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9 PM Daily NEWS Brief

9 PM Daily Brief – 3 February 2016

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

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GS PAPER 2


[1]. Five judge Constitution Bench to take a call on Section 377 / Hope floats again on Section 377

The Hindu | The Hindu

Context: The curative petitions against section 377 (criminalising sexual acts of lesbians, gays, bisexuals and transgenders (LGBT)) was up for hearing in Supreme Court yesterday.

The Verdict: SC has refereed the case to five judge Constitution Bench for in depth hearing. Bench hearing curative petition gave credence to arguments that the threat imposed by the provision amounts to denial of the rights to privacy and dignity and results in gross miscarriage of justice.

Curative Petition: A curative petition may be filed after a review plea against the final conviction is dismissed. It is meant to ensure there is no miscarriage of justice, and to prevent abuse of process. A curative petition is usually decided by judges in chamber, unless a specific request for an open-court hearing is allowed. The curative petition came into being after a 2002 case, Rupa Ashok Hurra vs Ashok Hurra and Anr.

Curative petition is necessarily heard by a bench of three judges comprising three senior most judges of Supreme Court.

A Brief Analysis:

Medieval prejudice is reflected in the Indian Penal Code Section 377. The retrograde decision of 2013 by Supreme Court upholding section 377 and rejecting review petition failed the vision of fundamental right, especially the idea that equality and dignity is the right of every section of the society.

The court in yesterday verdict has realised that the case has constitutional dimensions and has now paved the way for a comprehensive hearing on how to protect the dignity and rights of individuals with alternative sexual orientation by referring the matter to a five-judge Constitution Bench.

There has been an acknowledgement that section 377 has been basis of discrimination against transgenders which rebutts the earlier bench judgement that section 377 affects minuscule fraction of people and is not a mode of harassment.

Constitutional Bench: Constitution bench is the name given to the benches of the Supreme Court of India which consist of at least five judges of the court which sit to decide any case “involving a substantial question of law as to the interpretation” of the Constitution of India. This provision has been mandated by Article 145 (3) of the Constitution of India.The Chief Justice of India has the power to constitute a Constitution Bench and refer cases to it

[2]. Digging the hole, filling them up

The Indian Express

Context: 10th anniversary of Mahatama Gandhi Rural Employment Guarantee Act (MNREGA). The article looks into the different aspects of work carried out under the ambit of MNREGA.

First Phase:

According to the author, the first few years of MNREGA went by in addressing first generation issues like administrative setup and an implementation free of red tape and corruption.

The works: 

  1. Mud works: clearing water supply channels and desilting and deepening ponds and lakes.
    1. West Bengal – digging irrigation channel has brought an entire stretch of land under cultivation
    2. Tamil Nadu Tiruvalluvar District clearing bushes and grasses from canal system has ensured better drainage
    3. Desilting and deepending of water bodies has the potential to increase groundwater recharge.
    4. In Bundi rajasthan MNREGA workers have been used to maintain the canals which ensured better water supplies and fewer disputes among the upstream and downstream farmers.
  2. Rural connectivity: creation of roads led to  economic connectivity, empowering dalits in rural areas byreducing the disputes on  right of way.
  3. Sunderbans: a variety of work was taken up
    1. embankment
    2. flood protection works
    3. rejuvenation of mangrove forests.
  4. A variety of plantation and afforestration work has been taken up under the MNREGA.
  5. In Karnataka MNREGA has been used for the purpose of recharging public borewells.
  6. 40% component of MNREGA is for material using which fish farm ponds has been
  7. There has been experiment related to solid waste managementr that is underway under MNREGA.
  8. There are other works related to brick making and planting orchards.

Conclusion: 

The MNREGA is ridiculed even though it has shown some best practises and potential of rural poverty alleviation and empowerment. What is needed is a study of cost – benefit analysis of MNREGA project.


GS PAPER 3


[1]. Crop Insurance scheme may leave out tenant farmers

The Hindu

Context: Recent launch of new agriculture insurance scheme by Government of India known as Pradhan Mantri Fasal Bima Yojana (PMFBY).

The Modification:

Tenant farmers and share-croppers will not be eligible for relief under PMFBY. The All Indian Kisan Sabha has reiterated that agriculture and farmers are not victim of climate vagaries but more of vagaries in policy making of government.

[2]. Gearing up for Zika threat

The Hindu

Context: Declaration by WHO red flagging ZIKA virus as global emergency.

The Threat: virus has been found in the placenta and amniotic fluid of infected mothers and in the brains of foetuses and newborns. congenital malformations and neurological disorders in newborns.  Cases of Guillain-Barré syndrome, a condition in which the immune system attacks the nervous system, sometimes resulting in paralysis. Though the relationship between Zika and microephaly is not yet established, but  it is strongly suspected as the virus has been found in the placenta and amniotic fluid of infected mothers and in the brains of foetuses and newborns.

Carrier: Aedes aegypti mosquito. Body fluid is also suspected to be carrier of the virus.

WHO Declaration importance: WHO’s declaration galvanises international response to improve surveillance, detect infections and study the causal link between Zika infection and microcephaly and Guillain-Barré syndrome.

The Dilemma: vaccine development may face ethical problems as it would need to be tested on pregnant women, who are the worst-affected. Unlike in the case of Ebola, laboratory capacity to confirm Zika cases is needed as clinical diagnosis is unreliable; moreover, symptoms of Zika infection are similar to those of dengue.

India: 

Aedes, the vector for both the dengue and Zika viruses, is widespread in India, aggressive mosquito control measures are needed. That is why there is need of strong contingency plan in India to contain any outbreak of the disease.

[3]. Government sets up Tax Policy Council headed by Finance Minister

The Hindu

Context: Implementing recommendations of Tax Administration reform commission which stated that area of tax policy and associated legislation require structural modifications.

The Institutions Created: 

  1. Tax policy council: 10 member body headed by Union Finance Minister. It will be supported by a common Tax Policy and Analysis (TPA) unit  to cater to needs of both direct and indirect taxes.
  2. Tax Policy Research Unit (TPRU): will be a multi disciplinary body with the objectives of carrying out out studies on various topics of fiscal and tax policies referred to it by CBDT and CBEC. It will provide independent analysis, prepare and disseminate policy papers and background papers on various tax policy issues. It will assist Tax Policy Council and liaise with State Commercial Tax Departments.

It also recommended that Comprising tax administrators, economists, and other specialists such as statisticians, tax law experts, operation research specialists and social researchers should be set up for both the the boards.

[4]. RBI relaxes FDI norms to boost start-ups

The Hindu

Context: Focus on Start Ups as a machinery to propel the economy, both government and RBI is looking to incentivise Start Ups.

The rules relaxed:

Start-ups are now allowed to receive foreign venture capital investment irrespective of the sector in which they operate.

The regulatory changes for easing the cross-border transactions, particularly relating to the operations of the start-up enterprises, are proposed to be made in consultation with the Government of India.

The central bank simplified the process of dealing with delayed reporting of foreign direct investment (FDI)-related transaction by building a penalty structure into the regulations itself.

RBI has tried to address the regulatory difficulties being faced by the promoters of a start-up by proposing to permit receipt of deferred consideration and enabling an escrow/indemnity arrangement.

Proposed Rules:

RBI also said certain proposals are been considered and consulted with the government.

These proposals include, permitting start-up enterprises to access rupee loans under External Commercial Borrowing (ECB) framework with relaxations in respect of eligible lenders, issuance of innovative FDI instruments like convertible notes by start-up enterprises and streamlining of overseas investment operations for start-up enterprises.

[5]. With an eye on budget, Rajan holds interest rate / Let the rupee slide

The Hindu | The Indian Express

Context: The bimonthly monetary policy and upcoming Union Budget (Annual Financial Statement) 2016.

What has happened?

RBI has left the interest rate unchanged in bimonthly monetary policy review owing to stability in macroeconomic indicators. Also, RBI has decided to wait and watch till the Government comes out with its budget for the year.

RBI has noted that there can be upward movement in inflation owing to implementation of Seventh Pay Commission.

Note of caution for RBI:

On liquidity front, there remains a concern with systemic liquidity deficit well in excess of the prescribed one per cent of net demand and time liabilities currently. With revised Liquidity Coverage Ratio kicking in and deposit growth lagging, RBI may have to be proactive in managing the liquidity deficit through tools available at its disposal.

Effect on Rupee:

High interest rates have helped in keeping the rupee strong in recent years. It appears policymakers wish this to continue.

Threat for Rupee:

Recent slowdown in China and the depreciation of the yuan means India’s external environment has changed significantly. While two years ago it might have seemed like a good idea to prevent the rupee from weakening, a rethink is now warranted.

Accepting protectionist demands could impact downstream industries and have implications for India’s international treaty obligations.

India and protectionism: 

India is ranked No 1 in imposing the most protectionist measures since 2008. In 2015, India imposed the second highest number of protectionist measures, after Russia. For the fastest growing economy in the world, the policy of greater protectionism is becoming untenable.

If other currencies depreciate, it will further make India’s imports cheaper and increase the demand for trade protection. However, tariffs are not the only way to protect domestic industry. As is being seen globally, an alternative approach to raising tariffs to tackle the loss of competitiveness of domestic industry is currency depreciation.

[6]. PPP on BharatNet

The Financial Express

Context: TRAI: recommendation for PPP model for the national broadband project, BharatNet.

Aim of BharatNet: build a highly scalable network infrastructure to provide affordable broadband connectivity nationwide by 2017. It aims to provide 2-20 Mbps connections for all households and on-demand capacity to all institutions.

Reason behind the recommendation:repeated delays in rolling out the National Optic Fibre Network (NOFN).

Role of private sector: should include not just deployment but also implementation of the optic fibre cable (OFC) network. It will lead to capacity enhancement of the project which will be done by inclusion of professional management.

Model of venture:

The regulator believes that since rural broadband provision is prone to market as well as government failures, employing a PPP-based model to expand broadband coverage is a viable option. the private sector has to have control of the network for a concession period of at least 25 years. The regulator has suggested quite rightly that the period could be extended in blocks of 10/20/30 years on the mutual agreement of the government and the concessionaire.

Selecting the private partner:

Through the process of reverse bidding to determine the viability gap funding and be awarded to one whose demand for VGF is lowest and rationale.

The Challenge: 

The biggest problem that the private sector faces relates to right of way (RoW). Trai has rightly stated that provision of free RoW is a necessary and non-negotiable pre-condition to the successful deployment of BharatNet

[7]. US to accept Indian bilateral APA requests from Feb 16

The Business Standard

Context: Advance pricing agreements between India and US

News: US will accept Indian tax authorities application to seek information under the ambit of Advance pricing agreements from February 16. It is the means of settling transfer pricing disputes.

Benefit of APAs:  Bilateral APAs provide greater predictability in taxation, easing the uncertainty of doing business in each country. It provide greater certainty by removing double taxation, either totally or significantly.

Transfer Pricing: Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent company, the cost of those goods paid by the parent to the subsidiary is the transfer price.


By: ForumIAS Editorial Team


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