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9 PM Daily Brief – 19 April 2016

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Brief of newspaper articles for the day bearing
relevance to Civil Services preparation

What is 9 PM brief

GS PAPER 2

 

[1] Are there no rights violations in Union Territories, SC asks centre

The Hindu

Government told supreme court that Delhi can not have State human right commission because it is union territory not a state until parliament amend the law.

A Bench led by Chief Justice of India T.S. Thakur ask whether this government nurtured a fancy that Union Territories are “Utopian ideals” where no human rights violations ever takes place.

Solicitor-General Ranjit Kumar, appearing for the Centre.

Chief Justice Thakur said there was no need for an amendment in the laws to be made by Parliament to set up a human rights commission for Delhi.

Background

  • There is delay in the establishment of an SHRC in the national Capital
  • Recommendation was sent by the Delhi government to the Lieutenant-Governor for the establishment
  • Delhi government was not bothered to set up an SHRC even 22 years after Parliament enacted the Protection of Human Rights Act in 1993.

Who is NHRC?

The National Human Rights Commission (NHRC) of India is an autonomous public body constituted on 12 October 1993 under the Protection of Human Rights Ordinance of 28 September 1993. It was given a statutory basis by the Protection of Human Rights Act, 1993 (TPHRA). The NHRC is the national human rights institution, responsible for the protection and promotion of human rights, defined by the Act as “rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in the International Covenants”.

Functions of NHRC

  • proactively or reactively inquire into violations of human rights or negligence in the prevention of such violation by a public servant
  • by leave of the court, to intervene in court proceeding relating to human rights
  • to visit any jail or other institution under the control of the State Government, where persons are detained or lodged for purposes of treatment, reformation or protection, for the study of the living conditions of the inmates and make recommendations
  • review the safeguards provided by or under the Constitution or any law for the time being in force for the protection of human rights and recommend measures for their effective implementation
  • review the factors, including acts of terrorism that inhibit the enjoyment of human rights and recommend appropriate remedial measures
  • to study treaties and other international instruments on human rights and make recommendations for their effective implementation
  • undertake and promote research in the field of human rights
  • engage in human rights education among various sections of society and promote awareness of the safeguards available for the protection of these rights through publications, the media, seminars and other available means
  • encourage the efforts of NGOs and institutions working in the field of human rights
  • such other function as it may consider it necessary for the protection of human rights.

A State Government may constitute a body known as the Human Rights Commission of that State to exercise the powers conferred upon, and to perform the functions assigned to, a State Commission. In accordance to the amendment brought in TPHRA,1993

Other than Delhi, the Supreme Court had directed the governments of Himachal Pradesh, Mizoram, Arunachal Pradesh, Meghalaya, Tripura and Nagaland to set up SHRCs within the next six months.

[2] India China military hotline likely

The Hindu

Context

India is moving to enhance relations with China

What happened

Manohar Parrikar, defence minister met with Chinese defence minister Chang Wanquan to discuss the confidence building measures(CBM’s)

What was the talk

  • To establish a hotline between two military headquarters for effective border management
  • No clarification to start a process to clearly mark Line of Actual Control(LAC)(The Line of Actual Control (LAC) is a demarcation line that separates Indian-held lands from Chinese-controlled territory)
  • Without naming Ashton Carter’s visit, US defence secretary, China pointed out to India’s tradition of independent foreign policy (meaning that India should not indulge with US too much and their foreign policy)
  • Parrikar again made India’s stand very clear to China’s intervention in POK(Pakistan occupied Kashmir) in China Pakistan Economic Corridor(CPEC), China said that it has nothing to do with military or defence, it is just for economic aspects of the corridor

What is CPEC

  • The China Pakistan Economic Corridor is a collection of projects currently under construction, which is intended to rapidly expand and upgrade Pakistani infrastructure, as well as deepen and broaden economic links between Pakistan and the People’s Republic of China.
  • The corridor is considered to be an extension of China’s ambitious proposed 21st century Silk Road initiative, and is considered central to China–Pakistan relations.
  • Infrastructure projects under the aegis of CPEC will span the length and breadth of Pakistan, and will eventually link the Pakistani city of Gwadar in southwestern to China’s northwestern autonomous region of Xinjiang via a vast network of highways and railways

What is likely to happen

  • The Chinese have agreed to the memorandum and hotline will be opened up within two months
  • Local border meeting points will also increase, 5 are already activated

[3] An unjust briefing

Indian Express

Context

The supreme court judges were briefed by the National Security Advisor(NSA), Ajit Doval,on national security

Why is there an opposition

  • The judges should have been briefed by civil rights activists as well because to be enlightened by just one party on national security is not fair
  • Internal security is as much important as security from outside threats, so when national security is spoken it should also include the security from hunger, poverty, discrimination
  • Social activists and human rights defenders who try to uphold the constitutional rights of the people who are less able to reach courts to defend themselves, and are discriminated in the name of national security, the exploited workers, landless labourers-these are also people whom the Supreme Court needs hearing

What does Universal Declaration of Human Rights(1948) and our Constitution states

oppression of civil liberties, political marginalisation of minorities, widening economic inequalities and social disharmony are serious threats, not just to national but also global security

UDHR 1948

The Universal Declaration of Human Rights (UDHR) is a declaration adopted by the United Nations General Assembly on 10 December 1948 at the Palais de Chaillot, Paris

The Declaration consists of thirty articles which have been elaborated in subsequent international treaties, economic transfers, regional human rights instruments, national constitutions, and other laws.

10 December, and is known as Human Rights Day or International Human Rights Day

[4] India, OIC and the Kashmir Charade

Indian Express

Context

  • Analysis of the recently concluded summit of the Organisation of Islamic Cooperation (OIC) in Istanbul.

Organisation of Islamic Cooperation (OIC)

  • The Organisation of Islamic Cooperation (OIC) (formerly Organization of the Islamic Conference) is the second largest inter-governmental organization after the United Nations which has membership of 57 states spread over four continents.
  • The Organization is the collective voice of the Muslim world and ensuring to safeguard and protect the interests of the Muslim world in the spirit of promoting international peace and harmony among various people of the world.
  • The Organization was established upon a decision of the historical summit which took place in Rabat, Kingdom of Morocco

Rivalry between Iran and Saudi Arabia

  • The Istanbul summit seemed to push the rivalry between Iran and Saudi Arabia upwards by a notch.
  • This is what the OIC communique had to say about Iran: “The conference deplored Iran’s interference in the internal affairs of the states of the region and other member states including Bahrain, Yemen, Syria, and Somalia, and its continued support for terrorism”.
  • Although the OIC is quick to extend solidarity to Muslim minorities around the world, it rarely speaks up against oppression of any kind, including sectarian oppression, among its member states.
  • The strong denunciation of Iran’s regional policy by its fellow Muslim states,shows the deeply fractured nature of the OIC.

Pakistan’s obsession with Kashmir, a routine exercise

  • Pakistan put out the word that the rulers of the Islamic world had called on India to implement the “pending UN Security Council resolutions” on Jammu and Kashmir, expressed concern at the “gross violation” of human rights there by the Indian security forces and affirmed support to the Kashmiri struggle for “self-determination”.
  • Pakistan always play the Muslim card in the region but shared religious identity is of no great advantage to Islamabad today as it struggles to navigate the rivalry between Iran and Saudi Arabia and manage its implications for Pakistan’s domestic politics.

Response from India, a traditional reply

  • India expressed “utmost regret” at “factually incorrect and misleading references” to Kashmir in the statement issued by the OIC summit and declared that the organisation had no “locus standi” on matters internal to India.
  • India always bank on third world solidarity but India’s focus on Southern solidarity against the North is of no consequence as regional rivalries take precedence over great power interventions.

Putting common sense over custom

  • If the undivided subcontinent under the British Raj was a powerful external force in the Middle East, Pakistan and India have neutralised each other over the last seven decades.
  • Many in the Middle East are looking for support from India and Pakistan to secure their national interests.
  • A reasonable relationship or even a diplomatic ceasefire between India and Pakistan would significantly improve the salience of both Delhi and Islamabad in the Middle East.
  • But, then, it is never easy to put common sense above custom.

[5] G-20’s warning on the global economy

Livemint

  • The communique issued by the Group of 20 finance ministers and central bankers.
  • G20 finance ministers and central bank governors repeated their pledge to
    refrain from competitive currency devaluations, but offered no new initiatives to keep growth from stalling.
  • Global growth “remains modest and uneven”, the G-20 warned the large advanced economies against continuing their prolonged, excessive reliance on unconventional monetary policy to power growth.
  • The G20 officials took a slightly more positive view on financial markets, which they said had mostly recovered from sharp sell ofs earlier this year and were in better shape since they last met.
  • The G-20 meeting was held as the International Monetary Fund (IMF) released yet another downward revision of its outlook for global growth.
  • The IMF’s appraisal was accompanied by the reiteration both of the measures that it says are needed and those that must be avoided (particularly, beggar-thy-neighbour currency devaluations).

GS PAPER 3

 

[1] Service corner bulk of FDI inflows

The Hindu

What happened?

  • The surge in foreign direct investment (FDI) is led by the inflows into the services sector rather than manufacturing or infrastructure.
  • More than half of FDI inflows in 2015 came into services.

What does it means?

  • It can be said that the ‘Make in India’ initiative is yet to be  materialised into FDI inflows.

Which services sector?

  • Software
  • Financial services
  • Trading
  • Hospital
  • Tourisism

Manufacturing sector

  • The inflows into the manufacturing sector were up 6% in 2015 after the 19% decline in 2014.
  • FDI in infrastructure in 2015 was marginally lower than in 2014.
  • The impact of the FDI liberalisation measures in defence, railways and retail is not visible.

[2] Are negative rates the new normal?

The Hindu

Context

Negative nominal interest rates are being currently adopted by 6 central banks and 25% of the world economy

Why are these rates so low

  • Supporters argue that it will induce consumers to spend more and banks will be able to lend more, this will increase buying and it will augment growth and raise inflation expectations
  • Global uncertainties like low commodity prices, China’s slow growth in GDP, Britain’s uncertainty in EU membership, low interest rates in eurozone for long time, it not very unfamiliar to have low rates

What do opponents say

  • This is an experimental measure and it is less likely that it will help the economy
  • Avoid this, as this could hurt progress if there no reasonable strategy agreed upon for global growth
  • Germany and Japan has serious objections because it has more old people and low interest rates will affect their pensions, life insurance and savings
  • IMF although supported the idea that it would create extra stimulus in the economy and maintain price stability of a country but questioned for how long will a country offer negative rates.

[3] How to better the new ‘medicore’

The Hindu

The International Monetary Fund’s (IMF) World Economic Outlook (April 2016):

  • world economy will grow at 3.2 per cent in purchasing power parity terms in 2016, not 3.6 per cent as forecast last October.
  • In 2017, it will grow at 3.5 per cent, not 3.8 per cent as forecast earlier.

After years of fiscal and monetary stimuli, we are not about to see a return to high growth in the near future.

IMF Managing Director, Christian Lagarde, calls it the “new mediocre”.

Now the question is whether economic policy can do anything at all about it?

Falling oil prices have failed to provide any help for the world economy.

  • Oil prices fell by nearly half in 2015 compared to 2014 but this hasn’t helped.
  • revenues fallen —–>oil exporters cut their expenditure——> global demand reduced.
  • In emerging markets such as India, the fall in oil price hasn’t been passed on fully to consumers.
  • In advanced economies, they are in no mood to step up spending.
  • Falling oil prices also reduced capital expenditure in the oil and mining sectors.
  • Which in turn have had their own impact on non-energy sectors.
  • A fall in the inflation rate.
  • Central banks should have cut their policy rates in response. If they are not just because they are already close to zero.
  • Inflation has fallen but nominal interest rates haven’t.
  • This translates into a rise in real interest rates.

Two aspects of the global economy today are worrisome.

  • financial markets are prone to turbulence. If financial markets sink, even the IMF’s modest forecasts can be undermined. Emerging markets can be wrecked by sudden and large capital outflows.
  • Geopolitical risks
    • The World Economic Outlook mentions some of these:
      • the humanitarian disaster and the influx of refugees into Europe;
      • the possibility of the U.K. exiting the European Union;
      • the rise of protectionist tendencies in the U.S. and elsewhere;
      • internal strife in several emerging markets.

However, it omits a far more important development:

  • the heightened tensions between Russia and the West.
  • When geopolitical risks rise, investors tend to retreat.

Solutions

  • Loose monetary policies
  • Fiscal support
  • Structural reforms

An era of low growth

According to some economists, the world has entered an era of low growth. Reasons:-

  • Secular stagnation :- It means that investment has dropped because of slower population growth in the advanced world, people needing fewer things, and modern investment being less capital intensive than in the past.
  • Productivity Growth :-  Like population growth, productivity growth too has fallen in recent years
  • Overhang:-The world suffers from an overhang of excess debt, which is what led to the financial crisis. Economies take years to come out of such an overhang.

Crux of the debate on the global economy

  • Either the growth potential of the world economy is limited or, even if it is not, we lack instruments to step up the growth rate without creating serious risks.
  • In dealing with the “new mediocre”, don’t aim for the sky.
  • Just focus on minimising vulnerabilities in the economy, such as those in the financial sector or on the external account.

 

[4] Defence preparedness: The way forward

The Hindu

Issue

What needs to be done to make things better for defense industry?

Refer the following articles in the same sequence to get a background of the DPP and its related provisions:-

  1. Towards military self-reliance
  2. Make in India in defence
  3. Future of Indian Defence Industry

Reasons to cheer

  1. The introduction of a new category of Buy Indian (or IDDM, Indigenous Design Development and Manufacture), the graded acceptance of better quality through the introduction of an “enhanced” performance parameter clause, and the sudden energisation of private players in defence manufacturing are some cause for cheer.
  2. Many of the rules that hitherto put the private industry at a disadvantage vis-à-vis the Defence Public Sector Undertakings (DPSU) have been modified or removed.
  3. The incentivisation of Micro, Small and Medium Enterprises (MSME) bodes well for the future since they are crucibles of innovation and the true determinants of indigenisation.

What else needs to be done?

The following radical recommendations of the Dhirendra Singh Committee needs to be incorporated:-

  1. Procurement Executive (PE) should be created outside the government.
  2. The strategic partners in six key sectors (aircraft, ship building, etc.) should be selected.
  3. The private sector should be empowered by letting them lead in large ‘Make in India’ projects, with support from the DRDO and weightage should be given to quality.
  4. There should be training of the manpower associated with the acquisition process.

 

[5] Government clears 170 stalled projects

The Hindu

Context

  • Big project worth crore of rupees are now getting speedy clearances in the new government

What stalled the projects earlier

  • The main reason was central government clearances or permits relating to bureaucracy, political interference and hurdles related to sector wise policy

What is happening

  • The Project Monitoring Group that was setup in 2013 had cleared 150 projects worth 5.5 lakh crore till 2014
  • Under NDA govt. it has cleared 170 projects worth 6 lakh crore since March 2015
  • 206 project worth Rs. 7 lakh crore were added to the waiting list in the same time
  • A private company Centre for Monitoring Indian Economy(CMIE) said that the value of the projects stalled for various reasons peaked in March 2016 at Rs. 11.4 trillion!
  • The stalling is not related to govt., it is related to market related postponements, prices of the commodities in many sectors, the promoters of the projects are facing monet constraints, also the banks are not willing to give money due to their own considerations

What is Project Monitoring Group

  • Project Monitoring Group (PMG) was set up in the Cabinet Secretariat to track stalled investment projects, both in the public and private sectors and to remove implementation bottlenecks in these projects.
  • The PMG was formed under the earlier United Progressive Alliance government for removing bottlenecks in stalled projects involving an investment of Rs.1,000 crore or more on a time-bound basis.
  • Under the National Democratic Alliance government, the PMG has been asked to follow up on the timelines it sets for different ministries and state governments to provide clearances, in an extra push to ensure timely decision-making. Earlier, the PMG would set deadlines and the department of financial services would do the follow up

[6] Centre may need Parliament nod for some PSU stake sales

The Hindu

News

Supreme Court directed to put hold on disinvestment procedure of residual 29 per cent share in Hindustan Zinc Ltd.,

  • An erstwhile public sector company and a subsidiary of Vedanta since 2003

Supreme court asked government

“What is the compulsion for you to disinvest? You can’t do this without amending the law as the company was formed as an Act of Parliament”

This could apply to sales of the government’s shares in every public sector company that was created through nationalisation under Parliamentary legislation.

NITI Aayog is set to submit this month two sets of recommendations:

  1. Disinvestment of loss-making public sector companies
  2. On possible candidates for strategic sales

[7] Economic Revival: View from the ground

Livemint

Issue

  • Economic revival

Micro-indicators which shows that Indian economy has improved:-

  • Rise in electricity generation
  • Growth in consumption of petroleum products
  • Pick-up in bank credit
  • Jobs:- Although a rise in job listings Naukri Job.com may not reflect the complexity of the labour market in India, it does indicate some pick-up in activity.
  • Auto sales:- The recently concluded financial year was one of the best in recent times for cars and commercial vehicles sales.
  • Cement: The sharp growth in cement dispatches in the past couple of months shows that there is general increase in public investment.

Is this micro-data reliable?

  • These micro-indicators  should be read with caution as it may still not be safe to conclude that a full-fledged economic revival is underway.
  • On a number of occasions in the past, some indicator or the other has shown signs of life for some time, but the momentum eventually fizzled out due to lack of support from other parts of the economy.
  • Also, even as some indicators are showing signs of a turnaround, they are not sufficiently broad-based yet. For instance, while consumption of petroleum products has increased, non-oil imports—an indication of demand, particularly investment demand, in the economy—remains depressed.
  • Slower global growth is also a drag for economic activity as it is affecting exports and employment in exports-oriented sectors.

Wait and Watch

  • A good monsoon will help overall economic growth with higher agricultural production and possible revival in rural demand, which has suffered in the past two years because of deficient rainfall.
  • It is also possible that higher farm output will result in lower food price inflation, help anchor inflationary exceptions, and open up space for further monetary accommodation.
  • But it still remains to be seen if this can give a decisive push to what is still, at best, a nascent and fragile economic recovery.

[8] Payment banks do not have a viable business model: SBI Chief

The Hindu

Small and payments banks have not yet devised a business model which can be termed viable, SBI Chairperson Arundhati Bhattacharya

What are Small finance bank?

  • Small finance banks are a type of niche banks in India. Banks with a small finance bank license can provide basic banking service of acceptance of deposits and lending.
  • The aim behind these to provide financial inclusion sections of the economy not being served by other banks, such as small business units, small and marginal farmers, micro and small industries and unorganised sector entities
  • The firms must have a capital of ₹100 crore.
  • Existing non-banking financial companies (NBFC), micro-finance institutions (MFI) and local area banks (LAB) are allowed to set up small finance banks.
  • The promoters should have 10 years experience in banking and finance.
  • The promoters stake in the paid-up equity capital will be 40% initially which must be brought down to 26% in 12 years.
  • Joint ventures are not permitted. Foreign share holding will be allowed in these banks as per the rules for FDI in private banks in India.
  • The banks will not be restricted to any region. 75% of its net credits should be in priority sector lending and 50% of the loans in its portfolio must in 25 lakh range.

What are Payment banks?

  • The external advisory committee headed by Nachiket Mor submitted its findings on Payment banks on 6 July 2015
  • On 19 August 2015, the Reserve Bank of India gave “in-principle” licences to eleven entities to launch payments banks.
  • The minimum capital requirement is ₹100 crore. For the first five years, the stake of the promoter should be 40% minimum. Foreign share holding will be allowed in these banks as per the rules for FDI in private banks in India.
  • Any acquisition of more than 5% will require approval of the RBI.
  • The bank should be fully networked from the beginning.
  • The bank can accept utility bills.
  • It cannot form subsidiaries to undertake non-banking activities.
  • Initially, the deposits will be capped at ₹100,000 per customer, but it may be raised by the RBI based on the performance of the bank.
  • The bank cannot undertake lending activities.
  • 25% of its branches must be in the unbanked rural area.
  • The bank must use the term “payments bank” in its to differentiate it from other types of bank.

Reason she gave for non viable business plan:

  • A mobile banking customer, who is also a customer for payment services, will be less free to migrate to a competition for mobile services. Hence, it is hard to see payment banks taking away customers or income from commercial banks in a big way.

Concern:

  • Whether banks, particularly public sector banks, will survive this onslaught where dynamics of competition has changed because of entries of these new models and non banking companies.

1. The lead article of the day is covered under Editorial Today. Click here to read.

2. Science and Technology and Environment articles has been left out, they will be covered in weekly compilation for next week.

BY: ForumIAS Editorial Team 

 

Comments

One response to “9 PM Daily Brief – 19 April 2016”

  1. ROOPINI Avatar
    ROOPINI

    Great one.. 🙂

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