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9 PM Daily NEWS Brief

9 PM Daily Current Affairs Brief – May 8


National


[1]Glut ruins farmers trapped in ‘cobweb phenomenon

[2]Japan pitches for Chabahar port


Editorial/OPINION


[1]This time with feeling

[2]Space for all

[3]Decoding the doctrine


Economy


[1]This time with feeling

[2]ADB eyes Delhi as regional hub

[3] FATCA: Deadline, procedure and details

 


Front Page / NATIONAL


[1]Glut ruins farmers trapped in ‘cobweb phenomenon’

The Hindu

 Context

When prices of a commodity increase during a season of scarcity, more of it is cultivated leading to a problem of plenty

Price drop

Country is witnessing a price drop in various agricultural commodities due to the problem of plentiful production.

  • Tomato: farmers in Kolar, Karnataka, dumped tomatoes on the road after the prices collapsed to a new low of ₹2 per kg from ₹10 to ₹15 a month ago
  • Tur: In Maharashtra, the demand for tur, which rode a wave of high prices in 2016, plummeted after its production went up from 4.44 lakh tonnes in 2015-16 to 20.35 lakh tonnes in 2016-17
  • Grapes: Grapes also witnessed a crash in their prices resulting in despair for Maharashtra vineyard owners
  • Chilli:A long duration crop, consuming up to eight months for harvesting, red chilli cultivation was expanded in both Telangana and Andhra Pradesh in 2017 after the commodity commanded a good price in 2016.
  • However, in the absence of minimum support price for the crop, categorized as commercial, the market dynamics of demand-supply has kept the price low

The Cobweb phenomenon

Agricultural economists have traced the reasons for the resultant price crash to the “cobweb phenomenon

  • After the prices of a particular agricultural commodity shoot through the roof during a season of scarcity, farmers resort to boosting the production on the premise of the pre-existing demand and prices, leading to a problem of plenty

The problem

Problem for farmer is twofold. Neither do they benefit when a commodity fetches high prices during season of scarcity, like in case of pulses last year, nor do they benefit when they produce a bumper crop.

  • In first case, the wholesale retailers benefit
  • In second case, due to natural law of demand and supply, farmers have to contend with severely low prices

[2]Japan pitches for Chabahar port

 The Hindu

 Context

Indo-Japan civil nuclear cooperation agreement is still on track

Article contains excerpts from an interview with Japanese ambassador to India

Give it a go through


Front Page Editorial/OPINION


[1]This time with feeling

 The Hindu

 Context

The Centre has empowered the Reserve Bank of India to get banks to take tougher steps, including insolvency and bankruptcy proceedings against defaulters, to address the growing volume of bad loans on their books

What has been done?

An ordinance to amend the Banking Regulation Act of 1949 has been issued to quell doubts whether the existing provisions allowed the RBI to direct banks to deal with specific stressed assets

  • The RBI has also been vested with the power to form oversight committees wherever it deems fit
  • The ordinance is the latest attempt to resolve the twin balance sheet problem (of indebted borrowers and NPA-burdened lenders) plaguing India’s domestic investment cycle

 Conclusion

If the government wants to see a spurt in investment and job-creation, it needs to do more than just pin its hopes on new oversight committees. It must amend the anti-corruption law as has been promised for a while now, and accept the need to fix the policy-level stress affecting sectors such as telecom, power and highways

[2]Space for all

 The Hindu

 Context

  • By launching the GSAT-9 ‘South Asia satellite’, India has reaffirmed the Indian Space Research Organisation’s scientific prowess, but the messaging is perhaps more geopolitical than geospatial
  • In Line with India’s Neighborhood First Policy
  • Message to China, it is preparing to demonstrate its global clout at the Belt and Road Forum on May 14-15
  • With the GSLV launch India is showing that where it is capable its commitment to the development of its neighbors is strong
  • Finally, by going ahead with the project despite Pakistan’s decision to pull out, the Indian government is signalling that it will continue with its plans for the neighbourhood — ‘SAARC minus one’ — if necessary

[3]Decoding the doctrine

 The Hindu

 Context

More clarity is needed on implementing the Joint Indian Armed Forces Doctrine

Surgical strikes: Now the new norm

The Joint Doctrine of the Indian Armed Forces 2017, released in April, has formally embedded them as a part of sub-conventional operations — meaning that from now on, they are among a range of options at the military’s disposal to respond to terrorist attacks

Scope: Left Open

There is no mention of their employment being within the country or beyond its borders — the ambiguity is intended to send a message in the neighbourhood

New Discourse

Reversed a discourse which began in 1998 that India was out of conventional options in its quiver in the face of continued cross-border terrorism after the Indian and Pakistani nuclear tests

 NFU

The doctrine also reiterates the basic tenets of the Indian nuclear doctrine, no-first use (NFU) and minimum credible deterrence

Indigenization challenge

Another important pronouncement under the “National Military Objectives” is: “Enable required degree of self-sufficiency in defence equipment and technology through indigenization to achieve desired degree of technological independence by 2035.”

Not Make in India

While a grand pronouncement was made under the “Make in India” initiative, it has essentially remained an exercise in doling out billions of dollars to foreign companies

 Conclusion

The doctrine is a bold announcement, but without the necessary elements in place, it will remain just another document like the policy formulations enunciated earlier. Or worse, it will be relegated to being another political slogan for popular resonance rather than send out a message of intent beyond Indian borders and shores


Front Page Economy


[1]Time for a digital Indian Rupee

 The Hindu

 Context

Financial inclusion is an attainable goal

Digital transactions have soared with Net banking, credit cards, digital wallets, payment gateways, Aadhaar pay, PPI, UPI, payments bank and BHIM since demonetisation

Digital fiat currency: A need

In India, where more than 95% transactions are cash-driven, the rural and semi-urban populations have not had complete inclusion in this financial methodology. Hence, it is imperative to introduce digital fiat currency as part of the remonetisation of the economy for monetary sovereignty and policy effectiveness

Digital India Rupee

Government should issue a digital fiat currency, titled digital India Rupee, which would bear the same characteristics as does the cash Rupee. It would be legal tender and accepted throughout India. It would be backed by the Government

  • Backed by the government: Since digital India Rupee would be a centrally-issued sovereign currency, it would possess immense trust, security and control. It would also bring transparency on black money, tax evasion and other illicit activities under the legal framework
  • Minimum marginal costs:Also, with the negligible logistics costs and benefits of riding on existing infrastructure, the cost of digital India Rupee would be marginal. The transition from physical notes and coins to a digital currency could drastically bring this down at par with the rest of the world.

[2]ADB eyes Delhi as regional hub

 The Hindu

 Context

The Asian Development Bank (ADB) has operationally started working to create several regional hubs including New Delhi as one for South Asia, Kazakhstan for Central Asia

Backdrop

At a press conference marking the conclusion of the ADB’s 50th annual summit

What has happened?

Bank’s president Takehiko Nakaosays work has already started on procurement, deploying staff

‘Reduce time lag’

Observing that the “time required to approve a proposal as well as the time lag between approval and disbursement of loans can be further reduced

ADB

India, is a founding member of the ADB and its fourth-largest shareholder

The bank’s current portfolio of financing in the country includes 87 sovereign loans totalling $13.2 billion

[3] FATCA: Deadline, procedure and details

 The Hindu

 Context

Your bank account and other financial transactions like mutual funds need to be compliant with The Foreign Account Tax Compliance Act (FATCA). Non-compliance would lead to blocking of accounts

What is FATCA?

The Foreign Account Tax Compliance Act (FATCA) is a United States federal law that requires United States persons, including U.S. citizens who live outside the United States, to report their financial accounts held outside of the U.S., and requires foreign financial institutions to report to the Internal Revenue Service (IRS) about their U.S. clients

 Why is FATCA compliance necessary in India?

India had signed an agreement with the U.S. on July 9, 2015 which enables automatic exchange of financial information between India and the U.S

  • The agreement provides that Indian Financial Institutions will provide the necessary information to the Indian tax authority i.e. Central Board of Direct Taxes (CBDT), which information will then be transmitted to the U.S. automatically in the case of FATCA. The agreement came into effect on August 31, 2015

Which financial transactions need FATCA compliance?

The compliance is needed for bank accounts, mutual fund, national pension scheme and other such transactions. The compliance is needed to be done for all individual and entity accounts opened from July 1, 2014 to August 31, 2015

What do you need to submit to be FATCA compliant and how can it be done?

  • Individuals and entities need to provide details of their country of birth, country of citizenship, country of residence for tax purposes, among others, to the respective financial institutions.
  • The self-certification can be done online for bank accounts and mutual funds. The Pension Fund Regulatory and Development Authority has said it would come out with revised guidelines on FATCA shortly.

What will happen if I am not FATCA compliant?

In a press statement issued on April 11, 2017, the Finance Ministry said the process should be completed by April 30, 2017; otherwise the transactions would be blocked in the accounts for the said period. However, experts point out that on ground, the accounts have not been blocked; even if they have been, one can still provide self-certification and unblock the accounts


Front Page Indian Express


[1]Dissent and Aadhaar

 Indian Express

 Context

We have been numbed by a series of lies, myths and fictions about the project

A Surveillance State

Very soon, almost everyone will have an Aadhaar number, seeded in hundreds of databases. Most of these databases will be accessible to the government without invoking any special powers. Permanent surveillance of all residents becomes a possibility

No Dissent

With everyone on the radar, dissent is bound to be stifled

 How did we get there, without even noticing it?

Series of Lies about Aadhar

Aadhaar is a voluntary facility:  Soon it will be virtually impossible to live in India without Aadhaar. And if you cannot live without Aadhaar, in what sense is it voluntary?

Purpose of Aadhaar is to help welfare schemes: Welfare schemes have been used to promote Aadhaar (by creating mass dependence on it), irrespective of the consequences. As it happens, the consequences so far have been disastrous. If the name of a worker employed under the National Rural Employment Guarantee Act is spelt differently in his job card and Aadhaar card, he is at risk of not being paid

  • For the public distribution system, Aadhaar is a calamity: In Jharkhand and Rajasthan, millions of people are deprived of their food rations every month due to technical problems related to Aadhaar-based biometric authentication (ABBA), according to the government’s own data.

Aadhaar was endowed with mythological powers as a weapon against corruption: Many people fell for the simplistic claim that Aadhaar would “ensure that the money goes to the right person”. It may even create new varieties of identity fraud

Aadhaar-enabled “savings:Series of bogus claims about Aadhaar-enabled “savings”. Most of the savings figures have no solid basis e.g. when Aadhaar-related glitches deprive people of their entitlements and the shortfall is counted as “savings

 The technology was claimed to be flawless: Today, there is growing evidence that this is not the case. In ideal conditions, ABBA seems to work most of the time. But often the conditions are far from ideal, causing immense inconvenience

There is an ambiguity about the relation between Aadhaar and citizenship: Aadhaar deprivation could easily be used there as a weapon against illegal migrants, or communities branded as illegal migrants e.g. Assam,  Aadhaar enrolment in Assam being linked to the National Register of Citizens

 Confidentiality of the Data:The confidentiality of the identity information collected at the time of Aadhaar enrolment is a myth

NIDAI

  • The initial draft of the Aadhaar Act, known as the National Identity Authority of India (NIDAI) Bill, did protect that information. But the final version does not
  • On the contrary, it creates a framework that enables the government to share or sell that information, except for the core biometrics, with any “requesting entity”
  • A vast collection of lucrative Aadhaar applications is now being built on the back of this information sharing facility

Conclusion

This is almost as big a bait-and-switch as the claim that Aadhaar is voluntary.Even if it is not misused, the very existence of a huge infrastructure of surveillance is bound to stifle dissent


Front Page Live Mint


[1]India must oppose surging protectionism

 Live Mint

Context

It should aggressively voice its concern about increasing restrictions on the movement of professionals at both bilateral and multilateral forums

What has happened?

India’s second largest information technology company Infosys Ltd has announced that it will hire 10,000 Americans over the next two years

Protectionist sentiment

The overhaul of the visa programme is part of a wider protectionist agenda of the Trump administration, which has withdrawn from the Trans-Pacific Partnership and intends to renegotiate existing trade deals

  • Australia and New Zealand have also made movement of professionals difficult, and the UK has tightened visa norms.

 India should tread carefully

India Union commerce minister recently at counter moves against US companies operating in India. Indian policymakers should avoid taking such measures for multiple reasons:

  • First, Indian IT services companies have themselves to blame in part at least for not realizing in time that the labour-cost arbitrage model has limitations
  • Second, the US is not the only country which is making movement of professionals difficult.
  • Third, India needs foreign direct investment (FDI) to fund its growth
  • Lastly, Any retaliatory action against companies from the US—or any other country, for that matter—will affect the confidence of international investors and will bode ill for the economy in the medium-to-long run

 Measures India should take

  • India should aggressively voice its concern against increasing restrictions on the movement of professionals at both bilateral and multilateral forums
  • Global leaders did well to avoid protectionist policies in the aftermath of the 2008 financial crisis
  • India should play an active role in reviving a similar global consensus through multilateral forums as rising protectionism will have implications for global trade and growth

 

 

 

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