9 PM Daily Current Affairs Brief – 14th February 2017

The Hindu

Context

Court confirms cancellation of MBBS admissions

What has happened?

Terming their conduct an “act of deceit,” the Supreme Court has confirmed the cancellation of the admission of 634 students to the MBBS course made through Vyapam test in Madhya Pradesh between 2008 and 2012

Bench held that

The action of the students was “unacceptable behaviour” and did not warrant any interference under Article 142 of the Constitution.

Article 142

The Hindu

Context

In a reasoned and realistic Budget, the Finance Minister missed a couple of tricks while reducing the income tax rate for the first slab and the corporate tax rate for small companies

Author presents us with a brief commentary on various budgetary provisions.

Regressive budgetary measures

1. Reduction in tax rate: Author states that although the budget is bereft of any populist measures but one small act of populism still crept in i.e. of reduction in the income tax rate for the first slab from 10% to 5% & it is bad for the following reasons.
   • Low tax to GDP ratio: Total tax revenue in India is ridiculously low at 11% of GDP. It is essential that the tax to GDP ratio be increased significantly in order to finance increased public expenditure in the social sectors and infrastructure. How? By following this twin-pronged strategy,
     • Ø No reduction in tax rates: Author points out that there should be no decrease in the tax rates
     • Ø Making tax evasion more difficult: Secondly, a significantly larger share of national income must be brought under the scope of income tax. Increased computerization, KYC requirements, penalties on large cash transactions will all help in making tax evasion more difficult

 Authors’ suggestion

The government should have kept the 10% tax slab unchanged, and actually introduced a new 5% tax slab for those with taxable income of ₹2 lakh to ₹2.5 lakh

2. Reduction of corporate tax rate: Another backward step as per author is the reduction in corporate tax rate from 30% to 25% for companies with an annual turnover below ₹50 crore. Those above the threshold will continue to pay the existing rate of 30%. Author terms this measure regressive because,
   • Such a tax reduction provides no incentive to expand. Instead bigger units might be encouraged to split up so as to enjoy the lower tax rate.

Positive budgetary steps

• Providing thrust to agri sector: Budgetary allocation to agriculture and rural sector has been increased by 24%. Agriculture has also been promised increased credit. MGNREGA has been allocated the highest ever budgetary package
• Reform in Political funding: The budget has proposed a ceiling of ₹2,000 on cash donations to political parties, as well as the introduction of electoral bonds for political funding. They need to be supplemented by other steps such as subjecting the accounts of all major parties to auditing perhaps by the Comptroller and Auditor General of India’s office.
  

  ---

The Hindu

Context

With labour law reforms back on the Centre’s agenda, fresh discussions begin with trade unions today to push through a long-pending overhaul of the Factories Act of 1948

Tweaking its draft amendment

Labor ministry has tweaked its draft amendment bill

• State governments will decide: Instead of increasing the threshold limit set for the number of workers in an industrial unit to be statutorily covered by the factories law, the Centre is now proposing an enabling provision that lets State governments decide the threshold over which a unit will be considered a factory for the purpose of the law

Modification of the definition

• The definition of factory is proposed to be modified as in the original Bill by giving powers to the State governments to increase the threshold limit of workers up to 20 and 40 for factories working with and without the aid of power respectively
• Present situation: The present Factories Act 1948 applies to establishments with 10 or more workers, if the premise is using power and to establishments with 20 or more workers, without electricity connection
  

  ---

The Hindu

Context

Article talks about a TERI report titled “The Transitions in Indian Electricity Sector”

TERI – The Energy and Resources Institute

The Energy and Resources Institute (TERI) is a leading think tank dedicated to conducting research for sustainable development of India and the Global South

Observations

• No new investment in coal needed: The energy that would be available from renewable sources, nuclear and gas plants, both existing and planned, would be enough to meet India’s energy demand for the next 7-8 years, which means no new investment in coal is needed at least till then
• Increase in per capita power consumption: Per capita annual power consumption will increase from the current 1,075 kWh to 1,490 kWh in 2021-22, 2,121 kWh in 2026-27 and 2,634 kWh in 2029-30
• Increase in India’s renewable energy capacity: the country’s renewable energy capacity is set to increase to the targeted 175 GW level by 2021-22 and further grow to 275 GW by 2025-26

Recommendations

• Strengthening grid infrastructure: Report states that the Centre would do well to take steps to strengthen the grid infrastructure and build storage capacity
  

  ---

Indian Express

Context

The defence budget, 2017-18, raises serious concerns

Issue: Inadequate defence budget outlay

Stats

Total outlay to defence = Rs 274114 crore, excluding the outlay of Rs 85,740 crore for defence pensions

 What, defence analysts and standing committee on defence, want the defence outlay to be?

Defence outlay of 3% of GDP is being asked for

Few concerns

• Underutilization of existing meagre outlay: As has been noted in yesterday’s brief, the ministry of defence returned more than Rs13000 crore from the capital head in 2015-16, and another Rs7000 crore in 2016-17, which was unspent. This repeated underutilization of the capital budget weakens the case for higher allocations for new acquisitions
• Inadequate allocation for maintenance of equipment currently in use: Author states that there is an immediate requirement for funds for this purpose
• Inadequate allocation for war wastage reserves: Indian army needs adequate allocation on this front also

 War wastage reserve (WWR):War wastage reserves (WWR) are collections of military material held in reserve in case of war. This includes bullets and other form of ammunition, as well as equipment, weapons and fuel

• No contract signed under Make in India: Author states that under ‘Make in India’ programme, no development contract has been signed so far and with a meagre allocation of Rs 44.63 crore for assistance to prototype development, it seems the MoD isn’t expecting many projects
• Lack of future vision: Author mentions that while budget speech contained references to schemes like the Centralised Defence Travel System and the interactive Pension Disbursement System, there was no mention of important policy issues like the strategic partnership scheme and defence technology fund. It indicates that government is not thinking long term or is not serious enough

Way forward

What is needed is an outcome-oriented monitoring of utilisation of outlays, as recommended by the standing committee last year. This is the only way to ensure that the focus shifts from ensuring full utilisation of funds to spending these wisely on the desired outcomes — there is no indication that this is going to happen in the coming year

Read more: Defence Technology Fund, Why is Indian military running out of ammunition?

Indian Express

Context

Ensuring speedy trials requires concerted effort from both government and the judiciary

Issue: Undertrials in Jails

Who is an undertrial?

He is a person who is currently on trial or who is imprisoned on remand whilst awaiting trial.

• The 78th Report of Law Commission also includes a person who is in judicial custody on remand during investigation in the definition of an ‘undertrial’

Backdrop

Union Law Minister has issued a message to all high court chief justices to “review” cases of undertrials who have been incarcerated for long and to “take suomotu action for their release”

Seriousness of the problem

• National Crime Records Bureau (NCRB) data, for example, shows that of the over 2.82 lakh people in jail in 2015, about 67 per cent were undertrials
• More than 65 per cent of the undertrials spend three months to five years in jail before getting bail

Cause

High number of undertrials can be attributed to following causes,

• Overburdened judiciary: There is a lack of judges to deal with the rising number of cases. Section 167 of the Code of Criminal Procedures mandates that judges can extend a detainee’s custody for a period of 15 days at a time. For that to happen, the detainees have to be produced regularly before the courts. This rarely happens; proceedings don’t take place in time and the undertrials are shuttled from court to court
• Poverty: Most of the undertrials are from poor backgrounds and disadvantaged social groups resulting in a lack of resources to access the justice system

Read More: A very good article on undertrial issue

Live Mint

Context

India must strengthen its intellectual property rights infrastructure without giving in to US pressure to do away with the flexibility granted by WTO regulations.

Backdrop

National Intellectual Property Rights Policy was released in 2016

 Balancing interests

Author states that weaknesses in India’s IPR regime need to be smoothened out while taking care of India’s trade and public interest

Issues with India’s IPR regime

• Pending patent applications: When the Patents Act, 1970, was amended in 2005 to bring it in line with WTO requirements, there were a little over 56,000 pending applications. By the end of 2015—a decade later—India had close to 250,000 pending applications for patents and over 500,000 pending applications for trademarks. The bottleneck this creates has real economic costs. A UN Industrial Development Organization review of almost 200 studies on the link between IPR and economic growth found a strong consensus on a positive relationship. While the degree of benefits accrued may vary, that relationship holds true for both developed and developing economies. It has gained particular relevance in India now. Initiatives like Make In India and Start-Up India—require a strong IPR framework

Addressing concerns

Author states that policy has addressed following concerns

• Lack of patent examiners leading to pendency and prolonged application examination periods
• The lack of effective enforcement of existing regulations

The Problem

American pharmaceutical companies in particular take exception to following section of the Patents Act

• Sections 3(d):It prevents new formulations of existing medicines from being patented unless they improve therapeutic efficiency. Big pharmaceutical firms have used this method, called evergreening, to maintain market dominance and keep prices high
• Section 84: It provides for compulsory licences to meet the reasonable requirements of the public. Abuse of these provisions may well disincentivize research and development spending and doing business in India, as American companies claim

Author suggests

Author points out that India should maintain its stand and should not relinquish or dilute its public interest clauses in the face of pressure from US. This pressure is bound to increase now as the new president elect Trump has won riding on a protectionist sentiment.

Conclusion

Boosting bilateral trade will mean concessions and compromises on both sides. New Delhi must be flexible where it can. But on IPR it must strengthen its infrastructure while holding firm on the flexibility TRIPS grants it. It will not be an easy balance to maintain