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9 PM Daily Current Affairs Brief – April 20 2017



Front Page / NATIONAL [The Hindu]

[1]No threat to visas for professionals

[2] NGT orders closure of industries near Bellandur Lake

[3]Nod for purchase of VVPAT machines

[4]Our job is not to kill our people


Editorial/OPINION [The Hindu]


[1]Clouds of prosperity

[2]The case for mediated settlements

[3]SPARK or an ember?

[4]The degree disease


Economy [The Hindu]


[1]. State entities can seek loans overseas

[2]. H-1B visa restrictions may lead to layoffs


Indian Express


[1]. Valley’s lost middle ground


Live Mint


[1]. The case for long-term finance banks


The Hindu


Front Page / NATIONAL


[1]No threat to visas for professionals

 

The Hindu

 

Context

Visa Cuts likely for IT Professionals

 

What has happened?

The Union government has defended its foreign policy oriented towards job creation, and indicated that the latest measures taken by Australia and the United States will not curtail visas for Indian professionals

 

H1-B visas

Insofar as H1-B visas are concerned, the cap has remained at 65,000 since December 2004 when the H1-B Visa Reform Act of 2004 was enacted by the U.S. Congress

 

[2] NGT orders closure of industries near Bellandur Lake

 

The Hindu

 

Context

Announces environment compensation for garbage dumping

 

What has happened?

Banning the dumping of any kind of municipal solid waste around Bellandur Lake, the National Green Tribunal (NGT) directed immediate and complete shut-down of all industries around the water body

 

The Verdict

  • Closed: All the industries located in the vicinity of Bellandur Lake and discharging effluent are hereby directed to be closed
  • Joint Inspection Team:No industry is permitted to operate unless inspection by a joint inspection team is conducted and analysis of effluent is found to be within the permissible limits
  • SPCB:The green panel ordered the State Pollution Control Board to seal industries violating its directions
  • Compensation: An environment compensation of ₹5 lakh on anyone found dumping waste in and around the lake

 

Clean the Lake

NGT directed a committee comprising officials of BDA (Bangalore Development Authority), KLCDA (Karnataka Lake Conservation and Development Authority) and UDD to oversee one-time cleaning of the lake in one month, including desilting, removal of all waste from the lake and surface cleaning. The bench directed all authorities to ensure that no untreated sewage enters the lake

 

Namma Bengaluru Foundation

At the forefront of the fight to save the lake, announced the formation of a 10-member committee — United Bengaluru for Bellandur — comprising the petitioners, local residents and experts to ensure implementation of the NGT’s directions

 

Apology by Law Department

  • Law Department officials apologised to the bench, which took exception to their interpretation of its May 4, 2016 order on buffer zones around lakes and drains
  • Officials from the UDD and BBMP promised to withdraw the circular based on the legal opinion that the NGT order was only prospective and not retrospective
  • UDD officials said they would await a clarification from the NGT on the nature of the May 4 order

 

UDD: Urban Development Deptt of Karnatka

BBMP:Bruhat Bengaluru MahanagaraPalike

 

[3]Nod for purchase of VVPAT machines

 

The Hindu

 

Context

VVPAT Machines

 

What has happened?

  • It can be seen by the voter through a screened window for seven seconds to check if the vote has been correctly recorded
  • The Supreme Court in an order dated 8th October, 2013 had directed that [the] Government of India may provide required financial assistance for procurement of requisite number of VVPAT units for implementation in [a] phased manner

 

Machines Needed

Overall, 16,15,000 machines are needed and if the order is placed in April 2017, then the machines can be delivered by September 2018

 

Budget

  • Of the Rs. 3,173.47 crore approved by the government for these machines, about Rs. 1,600 crore will be allocated this year and the balance will be disbursed in 2018-19

 

Firms

  • Two public sector firms, Bharat Electronics Limited and Electronics Corporation of India, are entrusted with producing these machines
  • Both have indicated that they can deliver the order by next September if it is placed this month

 

History
Around 20,300 units were purchased in 2013, after the election conduct rules were changed to allow the use of VVPATs as an additional layer of transparency for the satisfaction of voters, on the basis of suggestions by political parties

  • While these units were deployed in select assembly and parliamentary constituencies, 67,000 more units were ordered in 2015, half of which have been supplied by now

 

 

[4]Our job is not to kill our people

 

The Hindu

 

Context

A-G defends the Army over panel reports on atrocities in insurgency-hit Manipur

 

What has happened?

A day after the Supreme Court questioned its silence over judicial enquiry commission reports accusing its personnel of committing atrocities in Manipur during insurgency, the Army said its job was not to kill “our own country’s people”

 

Biased Judges

  • The Army accused that the findings of the judicial probes may have been inadvertently “biased” as the judges who headed the inquiry commissions were locals
  • The court should not shut its eye to the possibility that the judicial officers, who headed these commissions of enquiry, were local people and may have been guided by local apprehensions and factor

 

Rues(means: bitterly regret)trust deficit

He rued the trust deficit apparent when insinuations are made that the Army is stage-managing deaths of innocents as armed encounters with insurgents

 

Backdrop

  • The arguments come in the backdrop of a curative petition filed by the Centre in the Supreme Court to urgently re-consider a July 2016 verdict, which ripped open the cloak of immunity and secrecy provided by the Armed Forces (Special Powers) Act of 1958 (AFSPA) to security forces for deaths caused during encounters in disturbed areas
  • The SC had held that “there is no concept of absolute immunity from trial by a criminal court” if an Army man has committed an offence
  • The curative petition argues that the judgment has become a fetter (a chain or manacle used to restrain a prisoner, typically placed around the ankles) against security forces involved in anti-militancy operations in sensitive and border areas of the country

Editorial/OPINION


[1]Clouds of prosperity

 

The Hindu

 

Context

The ‘normal’ monsoon forecast of the India Meteorological Department brings the promise of a year of growth and good health for India’s economy and ecology

 

What has happened?

The monsoon forecast should galvanise the country to make the most of a good season.

 

Positives

  • Boost for sectors: The prospect that 2017 will be a good year boosts the prospects of enhanced agricultural output, healthy reservoir levels, more hydropower and reduced conflicts over water
  • Testing of Expensive Water Management Initiatives: It will also test the efficacy of the expensive water management initiatives launched during 2014 and 2015 by the Centre and the State governments to harness rainfall and build resilience for future drought cycles

 

Forecasting Uncertain

Forecasting the all-India summer monsoon rainfall is fraught with uncertainties and has often gone off the mark

 

Use of Dynamic Model

The dynamic model that it is using this year to make a forecast that includes an assessment of two phenomena — a possible late onset El Niño in the Pacific Ocean and variations in sea surface temperatures that create the Indian Ocean Dipole — will be keenly watched

 

El Niño

El Niño is expected only in the later part of the year when the monsoon is in its final stages, the expectation of normal rainfall is reasonable. A confirmation could come in June

 

 

Preparing for Drought

Droughts affect more than the normal or surplus monsoons

 

Ways to fight Drought

  • During the Drought the focus has to be on plant protection, water harvesting and access to post-harvest technologies
  • Cutting water use: The NITI Aayog has also been calling for ways to cut water use, since India uses two to three times more water per tonne of grain produced compared to, for example, China, Brazil and the U.S
  • Creation of ponds
  • Provide solar power for more farms
  • Mechanise operations and expand drip irrigation coverage
  • Formal financing: Aiding small farmers with the tools and providing them formal financing can relieve their distress
  • Rainwater harvesting: A normal monsoon will also relieve water stress in the cities if they prepare catchments and reservoirs to make the most of the season and incentivise residents to install scientific rainwater harvesting systems

 

[2]The case for mediated settlements

 

The Hindu

 

Context

The country’s banking sector is severely stressed with one-sixth of the gross advances of public sector banks (around Rs. 7 lakh crore) being non-performing assets (NPAs)

 

What has happened?

To reduce NPAs, creditors and debtors need sufficient immunity to hammer out sound commercial solutions

 

Debt Restructuring

  • The Reserve Bank of India (RBI) brought out a Corporate Debt Restructuring scheme for resolution of dues from the larger companies which account for 70% of the debt portfolio; despite it being a well-structured system, it has failed to deliver substantially
  • It, however, omitted from attention the smaller borrower with loans less than Rs. 10 crore

 

Bad Bank

  • Would purchase the large loans from the holding banks
  • The latter would then have better-looking balance sheets; however, the former will find recovery no less difficult
  • It would then sell off assets to private buyers, who see opportunities for profit-making rather than investment in the economic productive sense

 

Roadblocks to settlement

Two core aspects appear to be the major roadblocks:

  • Limiting Direct Negotiations: The first is the limiting aspect of direct negotiations between bank and debtor, which usually run on the lines of high demands by banks and low offers by the debtor
    • Imbalance of negotiating strength:
      • Small Borrower: The smaller borrower especially is faced with an imbalance in negotiating strength and is thus denied feasible, even if unattractive, settlement terms
      • Larger borrowers:Large borrowers in acute distress may face similar problems
    • Cumbersome settlement terms: Settlement terms can be inconvenient, which, if breached, have consequences of closure of business and sale of property

 

Solution

Mediation Approach beneficial:

A mediation approach, where an independent neutral engages with both parties, is more likely, to lead to faster and better agreements

 

Full Information not shared

In face-to-face meetings between only creditor and debtor, the fuller gamut of settlement opportunities are not explored, because this would involve more information being exchanged or conditional concessions being made which borrowers fear will be seized upon by bank officers for enhancing demands and hard bargaining

 

Mediation to the Rescue again

Mediation reverses this; the process is designed to freely create, explore and refine options to yield a solution both amicable and sustainable

 

More benefits

Moreover, in their separate meetings with parties, mediators can bring home to them the problems with their case should it proceed to litigation, the lack of worthwhile alternatives to reaching an agreement at the table, and also persuade them to take more reasonable and practical stands

 

Mediation well accepted in India

  • Mediation is now well accepted in India, both legislatively and through extensive use by the courts. Agreements reached through this process are enforceable without difficulty
  • If the RBI sets up mediation panels consisting of bankers, accountants and experienced mediators, that will provide the required institutional framework and enhance trust and credibility in the process and personnel

 

Freedom from fear

Issues

  • The other major block, which paralyses decision-making in government and public sectors in India, is the fear of post-decisional retributive action by way of investigation and prosecution by multiple agencies such as the police, the Central Bureau of Investigation (CBI), the Central Vigilance Commission (CVC), the Lokpal, etc
  • Once initiated, the spectre of lengthy criminal trials looms, accompanied by fear of arrest, denial of bail and public ignominy
  • Courts respond inadequately — they do not speed up trials or consider bail applications expeditiously or penalise unnecessary prosecution

 

Effects

This inhibits settlements which are in the best interests of the bank but involve some concession or latitude inevitable in reaching the best compromise

 

Remedies

Freedom to take sound commercial decisions must be statutorily structured, else all our schemes will come to naught:

 

High Level Body

One way is to create a high-level body before which settlement agreements can be placed for approval

  • Examine Settlements:This body will examine the settlement to see if it is commercially advantageous and is in the interests of the public sector financial institutions, taking all prevailing circumstances into account
  • Complete Immunity:Where it comes to an affirmative conclusion, that should provide complete immunity — from the police, the CBI, the CVC, the Lokpal and the courts — for the officers of the bank who have negotiated and recommended such solution
  • Better than Oversight Committees:This is a better step than oversight committees which do not provide the backbone to take the commercial decision of beneficial compromise.
  • Headed by Top Officials:Such a body needs to be headed with high authority, drawn from the top echelons of the judiciary, the RBI and public sector banks, serving or retired
  • Multi-tiered Body:It should be a multi-tier body when the number of cases increases

 

[3]SPARK or an ember?

 

The Hindu

 

Context

The proposal for an independent S&T authority needs more thought.

 

What has happened?

Vigyan 2030: Science and Technology as the Pivot for Jobs, Opportunities and National Transformation

  • Top administrators in Indian science submitted a detailed project report to Prime Minister
  • This paper has reviewed portions of the 48-page report, titled Vigyan 2030: Science and Technology as the Pivot for Jobs, Opportunities and National Transformation

 

The Observation

The report, in its assessment of the state of Indian science, is stingingly honest: “The stature of Indian science is a shadow of what it used to be… because of decades of misguided interventions. We have lost self-confidence and ambition and the ability to recognise excellence amongst our own. In a false sense of egalitarianism(the doctrine that all people are equal and deserve equal rights and opportunities) , we often chose the mediocre at every level

 

Recommendations

SPARK(Sustainable Progress through Application of Research and Knowledge)

  • To have an independent science and technology authority that will have two parallel arms
  • Discovery Arm:A ‘discovery arm’ that can organise the expertise of various organisations across states and regions to solve a basic research problem
  • Delivery Arm: A ‘delivery’ arm that will closely work with industry and evolve public private partnerships
  • Will report directly to the Prime Minister
  • SPARK (Sustainable Progress through Application of Research and Knowledge), as the body is tentatively named, will be overarching yet have “light touch” governance

 

But India already has such bodies

  • Conceived as umbrella organisations that can pool the intellectual and technological resources of organisations and direct them towards specific missions, like
  • Principal Scientific Adviser, NITI Aayog, The Council of Scientific and Industrial Research
  • Scientific departments in India, from the Department of Atomic Energy to the Department of Science & Technology, have bureaucracies of their own
  • They battle the dilemma of having to take bold, expensive risks — that science by its very nature requires — and on the other hand, be accountable to the Finance Ministry

 

Challenges for the new body

  • Risk of “stepping on toes: Not only does a new overarching body run the risk of “stepping on toes” but it will also be a challenge to exert solemn authority without being a cantankerous (bad tempered, unco-operative) accountant
  • Commerce and Knowledge:  Somehow, combine commerce and knowledge without being commercial and ensure that good ideas — beyond the Indian Institutes of Technology and Science — don’t die out for lack of funds or recommendations from influential scientists
  • Continuity:
  • Any new idea, to rejuvenate the administration of science, must also ensure continuity
  • A change of government and new leaders has frequently meant ‘new priorities’ and the infant-death syndrome for the bold experiment

 

Conclusion

Can SPARK have a legal structure that can have continuity and the purpose of its creation hard-wired into it?

 

[4]The degree disease

 

The Hindu

 

Context

Article talks about higher education

 

What has happened?

An emphasis on quality in our research programs, rather than the number of seats, will further scholarship

 

Degrees aplenty, but limited opportunities for growth!

  • The current outcry about the University Grants Commission (UGC) decision to curtail MPhil and PhD seats in universities perhaps needs to factor in this as well as what goes on in universities
  • We must recognise that while students enrol for research, some drop out due to compelling reasons such as employment

 

The rigours of research

Far from being an innocuous (not harmful) phenomenon, the number of students a supervisor is allotted is significant

 

Number of allotted Students to Supervisors important

  • The supervisor is critical to the student’s intellectual life and is called upon if a student seeks a job reference, participation in a conference or workshop, funding, a hostel seat, or action on any form of injustice
  • The supervisor is the student’s lifeline

 

Impossible to dealprofessionally with more than -8 students at a time:In order to be efficient in her interaction with students, it is impossible for a professorial supervisor to deal with more than six-eight PhD students or one or two MPhil students at any given time

 

Other Work also:A professor also teaches and tutors other students, evaluates their essays and examination papers, and struggles to find time for research

 

Research takes long time:

  • The pursuit of doctoral research (in the social sciences) is ostensibly with a purpose to examine a problem with fine-tuned research, doing first-hand fieldwork, and making sense from different perspectives
  • The task of writing about it comes later
  • That is why doing research, in the social sciences at least, takes a phenomenally long time
  • It needs substantial commitment, abilities for meticulous data collection and analysis and, above all, the strength to persevere despite all odds

 

MPhil vs PhD

MPhil does not prepare a student for research PhD does:

A good PhD programme must have compulsory coursework, and it is this coursework that prepares a student for doctoral research

MPhil degree in itself also does not result in eligibility for a university position:

  • It is a myth to assume, however much you might want to retain the MPhil, that it helps prepare students for research
  • It is passing the ubiquitous National Eligibility Test (NET) administered by the UGC, or State Level Eligibility Test (SLET) at the State-level, or completing a PhD degree that in fact ensures eligibility for a teaching position in the university system

 

All Students do not do Research

  • All students who register for the MPhil programme do not necessarily have their eyes set on doctoral research

They seek entry into MPhil maybe for following reasons:

  • Waiting for admission to universities abroad
  • Retaining a privileged hostel seat
  • Simply remaining in the university system

 

Mentoring serious students

It is those students who are serious about doing research, belonging to different categories and socio-economic backgrounds, whom one must nurture and help to grow, as researchers and scholars, in our efforts as educators

 

Way Forward

  • The pursuit of degrees alone does not necessarily nurture scholarship
  • It perhaps diminishes higher education far more rapidly
  • An emphasis on quality in our research programs in a range of disciplines — rather than in the number of seats at our disposal — is the only way we can contribute to the growth of higher education and scholarship in this country

 

Conclusion

Let us first ensure this quality, outside Delhi and major Central universities, to ensure that students not only receive good education but also find themselves capable of having the skills for employment, and not necessarily in the university system alone

 


Economy


[1]. State entities can seek loans overseas

 

The Hindu

 

Context

Cabinet has allowed financially sound entities to borrow directly from ODA partners for projects.

 

What has happened?

Cabinet had approved policy guidelines to allow financially sound State government entities to borrow directly from bilateral ODA (Official Development Assistance) partners for implementation of vital infrastructure projects

 

Present system

The funding arrangements that bilateral agencies such as Japan International Cooperation Agency (JICA) provide, is either with State governments or central PSUs — State entities are not allowed.

  • If any State entity needs funding for its projects, it has to approach the State government and any such funding would be included under the State’s borrowing limits set by the Fiscal Responsibility and Budget Management (FRBM law).

 

New system

Based on some conditions,

  • A section of State entities with revenue of Rs. 1,000 Cr or more, who are working on infrastructure projects worth over Rs. 5,000 Cr, have been permitted to directly take money from such funding agencies on the basis of a central government guarantee
  • All repayments of loans and interests to the funding agencies will be directly remitted by the concerned borrower. The concerned State Government will furnish guarantee for the Loan. The Government of India will provide counter guarantee for the loan

 

Ensure checks

  • Risk of over-borrowing: For getting infrastructure projects off the ground, this is obviously a good move but it must be used prudently for select projects in a State as taking such financing out of the FRBM framework could tempt States to borrow too much for all sorts of projects
  • There need to be some checks in place to ensure that future governments aren’t burdened with too much long-term debt on terms that appear to be soft now, but could become costlier over the years

 

[2]. H-1B visa restrictions may lead to layoffs

 

The Hindu

 

Context

Indian IT firms are among the biggest beneficiaries of the visa programme

 

What has happened?

On April 18, Mr. Trump signed an executive order calling for a review of the H-1B visa program and sought increased scrutiny to prevent its abuse.

 

Global tightening

The U.S. move comes amid heightened curbs initiated by other nations including the U.K., Singapore and Australia, which has eliminated its 457 visa program

 

US: A key market for India

U.S. has been the key market for Indian IT firms, which have been among the biggest users of the H-1B visa program

 

Implications for India

  • Such a move could potentially hurt margins at India’s IT services providers and may lead to layoffs in the sector
  • The visa curbs will increase cost of delivery leading to a margin fall. As a result IT firms can’t afford to have bench and there may be layoffs

Indian Express


[1]. Valley’s lost middle ground

 

Indian Express

 

Context

Let us not look for final solutions — just a way to bring back a semblance of calm. Trust the army to do its job, including dealing with any aberrant behavior

 

Defusing the situation

Author, in the first few paragraphs has pointed towards defusing the current situation in J&K. Looking for a final solution is not going to help presently. The entire effort should be towards bringing calm back to the valley

 

Trust the army

Author, states that while the army values the support of its countrymen, suggestions on how it should conduct its operations are, frankly, not needed. The army knows what to do and has been doing it successfully since Independence

 

What needs to be done?

Author points out that

  • Youth engagement is the key: Initiatives for the youth of Kashmir have been half-hearted and ineffective, leading to radicalisation and terrorist recruitment
  • Strong response to terrorism and separatism: Author states that we should not be harsh on our own people, rather it is the cross-border infiltration and separatism that validates our attention and a strong response
  • Smart fence: We have to take our own steps to improve border management. A smart fence is required immediately

Live Mint


[1]. The case for long-term finance banks

 

Live Mint

 

Context

Article talks about long-term finance banks

 

What has happened?

RBI has published a discussion paper on the need for wholesale and long-term finance (WLTF) banks

 

Idea behind WLTF banks

Apart from universal banks which we already have, these banks will focus on different areas and simultaneously develop area specific competency

 

Focus area WLTF banks

The discussion paper notes that WLTF shall focus on,

  • Lending: WLTF banks will lend to the corporate sector, small and medium businesses, and the infrastructure sector
  • Foreign exchange and trade finance services: They may also offer services in the area of foreign exchange and trade finance

 

Funding

  • Via Debt & equity: WLTF banks can raise funds through issuance of debt and equity
  • Term deposits:They may also be allowed to accept term deposits above a threshold

 

Why we need WLTF banks?

  • Solution to the NPA problem: Presently, our banking system is riddled with the problem of Non-Performing Assets (NPAs). With specialized banks having core competency in long-term financing, such problems can be avoided in future as WLTF being specialized institutions will be in a much better position compared with commercial banks in evaluating and funding long-term projects
  • Benefits to other banks: Other banks can take help through the specialization services of these banks in evaluating funding requirements of various projects leading to a better allocation of financial resources
  • Competition:Establishment of WLTF banks will also enhance competition, which will lead to more efficient allocation of financial resources

 

Why, there is no guarantee that WLTF banks will succeed?

  • Struggle with the DFI model: India has tried the development finance institution (DFI) model in the past with limited success. After independence, DFIs were established to increase the level of investment in the economy
    • Industrial Finance Corp. of India (IFCI) was the first such institution to be established in 1948
    • This was followed by the establishment of state finance corporations
    • In later years, other institutions like the Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI) were established
  • Problem with DFIs: However, DFIs struggled with
    • Government interference
    • Changes in the economy

Hence, they accumulated high levels of NPAs. ICICI and IDBI have transformed themselves into commercial banks

 

A big problem for WLTF Banks

One of the biggest problems facing long-term finance institutions is

  • Competing for funds in the marketplace
  • Lending at competitive rates

 

Aspects that need attention

  • No government participation: Government participation in setting up WLTF banks should be avoided as it could end up defeating the purpose. Government ownership would lead to the same problems that public sector banks are facing at the moment. Further, these banks will be highly specialized and will need operational freedom, which is not possible with government ownership
  • Responsive licensing: Licences should only be issued to entities that are able to demonstrate the ability to build such a highly specialized bank, and are in a position to bring in capital
  • Regulatory architecture: The RBI will need to design a regulatory architecture that will enable growth with adequate safeguards. For example, the regulator may choose to exempt these banks from cash reserve ratio and statutory liquidity ratio requirements. These banks will compete directly with the bond market.

 

Conclusion

Author concludes by stating that WLTF banks will have to be designed well. With the right kind of ownership and regulatory architecture, these banks will help improve efficiency in the financial system and enhance the flow of credit to businesses with large and long-term financing needs.


 

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