Brief of newspaper articles for the day bearing
relevance to Civil Services preparation
What is 9 PM brief?
- GS PAPER 2
- Private airlines equally accountable to disabled: SC {Judiciary}
- Drought relief on order {Judiciary}
- Regime change in Brazil {Foreign Policy}
- Bangladesh, India to ‘fight terror together’ {Foreign Policy}
- India’s help sought to tackle drugs problem in Jaffna {Foreign Policy}
- GS PAPER 3
- Fuel loading begins at Unit II of Kudankulam nuclear plant {Infrastructure}
- IIP barely edges up, retail inflation at 5.4% {Economy}
- Amended Mauritius DTAA unclear on hybrid securities {Economy}
- Gold searches for buyers in India as global demand surges {Economy}
- Winning the war on food inflation {Economy}
GS PAPER 2
[1] Private airlines equally accountable to disabled: SC
News:
- Supreme court asked SpiceJet to pay Rs. 10 lakh to activist Jeeja Ghosh, who was pulled out of a plane in Kolkata four years ago
- Four years ago a private airline crew “pulled her out” of the plane at the Kolkata airport merely because the captain felt she was a threat to the flight.
- Four years later, the incident has become the trigger for the Supreme Court to direct authorities to revamp air travel laws to stop any kind of discrimination against disabled persons either in airports or on-board flights.
- In a major victory to the rights of disabled persons in the country, the apex court held it is the bounden duty of private airlines, especially their flight crew, to take care of every need of a disabled person.
- The Court held that private airlines, like their public counterpart, are equally liable under the numerous international covenants and instruments guaranteeing rights to persons with disabilities.
- It observed that humiliations suffered by disabled persons like being de-planed, threatened with physical violence, neglected by crew or asked to sign indemnity bonds before allowed to board a flight are in gross violation of existing laws like the Civil Aviation Requirements of 2008 with regard to ‘Carriage by Air of Persons with Disability and/or Persons with Reduced Mobility’ issued by the Directorate General of Civil Aviation.
[2] Drought relief on order
For comprehensive article on drought, refer editorial today Drought: Challenges and the way ahead.
News:-
- Supreme Court (SC) has issued a slew of directions to Centre, States on their failure to tackle drought . It entertained a petition filed by NGO, Swaraj Abhiyan.
SC pulls up Centre, States for failing to tackle drought
It accused the Centre of taking refuge in the concept of “federalism” to pass the buck to the States for declaring and managing drought and providing only financial aid.
The failure to declare drought by Bihar and Haryana has robbed the poor of their fundamental right to dignity of life.
Directions given by Supreme Court to Government
- Establish a National Disaster Response Force with specialist cadre in six months.
- Set up a Disaster Mitigation Fund within three months.
- Frame National Plan on risk assessment, risk management and crisis management in respect of a disaster
- Update 60-year-old Drought Management Manual keeping in mind “humanitarian factors” like migrations, suicides, extreme distress, the plight of women and children
- It has directed the Centre to take proactive steps in drought mitigation as well as in assessment,planning and relief as mandated by the Disaster Management Act, 2005.
- It clarified that a drought definitely falls under the definition of ‘disaster’ under Section 2(d) of the Disaster Management Act of 2005 and lashed out at the government for not even trying to enforce the statute.
Section 2(d) of the Disaster Management Act of 2005
“disaster” means a catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man made causes, or by accident or negligence which results in substantial loss of life or human suffering or damage to, and destruction of, property, or damage to, or degradation of, environment, and is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area.
[3] Regime change in Brazil +From a Marxist insurgent to an impeached President + Rousseff suspended to face impeachment trial
News
- Brazilian President Dilma Rousseff has been suspended to face impeachment, ceding power to her Vice President-turned-enemy Michel Temer.
- The impeachment, approved with a 55-22 majority, brings to an end 13 years of rule by the Workers Party (PT).
What are the charges?
- Brazil’s 68-year-old “Iron Lady” is accused of illegal accounting manoeuvres in which her government took unauthorised loans to cover budget holes during her tight re-election in 2014.
Future course
- Although many analysts agree that the seriousness of the charges against her is debatable, a tide of public anger over prolonged recession, corruption and the government’s inability to deal with Congress could sweep her away.
- Ms. Rousseff will now experience the humiliation of having to leave the presidential palace and hand over power to Vice-President Michel Temer.
- While the opposition politicians are understandably happy with the outcome, the impeachment is likely to deepen Brazil’s political crisis at a time when the country needs a stable administration to cope with the enormous challenges it faces, especially the current economic crisis, and chronic corruption.
- A two-thirds majority vote will be needed at the end of the impeachment trial to force Ms. Rousseff (68) from office altogether.
What is wrong with the impeachment?
- Those who support the impeachment, politicians and others, say it is a fight against corruption and Ms. Rousseff’s economic ineptitude. This line of reasoning has at least two problems.
- First, she has not been implicated in any corruption case.
- Second, it is not clear what kind of changes the incoming acting President can bring about to rescue Brazil’s economy from a free fall and to stabilise its politics — given that he faces corruption charges and has no popular mandate.
Response of Dilma
- Defiant to the end, Ms. Rousseff denounced a “coup” aimed at driving her from power, and urged her supporters to mobilise as she braces for an impeachment trial that is set to drag on for months.
- She said,“What is at stake is respect for the ballot box, the sovereign will of the Brazilian people and the Constitution.”
What should be done?
- The best, and the democratic, way out of this crisis would be to call fresh elections and let the people decide who should be the next President.
- He or she could start afresh on the basis of a new mandate.
- Unfortunately, Brazil’s political elite appear to be more interested in political manoeuvring than in addressing the real issues.
[4] Bangladesh, India to ‘fight terror together’
News:
- Indian Foreign Secretary met his Bangladesh counterpart.
- Outcome of the meeting: India and Bangladesh will “work together” to combat terrorism.
- They also said that “Bangladesh and India can resolve their pending bilateral issues through maintaining good relations.”
Other developments:
- India has also been supportive of a judicial process to address pending issues of retributive justice for war crimes committed during the movement for the independence of Bangladesh in 1971.
[5] India’s help sought to tackle drugs problem in Jaffna
News:
- In a meeting with a former Indian diplomat, leaders of fishermen from Jaffna raised the issue of the easy availability of drugs in the region, and sought India’s help to tackle the problem.
- Jaffna District Fishermen’s Federation’s president Naganathy Ponnambalam said drug trafficking, especially the smuggling of “Kerala ganja”, a prohibited substance, had gone up in recent times. “Not just some, the entire quantity of banned substances comes from India.”
Easy victims
- The Jaffna youth, many of whom are now unemployed, have became “easy victims” of the drugs which are available in plenty. Alcoholism too is rampant.
- Ganja is being sold even in micro retail shops and minor children are engaged in selling such substance.
Indian help:
- If the problem has to be tackled effectively, the cooperation of the Indian government is a must.
- Northern Province Governor has also emphasised the need for enlisting the support of the Indian government.
However, president of the Mannar District Fishermen’s Cooperative Society Union, says India alone is not to be blamed. “The primary responsibility lies on Sri lanka,”.
GS PAPER 3
[1] Fuel loading begins at Unit II of Kudankulam nuclear plant
Kudankulam Nuclear Power Plant
Kudankulam Nuclear Power Plant (or Koodankulam NPP or KKNPP) is a nuclear power station in Koodankulam in the Tirunelveli district of the southern Indian state of Tamil Nadu.
Additional Points
- Russia is building the KKNPP under a 1988 intergovernmental agreement.
- Unit 1 of KKNPP, India’s most powerful nuclear reactor till date, was commissioned in autumn 2013 and was restarted after a scheduled preventive maintenance on June 23, 2015.
- India and Russia had agreed to set up six VVER-1000 type reactors of 1000 MW each at Koodankulam to be supplied by Rosatom State Corporation of Russia.
- Officials have said this was the first nuclear power plant in the world where the post-Fukushima safety enhancement requirements had been implemented and were being operated successfully.
[2] IIP barely edges up, retail inflation at 5.4%
Issue
- Analysis of the key economic indicators.
Key Observations
- India’s industrial output growth slowed down to 2.4 per cent in financial year 2015-16 with the Index of Industrial Production remaining virtually flat in March 2016, growing by a mere 0.05 per cent.
- Consumer price inflation, on the other hand, accelerated to 5.4 per cent in April from 4.8 per cent in March.
Analysis
- The moderation in the industrial output index, which grew 2 per cent in February, was driven by a contraction in the mining and manufacturing sectors, a slowdown in the consumer durables sector and a worsening scenario in the capital goods sector that shrank for the fifth month in a row.
- The IIP and the Consumer Price Index (CPI) numbers indicate there are no real signs of a sustained recovery in the economy and suggest that the Reserve Bank of India will hold off on cutting interest rates in the near future.
- These numbers could also suggest a slowdown in GDP growth.
- The IIP numbers come as a surprise since the core sector data for March showed a strong growth of 6.4 per cent, which had seemed to suggest that the economy was seeing green shoots of recovery.
- The core sector data was better because most of it was dependent on government expenditure.
- In sectors like, power, coal and cement, the role of government was significant. The rest of the IIP covers the private sector and there, the story is of no visible green shoots yet.
Core Sectors
- The eight infrastructure sectors that make up the core sector index – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity – together have a 38% weightage in the Index of Industrial Production (IIP).
[3] Amended Mauritius DTAA unclear on hybrid securities
News:
- The two countries India and Mauritius amended their 33-year-old tax treaty, bringing the curtains down on the Mauritius route, which government revenue officials and critics said had become synonymous with tax avoidance and abusive practices such as treaty shopping and round-tripping.
- The amendment to the 1983 treaty will come into force from April 1, 2017.
Under the new safe harbour rules:
- Gains will be taxed as capital gains than as business income. This will require them to reconfigure their plans.
- This will push offshore fund management companies to set up shop in India.
Ambiguity:
- It is not clear if the amendment covered investments made using hybrid securities.
- The extent of its applicability to hybrid instruments is still open, and they could technically walk away with residence-based taxation protections.
Additional information:
- What are hybrid securities?
Hybrid securities, often referred to as “hybrids,” generally combine both debt and equity characteristics. The most common type of hybrid security is a convertible bond that has features of an ordinary bond but is heavily influenced by the price movements of the stock into which it is convertible.
[4] Gold searches for buyers in India as global demand surges
Issue
- Re-introduction of excise duty is one major reason impacting demand.
- The demand for gold in India fell by 39 per cent in the first quarter of 2016 due to increase in duties and stricter disclosure norms, according to the World Gold Council (WGC).
- The demand for gold in India in the first quarter was 116.5 tonnes, 39 per cent lower than in the corresponding quarter of 2015 when it was 191.7 tonnes.
Reasons:
- The sharp increase in the price of gold since the beginning of the year.
- Customs duty on gold.
- The regulation introduced ensuring PAN card details are disclosed for purchases above Rs.2 lakh is also reported to have affected buying.
Global demand
- Global demand for the yellow metal during the first quarter of 2016 was pegged at 1,290 tonnes, an increase of 21 per cent compared to the year-earlier period.
- Incidentally, the aggregate demand in the three-month period between January and March made it the second-largest quarter on record.
Reason for rise in global demand:
- According to WGC, the rise in demand was driven by huge inflows into exchange-traded funds (ETFs), fuelled by investor concerns regarding economic fragility and an uncertain financial landscape.
- The total inflow into ETFs during the period was 364 tonnes – the highest quarterly flow since the first quarter of 2009.
- In the corresponding quarter of 2015, ETF inflow was pegged at 26 tonnes.
- Global demand for jewellery was down 19 per cent as higher prices along with industrial action in India and a softening Chinese economy led to many consumers delaying making purchases.
Additional information:
- What is an Exchange Traded Fund?
An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange.ETFs experience price changes throughout the day as they are bought and sold.
[5] Winning the war on food inflation
Context
- According to author, staying on the RBI’s CPI inflation glide path is eminently achievable, but sustaining it around 4% from thereon will be a challenge.
How we have managed to restrain food inflation despite two successive monsoon failures ?
- Credit for this must go to
- The government’s proactive management of food supply and fiscal restraint
- Low global food inflation
- And the Reserve Bank of India’s (RBI’s) relentless focus on tamping down inflationary expectations.
The battle to rein in inflation at 5% in the current financial year seems to have been won.
But, has the war to douse price fires over a medium term been won?
- Surveys by the RBI in January and March show that though consumer expectations on inflation for the three months ahead have declined by almost 2 percentage points over previous surveys, the one-year-ahead expectations have come down only by 0.6 percentage points and remain higher than current inflation levels.
- The inflation can rise if crude and commodity prices claw back significantly.
- In the sticky components, particularly health and education, lack of private-sector appetite and the absence of adequate and good quality public provision of health and education challenge supply, while rising population and incomes are continuously pushing demand.
Bigger challenges ahead
- While the 5% CPI inflation goal for March 2017 is achievable
- The bigger worry for the RBI from a medium-term perspective is food, which has a 40% weight in the new CPI.
- The International Monetary Fund recently noted that high inflation in India was underpinned by elevated and persistent food price inflation, which cascades quickly into rural and urban wage and non-food inflation.
Volatile components of food inflation
- The inflation in prices of pulses and vegetables continue to spike or remain elevated.
- Not only has their inflation been sticky, it has also been characterized by high volatility.
- In the past four fiscals, on average, about 1.1% of the inflation rate was from pulses and vegetables.
- In the past fiscal, weather shocks caused pulses inflation to surge to 31.9% from 7.9% the previous year, which prevented a sharper decline in food inflation.
- As measured by the wholesale price index, prices of pulses have spiked almost every three years and is the most volatile sub-group under the food index after vegetables.
- The past four years have seen CPI-based pulses inflation average 13.6%—the highest among food sub-groups.
- Following pulses closely is the vegetables sub-group, which has also been very volatile with average inflation at 12.5% in the past four fiscals.
- Here again, low productivity is a structural glitch. Although growth in area under production has more than trebled since the turn of the millennium, output has grown at a slower pace, causing productivity growth to slump.
How can we win the war on inflation?
- The upshot of all is that staying on the RBI’s CPI inflation glide path is eminently achievable, but sustaining it around 4% from thereon will be a challenge.
- It cannot be achieved without the government addressing structural bottlenecks in supply, and there are serious efforts to materially improve farm productivity.
- Indeed, the Union budget for this fiscal has lent some thrust to agriculture. The next step is to relentlessly push for structural changes that will alter the face of the farm ecosystem itself.
- Only then can we hope to win the war on inflation for good.
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