9 PM Daily Brief – 13th September 2016

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NATIONAL 

 

[1].GST Council gets Cabinet nod, roll-out likely in April

The Hindu

Context:- The Union Cabinet approved the setting up of the Goods & Services Tax (GST) Council and its Secretariat on 12^th September 2016

What is the Empowered committee of State Finance ministers?

The Empowered Committee of State Finance Ministers was originally set up on 17th July, 2000 by the Government of India.

• All the Ministers in charge of Finance/Taxation of all State Governments and Union Territories with legislatures, Additional Secretary (Revenue), Government of India and Member Secretary, Empowered Committee are the members of the Empowered Committee.

Objective

Objective of Empowered Committee of State Finance Ministers was to

• monitor the implementation of uniform base rates of sales tax by States and Union Territories
• monitor the phasing out of the sales-tax based incentive schemes
• decide milestones and methods of States to switch over to VAT
• monitor reforms in the Central Sales Tax system existing in the country

After the creation of GST Council, the empowered committee would cease to exist.

Members in GST Council

• State: Each State is to nominate a minister as a voting member, who may or may not be holding the finance or the taxation portfolios.
• Centre: The Centre will have two representatives on the Council: the Union Finance Minister will chair it and Union Minister of State in-charge of Revenue, will be a member

Note: – For a detailed overview of GST Council please refer to 9pm brief dated 12^th September 2016

 

[2]. Pulse buffer stock to be increased to 20 lakh tonnes

The Hindu

Context:- The Centre approved the enhancing of buffer stock of pulses to 20 lakh tonnes on 12^th September 2016

The Buffer stock would be built through

• domestic procurement, that would be done by Food Corporation of India, the National Agricultural Co-operative Marketing Federation of India and Small Farmers Agriculture-Business Consortium
• imports of 10 lakh tonnes each

Government also decided that,

• The specific variety of pulses and their quantities for the buffer stock would be decided on the price and the availability
• The release of pulses from the buffer stock and procurement in the subsequent year will be based on the prevailing pulse [production] scenario as well as the buffer stock position.
• The requisite funds for this operation will be provided to the price stabilization fund scheme (PSFMC) of the department

Aim: To stabilize the prices and encourage farmers to scale up production

 What is a price stabilization fund?

Price Stabilisation Fund (PSF) refers to any fund constituted for the purpose of containing extreme volatility in prices of selected commodities.

• The amount in the fund is generally utilised for activities aimed at bringing down/up the high/low prices say for instance, procurement of such products and distribution of the same as and when required, so that prices remain in a range.
• India first created a price stabilisation fund for some export oriented plantation crops in 2003, and this ceased to exist in 2013. Another fund was created in 2015 for perishable agricultural and horticultural commodities, but initially limited to support potato and onion prices only
• The Government of India, on 27 March 2015, approved the creation of a Price Stabilization Fund (PSF) with a corpus of Rs.500 crores as a Central Sector Scheme, to support price control of perishable agri-horticultural commodities during 2014-15 to 2016-17.
• The States have to set up a ‘revolving fund’(a fund which is constantly replenished and not limited by the fiscal year considerations) to which Centre and State contributes equally (50:50).  In case of NE states this ratio is 75:25.
• The Price Stabilization Fund is managed centrally by a Price Stabilization Fund Management Committee (PSFMC) which approves all proposals from State Governments and Central Agencies.
• PSF is administered by Ministry of Agriculture

 

EDITORIAL/OPINION 

[1]. They are the world

The Hindu

Context:- report by UNICEF titled “Uprooted: The Growing Crisis for Refugee and Migrant Children” highlights the dreadful impact that refugee crisis has had on the children

Report states that,

• 50 Million children have migrated or have been forcibly displaced across the borders
• Out of these 50 Million, over 50 are those who have fled due to violence
• 1 out of 3 children who live outside their country of birth is a refugee
• In 2015, Syria and Afghanistan accounted for nearly half the world’s child refugees

The impact

Above stats show just how the children in war torn areas have been impacted, without any fault of theirs.

Author goes on to say that,

Child trafficking, drafting of children by armed groups to fight for them and exploitation of children through sex trade are some problems that need to be tackled head on.

 

[2]. Why Healthcare access eludes India?

The Hindu

Context:- Author tries to ascertain as to why universal healthcare access in India is low despite having world class doctors

Why universal healthcare access is necessary?

Healthcare access ensures,

• Overall well-being of the population i.e. a healthy citizenry
• Increases the productivity of the population

Constitutional backing

Under Part IV of the Constitution which deals with the Directive Principles of State Policy,

• Article 47 under part IV lists the “Duty of the State to raise the level of nutrition and the standard of living and to improve public health”

Why government has been unable to ensure a universal access to healthcare?

• Inadequate healthcare infrastructure: There is a demand-supply gap in the healthcare sector in India. In comparison to World Health Organization’s (WHO) stipulated minimum doctor to patient ratio of 1:1,000, India has only 0.7 doctors per 1,000 patients. Supply side here means the total number of doctors, medical care professionals and total number of hospitals required to serve the people are low. Moreover, policymakers have increasingly focused on addressing demand side issues rather than supply side inefficiencies meaning they have focused their efforts to prevent the spread of ailments and diseases rather than ensuring that we have a sizeable quota of doctors & equally world class hospitals to treat ailments.
• Abysmal Healthcare expenditure: India spends very low on its health care sector.  India accounts for over 17 per cent of the world’s population while spending less than 1 per cent of the world’s total health expenditure. Our total healthcare expenditure stands at 4.1 per cent of GDP, which is among the lowest in the world.

1. Delay in disbursement of the funds to state ensure that critical government schemes are marred with delays.
2. Funds given to skill-building of health-care professionals are usually not utilized owing to lack of such human resources

• Poor governance due to corruption and innumerable regulations that have inhibited access to variety of healthcare providers is another factor for lack of Universal access to healthcare in India
• Due to low levels of awareness regarding various diseases, inadequate monitoring and lack of proper policy initiatives to eradicate diseases pose another challenge to providing healthcare in India

What needs to be done?

Author says that an integrated approach is needed to make healthcare universally accessible and affordable at the same time. A universal access to healthcare will not only impact the overall productivity of the populace but also help in eradicating poverty and pushing positive growth.

Conclusion

We can take examples of China and Japan which have invested in so vigorously in healthcare and education. India also needs to follow a similar strategy and make its citizens more competitive and act as an asset to the country’s growth.

 

[3]. The Margarita Mirror 

The Hindu

Context:- In the wake of recent NAM summit where instead of our PM, Vice President will be going, author puts forward a question,

Has NAM lost its relevance in today’s time?

Let us find out

Formation of NAM

The term “Non-Alignment” was coined by V K Menon in his speech at UN in 1953.

• The Non-Aligned Movement (NAM) was created and founded during the collapse of the colonial system and the independence struggles of the peoples of Africa, Asia, Latin America and other regions of the world and at the height of the Cold War.
• NAM was formed in 1961, at the initiative of Egypt, India and Yugoslavia.

Historical background

In 1954, Bandung (Indonesia), 29 Heads of States of Africa and Asia with the aim of identifying and assessing world issues at the time and pursuing out joint policies in international relations. They did not want to join any power blocs existing at that time because of the ensuing complications. They formulated a policy of non-alignment.

In September 1961, 6 years after Bandung, the Movement of Non-Aligned Countries was founded on a wider geographical basis at the First Summit Conference of Belgrade. At this meeting it was announced that NAM would push for an alternate economic order and for a campaign against the nuclear arms race.

Erosion of authority of NAM
After around 60 years of its first meeting, the authority of NAM has gradually eroded. Major reason has been the,

• The Third World debt crisis of the 1980s

Economically weak countries of the NAM were in no position to assert the same authority and will over the global policy order that it did during its formative years.

 American ascendancy

The result of economic crisis of 1980s was that the countries of NAM began knocking the doors of US. These nations were riddled with debts that they wanted to repay as soon as possible. They were left with no option but to take sides.

Important powers backed away

Major international bigwigs gradually started to break away from NAM.

Argentina left in 1991

Yugoslavia crumbled

 Weak Leadership

Leadership of NAM has over the years been in the hands of the countries that have been skeptical towards American policies, like

• South Africa (1998)
• Malaysia (2003)
• Cuba (2006)
• Egypt (2009, was convulsed in the Arab Spring during its presidency)
• Iran (2012)
• Presently, Venezuela
• Next, Azerbaijan (a newcomer to NAM)

Author says that Venezuela wants to make the NAM summit a success but it will be difficult due internal turmoil that it’s been facing.

Still relevant

In the view of Venezuela’s president Nicolas Maduro, NAM is still relevant. He says that it is necessary to emerge with an alternative bloc to the West to counter its neo-colonial dominance (It is the practice of using capitalism, globalization and cultural imperialism to influence a developing country instead of direct conflict).

Way Ahead

NAM has certainly lost its significance due to policy shifts in majority of countries like India, one of the core founding members. In order to stay relevant, it needs to come up with a plan, a vision document like New International Economic Order (NIEO) in 1973 which was a charter for a different way to manage political disagreements and trade across states. This document had the potential but it died due to the debt crisis. NAM needs to conjure up such futuristic policy initiatives so that it can place itself as a potent alternative to the West bloc.

 

[4]. Transit at Gojadanga

The Hindu

Context:- Author talks about the issue of Migrant smuggling from Bangladesh into India along the Gojadanga border.

Gojadanga BSF Check post

Migrant Smuggling

As per Article 3 of the Protocol against the Smuggling of Migrants by Land, Sea and Air, which supplements the United Nations Convention against Transnational Organized Crime, migrant smuggling is defined as,

“The procurement, in order to obtain, directly or indirectly, a financial or other material benefit, of the illegal entry of a person into a state party of which the person is not a national”

Gojadanga check post

• Gojadanga is an obscure zero line village (villages on the international border) and shares the border with Bhomra village in Satkhira district of Bangladesh.
• Gojadanga is manned by the BSF while the Bhomra border is looked after by the Border Guard Bangladesh (BGB)

 How are illegal migrants smuggled and why are they smuggled?

The Indo-Bangladesh land border along the Gojadanga village, which stretches 3 km, is completely unfenced, with people living up to zero line on both sides of the border. This makes it extremely vulnerable to illegal migration from Bangladesh. It is through this stretch that smuggling takes place.

• Sometimes migrants voluntarily opt to come the other side of the border into India in search of better job opportunities, medical treatment and visits to families on the Indian side of the border.
• Due to rampant poverty along the border areas of Gojadanga, some villagers have made illegal migrant smuggling their professional job.

Human trafficking along the border is difficult to track. Why?

• BSF can only apprehend the illegal migrant for 24 hours. After that he has to be handed over to the local police which takes over the case from there on.
• Bangladeshi migrants are often unaware that they are being trafficked. In lieu of job opportunities they are smuggled into India and then they are sold into prostitution or forced labour.
• Sometimes even BSF officials illegally help the smugglers.

Under which act & how the illegal migrants & smugglers are charged?

Illegal migrants are charged under the Foreigners Act 1946.

• The act states that if an offender is a foreigner, he/she should be punished under this act and deported
• The cross-national touts/migrant smugglers are set free after a sentence of few months
• The victim is mostly sent to a shelter home in West Bengal till the time the he or she can be repatriated to Bangladesh
• The trafficker can be charged under Section 366B of the Indian Penal Code, which states that importation of a girl below the age of 21 years is a punishable offence. However, this provision is rarely implemented since police officers are usually unaware of it.

Way ahead

Short-term solution: Fencing along the border, which is currently in progress, might help in preventing this menace

Long-term solution: The underlying problem or the root cause of this problem is the lack of economic growth and job opportunities in the border villages. If government is able to provide the residents of such villages with good education, job prospects and a brighter future they won’t aid and abet this problem of migrant smuggling. This holds true for government on both sides of the border

Conclusion

The United Nations Office on Drugs and Crime notes, “Migrant smuggling affects countries of origin, transit and destination”. Thus, it “requires the collaborative response of all” the affected countries.

Addressing the socio-economic causes while simultaneously strengthening the legal framework will is the best option available to deal with this situation

 

[5]. New Dynamic in the North West

Indian Express

Context:- With Afghanistan looking towards an increased partnership with India, it is time for India as per author to think about the future challenges and risks involved

Initial policy of Afghanistan

As Ashraf Ghani became the president of Afghanistan in 2014, it seemed that strong ties with India were not on his agenda.

• He focused on Pakistan’s military first.
• After being elected as president he visited countries in the following order,

1. China
2. Pakistan
3. US
4. India

• Ashraf Ghani further announced a MoU for Afghan and Pakistani intelligence agencies to work together.
• It was followed by talks with Taliban in Pakistan, which included China

India’s stand

India also reciprocated & except just one high profile visit of NSA to Kabul there were no other visits. No agreements that were planned were signed like the Motor vehicles transit and extradition agreements etc.

What has changed now?

Afghanistan has realized the futility of engaging with Pakistan with latter’s continued support to Taliban. So, now in 2016 it seeks to amend its ties with India and Afghan president will be arriving in New Delhi on September 14 on a two day visit to hold “close consultations” on key issues.

Author talks about the Afghanistan, Pakistan & India’s relation dynamic

He states that

• Afghanistan shares a 2500km open border with Pakistan and there is a large Pashtun population in Pakistan, many of whom share economic links with their kin across the border. So, Ghani was not wrong to try to find a compromise with Pakistan. It was not controversial in any manner if he gave Pakistan a priority.
• But Afghanistan misjudged the intent of Pakistan. Ghani mistakenly believed that Pakistan would be open to a reasonable accommodation of Afghanistan’s concerns.
• Pakistan wants a weak regime in Afghanistan, a regime which it can control indirectly but currently it has no power to see its vision fulfilled
• So, most regimes in Kabul have looked to India to counter Pakistan but India’s role in Afghanistan has been limited due to a trade-off of normal relations with Pakistan. India didn’t want to destabilize any options of peace with Pakistan even if that meant ignoring what Pakistan does in Afghanistan but with recent spate of violence in Kashmir and increased interference of Pakistan, India has nothing to hold itself back.

Conclusion

With US pulling out of Afghanistan, Pakistan is increasingly looking to dominate it through Taliban. Moreover, it is expecting that Russia and China will support its efforts to hegemonize Afghanistan. In light of these circumstances, India cannot stay back. Time has come to take calculated risks wrt Afghanistan

 

ECONOMY

[1].Cabinet nod for expanded trade with China, Asia-Pacific (APAC)

The Hindu

Context:- The Union Cabinet approved a move for exchange of tariff concessions under the Asia Pacific Trade Agreement (APTA), towards expanding trade ties with five nations in the region, including China on 12^th September 2016

What will India get?

India is likely to benefit from offers of China and South Korea for duty concessions in sectors including textiles, chemicals and iron and steel

What has India offered?

India in return has offered duty concessions on rail rolling stock, nuclear reactors and fissile material to boost the ‘Make in India’ initiative

Relevance of APTA

Asia Pacific Trade Agreement (APTA) is relevant as it is the only preferential trade agreement in force between India and China

 

What is a preferential trade agreement?

A preferential trade agreement like APTA is the weakest form of economic integration wherein two countries give preferential access to certain products from the participating countries via lowering the tariffs for each other. It should be noted that tariffs are not abolished completely.

APTA can be established through a trade pact.

 

What is APTA?

The Asia-Pacific Trade Agreement (APTA) is a preferential trade arrangement formerly known as the Bangkok Agreement. The Bangkok Agreement, signed in 1975. Till now, signatories to the Agreement include China, Bangladesh, India, Lao, Republic of Korea and Sri Lanka.