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9 PM Daily Current Affairs Brief – 15 January 2017



Front Page / NATIONAL [The Hindu]

  1. Aero India: The skies are afire, but it’s all calm on the ground
  2. SC is looking at triple talaq, not Uniform Civil Code: CJI

Editorial/OPINION [The Hindu]

  1. The long and winding road to justice
  2. Importance of goods and services
  3. The ecological balance-sheet

ECONOMY [The Hindu]

  1. Wholesale inflation surges to 5.25%

Live Mint

  1. The pathologies of redistributive resource transfers

NoteDownload the Summary of ECONOMIC SURVEY 2016-17 Here 


Front Page / NATIONAL [The Hindu]


[1] Aero India: The skies are afire, but it’s all calm on the ground


The Hindu

 

Context

Aero India 2017 seemed to be the largest ever — at least in size — with the exhibition area spread over more than 27,600 sq. m.

 

Little participation from foreign fighters

The first day of the five-day event, touted as Asia’s premier air show, saw very little participation of foreign fighters, planes and drones; while, aircraft and helicopters of the Indian Air Force took over in greater abundance

 

Duller exhibition halls

The number of exhibitors this time is 549, down by nearly 100 from the last edition. Those who have attended Aero India over the past few editions have attributed this to the lack of large deals on the horizon (2015 had seen defence companies vie for the lucrative multi-billion dollar Medium Multi-Role Combat Aircraft contract from the Indian Air Force)

 

Managing Waste

The five-day show at the air base at Yelahanka is expected to generate around 40 tonnes of waste, of which about 12 to 15 tonnes will be wet waste. Bengaluru-based startup Reddonatura will be handling the waste by deploying fully automatic composting machines


[2] SC is looking at triple talaq, not Uniform Civil Code: CJI


The Hindu

 

Context

Bench to decide on whether polygamy, ‘nikahhalala’ are violation of rights

 

What has happened?

The Supreme Court has clarified that it will decide on whether triple talaq and polygamy are violations of Muslim women’s rights and will have nothing to do with the requirement of a Uniform Civil Code.

 

What did the Bench say?

A Bench led by Chief Justice of India J.S. Khehar said,

  • The issue of Uniform Civil Code was “completely different” and had nothing to do with the issue at hand.
  • It would hear debates on the “legal” aspects of the practices of triple talaq, ‘nikahhalala’ and polygamy among Muslims and would not deal with the question whether divorce under Muslim law needed to be supervised by courts or court-supervise arbitration as it fell under the legislative domain

 

Backdrop

The Centre had earlier opposed the practice of triple talaq, ‘nikahhalala’ and polygamy among Muslims and favoured a relook on grounds of gender equality and secularism.

 

What is Uniform Civil Code (UCC)?

Uniform Civil Code (UCC) seeks to replace personal laws of different religions of India with a common set of rules to govern the citizens.

  • DPSP: Article 44 of the Directive Principles in India had made it a duty of the government to implement it
  • UCC would set common laws for public law and cover marriage, divorce, inheritance, adoption and maintenance

 

Read More: Take a look at this article


Editorial/OPINION [The Hindu]


[1] The long and winding road to justice


The Hindu

 

Context

Article talks about the outcome, aftermath & issues related to the State Of Karnataka v. SelviJ.Jayalalithaa& Otherscase

 

Outcome

All the accused have been convicted under the Prevention of Corruption Act

  • In September 2014, the former rendered the judgment, 18 years after inception of the case. He found that during the period 1991-1996, the extent of disproportionate wealth was to the tune of ₹58 crore. The main accused was sentenced to four years of imprisonment and asked to pay a fine of ₹100 crore. Ms. Sasikala, guilty of abetment, also got a four-year term with a fine of ₹10 crore

 

The Case

In 1996, Subramanian Swamy filed a criminal complaint under the Act, alleging accumulation of vast wealth through corrupt acts by the erstwhile Chief Minister abetted by her close aide.

 

Section 13(1)(e)

Under Section 13(1)(e) the burden lies on the prosecution to prove that the assets of the public servant are disproportionate to his or her known sources of income. Once done, there is a presumption of guilt. It is a provision designed to combat corruption by public servants, and for guilt or innocence to be quickly established.

 

Issues

  • Long delay: It took 18 years for the judgment of the trial court to be handed down. Jurisdictional objections and petitions were filed to delay the justice. Trial court failed to speedily dispose of such petitions resulting in delay. There is a need to ensure that these cases are fast-tracked

 

Rest of the article presents a history of events that finally culminated into SC judgement convicting all the accused

 

One can leave it or give it a cursory read.


[2] Importance of goods and services


The Hindu

 

Context

As the polls in Uttar Pradesh shift eastward, issues of economic delivery and the impact of demonetisation appear to be increasingly salient for voters

 

In the wake of upcoming UP polls, author presents a brief commentary on the perceived voter behavior and the actual ground reality wherein other factors like economic well-being & efficient delivery of public goods and services are being weighed equally by various communities, instead of voting solely on the basis of identity

 

Interested aspirants can give it a read if they want to.


 

[3] The ecological balance-sheet


The Hindu

 

Context

Greater focus is required to reverse both inadequate budgetary allocation for the Ministry of Environment and its under-utilization

 

Budgetary allocation increased

Author states that although the budget allocation to Ministry of Environment Forest &Climate Change (MoEFCC) has increased 18.88% from the last year, some vital areas which required immediate policy intervention from the state have been casually ignored

Author’s contention

Increased funding offset by absence of corresponding measures: In the current Budget, while there has been an increase in allocation to the MoEFCC, funding for renewable energy forms, solar use in rural areas, etc. has been reduced. The pluses of additional funding have been offset by paltry efforts at consolidating environmental conservation

 

Other problems: –

 

Meagre Budgetary allocation

Author points out that in the wake of increasing environmental challenges in India, MoEFCC has been allocated inadequate funds. He cites following pointers wrt budgetary allocation,

  • Superficial renaming: There has been superficial renaming of ‘Clean Energy Cess’ levied on coal, lignite and peat as ‘Clean Environment Cess’ with an increase in the rate of levy to ₹400 per tonne. This increase was done during previous budget
  • Lowly allocation to CPCB: Central Pollution Control Board has been allocated a measly sum of ₹40 crore and ₹74.30 crore. In the light of recent events like High levels of pollution in Delhi the funding is visibly unremarkable
  • Poor allocation to wildlife conservation projects:The treatment of wildlife conservation has been no different, with ambitious projects like Project Tiger having the budget slashed by ₹30 crore and Project Elephant receiving a marginal boost of ₹2.5 crore

 

Underutilization of Funds

A breakdown of the actual expenditure shows that out of the ₹850.02 crore dedicated to implementing the Centrally sponsored core schemes, the total outlay was only ₹566.38 crore

  • These Centrally sponsored schemes include Project Tiger, Project Elephant, Integrated Development of Wildlife Habitats and Conservation of Natural Resources and Ecosystems
  • For instance, Project Tiger has barely managed to utilise half the funds allocated to it. Similarly, underutilization of funds is a problem which affects State projects as well

 

Way forward

Author states that to rein in mindless industrial growth at the cost of environment, to address the problems of disappearing wildlife, increasing conflicts, deterioration of ecology and habitat destruction, scientific, sustained and intensive measures of conservation are required. A small step in this regard would be to acknowledge the role of the environment in budgetary allocations and ensure rational dedication of funds


ECONOMY [The Hindu]


[1] Wholesale inflation surges to 5.25%


The Hindu

 

Context

The index saw its growth accelerating from 3.39% in December 2016

 

What is WPI?

The wholesale price index is an index that measures and tracks the changes in the price of goods in the stages before the retail level. WPI shows the average price change of goods included in the index and is often expressed as a ratio or percentage, and the change is one indicator of a country’s level of inflation

 

Breaking down WPI

WPI compares the total costs of the goods being considered in one year with the total costs of goods in the base year. To illustrate, imagine 2010 is the base year. The total prices for that year are equal to 100 on the scale. Prices from another year are compared to that total and expressed as a percentage of change

 

For example, if the total price of the goods under consideration in 2010 was Rs 4,300, and the total for 2015 is Rs 5,000, the WPI for 2015 with a base year of 2010 is 116, indicating an increase of 16%

 

Note: WPI does not take into consideration the retail prices or prices of the services



Read More: WPI & inflation
What has happened?

The Wholesale Price Index grew 5.25% in January on the back of accelerating inflation in the crude oil and minerals sectors.

  • Index in December: 3.3%

 

Why, a substantial increase, in inflation?

This significant increase in inflation has come from a substantial increase in the prices of fuel and power and marginal increase in prices of manufactured goods (over previous month)

 

Rest of the article contains only stats and numbers

 

Give it a light read


Live Mint


[1] The pathologies of redistributive resource transfers


Live Mint

 

Context

The evidence suggests that all the pathologies associated with foreign aid appear to manifest in the context of intra-country transfers too

 

Two Indias

In the first few paragraphs, article points towards the existence of two Indias,

  • one which has grown rapidly due to better geography, namely coastal states like Gujarat, Maharashtra, Andhra Pradesh etc
  • The other India is the one whose development has been contingent on other development models based onaid given through special category status. Examples: North-East, Jammu and Kashmir, Himachal Pradesh and Uttarakhand

 

Adverse effects of aid

Survey states that in the international context, foreign “aid” has been shown to create a number of adverse effects

  • Resource dependency: Countries receiving aid have little incentive to increase their own resource base in the form of institutional development and enhanced tax base. This leads to systemic resource dependency
  • Can trigger Dutch Disease:Another potential downside of aid is that it could trigger the “Dutch disease”, named after the impact that discovery of natural gas in the North Sea had on the domestic economy in the Netherlands.

 

Dutch disease is the negative impact on an economy of anything that gives rise to a sharp inflow of foreign currency, such as the discovery of large oil reserves. The currency inflows lead to currency appreciation, making the country’s other products less price competitive on the export market. It also leads to higher levels of cheap imports and can lead to deindustrialization as industries apart from resource exploitation are moved to cheaper locations

 

Author’s contention

Are we seeing the signs of Dutch disease in India?

  • Author singles out Redistributive Resource Transfer (RRT) as a concept similar to ‘aid’

 

What are RRT?

Redistributive Resource Transfer or RRT to a state (from the Centre) is defined as gross devolution to the state adjusted for the respective state’s share in aggregate Gross Domestic Product(GDP). The top 10 recipients are: Sikkim, Arunachal Pradesh, Mizoram, Nagaland, Manipur, Meghalaya, Tripura, Jammu and Kashmir, Himachal Pradesh and Assam.

 

Two key differences b/w foreign aid & RRT

  • RRT are intra-country transfers and do not augment overall national disposable income like foreign aid does
  • The donor-recipient relationship is also very different because states benefiting from transfers are part of the national governance structures that determine them

 

Economic Survey 2016-17

Survey then points to some of the observations made in Eco Survey regarding RRT

  • RRT are substantial: Annual per capita RRT flows for all the North-Eastern states (except Assam) and Jammu and Kashmir have exceeded the annual per capita consumption expenditure that defines the all-India poverty lines, especially the rural one. In other words, RRT are substantial in magnitude
  • Outcomes of a higher RRT:Higher RRT seem to be associated with,
    • Lower per capita consumption
    • Lower gross state domestic product (GSDP) growth
    • Lower fiscal effort (defined as the share of own tax revenue in GSDP)
    • Smaller share of manufacturing in GSDP, and
    • Weaker governance

 

Observation: RRT curse

Eco Survey concludes from the above observations that all the ills associated with ‘foreign aid’ seem to manifest themselves in the context of intra-country transfers too i.e. existence of RRT curse

 

So,

 

Should RRT be dispensed away with?

No because in a federal system the Centre must play a redistributive role because it will always have to redirect resources to under-developed states. Rather, the Centre will need to ensure that the resources it redistributes are used more productively

 

Possible reasons for RRT curse

Eco survey points out that it is possible that the “RRT curse” originates from,

  • Poor connectivity and poor infrastructure—physical, financial and digital: Enhancing connectivity on a war footing (as the government has attempted for financial inclusion with the Pradhan Mantri Jan Dhan Yojana, or PMJDY, expediting the optical fibre network, etc.) will have a moderating effect

 

What can government do more beside enhancing connectivity?

Besides enhancing connectivity, government can modify the flow of RRTs in the following manner

  • Direct flows to households: One possibility will be to redirect a quantum of RRT directly to households as part of a universal basic income (UBI) scheme in relevant states. Targeting issues plague existing development interventions and transfers directly to households could eliminate a large majority of these problems.
  • Performance-contingent transfers: Future Finance Commissions could revert to the practice of the 13th finance commission of explicitly conditioning transfers on the tax effort of states so that states do not become resource dependent solely on RRTs
  • Governance-contingent transfers: Given that some high RRT recipient states have performed better than others, the capacity of states to utilize funds efficiently plays an important role. To encourage better governance, the fund transfer mechanism could include a few monitorable institutional indicators as criteria for resource transfers

 


 

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