Brief of newspaper articles for the day bearing
relevance to Civil Services preparation
- GS PAPER 1
1. No law prevents women from entering temples: HC {Social} - GS PAPER 2
- Cabinet nod for Uttarakhand, enemy property ordinances {laws and rule}
- GS PAPER 3
- Disrupting the disruptors {FDI}
- ‘Market access for India’s services key to BTIA’ {India’s trade relation}
- Lessons from the Palmyra victory {International affairs}
- ADB lowers India’s growth forecast to 7.4 % for 2016-17 {Economic growth}
- Budget sets priorities for government spending {Bugdet}
- Monetary policy challenges persist in good times and bad {Economy}
GS PAPER 1
[1] No law prevents women from entering temples: HC
Bombay High Court’s verdict
- “There is no law that prevents women from entering a place of worship and if men are allowed entry, women should be allowed too.”
Ban was violating
- Articles 14 Equality before law
- 25 and 26 Freedom of religion
- Article 25. Freedom of conscience and free profession, practice and propagation of religion.
It is the State government’s duty to protect the rights of women.
Punishment?
- 6 months imprisonment if someone restrict someone’s entry in a religious place as per maharashtra law.
- The court also directs government to give wide publicity to the Act and issue circulars, informing the general public at large about the Act and its provisions.
PIL on Haji Ali dargah entry
- The State government said that equality must rule over tradition and customs and that the dargah trust should only administer, not regulate, tradition.
GS PAPER 2
[1] Cabinet nod for Uttarakhand, enemy property ordinances
Union Cabinet approved two ordinances
- to authorise expenditure beyond April one in Uttarakhand which is under President’s Rule
- to amend the Enemy Property Act, 1968.
On the Uttarakhand ordinance, Prasad said that in the “absence” of an appropriation bill in the state, “no withdrawal can be done as far as the Uttarakhand government is concerned from the Consolidated Fund of the state”
The cabinet, therefore, recommended an appropriation ordinance, so that withdrawal of money for expenditure can be done
Because there was no time to pass the Uttarakhand state budget in parliament.
Enemy Property Act, 1968
The act provided for the continuous vesting of enemy property in the custodian. The possession of enemy properties spread across many states in the country vest with the Union Government through the Custodian of Enemy Property for India.
Enemy properties
- In the wake of the two India-Pakistan wars in 1965 and 1971, there was migration of people from India to Pakistan.
- The properties and companies of such migrated persons (acquired Pakistani nationality) were confiscated by Union Government under the Defence of India Rules framed under Defence of India Act.
- These enemy properties were vested in the Custodian of Enemy Property for India by the Union Government.
- In the Tashkent Declaration (signed in 1966), a clause was included to discuss the return of the assets and property taken over by either side in connection with the conflict.
- However, Pakistan Government had disposed of all such enemy properties in their country in 1971.
Current status
- The ordinance for amendments to the Enemy Property Act was promulgated in January 2016.
- The Lok Sabha has passed a bill to replace the ordinance but the government could not get a Rajya Sabha nod. Thus, a new ordinance needs to be issued.
President’s rule on a state:
- In case of failure of the constitutional machinery, the state legislation is suspended and the executive authority of the state is assumed by the president in whole or in part. This is popularly known as the ’President’s rule’.
GS PAPER 3
[1] Disrupting the disruptors + E-commerce norms may prove to be a dampener + A half opening
The Hindu The Hindu Indian Express
Issue?
100% FDI in e-commerce has been allowed by the Government.
Need for the new norms
- The e-commerce players had exploited the policy ambiguities and loopholes to obtain attractive valuations for their enterprises.
- And this industry has attracted Billion of dollars, venture capital and private equity investors.
- So, there was a need to make the markets more mature and liberalise e-commerce.
- 100 % overseas ownership is allowed in the venture, as long as a business entity acts purely as a marketplace.
Safeguards from the Marketplace Operator’s perspective
- The responsibility for both delivery and quality of the product and related warranties lies with the seller.
- E-commerce firms can provide support services to sellers, including warehousing, logistics, call centres and payment collection.
Irritants for the e-commerce industry
1. The new rules place an upper limit of 25 per cent as the maximum sales that an e-commerce entity can source from any one of its vendors.
- This is an artificial distinction driven by a flawed notion — of bringing about parity between rules governing physical retail and e-retail.
- Instead of simplifying the complex labyrinth governing physical retail, the government has chosen to further complicate e-retail.
2. The policy makes a distinction between inventory-based e-commerce (where no FDI is allowed) and marketplace-based e-commerce (where 100 per cent FDI has been allowed).
- This provision is likely to trigger a cat-and-mouse game where firms create newer entities to avoid being caught.
3. The rule that states e-retailers “will not directly or indirectly influence the sale price of goods and services and maintain a level playing field”.
- Pricing freedom is central to the functioning of a market. There are also practical difficulties in enforcing this.
Response from the ‘Offline Players’
- They have welcome this move of the government as they had suffered because of the deep-pockets-backed discounts offered by the e-retailers.
- They are pleased that now e-commerce players will operate as technology providers and not as retailers.
- According to them, marketplaces should behave like marketplaces and provide technology platforms to sellers by charging a fee rather than getting into an inventory-based model.
- Fees should be their only income; this can put an end to the predatory pricing and provide level playing field for all.
- For example:- Consumer electronics and cell phone makers, which were among the hardest hit by e-commerce discounts, can now hope for a level playing field.
Response from the Consumers
- Discounts have been restricted and it can only be allowed by the sellers.
- Post sales, delivery of goods to the customer and customer satisfaction will be the responsibility of the seller.
- For example:-If a customer is buying from Amazon and he is not satisfied, then the seller would be responsible for that.And it would be very inconvenient for the customer to get its grievances redressed through the sellers.
- If the marketplace(Amazon) can provide logistics support, then they should be accountable for the quality of the final product they deliver.
The way forward
- The government should dissolve the distinction between physical- and e-retail.
- It should simplify norms that allow businesses to flourish, creating jobs as well as providing a richer array of goods and services to consumers at the lowest price.
- The e-commerce market has seen exponential growth and is expected to touch $69 billion by 2020. It is an industry that has the potential to create jobs and spur economic growth. But a ham-handed policy framework is not the way forward.
[2] ‘Market access for India’s services key to BTIA’
Issue
India wants Services to be the key in trade deal between India and EU during 13th India-EU summit in Brussels
- What is BTIA
Broad based Trade and Investment Agreement (BTIA)
Seeds of a High Level Trade Group (HLTG) were sown during the 2005 India-EU Summit
To explore ways to give further boost to trade and investment between the duo
A broader platform for expanded trade ties inculcated through the negotiations of a broad-based Bilateral Trade and Investment Agreement (BTIA)
What exactly are services related to in this context?
• It’s mainly IT and ITES sector among others
Why India does not have trade in services?
- EU considers India insecure in keeping data secure
- A ‘data secure’ status is needed by EU
- This has hampered the progress of negotiations around the liberalization of trade in services in the BTIA
- Textiles is also a sector where negotiations are difficult, because not much access is available
Visa issues with US
- High fees for H-1B and L-1 visas
- H-1B and L-1 are temporary work visa
- India initiated this dispute with the US at WTO on march 3
- This was against the background of already solar panel dispute involving domestic component requirements in India’s solar panel program
- UK also hiked fee across most visa categories including Tier 2 visas, used to employ skilled foreign workers in the U.K.
[3] Lessons from the Palmyra victory
Story
The recapture of the ancient city of Palmyra by Syrian government forces marks one of the biggest setbacks for the Islamic State since the group announced its ‘Caliphate’ in June 2014.
It also demonstrates the continued weakening of the IS on the battleground.
It lost about 14 per cent of the territory in Iraq and Syria last year, including the city of Ramadi, to Iraqi troops.
Several factors have been at play in structurally weakening the IS over the past few months.
- tide started turning against it when in June it lost Tal Abyad, a strategically important town on the Turkish-Syrian border, to Kurdish rebels.
- Turkey’s move to tighten its long and porous border with Syria after jihadists began attacking Turkish cities and international pressure mounted on Ankara, squeezed the IS’s cross-border supply lines.
- Pointed U.S. air strikes on the group’s oil infrastructure and training camps too weakened it both financially and organizationally.
- But the final blow came from Russia. Five months of Russian intervention has bolstered the regime of Bashar Al-Assad, raised the morale of its troops and helped it make major advances on the ground.
Palmyra is an instance that could be repeated in future battles against the IS:
- First weaken the organisation through multiple attacks and then launch a final ground offensive by the most organised military force — in this case the Syrian national army — to recapture territories.
For the IS, territory is important
The claim of establishing a ‘Caliphate’ comes out of the territories it controls. So every time it loses land the ‘Caliphate’ shrinks, weakening its terror machinery further.
The fight against the IS will not be complete unless its core is destroyed.
If the advances made in Ramadi and Palmyra are to be taken forward, there has to be coordination between the anti-IS forces, including the U.S. and the Syrian army.
The international community must help the Syrian and Iraqi governments continue their campaigns to free more territories from the IS
[4] ADB lowers India’s growth forecast to 7.4 % for 2016-17
Why ADB forecasts India’s lower growth
- Failure of the government to push through the Goods and Services Tax and the Land and Labour Reforms
- Asian Development Bank has lowered India’s growth forecast to 7.4 per cent from an earlier estimate of 7.6 per cent for the financial year ending March 31, 2017.
- Non-performing assets and an overleveraged corporate sector leave limited scope for more private investment in infrastructure and highlight the need for policy actions
3 points which offsetted a double digit decline in exports by increasing
• Manufacturing
• Private consumption
• Capital expenditure by the government
Inflation and imports
• Imports contracted largely due to a sharply lower oil bill
• Inflation remained broadly subdued on the back of lower global commodity prices
• FDI increased by measures taken by the government
• Budgetary deficit reduced by curbing spending and increased tax revenues
Solutions to increase growth by implementing necessary reforms
• Unifying the tax regime
• Improving labour market regulations
• Opening further to foreign direct investment and trade
• Strengthened public banks and corporate de-leveraging are expected to result in an uptick in bank credit and boost private spending, including on infrastructure
About ADB(ASIAN DEVELOPMENT BANK)
• ADBI provides intellectual input for policy makers in ADB’s developing member countries (DMCs).
• It does so by conducting research with a focus on medium- to long-term development issues of strategic importance that affects the region and through capacity building and training (CBT) activities that contribute to ADB’s overarching objective of poverty reduction.
Objectives of ADBI
• Identify effective development strategies and improve the capacity for sound development of the agencies and organizations engaged in development work in ADB’s DMCs.
• ADBI focuses its activities on areas where it has a strategic advantage, such as the analysis of emerging policy issues from regional as well as medium- to long-term perspectives, and the facilitation of policy dialogue among senior DMC policy makers
[5] Budget sets priorities for government spending
Budget 2016-17 has introduced a new classification system for the Centre’s spending
The new system divides Centrally Sponsored Schemes (CSS) into three categories:
Based on the recommendations of a sub-committee of chief ministers formed by Niti Aayog for the rationalisation of the CSS.
- Core of the Core (Mahatma Gandhi National Rural Employment Guarantee Scheme)
- Core
- Optional Schemes
Aim
- Re-organised into outcome-based Umbrella programmes and schemes to avoid thin spread of resources.
- To ensure optimum utilisation of resources
This system put in place as a run up to next financial year, when the Plan/Non-Plan distinction in government expenditure will be done away with.
What are plan and non plan expenditures?
- Planned expenditure: Any expenditure that is incurred on programmes which are detailed under the current (Five Year) Plan of the centre or centre’s advances to state for their plans is called plan expenditure. Provision of such expenditure in the budget is called Plan Expenditure.
- Non plan expenditures: This refers to the estimated expenditure provided in the budget for spending during the year on routine functioning of the government. Non- Plan expenditure is all expenditure other than plan expenditure of the govt. Such expenditure is a must for every country, planning or no planning. on police, Judiciary, military, etc. Similarly, the government has to incur expenditure on normal running of government departments and on providing economic and social services. Like Interest loans, on police, Judiciary, military, etc. Similarly, the government has to incur expenditure on normal running of government departments and on providing economic and social services.
- Core of the Core schemes 75 per cent of the material expenditure from the Centre and 25 per cent from the states.
- Core schemes will have a 60:40 formula
- Optional schemes will have a 50:50 formula, with the states having the flexibility to decide whether to invest in these or not.
Eight schemes under Core of the Core. including MGNREGA and all the umbrella schemes for the upliftment of minorities, Scheduled Castes, and Scheduled Tribes.
33 schemes under Core schemes including the Krishi Unnati Yojana, the Smart Cities programme, and the modernisation of the police force.
Why this new classification?
- Till 2014-15, out of 66 CSS, almost 86 per cent of the Central assistance was accounted for by only 17 schemes (known as ‘Flagship Schemes’ on account of their size and scale)
- The balance 49 schemes received low budgetary allocations
- even in the low-budget schemes, some Central assistance was available
- the States therefore felt compelled to implement them all
[6] Monetary policy challenges persist in good times and bad
Issue
India’s food supply and distribution can be strengthened and made resilient to fluctuations in rainfall such that the uncertainty around the monsoon ceases to be a monetary policy constraint.
How and why Indian economy is affected by monsoon
- Potential risk of drought recurs annually, and constrains monetary policymaking in India.
- Weak growth is associated with a lower inflation outlook, allowing for monetary policy stimulus without consequent inflationary pressures.
- Poor monsoon in India simultaneously weakens growth and spurs food inflation, complicating the central bank’s determination of growth/inflation trade-offs.
- Monetary policy loosening to revive weak growth would exacerbate inflationary pressures.
- Tightening policy to dampen inflation could intensify the growth slowdown.
Points which show India on path of recovery
- Indian economy is now considered the world’s fastest-growing major economy.
- Inflation has dropped from double-digit peaks a few years ago to levels within the central bank’s target this year
- The current account deficit has fallen to below 2% of gross domestic product (GDP) from more than twice that level three years ago.
- Foreign exchange reserves are back at high levels. This year’s budget reiterated the government’s commitment to fiscal consolidation.
But How?
- GDP data indicates a recovery is under way, but the numbers on corporate profitability, export performance and industrial output are less rosy. Bank balance sheets are still under duress.
- It is unclear how civil servant pay hikes will affect fiscal and inflation metrics this year.
- The benefits of lower oil prices on the current account deficit are somewhat offset by a more subdued outlook for remittances from migrants in oil-exporting regions.
- The external financial environment remains volatile.
- How monsoon will support or damage growth and inflation will remain a mystery until mid-year
Rainfall volatility
• India’s weak rural infrastructure to store water impacts agricultural output.
• High share of agriculture in employment amplifies the impact of lower output on rural incomes, and hence GDP growth.
• Inefficient food distribution heightens the inflationary impact of lower agricultural output on the cost of food.
Food
• Large portion of Indian household spending goes towards food, so total consumption suffers when food inflation eats into rural and urban household purchasing power.
• The impact of food inflation on the government’s food subsidy bill raises fiscal risks.
Inflation and Oil prices
• Indian inflation did decline over the past year, despite a somewhat suboptimal monsoon.
• Lower oil prices helped, as did the implementation of an inflation-targeting framework.
What should be our aim?
India’s demographics will steadily increase food demand, so unless supply is strengthened, food inflation will remain a constraint on the economy.
For the next few days, the key question about monetary policy will simply be whether or not the Reserve Bank of India changes policy rates.
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