertakings with a view to auctioning such land to the private sector, or deploying it for urban renewal projects.

Analysis

• This step appears to be in sync with the Budget promise to encourage public sector firms to divest individual assets and re-invest the proceeds in new projects.

Approach

• A committee has been tasked with creating an inventory of public landholdings and identifying plots that are not needed for future expansion or strategic purposes, and thus could be alienated for other uses.

Challenges

• Valuation of land is a prickly issue that leaves governments susceptible to extreme scrutiny from political peers as well as the auditor.
• In addition, it can take years to conclude.

Previous experience

• Previous government had set up the Committee on Allocation of Natural Resources to suggest transparent mechanisms that would eliminate discretionary powers in such allocations.
• Every department told the panel it had no land to spare that could be considered surplus.
• The committee had mooted creating a depository of all government/public sector land with satellite mapping done to indicate actual usage, which it is hoped the new panel will also do.
• Other recommendations are also pertinent: land transactions should be on an outright sale basis with the optimal land use being approved before the sale, via e-auction.

Road ahead

• It must also be kept in mind that this exercise is a minor recompense for the larger reform agenda that the government has set aside: amending the land acquisition law.
• A model tenancy law that the NITI Aayog has mooted as an alternative reform step to allow the leasing of agricultural land, also remains a work in progress.
• The government needs to put more energy into those solutions for faster economic growth.

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GS PAPER 3

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[1] Tejas to replace MiG as key fighter

The Hindu

Issue

• Defence Minister has said that indigenously developed Light Combat Aircraft (LCA) Tejas would be the mainstay of the Indian Air Force and would likely replace the entire MIG-21 fleet of almost 250 fighters.

What is Tejas

• The Tejas is an Indian single-seat, single-jet engine, multi-role light fighter designed by the Aeronautical Development Agency (ADA) and Hindustan Aeronautics Limited (HAL).
• It came from the Light Combat Aircraft (LCA) programme, which began in the 1980s to replace India’s ageing MiG-21 fighters.

Reason

• About 250 MiG-21s were in service, most of which would be phased out in the next 10-15 years.

Limitation of LCA

• The LCA being a single-engine, light-weight fighter, it has its limitations, which is why another twin-engine fighter would be needed other than the Rafale.
• Functionally, the LCA is better than many other foreign fighters. It reacts very smoothly, fly-by-wire, its turn radius is very good, manoeuvrability is very good but it has limitation in the sense that it is a light combatant… It cannot go into deep penetration… It is mostly good for dogfights in our own sky or to degrade the opponent Army’s command posts.
• Thus we need more twin-engine fighters for deep penetration.

[2] FDI inflows rise 29 %

The Hindu

News

• Foreign Direct Investment (FDI) inflows into India increased by 29 per cent to a record $40 billion during in the financial year ended March.

New Record

• The total FDI flows in FY’16 is the highest-ever at $55.4 billion.
• The previous highest FDI inflow was in FY12 when the country received $46.55 billion

Contribution

• Of the FDI inflows (equity) in FY’16, services sector (including financial, banking, insurance, non-financial / business, outsourcing, R&D, courier, technology testing and analysis) attracted maximum investments of $6.88 billion.
• It was  followed by computer hardware and software ($5.90 billion).
• Trading business attracted $3.84 billion
• And automobile industry got $2.52 billion.

Sources of FDI

• Maximum inflows (equity) were from Singapore ($13.69 billion)
• It was  followed by Mauritius ($8.35 billion)
• Then US ($4.19 billion), the Netherlands ($2.64 billion) and Japan ($2.61 billion).

Department of Industrial Policy & Promotion

• Department of Industrial Policy & Promotion was established in the year 1995, and in the year 2000 Department of Industrial Development was merged with it.
• It is working under the Ministry of Commerce and Industry, Government of India.
• This department is responsible for formulation and implementation of promotional and developmental measures for growth of the industrial sector, keeping in view the national priorities and socio-economic objectives.
• While individual Administrative Ministries look after the production, distribution, development and planning aspects of specific industries allocated to them, Department of Industrial Policy & Promotion is responsible for the overall industrial policy.
• It is also responsible for facilitating and increasing the FDI flows to the country.

[3] Norms soon to weed out fraud in staffing industry

The Hindu

Issue

• Labour reforms

Context

• The government has decided to  regulate private employment agencies by amending the contract labour law of 1971.

Problems with  private recruitment agencies

• The number of staffing agencies is growing and is largely unregulated and they mislead the workers.
• There is no official website to check the authenticity of a particular agency.
• There are several staffing agencies that dupe people in the guise of getting them employed after charging them hefty amounts.
• Unfortunately till date, there has been no regulation for private recruitment agencies.

Principles for the proposed regulation for staffing firms

• First, they should not charge any money to the candidate.

• Second, the due diligence of workers such as character verification, police verification, and evaluation of capabilities should be done by the staffing agency. This may be time consuming and expensive but is the need of the hour.

Conclusion

• A national licensing regime for staffing firms will be critical to keep a check on ‘mom-and-pop’ shops that exist in the form of contractors.
• We should have only reputed and quality staffing agencies in the arena and all disreputed agencies should be eliminated.
• We will then be able to create meaningful and purposeful jobs in the country.

[4] Against the grain

Indian Express

Issue

• Questions are being raised over the credibility of the official information on farm production.

Analysis

• The Union agriculture ministry has pegged this year’s wheat crop at 94 mt-plus, a jump of 7.5 mt over 2014-15.
• This, when both market arrivals and government procurement have fallen by about 5.1 mt, even as wholesale wheat prices are ruling roughly 15 per cent higher than last year.
• The fact that even for 2014-15, the ministry’s final figure of wheat production turned out be about 9.2 mt lower than the first advance estimate of 95.76 mt, raises further doubts about the quality of official data. And that isn’t restricted to wheat.

Questions over mechanism

• Does Krishi Bhawan have a robust mechanism to track the progress of sowing in various states, the status of crops at different stages of growth, arrivals in mandis and stocks with the trade, apart from imports, exports and prices both in domestic and international markets?
• The importance of such information is obvious for policy purposes, whether it relates to fixing of minimum support prices for promoting/dissuading cultivation of particular crops or supply-side management with a view to control inflation.
• Recent experience — at least with regard to onions, pulses, sugar and now wheat — points to the government not being particularly possessed of timely market intelligence.
• Being slow in reacting to both shortages and gluts has, in turn, produced knee-jerk responses — typically in the form of imposition of export curbs or stock-holding limits without a thought to what these would do to producer incentives.

Question over credibility

• Trust in government economic data is premised on its not being in business and, hence, unlike private industry, not financially standing to lose from giving out the right information.
• It is this credibility that becomes a casualty when official information on farm production or GDP growth is seen to be providing an exaggerated picture of buoyancy, which does not appear to square up with the ground reality.

Conclusion

• Crop output estimates are always fraught with uncertainty, as production happens not in factories, but over millions of hectares of open fields exposed to the elements.
• Their numbers are, therefore, subject to margins of error and upward/downward revisions much more than in steel or cement.
• But when the gap between initial and final estimates or that of the government vis-à-vis private trade are of the order of 10 million tonnes (mt), there’s a serious problem.
• The agriculture ministry should explain the basis for its optimistic output estimates.