9 PM Daily Current Affairs Brief – 28 March 2017

[1]. Do less, do it better

---

Live Mint

---

[1]. Farm loan waiver is no solution for Indian agriculture

---

Front Page / NATIONAL

---

[1]. SC counters push for Aadhaar

 

The Hindu

 

Context

The recently-passed Finance Bill made Aadhaar mandatory for filing tax returns and getting a permanent account number (PAN)

 

History

In October 2015, the government had assured the Constitution Bench that the requirement for Aadhaar would be purely of a voluntary nature for citizens to access public subsidy. The court had said this would remain so till it took a final decision on whether the Aadhaar scheme was an invasion of privacy

 

Give the rest of the article a light read

 

[2]. Supreme Court for policy to curb farmer suicides

 

The Hindu

 

Context

The Supreme Court has said the Centre should address the “serious issue” of farmers taking their own lives and implement a comprehensive policy to be adopted by the State governments for preventing the tragedy

 

Article only presents us with the Centres’ plan to roll out a comprehensive policy to address farmers’ problems

 

As and when such a policy is rolled out, it will be dealt in detail.

 

[3]. Find alternatives to pellet guns: SC 

 

The Hindu

 

Context

Reminds govt. that a ‘welfare state’ is meant to protect all with harm to none

 

Backdrop

• SC was hearing a petition from J&K High Court Bar association over the death and injuries of protesters besides spectators watching the incidents from their houses

 

• The High Court had on September 22 rejected the plea for a ban on pellet guns on the ground that the Centre had already constituted a Committee of Experts through its memorandum of July 26, 2016 for exploring alternatives to pellet guns

 

• The High Court had also declined to accept the plea to prosecute the officers who ordered pellet guns to be used and those who shot the agitators

 

SC’s view

• Find alternatives: Citing that it is a welfare state the Supreme Court asked the Centre to come up with alternatives to pellet guns used by security forces against agitators and stone-pelting mobs on the streets of Jammu and Kashmir

 

Centre’s stand

Centre responded that,

• Self-defense: Security forces are face-to-face with violent mobs, sometimes used as a human shield by militants who open fire at them. The agitators even throw petrol bombs at the forces
  • Security personnel battle for their own lives and use these guns, at the minimum, as a means of self-defence, and at the most, to bring law and order back on the streets

---

Editorial/OPINION

---

[1]. Giving short shrift to children’s rights

 

The Hindu

 

Context

In the last three years, important entitlements for children have been undermined by the Centre

 

Author’s contention

Child rights have come under attack during last three years as per the author. He presents us with a non-exhaustive list of such attacks

 

1. Violation of women’s right to maternity entitlements under the National Food Security Act (NFSA), 2013 for more than three years

• Entitlements under the act: Under the Act, every pregnant woman is entitled to maternity benefits of Rs. 6,000, unless she is already covered by maternity schemes in the formal sector
• Union Budget that followed, for 2016-17, did not make any provision for maternity entitlements beyond the pilot scheme (for 53 districts only) initiated by the previous government. This was all the more startling as the Central government had assured the Supreme Court in writing, on October 30, 2015, that this scheme — Indira Gandhi MatritvaSahyog Yojana — would be extended to all districts in 2016-17
• On December 31, 2016, with the Prime Minister finally endorsing maternity entitlements, things started moving after that, but not much: the allocation of Rs. 2,700 crore in the 2017-18 Union Budget is barely enough to cover a fourth of all births, even with the proposed 60:40 ratio for Centre-State funding

2. No attention to ICDS: Central government is giving short attention to the Integrated Child Development Services (ICDS) and it was hit by Budget cuts in 2015-16. The cuts were partly reversed later on, but, meanwhile, they had done much damage and sent a disastrous signal down the line. State governments were not amused.For instance, in a letter sent to the Central government on July 15, 2016, the Government of Odisha complained that salary payments to anganwadi workers were held up by Budget cuts, while planned schemes for pre-school education and medicine kits “could not be taken up”
3. Cuts in the allocation to the mid-day meal scheme: The midday meal scheme is also being starved. Like ICDS, the midday meal scheme received cuts in the 2015-16 Budget, with an initial Budget cut of 36%. The allocation for midday meals in this year’s Budget, Rs. 10,000 crore, is still 25% lower in money terms than the corresponding allocation four years ago (in real terms, the decline would be even larger). The Budget cuts, of course, must be seen in light of the fact that the share of States in the indivisible pool of taxes was raised from 32% to 42% in 2015-16
4. Scrapping the JSY: Plans are in progress to scrap the Janani Suraksha Yojana (JSY), a scheme of conditional cash transfers aimed at promoting institutional deliveries
   • Rise in institutional deliveries:Recent data clearly show a surge in institutional deliveries in the last 10 years or so (e.g. from 39% in 2005-6 to 79% in 2015-16 according to National Family Health Surveys)
   • Decline in MMR:Incidentally, the decline of maternal mortality has also accelerated in recent years
   • Yet the Central government is now planning to phase out JSY
   • JSY to be subsumed under maternity benefit scheme: In a presentation made at VigyanBhavan on February 22, 2017, the Secretary, Women and Child Development, explained that JSY would be “subsumed” under the maternity benefit scheme from next year, as the latter provides a “higher amount for institutional delivery”
   • In other words, maternity benefits will be made conditional on institutional delivery, in violation of the NFSA, and further, this linkage will be taken as an excuse to discontinue JSY, even though maternity entitlements and JSY serve distinct purposes
5. Compulsory Aadhaar: Aadhaar is now being made compulsory for all these schemes — midday meals, ICDS (yes), maternity benefits, JSY etc
   • Curbing corruption:This is being done in the name of curbing corruption, but no credible evidence has been given that identity fraud is a serious problem in these schemes, or that Aadhaar is the best possible solution
   • Real motive: Rather, this seems to be part of the blind drive to make Aadhaar universal, regardless of the possible damage
   • No respect for Judiciary: The imposition of Aadhaar on midday meals and related schemes exposes, once again, the claim that Aadhaar is a voluntary facility. It also shows that the Centre has no respect for Supreme Court orders, and that the Supreme Court, for some reason, does not mind.

 

Conclusion

Author concludes that the hostility of the central government may soon seep through to the state governments wrt children welfare which would be a tragic loss not just for Indian children but also for the entire nation

 

[2]. Powered by a pause

 

The Hindu

 

Context

Delays in the Indo-U.S. nuclear deal bring an opportunity to re-examine the energy basket

 

Issue: Delay in operationalization of Indo-US nuclear deal

 

Note: News has been covered in detail in the brief dated 27^th Mar 17

 

Author’s contention

Author suggests that rather than seeing the present circumstances as a setback the government and officials should use this as an opportunity to re-examine the country’s engagement with nuclear energy for future needs

 

A global phenomenon

Author states that Westinghouse’s near-bankruptcy is part of a larger pattern of worldwide cost overruns and delivery delays across the nuclear energy industry

• Areva facing similar difficulties: Nuclear manufacturer Areva (in partnership with Mitsubishi) has a similarly precarious position despite hopes of a bailout by the French government
• Even Russian supplier Rosatom’s Kudankulam units 1 and 2, in the only foreign collaboration now operational in India, were built in double the time budgeted

 

Other issues

Apart from cost over-runs and delivery delays, other issues still remain to be settled, like,

• Cost of importing reactors: The cost of importing reactors, relative to those based on indigenous design, is another concern
• Land acquisition:Land acquisition issues remain
• Requirement of large water reservoirs: The need for large water reservoirs for the reactors also remain and which will only grow if the government goes ahead with its plans for 55 reactors of 63,000 MW in total by 2032
• Possible tsunami scenario:In addition, given concerns about a possible tsunami scenario along the Andhra coast, where many of these reactors are planned, the Department of Atomic Energy and NPCIL are looking for options farther inland

 

Rise of other energy alternatives

Following factors have resulted in rise of other potent renewable energy sources over nuclear power,

• Rapid progress in technology in other renewable energy sources such as wind and solar power
• The collapse of oil prices
• The expansion in gas projects as a viable and clean alternative

 

Benefits to India

• Cost effectiveness: The energy alternatives to nuclear energy could be more cost-effective for a developing country such as India, as the energy can be made available in smaller units, and then built up, unlike nuclear plants where nothing can be transmitted until the whole plant is complete and attains critical status
• Safety concerns: After Fukushima, nuclear energy is being viewed with suspicious eyes all over the world. The disaster potential of nuclear energy is a very potent factor which the government should take into account

 

Conclusion

Author concludes by stating that this is the best time for India’s energy planners and government to take a long, hard look at the cost-benefit analysis on the nuclear power balance sheet

 

[3]. Turning the clock back

 

The Hindu

 

Context

With several bilateral investment treaties lapsing on March 31, FDI inflows could take a hit

 

Issue: Bilateral Investment Treaties (BITs)

 

Why, in news?

In the pre-1991 era India didn’t believe in BITs.

• India started signing BITs from the early 1990s. The signing spree continued unabated till 2010 with India inking BITs with 83 countries but rattled by many BIT claims brought by foreign investors from 2011 onwards, in 2016, India unilaterally issued BIT termination notices to 58-member countries
• Reportedly, these BITs would lapse on March 31 after the expiry of the mandatory one-year notice period. Although the terminated BITs will continue to be relevant for existing foreign investment in India and Indian investment in these countries for the next 10-15 years due to survival clauses, any new investment, either from these 58 countries to India or vice versa, shall not enjoy BIT protection as was the case before 1991.

 

Present situation

India adopted its Model BIT in 2016 and is keen on signing it with all the 58 countries but as the model BIT tilts unfairly on the regulating power of the state, it has been shunned so far.

 

Do BITs impact investment inflow to India?

Yes. They do. Two studies support this argument

• First study: The first, done by Rashmi Banga, examines the impact of BITs on FDI inflows in 15 Asian developing countries including India from 1980-81 to 1999-2000

Observations:

• The study shows that BITs signed by these 15 countries with developed countries had a stronger and significant impact on FDI inflows in these 15 countries
• However, BITs signed by these 15 countries with developing countries didn’t have much impact on foreign investment inflows
• Till the year 2000, out of the 14 BITs India signed, nine were with developed countries. Therefore, BITs had a significant impact on FDI inflows in India, which rose from $393 million in 1992-93 to $4,029 million in 2000-01

• Second Study: A very recent one by NitiBhasin and RinkuManocha, considers the impact of BITs on FDI inflows in India from 2001-2012
  • Observation:This study also demonstrates that BITs signed by India contributed to rising FDI inflows in the said period by providing protection and commitment to foreign investors

 

Comparing the Indian model BIT and EU-Canada BIT

Author compares the model BIT adopted by India and the EU-Canada Comprehensive Economic and Trade Agreement (CETA) to offer the reader some perspective.

• MFN provision: The EU-Canada CETA contains a ‘most favoured nation’ (MFN) provision — a cornerstone of non-discrimination in international economic relations — which is missing in the Indian Model BIT
• Mandatory obligation to litigate in domestic courts: The Indian Model BIT, unlike the EU-Canada CETA, mandatorily requires foreign investors to litigate in domestic courts for five years before pursuing a claim under international law
• Protection to investors if state goes back in its promises: The EU-Canada CETA provides protection to foreign investors in situations where the state goes back on the concrete representations it made to lure an investor, which the investor relied upon while investing. The Indian Model BIT is silent on this, thus exposing foreign investors to regulatory risks
• A Multilateral investment court: The EU-Canada CETA talks of pursuing the establishment of a multilateral investment court to settle investment disputes. Will India support such a proposal?

 

[4]. Trust the EVMs

 

The Hindu

 

Context

Machine-manipulation charges levelled by some political parties have no real basis

 

This issue has already been covered in detail in 27^th Mar 17 brief

Economy

[1].‘Digital platform to help railways save Rs. 60,000 crore’

 

The Hindu

 

Context

Entire operations can be monitored on a single platform

 

What has happened?

Indian Railways will invest about Rs. 12,000 crore in developing a common digital platform for integrating information from all its departments leading to savings of about Rs. 60,000 crore

 

Name of the platform: IR-One ICT

• ‘One ICT’ will cover all the aspects of the Indian Railways, including cost analysis, attendance, accounting, asset management, medical management and land management.

 

Completion period

• 1^st phase: About 2 to 3 years

 

Benefits of the platform

• Single platform monitoring of entire railways: With the common platform, the monitoring of the entire Indian Railways operations can be done on a single platform
• Multiple benefits: Better capacity and asset utilization would help the railways run more trains, carry more freight, provide better and reliable services to passengers, increase its revenues and make its operations more safe

---

Indian Express

---

[1]. Do less, do it better

Indian Express

 

The Context

New NITI Aayog recruitment rules should trigger a revamp of the Indian state’s human capital

 

About the New Rules

• The new recruitment rules of NITI Aayog are thoughtful
• Their hiring context is different from large frontline government organisations and tweaking leadership selection will be ineffective without tackling culture and performance management
• Rules create a level playing field for outsiders and insiders and confront issues like cost-to-government, promotion, equivalence, employment contract format, etc
• Most importantly, their five-year contract, extendable by two years, should become standard for all senior positions

 

Reboot of the human capital

Reboot government human capital on these four fronts needed:

 

Fresher Selection:

• Fresher hiring for central government officers in the IAS, IPS, RBI, etc, is probably better than any private sector management trainee programme because of the high quality and quantity of applicants, the UPSC’s institutional integrity, starting compensation, process rigour, etc.
• Replicating this transparency, process and institutional ability to non-officer hiring and state government hiring could rapidly improve legitimacy, competence and trust

 

Leadership Selection:

Leadership pipeline depending on a line (seniority) or a monopoly (only staffed by insiders) cannot be effective, So

• Leadership Selection needs thoughtful design:
  • Pathways to top jobs for young insiders
  • Lateral entry at scale
  • Specialisation opportunities by tenure
  • Training for insiders
  • 25 per cent of all senior appointments through open advertisements and giving insiders a real shot at these jobs when they are 45 years old

 

Performance Management:

• Any organisation that does not punish its poor performers punishes its high performer
• Pending a revamp of appraisal systems, all central and state officer cadres should adopt the “colonel threshold” of the army under which, if you are not shortlisted from promotion, you retire at age 50

 

Culture

The government is organised vertically but important horizontal problems like urbanisation and industrialisation seem unsolvable because of the lack of teamwork across departments

 

Conclusion

• Honest and competent civil servants — and there are many — must initiate human capital reform as their contribution to creating a high-performing Indian state that does fewer things but does them better
• India is on the move and if self-healing is delayed further, it will be imposed from the outside. Civil service reform is inevitable, unstoppable and overdue

---

Live Mint

---

[1]. Farm loan waiver is no solution for Indian agriculture

 

Live Mint

 

Context

In the case of repeated farm loan waivers, it makes sense for borrowers to default strategically

 

Backdrop

The new Bharatiya Janata Party government in Uttar Pradesh is considering a farm loan waiver

as promised in its election manifesto

 

The Case

Ideally: The Narendra Modi government wants to double farm income by 2022 through the transformation of Indian agriculture

Reality: Focus on farm loan waivers continues

Examples, Punjab, U.P, Maharashtra etc. all trying for farm loan waivers

 

Not the Solution

• Loan waivers affect credit discipline: Repeated loan waivers affect credit pricing and disrupt the credit market. Unlikelyto help the agriculture sector in the long run
• Banks may get more selective in extending credit
  • World Bank study—The Economic Effects Of A Borrower Bailout: Evidence From An Emerging Market: No evidence of greater investment, consumption or positive labor market outcomes in areas where debt relief led to a significant reduction of household debt
  • The bailout also led lenders to reallocate credit away from districts with high program exposure
• Political intervention distorts the credit market:

Harvard Business School paper—Fixing Market Failures Or Fixing Elections?
Agricultural Credit In India:

• Agricultural credit extended by government-owned banks goes up in an election year, while defaults also increase during election time
• Borrowers anticipate a waiver
• This becomes a self-fulfilling cycle with long-term consequences—defaults would lead to loan waivers, and waivers will lead to more defaulters

• Huge fiscal cost: significant impact on general government finance and the combined deficit

 

Conclusion

• The agriculture sector needs government support but loan waivers are not the solution
• On the contrary, expenditure on loan waivers will eventually leave less fiscal space for public expenditure in agriculture
• India needs massive investment in areas such as irrigation, water conservation, better storage facilities, market connectivity and agricultural research
• The problems in Indian agriculture are structural. Loan waivers will only end up complicating the problem
• The Indian economy has suffered a lot due to competitive populism in the past. It’s time parties and governments addressed the real issues.

 

---