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9 PM Daily NEWS Brief

9 PM Daily Brief – 28th November 2015

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


National


[1]. Human development holds the key

What is Naxalism?
The term Naxal is derived from the name of the village Naxalbari in West Bengal
• The Naxals support Maoist political sentiment and ideology.
• The Naxalism movement originated with the split of the Communist Party of India (Marxist), which resulted into the formation of the

Causes of Naxalism
• Mismanagement of Forests,
• The Growing inter and intra regional disparities,
• Absence of proper Industrialisation
• Lack of land Reforms
• Lack of proper tribal policies

What is tiger reserve?
A tiger reserve is a specific area within the borders of which a particular species or animal is protected by the law. In a tiger reserve a tiger is protected under the law. Killing or hunting a tiger in such a reserve is an offence and illegal.

1970– A ban on tiger hunting was imposed in India
1972– Wildlife Protection Act came into force

Project Tiger
Project Tiger is a tiger conservation programme launched in 1973 by the Government of India during Prime Minister Indira Gandhi’s tenure.
In India, tiger reserves have been constituted under Project Tiger via a core-buffer strategy meaning separate areas have been marked as core and buffer.
Core areas: The core areas are freed of all human activities. It has the legal status of a national park or wildlife sanctuary
Buffer areas: The buffer areas are subjected to ‘conservation-oriented land use. It comprises forest and non-forest land.

At present, India has around 27 Project Tiger reserves. The government has set up a Tiger Protection Force to combat poachers and funded relocation of villagers to minimize human-tiger conflicts.

National Tiger Conservation Authority
The National Tiger Conservation Authority was established in December 2005 following a recommendation of the Tiger Task Force, constituted by the Prime Minister of India for reorganised management of Project Tiger and the many Tiger Reserves in India.
The Wildlife Protection Act of 1972 was amended to provide for constituting of the National Tiger Conservation Authority responsible for implementation of the Project Tiger plan to protect endangered tigers. The National Tiger Conservation Authority is set up under the Chairmanship of the Minister for Environment and Forests.

Penalties under Wildlife Protection Act, 1972
An offence involving a species listed in Schedule I or Part II of Schedule II, or an offence committed within a sanctuary or natural park, attracts a
• Mandatory prison term of three years, which may extend to seven years
• Mandatory fine of at least Rs. 10,000.
For a subsequent offence, the prison term remains the same, while the mandatory fine is at least Rs.25, 000

An offence committed inside the core area of a Tiger Reserve,
• Mandatory prison term of three years, extendable to seven years
• A fine of Rs. 50,000 extendable to Rs. 2 lakhs
In case of a subsequent conviction of this nature,
• An imprisonment term of at least seven years
• a fine of Rs. 5 lakhs which may extend to Rs. 50 lakhs

Current status of tigers in India
India holds over half the world’s tiger population. According to the latest tiger census report released on March 28, 2011 by the National Tiger Conservation Authority, the current tiger population estimated is 1,706 (i.e. ranging between a minimum of 1,571 to a maximum of 1,875). The results include figures from 17 Indian states with a tiger population.

How tiger population is ascertained?
In India, Tiger census is carried out every 4 years started in 2006.
Pugmark Technique: pugmark technique has been one of the most popular ways of counting tigers. Each tiger is known to leave a distinct pugmark on the ground and these are different from the others in the big cat family. Photographs or plaster casts of these pugmarks are then analysed to assess the tiger numbers. This technique is not accurate enough.
Using cameras: Cameras are left in dense forests for several days to capture images of individual tigers. These cameras are heat and motion sensitive. They lie idle till they detect any motion or a sudden change in temperature.
This means, they capture just about anything that moves — other animals, even birds. All these get captured by the camera. The images of the tigers captured have to be de-duplicated to find the number of individual tigers. Each tiger is known to have a very unique stripe pattern.
This is used to differentiate one tiger from the other. While this differentiation can be done relatively easily with the naked eye in case of two or three tigers, comparing a large number of images becomes difficult. The researchers have developed software that matches the stripes on any one image with those on all the other images and throws the best five matches.
These are then analyzed manually to assess whether the selected images are of different tigers. The exercise does not end here. It’s impossible for the cameras to capture every single tiger present in India.
So, based on the ground surveys and camera trapping methods, an extrapolation is done to estimate the number of tigers in the entire country. The drawbacks of this technique being that it is not possible to install cameras at every place that is likely to have tigers, and even in places where they are installed, there is no certainty that the tiger would walk into a camera’s range.
DNA testing: DNA analysis of cats can also be used to estimate the tiger population.

What is happening?
Of late the Kawal Tiger Reserve (KTR) in Adilabad district has become a safe zone more for the resurgent Maoists than tigers.

Main issue: Without the backing of the locals, Maoists can’t thrive as Adivasis have no belief in the corrupt system and when Maoists show them a hope, they simply tag along and help them

How can this problem be resolved?
Reducing dependence upon forests: Adivasis’ dependence upon forests can be decreased so that they do not have to rely on the forests for their livelihood and it has been seen that people who are on the path of development are less likely to support Maoists.
Maharashtra Model can be followed in this regards wherein the development of villages in the buffer area of the Tadoba Andhari Tiger Reserve in Chandrapur district of Maharashtra decreased the forest communities’ dependence on forest and inclusive development.

Steps that can be taken specifically in KTR,
In KTR buffer areas activity should be concentrated on,
• formation of eco-development committees,
• Capacity building for enhancing livelihoods,
• Provision of LPG kits to decrease dependence of Adivasi families on forest for fuel needs
• Facilitation of value addition and marketing of non timber forest produce

Issue of corruption
The concept of physical development of villages to contain extremism began to be implemented since the year 2000 but most of the schemes could not reach the poor owing to corruption. Though the economic activity in other villages saw some change, the tribal villages in the Mangi-Indervelli belt falling in KTR by and large remained deprived of it.

Funds given under Integrated Action Plan (IAP) never reach the proper beneficiaries due to corruption.

What is IAP?
In February 2009, the Indian Central government announced a new nationwide initiative, to be called the “Integrated Action Plan” (IAP) for broad, co-ordinated operations aimed at dealing with the Naxalite problem in all affected states (namely Karnataka, Chhattisgarh, Odisha, Andhra Pradesh, Maharashtra, Jharkhand, Bihar, Uttar Pradesh, and West Bengal).

Importantly, this plan included funding for grass-roots economic development projects in Naxalite-affected areas, as well as increased special police funding for better containment and reduction of Naxalite influence in these areas.

[2]. Sundarbans to become separate district next year

Sundarbans
The Sundarbans is a cluster of low-lying islands in the Bay of Bengal, spread across India and Bangladesh, famous for its unique mangrove forests. This active delta region is among the largest in the world, measuring about 40,000 sq km.
The Sundarbans archipelago comprises 104 islands (of the Indian side of the delta) of which 54 are inhabited. Along with a population of five million, Sundarbans are also home to about 76 tigers and a huge variety of fauna and flora found in the mangrove forests.

What is an archipelago?
Archipelago sometimes called an island group or island chain, is a chain, cluster or collection of islands.

Sundarban forests
The Sundarbans forest is about 10,000 sq km across India and Bangladesh, of which 40% lies in India, and is home to many rare and globally threatened wildlife species. The forest in India is divided into the Sundarbans Tiger Reserve (STR ) and 24 Parganas (South) Forest Division, and together with the forest in Bangladesh is the only mangrove forest in the world where tigers are found.

Sundarban Delta
The delta supports a sizeable population of wild tigers and other wildlife; it is also an ecologically fragile and climatically vulnerable region that is home to over 4.5 million people.

India’s vision wrt Sundarbans
India’s vision for this landscape is to develop a climate resilient Sundarbans that supports biodiversity, ecosystems services and sustainable development.

sundarbans

  Sundarbans (Image source: wwfIndia.org)

What has happened?
It has been announced by the West Bengal government that Sundarbans would be designated as a district from the year 2016.

Why is this being done?
This announcement has been made due to the following reasons,
Sundarbans lack even basic emergency or healthcare infrastructure: In times of flood or any natural calamity, any assistance from the state takes days to reach the people. Also, in absence of proper health infrastructure many quacks have made this area their home.
Fragile ecosystem: Sundarbans is a very fragile ecosystem which has exceeded its carrying capacity of the population as per a report by World Bank in February 2015

Carrying capacity
In ecological terms, the carrying capacity of an ecosystem is the size of the population that can be supported indefinitely upon the available resources and services of that ecosystem.

 


Opinions & Editorials


[1]. Grasp the climate moment

Context: 21st session of the conference of parties (COP) that commences on November 30th, 2015 presents an opportunity for world leaders to come together on the issue of environmental change and carve a framework for sustainable development.

 

Challenges before India

India needs to balance its growth requirements and the consequent environmental impact. India also has to adapt to the severe consequences of changing climate, such as catastrophic droughts and storms, damage to agriculture, loss of biodiversity and harm to human health.

 

Core agenda of Paris meet

The negotiations revolve around a target of further maximum rise in global temperatures of only 2 degrees Celsius over pre-industrial levels.

This goal imposes a ceiling on the amount of carbon dioxide that can be added to the atmosphere by all countries put together, which is about 1,000 billion tonnes. Without radical decarbonisation measures, this carbon budget would be exhausted in less than two decades according to some estimates.

 

Point of conflict between the developed and the developing

From past few years, the developed countries have been demanding that the,

  • Burden to adapt to the climate change should be shared equally by all the nations and that
  • Developing nations should also accept the legally binding emissions cuts.

 
Why is this not fair?

The demands of developed countries are not fair because developed countries have contributed more to the environmental pollution. So, how can they ask other developing nations to share the burden equitably? They should help the developing nations to adapt their economies to cleaner options by providing suitable funds and technologies. It is on this front that developed nations hesitate.

A $100 billion annual fund to be available from 2020 has made no great leap, having received only pledges of aid. A smaller Green Climate Fund has set apart a mere $168 million for eight projects, some of which have run into hurdles.

 

Conclusion

Meeting at Paris is a great opportunity for the nations to work out their differences and craft an agreement that incorporates all the key elements needed to attain the climate target.

 

[2]. The radicalization myth: Islam doesn’t propagates hatred, it teaches equality

Context: In the light of recent Paris attacks followed by the events in Bamako, the capital city if Mali, author herein clearly enunciates that Islam is being falsely associated with ISIS. Islam’s ideology is that of love, peace and brotherhood, not of war and bloodshed.

 

Author is Mahmood A. Madani, general secretary of Jamiat Ulama-i-hind.

He says that,

  • Islam doesn’t justify violence or targeting of innocent lives in the manner in which it was done in Paris.
  • The Prophet was a messenger of peace.
  • Islam teaches equality, it doesn’t propagate hatred.
  • Individuals and organisations engaging in such criminal acts have no place in any religion.
  • He says that this was also the message at the countrywide anti-IS protests organised by members of the Jamiat Ulama-i-Hind in 75 cities after the Paris attack.
  • Attacks should not be projected as clash between religions. For example, Syria is not just Muslims. There are Christians, Jews, Druze and other religious groups who are suffering alongside their Muslim brethren. To reiterate, any violent attack targeting innocents is an assault on humanity and that is how it should be looked at.
  • He points to evidence which states that U.S and even France might be responsible for the creation of IS.
  • Indian Muslims are immune to the radicalization that is being carried out by IS in other countries, in the name of Islam and jihad.
  • PM recently called the Indian tradition of Sufi Islam a message of peace. Not just Sufis, but all Muslim sects have been strong believers in peaceful coexistence.

 

Conclusion

Author concludes by asserting that instead of a de-radicalisation programme targeted specifically at Muslims, government should focus on creating equal job opportunities and address their safety concerns.

 


Economic Digest


[1]. Govt panel to evaluate candidates for RBI Deputy Governor post

 

What has happened?

Government appointed panel will interview candidates next month for the post of Deputy Governor of the Reserve Bank of India as the term of Urjit Patel, the central bank’s incumbent (incumbent means one who holds the office) in charge of monetary policy, expires in January 2016.

 

A central bank Deputy Governor can be appointed for a term with a maximum of five years or till the age of 62, whichever is earlier

The RBI has four deputy governors and typically two are from the outside, of which traditionally one is a commercial banker and the other an economist.

 

Urjit Patel committee

Mr. Patel, headed the important committee to review the structure of the monetary policy that was set up by central bank governor Raghuram Rajan

 

[2]. Structural reforms: now the difficult fiscal part

 

What has happened?

The proposed changes in corporate tax structure has been met by criticism from the industry

Government’s present emphasis on structural reforms confirms the following observation,

‘The strongest reform momentum tends to coincide with periods of economic stress or turbulence’

 

IMF report

A report by IMF analysed reform experiences of 108 countries.
Objective: to infer linkages between structural reforms and macroeconomic performance

Result: reform efforts gathered pace when many emerging markets faced financial crises. Like,

  • in the mid-1970s (breakdown of the Bretton Woods system and the first oil price shock)
  • the late-1980s and early-1990s (Latin American debt crisis and recession in many countries after the 1987 stock market crash)
  • in the late 1990s and early 2000s

 

[3]. Insolvency and Bankruptcy Bill, 2015: The return to reforms

 

What has happened?

Government has released for public comments the draft Insolvency and Bankruptcy Bill, 2015, prepared by the Bankruptcy Law Reform Committee chaired by TK Viswanathan.

 

Let us understand about the key stakeholders and players in the insolvency resolution process.

 

Creditors – In simplest terms, those who loan money are creditors

The creditors to the company are divided into,

  • Financial creditors (such as banks and bond holders)
  • Operational creditors (trade creditors).

Corporate Insolvency process: The insolvency process is aptly called a corporate insolvency resolution process. Any creditor with an undisputed debt (A undisputed debt is one that you agree is owed to the creditor) can initiate a corporate insolvency resolution process by making an application to the National Company Law Tribunal with jurisdiction over the company.

 

If the tribunal admits the application, the control and management of the affairs of the company automatically vests in the hands of an insolvency professional appointed by creditors. The new industry for insolvency professionals is overseen by insolvency agencies which are also regulated under the Bill. A new regulatory body, the Insolvency and Bankruptcy Board of India, has been empowered to make rules under the Bill and oversee the regime.

 

A good bankruptcy law needs to balance the interests of creditors, employees and the company itself. Let us see define few areas and see how this bill does the balancing act.

  • Speed of the process – Inordinate and often unnecessary delay is the overwhelming problem with the existing insolvency regime in India. In an insolvency situation, speed is paramount, so as to preserve value and ensure chances of the company’s revival. The Bill takes the timing of the process seriously. The tribunal is required to decide whether to admit a corporate insolvency resolution process within a time-bound period (usually 2-5 days, weekends and national holidays notwithstanding!). The entire corporate insolvency resolution process is required to be completed within 180 days from commencement, extendable once, under exceptional circumstances, for a further 90 days.

In the Bill any creditor can propose a resolution plan. Thus, there would likely be a flood of resolution plans. So, success of this feature also depends upon whether a lively and robust insolvency professionals market develops in India. Failure to adhere to 180/270 days timeline results in commencement of liquidation process.

  • Balancing stakeholder rights – The Bill attempts to establish a delicate balance between (a) creditors, as a whole, and the company; (b) financial creditors and operational creditors; and (c) secured creditors and unsecured creditors.

 

(1). Creditor- company bargain– The typical needs for a company in an insolvent situation are stay on the enforcement of debts against the company; and management control to steer the company out of financial distress. The Bill gives the former but not the latter. In India, under this bill the control and management of the company vests with insolvency professionals appointed by the creditors.

(2). financial creditors – operational creditors bargain: The Bill denies operational creditors a seat at the creditors committee table. In return, the interests of operational creditors are protected under a statute. The tribunal, when reviewing the resolution plan, needs to ensure that operational creditors are treated fairly. The Bill has delegated the Board the power to provide further guidance on this.

(3). Secured creditors-unsecured creditors bargain: The Bill appears to club secured creditors with unsecured creditors. For example, the creditors committee comprises of all financial creditors and the resolution plan is approved by 75% (in value) of all financial creditors (regardless of whether secured or unsecured). As drafted, if secured creditors constitute less than 25% of the financial debt of the company, the unsecured creditors would be able to “cram down” a resolution plan on such creditors. Unsecured creditors would also be able to vote to extend the corporate insolvency resolution process by a further 90 days.

  • Providing for a fresh start: The intent and purpose of the Bill, captured in its preamble, is “to promote entrepreneurship, availability of credit by consolidating and amending the laws relating to reorganisations and insolvency. The bill gets into the detail about the corporate resolution process, appointment of qualified insolvency professionals and even introduces a fast-track mechanism.
  • Providing for optimal judicial intervention: One of the primary reasons for the failure of the existing insolvency regime has been the excessive intervention of courts. Courts should be facilitators in a resolution process rather than a mere negotiation tool. The Bill recognises the balance that is required between excessive court intervention and excessive power in the hands of creditors. It seeks to achieve this delicate balance by giving the tribunal limited but precise powers. It appears that the tribunal can reject a corporate insolvency resolution commencement application and the ultimate resolution plan itself only in certain limited circumstances. The tribunal and courts will need to recognise and comply with this restrained approach for the Bill to really make a difference.

 

Conclusion

The Bill is clearly a major reform initiated by the government and has attempted to strike a delicate bargain between various stakeholders. Perhaps a re-look at the treatment of secured creditors is merited.

By: ForumIAS Editorial Team

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9 PM Daily NEWS Brief

9 PM Daily Brief – 27th November 2015

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


National


                                            [1]. Kerala scientists develop saltwater-tolerant paddy

 

What has happened?

Scientists at the Rice Research Station of Kerala Agricultural University (KAU) at Vyttila have developed a new variety of paddy tolerant to saltwater intrusion, a major challenge faced by farmers in the lowlands.

 

Methodology adopted by scientists

The feat was achieved by the introduction of genes tolerant to salinity and iron toxicity into Jyothi, Kerala’s most popular rice variety.

Saltwater tolerant gene: SalTol. The SalTol gene is the donor for salinity-tolerant rice breeding programmes all over the world.

SalTol is present in: Pokkali, the most salt tolerant variety in the world

SalTol was introduced into Jyothi to achieve saltwater tolerant paddy.

Technique used: Introgressive hybridisation

Project began in 2008

Benefit of saltwater resistance

The new introgressed paddy variety of Jyothi can now be cultivated in the Eastern and Western coastal areas of Indian Peninsula.

Future work

Submergence of crops is another major challenge faced by farmers in lowlands, so the research team is now working on the introduction of a submergent tolerant gene (Sabl) into Jyothi, to make the rice variety resistant to flash floods up to two weeks.


International


                                                      [1]. Old friction led to shooting down of the jet

What happened?

Turkey shot down a Russian warplane near the Turkish-Syrian border. Both the governments are giving conflicting information as to what actually happened and both claim to have hard evidence to support their stands.

Turkish government says – ‘The planes violated their airspace. The pilots were warned suitably and when they didn’t listen, one of the planes was shot down’

Russian government says – ‘Planes were never outside the Syrian airspace. They never violated the Turkish airspace’.

It’s the first time in decades that a NATO country has shot down a Russian or Soviet war plane, and the first plane Russia has lost since it began its campaign in Syria.

What can be the consequences of this whole scenario?

    1. Impact on Russia-Turkish economic ties since after the imposition of sanctions by the European union, Turkey has been a key tourism destination for Russians
    2. Geo-political impact: These events can have significant impact in terms of Syrian conflict and the ISIS war. World is already divided in two over what should be done in Syria. U.S believes Assad should go while Russian believes Assad should remain. Turkey is in favour of removal of Assad so it is aiding the rebel forces fighting against him. The area in which the Russian jet was downed is controlled by Turkmen rebels, a Turkic ethnic minority who are fighting Syria’s Assad regime and who have close ties to Turkey.
A

Russian-jet

Flight path of Russian jet as per Russia & Turkey [Image source: www.abc.net.au)]

Why would Turkey shot down the jet?

      1. Opposing positions: Ankara and Moscow both are on the opposite sides when it comes to Assad and Syria. Turkey wants to topple Assad while Russia supports Assad. So, when Russia started its campaign against Turkey-backed Syrian rebels in the northern Syria, it wrecked Ankara’s policy of Assad’s ouster creating feelings of anger and distrust.
      2. Border dispute: The area in which the Russian jet was shot down has been a point of conflict between Russia and Turkey. Russia has sometimes supported Syrian claim.
A

The Hatay province of Turkey runs south along the Mediterranean Sea, deep into Syria. It is a melting pot of ethnic Turks and Arabs. The League of Nations granted Hatay province to France after World War I as part of France’s legal mandate over Syria. Ethnic Turks led the province’s secession from Syria and declaration of an independent republic in 1938, and that republic then joined Turkey the next year.

Syria has questioned the loss of Hatay over the years. When Hatay seceded from the French mandate of Syria, Hatay’s borders did not encompass all of the ethnic Turks in the area; many Turkmens remained just across the border in what is now northernmost Syria.

HATAY PROVINCE

Hatay Province [Image source: www.snipview.com]

 

Conclusion

Instead of escalating the situation further, both countries should sit together and resolve the issue. ISIS which is the main enemy here should not be forgotten amidst unnecessary revenge talk.

                                                 [2]. India-Southeast Asia: More clarity needed

 

What author says in the article?

In the backdrop of PM’s recent to Southeast Asia, author explains that in order to be a more active regional player India needs to articulate its stance more clearly.

Major points that author makes,

      1. An opportunity: At this point of time Southeast Asia is suffering from a slowdown. China is under an economic slump while Japan is under recession. Countries are feeling a need to boost growth. To this end the finalisation of ASEAN Economic Community (AEC) framework has been a very important step forward but even then the desired outcome will not be possible unless trade & investment are increased with the rest of the world. It is here, where India can jump in and help. For the subcontinent, Southeast Asia can be a partner in Make in India & a source of capital, finance and tourism
      2. Expectations unfulfilled: The key expectation from the visit was that India would spell out details regarding future engagement with Southeast Asia esp on the economic front. The conclusion of RCEP is a major expectation. Such expectations on the economic side were unfulfilled as the commitments. There were commitments during the Prime Minister’s visit on early conclusion of the RCEP negotiations. There were also assurances of multiplying trade volumes with Singapore and Malaysia along with shared commitments on increasing investments but they lacked deeper specific s and details.
      3. India should have sent out a clear message regarding the gains it expects from the conclusion of RCEP to indicate its sincerity & eagerness to play the role of a major regional player in the Southeast Asia
      4. Unclear Act East policy: There is also disappointment over the lack of clarity on the specific contents of the Act East policy. Speculation is there as to what it actually entails. Whether India will take active interest in regional matters like South China Sea dispute or not. This confusion needs to be eradicated and a clear policy needs to be spelt out.
A

                                     [3]. The most important fight against ISIS is the ideological war

What the article says?

Author, a Spanish ambassador, articulates that it is not Islam that is responsible for ISIS but a very radical ideology that has been twisting the meaning of Islam to transform it into a violent and monstrous entity.

Objectives of ISIS

      1. Those nations, where Islam was once dominant like Spain (which IS calls as Andalus) and India which once was influenced by Islam are on its agenda
      2. To target nations that they have a special hatred of – the US, Israel and western nations. Spain for example falls in more than one category – it has a special significance for IS as does India. No one is immune to this but the fact is that India, like Spain has had an impressive track record in the fight against terrorism in all these years.
A

Countering ISIS

      1. Understanding ISIS: What the world needs to understand is that ISIS are not terrorists. They have their own territory, their own resources, their own money and their own army. They need to be countered, keeping that in mind. It is a war against organised crime and the fight has to be against financing, sources of weapons as well as recruitment.
      2. Ideological battle: The radical ideology that is being propagated by ISIS needs to be countered by an anti-IS ideology. It is the responsibility of the world to point out the fallacies in the IS ideology by enunciating clearly that such form of violence has no place in Islam. The teachings of Koran have been manipulated and twisted to produce a convoluted set of ideas which go against the very soul of Islamic tradition.
A

Conclusion

It is not just about fighting the IS with police forces and air strikes, it is about devising a very sophisticated strategy to counter the ideological war.

 

 

 

By: ForumIAS Editorial Team

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9 PM Daily NEWS Brief

9 PM Daily Brief – 26 November 2015

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

 


Science & Technology


[1]. This technology is hundred times faster than WiFi

What has happened?

Scientists have achieved speeds in the lab of up to 224 GB per second. Office tests in Tallin, Estonia achieved speeds of 1 GB per second, 100 times the speed of traditional WiFi. Technology is named as LiFi or Light Fidelity.

Drawbacks of WiFi

  • Running out of space: WiFi is achieved by transmitting data through radio waves, but can only transfer so much at a time. By 2019, it is estimated that the world will be exchanging roughly 35 quintillion bytes of information each month. Because radio frequencies are already in use and heavily regulated, that data is going to struggle to find a spot in line
  • Poor efficiency: The base stations responsible for transmitting radio waves only function at about 5% efficiency , most of the energy being used to cool the stations.
  • Security of data: For those Base stations that transmit sensitive data, security is also a problem, as radio waves travel through solid objects such as walls and doors.
A

How LiFi works?

LiFi works by flashing LED lights on and off at incredibly fast speeds, sending data to a receiver in binary code. It’s essentially an ultra-fast version of turning your flashlight on and off to create Morse code. The flashes occur so fast that they are not seen by the naked eye.

All one need to do is fit a small microchip to every potential illumination device and this would then combine two basic functionalities -illumination and wireless data transmission. In other words, the infrastructure is already there. We can use the LED bulbs we already have, with some tweaking


International


[1]. 2015 set to be ‘hottest year on record’, says UN

What has happened?

2015 is set to be the hottest on record and 2016 could be even hotter due to the current El Nino weather pattern, says WMO (World Meteorological Organisation)

WMO’s observations,

  • Global average surface temperatures in 2015 were likely to reach what it called the “symbolic and significant milestone” of 1° Celsius above the pre-industrial era. Why? It is because of a combination of a strong El Nino and human-induced global warming
  • The years 2011-2015 have also been the hottest five year period on record, with temperatures about 0.57 °C (1.01 degrees Fahrenheit) above the 1961-1990 reference period.
A

The world’s ten warmest years have all occurred since 1998, with eight of them being since 2005


Opinions & Editorials


 [1]. Looking for a winter turnaround

Background: The monsoon session of the parliament was incredibly unproductive. No business could be conducted in both the houses of the parliament. Lok Sabha worked for a 47 hours out of stipulated 82 hours while Rajya Sabha worked for a meagre 9 hours with 82 hours being washed away.

What is a session of the parliament?

The period during which house meets to conduct its business is called a session

Types of sessions

  • Budget session: From February to May (longest)
  • Monsoon session: From July to September
  • Winter session: From November to December (shortest)
A

Winter session of the Parliament is going to be convened from Nov 30th 2015

Bills shortlisted by the government to be considered and passed in this session – 20

Important bills to be considered are,

  • Constitution Amendment Bill, to enable the introduction of the Goods and Services Tax (GST) – Constitutional amendments are covered under Article 368 of the constitution has to be passed by both the houses of the parliament by a two-thirds majority. Then it needs be ratified by 15 state legislatures before being sent to President. This Bill was referred by the Rajya Sabha to a select committee. The success of the government in getting this Bill passed will depend on its ability to find a mutually agreeable position on many of these issues.
  • Electricity (Amendment) Bill – is a significant move towards greater competition in the sector. The Electricity Act 2003 trifurcated the sector into generation, transmission and distribution. This Bill further bifurcates distribution by enabling supply companies. The Bill envisages multiple supply companies in a geographical area which would compete for business and lead to improved customer service and lower tariffs.
  • Real Estate (Regulation and Development) Bill – seeks to regulate the transactions between developers of residential property and buyers. It recognises the information and power asymmetry between developers and customers, and establishes various norms for developers. These include registering all projects, disclosure on websites of the layout plan and completion date, separate bank account for each project and ensuring that 70 per cent of the funds collected are used for construction of the project.
  • Child Labour (Prohibition and Regulation) Amendment Bill – Child labour act is being amended. Currently, children below 14 years of age cannot be employed in hazardous industries (which include domestic service). The Bill amends this to prohibit the employment of children below 14 years in all occupations except when the child helps his/her family after school hours. The Bill prohibits children between the ages of 14 and 18 years from entering hazardous occupations.
  • Juvenile Justice (Care and Protection of Children) Bill – The Juvenile Justice Bill has been passed by the Lok Sabha and has to be taken up by the Rajya Sabha. The age at which a person may be tried as an adult is being reduced from 18 years to 16 years in case of heinous crimes (which carry a maximum punishment of at least seven years imprisonment). The Bill also has provisions for children in need of care and protection, and adoptions (a single male cannot adopt a girl child). It sets punishment for offences, some of which do not appear proportional to the gradation of the offence. For example, giving a child (that is, a person below 18 years of age) any intoxicating liquor or tobacco product may lead to a prison sentence of seven years, while the maximum punishment for selling or buying a child is five years imprisonment.
  • Whistle Blowers Protection (Amendment) Bill– The Whistle Blowers Protection Act was passed last year to protect persons making disclosures related to corruption. This Act is being amended to prohibit disclosures under 10 categories (the same list under which information may be denied in the Right to Information Act).
  • Prevention of Corruption (Amendment) Bill– Currently, the Prevention of Corruption Act makes giving a bribe to a public servant an abetment to the main offence. The Bill amends this provision to explicitly make this an offence. The Act requires prior sanction for prosecution of public officials; the Bill extends this protection to former officials
A

[2]. Victims of War, apostles of peace

What is genocide?

A Polish Jew, a one-time student of Philology, coined the term “genocide.” The term was a legalistic one and referred to nations that eliminate a people for being just that.

What is this article about?

In this article, author says the following things,

  • Media should report important happenings. Events that are important, that can influence, impact and force people to look for solutions to the existing problems around them should be given space in the press and media. One such event was organised by Women in Black, in Bangalore, an international group. In this seminar witnesses of genocide recounted their tales and stories but no coverage was given to them.
  • India has forgotten the two major genocidal events on the back of whom it was formed, namely, the partition and the Bengal famine. Lots of people died in these events but there are no memorials or monuments for them.
  • Women, in the seminar, were from Armenia, Iraq, Iran, Afghanistan, women from Bosnia, Rwanda. Rape was the common thread that linked all the narratives. Genocide seemed to love the rituals of rape as its accompaniment.
  • Development can also be as genocidal as war. For eg: Development of dams has led to around 40million refugees in India. India has more refugees from dams than wars.
A

Women in the seminar seem to be suggesting that the standard reaction to the acts of terror in the world is not sufficient. A proper discourse on peace should be initiated around the world to counter such violence and hatred.

India has no proactive theory of peace and it should be put back on the agenda

[3]. Going Solar

What has happened?

A recently concluded solar power auction in Andhra Pradesh earlier this month has shown that solar power is finally here to stay. This was an international auction for a commercial, grid-connected plant of 500 MW, in which 30 Indian and foreign companies participated.

All the bids in this auction were for setting up Photovoltaic (PV) power plants, which can deliver power only during daylight hours and at full efficiency for only a part of those hours. Why?

Storing electricity is prohibitively expensive because doing so through batteries would entail economic and environmental costs.

The result

Along with its plans to increase the solar output to 1,00,000 MW government is also planning to increase the coal-fired power output by establishing 455 coal-based power plants by 2030.

Instead of going down that road, where we have to sacrifice our environment for growth, author suggest following things,

Concentrated Solar thermal power – Concentrating Solar Power (CSP) technologies use mirrors to concentrate (focus) the sun’s light energy and convert it into heat to create steam to drive a turbine that generates electrical power

Benefits of CSP

  • Can provide electricity day and night without any fossil fuel backup so they need not be paired with conventional sources of energy to fulfil the energy demand
  • Distribution cost is less: CSP plants can produce steam at well above the 593 degrees Celsius required for supercritical power stations and can, therefore, be used with the same ultramodern turbines that are being used in our ultra-mega power plants. This makes it possible to feed the power directly into the existing national grid, without having to step up the voltage.
A

Crucial breakthrough in CSP

The crucial breakthrough came in 2011, when Gemasolar, a 20 MW Solar thermal power plant, began delivering 6,500 hours of power a year to a small city in Seville, Spain, for the past three years. This is 10 per cent more than what the coal-fired power plants have been delivering in India in recent years.

Why PV should not be preferred over CSP?

  • Loss in efficiency – PV panels lose half a per cent of their efficiency for every degree of temperature rise above ambient levels. This amounts to a 2 per cent fall in delivered power for every extra degree of heat.
  • Transmission Cost- PV power also needs to be stepped up to grid voltages. This increases the cost of transmission by up to three times.
A

Conclusion

Hence, it is better if government focuses on CSP instead of PV power plants for a sustainable and long term solution to India’s power needs

[4]. Way of the committee

What author says?

Author feels that in last few years the political stand-offs have resulted in very unproductive parliament session. Last, monsoon session is a very good example of this as no substantial work could be done in either houses of the parliament. Hence, there should be a mechanism to isolate the parliament from the unexpected and inexplicable changes in the politics.

The system of departmentally related standing committees was instituted by Parliament in 1993.

What is a parliamentary standing committee?

Work done by the parliament in modern times is considerable in volume but the time at its disposal is quite limited. So, in order that all legislative and other matters are considered in detail, parliamentary committees were formed.

These are of two types,

  • Ad-HocAd hoc Committees are appointed for a specific purpose and they cease to exist when they finish the task assigned to them and submit a report.
  • Parliamentary standing committee– Standing Committees are Committees appointed every year or periodically, and their work goes on in a continuous basis. The three most important Standing Committees (which deal with finance) are worth special mention
    • Committee on Estimates
    • Committee on Public Accounts
    • Committee on Public Undertakings
A

Additionally, there are 24 Departmentally Related Standing Committees that deal with affairs of a specific Department/Ministry

Significance of Parliamentary committees

  • They examine ministerial budgets
  • analyse legislation
  • Scrutinise the government’s working – Their strength lies in the depth and rigour of their reports. If these committees work effectively, they can keep a close watch on government functioning
A

They do this without any populist or political considerations. More significantly, they function through the year. They are important forums for debate.

Improving Parliamentary committees

1). Dedicated research staff– Parliamentary committees don’t have dedicated subject-wise research support available. Their working can be strengthened by providing them with full-time sector-specific research staff.

In 2002, the National Commission to Review the Working of the Constitution (NCRWC) pointed out that committees were “handicapped by lack of specialist advisers”. The commission recommended that in order to strengthen the committee system, research support should be made available to them.

2). Building consensus– Parliamentary committee forums can be used to garner public opinion and evolve political consensus on contentious issues.

3). Mandatory scrutiny of bills– Mandatory scrutiny of bills by parliamentary committees would ensure better planning of legislative business. At present it is not required to send every bill to parliamentary standing committees for scrutiny.

Conclusion

The deliberations and scrutiny by committees ensure that Parliament is able to fulfil some of its constitutional obligations in a politically charged environment


Economic Digest


[1]. From non-performing to performing

What has happened?

The ministry of finance recently released the draft Insolvency and Bankruptcy Code (IBC), proposed by the Bankruptcy Law Reforms Committee.

A strong insolvency resolution framework is necessary,

  • To deal with the business failures that occur in an economy
  • To address the issue of low recovery rates by banks which are facing a rising number non-performing assets and bad loans
A

Existing mechanisms to deal with NPAs

  • The Recovery of Debts Due to Banks and Financial Institutions Act, 1993
  • Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002- Asset reconstruction companies were instituted under SARFARESI to buy bad debts from banks and recover from defaulters.
  • Debt restructuring
A

Despite all the existing mechanism, NPAs have risen and debt recovery rate is quite low. A weak legal framework for resolving failure is the major reason behind this.

Accumulation of Bad debt slows the economy- Banks are not able to extend fresh credit.

Creation of future lenders is hampered by a weak legal setup to protect creditors’ rights

Benefits of IBC

With the proposed IBC, the labyrinth of extant Indian laws dealing with corporate insolvency are being replaced by a single comprehensive law that,

  • Empowers all creditors—secured, unsecured, financial and operational to trigger resolution
  • Enables the resolution process to start at the earliest sign of financial distress,
  • Enables a calm period where other proceedings do not derail existing ones,
  • Replaces existing management during insolvency proceedings while keeping the enterprise as a going concern,
  • Offers a finite time limit within which debtor’s viability can be assessed
A

Conclusion

While this will not necessarily be a magic bullet that will make NPAs vanish from bank balance sheets but it can facilitate better recovery and faster closure of troubled assets.

[2]. New agency to give teeth to A/C frauds

What has happened?

The government will soon set up a specialised agency to investigate large corporate accounting frauds. The threshold of accounting frauds to be probed by the upcoming agency is likely to be `. 500 crore and above

This agency was first suggested in the aftermath of the Satyam fraud, in which the auditor was also implicated

A recent study by Assocham and Grant Thornton India said there was a 45% increase in Indian corporate fraud in the past two years.

What would be the mandate of proposed agency?

  • To examine accounting frauds of certain classes of listed companies
  • To investigate auditing and accounting frauds, either suo moto (on its own)or on referral by the Centre
  • The agency will make recommendations on formulation and laying down of accounting and auditing standards for companies. It will also monitor and enforce compliance and oversee quality of service of professionals in the industry.
A

Existing mechanism

At present, the Institute of Chartered Accountants of India (ICAI) has authority to investigate and take disciplinary action in cases in which an auditor is involved. Any fraud below the threshold set by the government could still be investigated by the professional association.

ICAI’s stand on the proposed body

They have made a representation to the government that ICAI’s mandate should not be diluted and authority to initiate probe and take disciplinary action against auditors should rest with the institute

Author’s opinion

India already has a specialised agency, SFIO (Serious Fraud Investigation Office) to do cutting edge investigation on financial frauds.

ICAI can take disciplinary action against the errant auditors. So, instead of creating a new agency steps should be taken to strengthen SFIO. Experts from the fields of cyber-security, forensic auditors should be roped in to improve the quality of the investigation but to ensure that best talent is tapped in the salaries should also be market-linked.

By: ForumIAS Editorial Team

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9 PM Daily NEWS Brief

9 PM Daily Brief – 25 November 2015

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

 


National


[1]. India to press for equity at climate change talks despite pressure

Context: 21st session of the Conference of Parties (COP) is going to be held at Paris. The article discusses what India’s stance is going to be at the session.

India’s strategy at Paris

India’s strategy at the Paris Climate Change summit will be to work with emerging economies and press the developed world to concede that responsibility for cutting carbon emissions after 2020 cannot be shared equally by rich and poor nations

 Major issues India will focus on,

  • Failed ambitions on transferring low carbon technologies to the developing world
  • The lack of support for a plan to fund mitigation (gradual reduction) and adaptation efforts
  • Emphasis on CBDR: India will stress that developing countries should be given a greater room for cutting their emissions in accordance with their development needs so that they can fuel their economic growth.
A

[2]. Fortifying rubber wood naturally

What has happened?

A five-year-long research by scientists of the Institute of Wood Science and Technology (IWST) has resulted in finding an organic natural plant extract for treatment of rubber wood to preserve it better and make it stronger to match its friendly pricing.

Why rubber wood needs treatment?

Teakwood and rosewood have natural properties to protect them from termites and weather while rubber wood is highly susceptible to termite attacks so it needs treatment. Rubber wood comes under timber plantation.

The organic natural plant extract is an eco-friendly wood preservative

What does the mix has?

A combination of pongamia (honge) seed oil, cashew shell liquid, neem oil and specialised extracts of five other leaves and barks, including the acacia bark

At present the inorganic chemical based treatments are used in the industry. Health of the timber cannot be maintained with chemical treatments that has heavy metals as copper, chromium and arsenic elements in the mix


International


 

[1]. India, Singapore enters into a strategic partnership

What has happened?

India & Singapore signed a joint declaration wherein they have committed to a strategic partnership in the following areas,

  • Defence
  • Political
  • Security
  • Economic
  • Cultural
  • People to people contact
A

 Other highlights of the PM’s visit,

  • 10 bilateral agreements were signed
  • Memoranda of understanding for curtailing drug trafficking and improving cybersecurity enabling Singapore and India to collaborate on technology and research.
  • Agreements on collaboration in urban planning and wastewater management
A

Singapore could also be the country where India launches Rupee bonds.

What is a bond?

Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the issuer. However, the buyer does not gain any kind of ownership rights to the issuer, unlike in the case of equities.


Opinions & Editorials


 [1]. Crime and penalty in Bangladesh

Background to Bangladesh War

After the partition of India in 1947, East & West Pakistan were created. West Pakistan had Bengali Muslims as a majority population and to the East Pakistan authorities the Bengali Muslims of the East Pakistan were ‘inferior and impure’. So, the West Pakistan authorities began a policy of forcible assimilation of Bengalis on the cultural front.

The people of the East were looked upon as second-class citizens by the West, and Amir Abdullah Khan Niazi, who served as head of the Pakistani Forces in East Pakistan in 1971, referred to the region as a “low-lying land of low, lying people”.

1948: Jinnah declared Urdu as the national language of newly formed Pakistan despite the fact that only 4% of Pakistan’s population spoke Urdu at that time.

Refusal to recognise Bengalis as the second national language led to the formation of Bengali Language movement and strengthened the support base of the Awami league in the East Pakistan. Awami league was formed as an alternative to the Muslim league.

1952 Dhaka protest: The students of the University of Dhaka and other political activists defied the law and organised a protest on 21 February 1952. The movement reached its climax when police killed student demonstrators on that day. The deaths provoked widespread civil unrest. After years of conflict, the central government relented and granted official status to the Bengali language in 1956.

The Bengali Language movement acted as a forerunner for the Bengali nationalist movements like the Bangladesh liberation War in 1971.

1965 Indo-Pak war: During the war East Pakistan no extra military units were assigned to East Pakistan. Bengalis feared that in case of an Indian attack they would be left defenceless. This scenario aggravated the situation further, proliferating feelings of mistrust between the authorities of the East and West Pakistan.

Bhola Cyclone: It was a devastating tropical cyclone that struck East Pakistan (now Bangladesh) and India’s West Bengal on 12 November 1970. It remains the deadliest tropical cyclone ever recorded and one of the deadliest natural disasters in modern times.

The slow and inept response of the Pakistani government towards the relief work contributed to the already growing dissatisfaction. It exacerbated the bitterness felt in East Pakistan, swelling the resistance movement there. Funds only slowly got through, and transport was slow in bringing supplies to the devastated regions.

As tensions increased in March, foreign personnel evacuated because of fears of violence. The situation deteriorated further and developed into the Bangladesh Liberation War in March. This conflict widened into the Indo-Pakistani War of 1971 in December and concluded with the creation of Bangladesh. This was one of the first times that a natural event helped to trigger a civil war.

Response of West Pakistan government

The West Pakistani establishment prevented them from forming a government. President Yahya Khan banned the Awami League and declared martial law.

After the West Pakistan government’s rejection of the mandate in 1971 elections, came the operation Searchlight.

Operation Searchlight

26th Mar 1971: This was a military operation conducted by the West Pakistan establishment to suppress the Bengalis call for self-determination. The original plan envisioned taking control of the major cities of East Pakistan on 26 March 1971, and then eliminating all opposition, political, or military, within one month, which didn’t happen.

Operation Searchlight was the culminating event that led to the Bangladesh Liberation war. It was during this operation that millions of people were killed en masse by the Pakistani army and the militias formed as a part of its paramilitary wings.

Operation searchlight pursued the systematic elimination of nationalist Bengali civilians, students, intelligentsia, religious minorities and armed personnel. Ethnic cleansing, mass murders, rapes were committed as a part of this operation.

This operation and the events that took place during the Bangladesh Liberation War have been categorised as genocide.

What has happened?

Two political leaders of Jamaat-e-Islami and Bangladeshi Nationalist Party (BNP) have been convicted and hanged as a part of the war crime trials going on in Bangladesh.

Jamaat-e-Islami: Ali Ahsan Mohammad Mujahid

BNP: Salahuddin Quader Chowdhury

Jamaat-e-Islami

The predecessor of the party (Jamaat-e-Islami Pakistan) strongly opposed the independence of Bangladesh and break-up of Pakistan. In 1971, it collaborated with the Pakistani Army in its operations against Bengali nationalists and pro-liberation intellectuals. Many of its leaders and activists are accused of participating in the Pakistani paramilitary forces that were implicated in war crimes, such as mass murder, especially of Hindus, rape and forced conversions of Hindus to Islam.

Bangladesh nationalist Party (BNP)

The BNP was founded as a centre-right liberal democratic party. It was established on September 1, 1978 during the regime of Ziaur Rahman. It has ruled Bangladesh for a total of 14 years and three terms since its birth (1978–1982, 1991–1996, 2001–2006)

The author argues that the conviction might be right but the death penalty given as a means to achieve the justice is wrong. Why?

  • It gives the trial proceedings a color of revenge rather than of justice and thus weakens the stand of government
  • The hardline stance government is taking might help the Islamic fundamentalists to recruit the followers from the sympathisers of those convicted, which is actually a large number, considering both Jamaat-e-Islami and BNP have large support bases. This is already happening as Jamaat is still organisationally strong and has vowed for revenge.
  • Attacks on the secular writes and bloggers have also intensified after the executions. This might be due to the hardline stance of the government against the war criminals.
A

Conclusion

The challenge before Dhaka is huge. It has to ensure that those who committed crimes against humanity during the war are brought to justice, while at the same time preventing Islamist forces from using that process to their benefit.

[2]. Not without our girls

Common concepts and indicators wrt population

Birth rate: Number of live births per 1000 of the population.

Death rate: Number of deaths per 1000 of the population.

These statistics depend on people reporting the births and deaths that happen in their family. In I India it is mandatory by law to report births and deaths.

Growth rate or rate of natural increase of population: It refers to the difference between the growth rate and death rate.

Case1:

When growth rate is 0 or near 0 => population has stabilised or reached the replacement level.

Replacement level: It is the rate of growth required for new generations to replace the older ones that are dying out.

Case2:

When there is negative population growth => fertility levels are below the replacement rate. For eg: Countries like Japan, Russia, Italy and Eastern Europe are experiencing this negative growth rate.

Case3:

Very High growth rate is due to demographic transition.

Fertility rate: It refers to the number of live births per 1000 women in the child-bearing age group, usually taken to be 15 to 49 years. Unlike Birth and Death rates this indicator is crude rate i.e. a rough average.

Total Fertility rate: It refers to the average number of births to a cohort of women up to the end of the reproductive age period (estimated on the basis of the age-specific rates observed during a given period)

What has happened?

New data from a census has revealed that the desire for a male child in our society is more, even if it is at the exclusion of female child.

Observations from this data

  • Pre-natal sex selection: Given that India has been successful in lowering the fertility rates in South India without coercive methods as in China, another implication has risen. The pressure to have small families is making the pre-natal sex determination more common. The census data shows that the smaller families have more boys and larger families have more girls than boys. Lack of access to pre-natal test technologies in the marginal communities had resulted in better sex ratios but due to urbanisation this is changing too
A

Conclusion

India must build upon his success in bringing down the fertility levels but not at the cost of the girl child. A meaningful discourse on the gender equality is the need of the hourr.

[3]. Among the Ramayanas, Sita’s ascent

Context: Author feels that attempts are being made to impose a single and homogenous version of Ramayana on the country whereas the other versions of Ramayana that one can find in villages of India are being thrown into the shadows of anonymity

Why the author feels so?

  • Fixing a date on Ramayana: Union Minister of State for Culture and Tourism Mahesh Sharma praised a foundation for researching on the Ramayana, which like the Indian Council of Historical Research is trying to fix a date to the epic.
  • Nearly five years ago, poet and scholar A.K. Ramanujan’s Three Hundred Ramayanas, prescribed as study material for history undergraduates in Delhi University, was removed from the curriculum. It was done following the pressure from the ABVP (Akhil Bhartiya Vidyarthi Parishad)
A

Conclusion

It is futile to try to fix a date to this epic or even try to impose a standardised version of it on the country because other versions of Ramayan exist and they are equally important

A

[4]. The pulse of the matter

Context: Farmers tend to lose out irrespective of whether crop prices go up or down. Government needs to rectify this.

What is the issue?

Whenever the prices of the crops go up like recently in case of dal, the only ones who gain profit are the traders i.e. the middlemen and the sellers.

It’s quite ironic, even when the prices of crops go up farmers lose and when they are down they have to lose out on profits anyway.

Examples

  • A case of Daal: The prices of Tur daal reached Rs 200/kg some time back but the profits of higher prices were pocketed by the middlemen and the sellers.
  • A case of potato: Similarly, because of a bumper production of potato the prices have crashed. At the wholesale market potato is available at Rs. 4 to Rs. 5/Kg but still it is being sold at Rs 14 to Rs 15/Kg in the open market. The result is that potato farmer is still suffering despite a bumper harvest.
A

The problems

  • Only inputs: Farmers complain that though they receive good input informs of fertilizer, seeds and other agricultural info but no one comes forward to sell their produce at remunerative prices. Since the green revolution the focus has been solely on the production and when the harvest is good farmers’ profits are neutralised by low prices.
  • Only traders’ benefit: In case of the market, farmers are forced to sell their produce just after the harvest as they are already under debt. So, by the passage of time the prices go up it is only the traders who gain, not the farmers because they had already sold their produce to the trader. By the time the product reaches the retail outlets more prices are added on to it, meaning consumers also do not get the benefits of the excess production.
A

Hence, the responsibility to ensure that the farmers get proper value for their crops is of the government.

What government does?

Government declares MSP (Minimum Support Price) for 25 crops but procurement is done only for paddy and wheat.

Impact of what government does?

This system has led to distortions in the production patterns of the country because the cultivation of rice and wheat is considered to be safer because of an assured market.

Encouraging farmers to grow pulses

India largely being a vegetarian country has a very important source of protein in terms of pulses so their production needs to be increased.

  • Research- In case of pulses a hybrid variety like corn and paddy has not been successful in enhancing the yield so more research is required to increase the productivity of pulses.
  • Increasing the area under pulse production is also a good way to increase pulse yield.
  • Improving seed availability – seed availability of pulses has been problematic
A

Benefits of growing pulses

Nitrogen fixation: In the roots of pulses lies a bacterium called Rhizobium which can fix the nitrogen from the atmosphere into the soil thus enriching its quality and fertility.

How can government bring the prices down?

Some long term solutions can include,

  • Maintaining buffer stocks- To maintain buffer stocks we would need to have a sufficient production first. So, government should encourage the farmers to grown pulses. Having a buffer stock means government can release pulses in the market
  • Improving the irrigation facilities: As pulses are mostly grown in rain-fed areas so improving the irrigation facilities will improve the production levels.
A

Ensuring proper prices: Agriculture in India is becoming an unattractive profession. Farmers continue to pursue it because they have no other option. If the government ensures a proper remunerative price for their produce only then the situation would be rectified

[5]. City of new dreams

Context: PM delivered the 37th Singapore lecture on the concluding day of his 4-day Malaysia visit.

Main points of PM’s lecture

  • Singapore is not only India’s largest trading partner in Southeast Asia but also its “biggest source and destination” for investment, and a major partner in newer projects like smart cities, clean energy and sustainable infrastructure
  • Act East policy: PM delineated the good work done by the P.V Narsimha Rao’s government which enacted the Look East policy thereby reiterating his commitment to ‘Act East Policy’ by cultivating good relations with China, Korea, Japan and ASEAN
A

India & Singapore

India has signed,

  • a new, enhanced bilateral defence cooperation agreement with Singapore
  • nine deals, including on cyber security, civil aviation and shipping
A

Conclusion

The author feels that New Delhi has let down its South-Asian partners by not stepping up to its role of providing security to these nations. The new defence pact reinforces India’s commitment towards this goal.


Economic Digest


[1]. Student loans dry up as bad debt climb at Banks

What has happened?

Data compiled by the finance ministry has shown that an increase in Non-Performing assets (NPAs) have led several public banks to go slow on educational loans.

The issue

NPAs in education sector: There are a lot of NPAs in the education sector. Such loans should be devised in a flexible manner

Under educational loan scheme,

A student can borrow up to,

  • 10 lakh for domestic education
  • 20 lakh for studying in foreign colleges
  • Borrowers need not pay during the tenure of the course and for an additional year
  • The repayment period is five to seven years
  • For loans up to Rs.4 lakh, banks cannot demand any collateral : As per bankers, maximum number of bad loans are in this segment
A

Credit-guarantee fund

Government has created a credit guarantee fund that banks can draw upon in case of defaults on loan repayments

Vidya Laskhmi portal

It is a first of its kind portal providing a single window for students to access information and submit applications for educational loans to banks and for government scholarships. Banks have been asked to integrate their systems with this portal.

[2]. Pooled Funding Vehicle Rules a Tad Too Liberal?

What has happened?

In a gazette notification issued last week, government has mentioned that an Alternative Investment Fund (AIF) -a pooled investment vehicle -in India can have majority or even almost the entire money from offshore investors and still buy into businesses where foreign ownership is restricted.

What is a pooled investment vehicle?

Investment funds that combine capital from many investors to deploy it according to a particular investment strategy is termed as pooled investment vehicle

What is AIF?

Anything alternative to traditional form of investments is referred to as Alternative investments. Examples of traditional form of investment include bonds, fixed deposits or real estate

AIF in India

In India, alternative investment funds (AIFs) are defined in Regulation 2(1) (b) of Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

It refers to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership(LLP). These are presently not governed by SEBI or by other sectoral regulators like PFRDA, IRDA or RBI. Hence, in India, AIFs are private funds which otherwise do not come under the jurisdiction of any regulatory agency in India.

Capital Fund, hedge funds, private equity funds, commodity funds, Debt Funds, infrastructure funds, etc while, it excludes Mutual funds or collective investment Schemes.

What does the new rule say?

It says that now a fund would be considered domestic as long as its sponsors and managers are Indian. For eg: An AIF set up by a local Indian company having 75% foreign investment would be considered as foreign while a fund having 49% foreign investment with an Indian asset management company controlled by an Indian holding 51% would be considered local.

What analysts have to say?

Companies might use this rule to scuttle FDI regulations. Foe eg: A 500crore AIF having 495 crore of foreign investment can directly buy as much as it wants into companies carrying out ecommerce, or holding farm land or making defence machinery -entities where foreign ownership is either capped or barred.

One benefit of a relaxed AIF regime is,

  • Greater investment
  • Access to foreign capital for all sectors
A

[3]. Robbing Peter to pay Paul

What has happened?

7th Pay commission has recommended a 23.55% hike in the salary of the central government employees.  Author in this article has said that government in order to finance the pay hike would resort to ‘taking from one hand and giving it to other’ policy.

How can govt finance the pay hike?

  • Taxpayers’ purse: Taxes can be raised. If so, higher salaries will come at the expense of all taxpayers. If taxpayers consume less than the government servants then the consumption will rise but if the taxpayers consume more than the government servants then the consumption will decrease as when taxes are increased the amount left to spend is less.

 

  • Printing the money: Government can finance higher salaries by printing money -technically called monetising the fiscal deficit but RBI won’t allow government to pursue this policy.

 

  • Borrowings: the government can finance higher salaries by borrowing more from markets but additional borrowing would increase the fiscal deficit. Finance minister is absolutely committed to reducing the fiscal deficit, from 3.9% of GDP this year to 3.5% next year and 3.0% the year after. So, he cannot use this route to finance higher salaries. The same is true of state governments, which must also prune their fiscal deficits in line with their financial responsibility and budget management targets.

 

  • Financial cuts: The government can finance higher salaries by cutting its own spending. It can’t reduce interest on past debt, and obviously cannot reduce salaries -it has to increase them. So, by cutting investment it can pay for increased salaries which is bad because the need of the hour is to boost investment.

By: ForumIAS Editorial Team

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Categories
9 PM Daily NEWS Brief

9 PM Daily Brief – 24 November 2015

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

 What is 9 PM Daily Brief? Read Here.


National


[1]. “Amendment to Child Labour Act leaves issues unaddressed”

What has happened?

Union government has given its approval for moving amendment to the Child Labour (Prohibition and Regulation) Act, 1986. The amendment if passed will defeat the entire purpose of the Act itself.

What the amendment proposes?

The proposed amendment states that children will be allowed to work in family enterprises and in the TV and Entertainment industry, except circus. The Bill proposes to allow children to work in family enterprises. Also, the list of prohibited occupations set forth in the schedule has been reduced to just three, including mines, inflammable substances and explosives. Earlier, the Child Labour law prohibited employment of a child in 18 occupations and 65 processes.

 The problem: Maximum number of child labour is employed in family-run trade

A

[2]. Now, COPD will take your breath away

What has happened?

Chronic Obstructive Pulmonary Disease (COPD) — a progressive non-communicable lung disease that makes it hard to breathe — is on the rise in the Capital with doctors now being advised to identify and counsel patients who visit them with the problem.

What is COPD?

COPD, or Chronic Obstructive Pulmonary Disease, is a progressive disease that makes it hard to breathe. “Progressive” means the disease gets worse over time.

COPD can cause coughing that produces large amounts of mucus (a slimy substance), wheezing, shortness of breath, chest tightness, and other symptoms.

Cigarette smoking is the leading cause of COPD. Most people who have COPD smoke or used to smoke. Long-term exposure to other lung irritants—such as air pollution, chemical fumes, or dust—also may contribute to COPD

People with existing COPD disease are considered to be at an increased risk of developing morbidities like cardiovascular issues, lung cancer and a variety of other medical anomalies.

COPD and India

It is the third leading cause of death worldwide and in India approximately 15 million suffer from COPD


International


 

[1]. On his first visit to Tehran in years, Putin lifts ban on nuclear co-operation with Iran

What has happened?

President Vladimir Putin has eased restrictions on Russian companies working on Iranian enrichment sites as he travelled to Tehran for his first visit since 2007. This comes in the backdrop of Iran’s historic deal with world powers

What was agreed in the historic deal by Iran with the world powers?

  • Iran agreed to dramatically scale back its nuclear programme, making it much more difficult for it to develop nuclear weapons.
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  • Tehran agreed to slash by two-thirds the number of centrifuges, machines that can “enrich” or purify uranium to make it suitable for peaceful uses but also for a nuclear weapon.
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Why Putin has done so?

Russian companies are eyeing business opportunities in Iran after the sanctions are expected to be lifted in the next two months, once the deal reaches the implementation stage.

[2]. Where does the IS get its money from?

What has happened?

The IS has established a proto-state in the self-proclaimed ‘Caliphate’ that stretches from the suburbs of Damascus to the outskirts of Baghdad comprising 8 to 10 million people. This organisation has its own funding sources. The biggest challenge for the world powers is to choke these sources.

What is a proto-state?

A protostate is a group of people in the process of becoming a state, or performing some but not all functions of a state.

What is a caliphate?

A caliphate is a form of Islamic government led by a caliph – a person considered a political and religious successor to the Islamic prophet, Muhammad, and a leader of the entire Muslim community.

Proof that IS has strong financial resources

  • It has a religious police in the ‘Caliphate.
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  • It is also running schools, food points and other administrative centres.
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  • Besides, it is fighting a protracted war on its borders against several enemies — the Iraqi and Syrian national armies, rebel forces and other jihadist groups such as Jabbat al-Nusra.
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  • According to The Economist , IS fighters are paid around $400 a month, better than an average Iraqi soldier.
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ISIS MAP
5-year Plan of ISIS (Image source: www.dailymail.co.uk)

Where does the money come for all the above operations?

  • Donors’ money: Usually terror organisations are run on the money they receive from the international donors. These donors include businessmen, wealthy families and other donors in Saudi Arabia, Qatar, Kuwait and the UAE. In 2013-14 IS received around $40Million from these donors.
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  • Capture of Raqqa: Ever since the capture of Raqqa, the eastern city of Syria, IS’s financial revenue has increased manifold through tax collection in the caliphate.
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  • Kidnappings: The group has also made millions from kidnappings
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  • Looting of banks that fell in its hands like in Mosul
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  • Black marketing antiques: The IS has also set up a Ministry of Antiquities whose main job is to sell precious and historical artefacts in black market and generate cash.
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  • Oil Trade: IS’s single largest source of income is oil trade. The group controls 10 Syrian oil fields and 4 small fields in Iraq. The group has established a network of oil trade starting from the production fields to the end user in and around the ‘Caliphate’. The Financial times report puts the IS’s daily revenue from oil trade at $1.5 million.
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They sell oil to independent traders at the oil fields who will get it refined in the mobile or local rudimentary refineries established in Iraq and Syria and then the refined product would be taken either to the IS-controlled or private oil markets or to the neighbouring countries such as Turkey where traders would buy it.


Opinions & Editorials


 [1]. India’s carbon caution in Paris

Context: On November 30th 2015, Paris will host the gathering of 21st session of Conference of Parties (COP-21) to the United Nations Framework Convention on Climate Change (UNFCCC).

 What is the purpose of this session?

The major aim of the session is to achieve a legally binding and universal agreement on climate, from all the nations of the world.

How is the purpose going to be achieved?

Member nations were asked to prepare and submit national roadmaps on reducing Green House Gas (GHG) emissions, termed as INDCs (Intended Nationally Determined Contribution). Based on these submissions a nations’ accountability shall be fixed.

What is IPCC?

The Intergovernmental Panel on Climate Change (IPCC) is a scientific intergovernmental body under the auspices of the United Nations, set up at the request of member governments. It was first established in 1988 by two United Nations organizations, the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP), and later endorsed by the United Nations General Assembly

Aim

The IPCC produces reports that support the United Nations Framework Convention on Climate Change (UNFCCC), which is the main international treaty on climate change.

The aims of the IPCC are to assess scientific information relevant to:

  • Human-induced climate change,
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  • The impacts of human-induced climate change,
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  • Options for adaptation and mitigation.
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Structure of IPCC

It composes of 3 working groups, a Task force and a Task group. The activities of each Working Group and of the Task Force are coordinated and administrated by a Technical Support Unit (TSU).

What are the assessment reports, special reports and synthesis reports?

Assessment report: These are published materials composed of the full scientific and technical assessment of climate change, generally in three volumes, one for each of the Working Groups of the IPCC and a Synthesis report

Special reports: These are materials that provide an assessment of a specific issue and generally follow the same structure as a volume of an Assessment Report

Synthesis report: The Synthesis Report synthesizes and integrates materials contained within the Assessment Reports and Special Reports and is written in a non-technical style suitable for policymakers. It is composed of a longer report and a Summary for Policymakers.

What science says?

IPCC’s 5th Assessment report says that there is only a set amount of greenhouse gases that humanity can emit in the atmosphere, to keep the rise in the global temperature below a specified level. This set amount of GHGs includes what has been emitted and what will be emitted in future.

 What is the amount left for the future?

The estimate based on AR5 is that between now and the end of the century i.e. 2015 and 2100, if we take account of non-carbon dioxide gases too, the total emissions should lie within 1,192 to 2,000 billion tonnes.

The logical step

So, the most logical thing would have been to find a fair and equitable distribution of this global carbon budget amongst the nations of the world but instead we have INDCs where each and every nation including the developed, have been allowed to declare what it will do, irrespective of whether the sum total would enable us to stay within the global cumulative limit.

INDCs :A fallacy

AS per UNFCCC’s estimates the global carbon emissions expected after the reductions from the INDCs amounts to 750billion tonnes until 2030.

Let us break it down a bit, as you have read earlier in the article, as per AR5, the cumulative limit, from now till the end of this century, is between 1192 – 2000 tonnes.

Out of that 750 billion tonnes i.e. around 75% is going to be utilized in the first 15 years i.e. from 2015 to 2030 meaning for the next 80 years we would be left with 25% of global cumulative carbon emission limit.

Moreover, the developed nations’ contribution to global emissions has been higher taking in account their previous emissions. They have contributed disproportionately to the global carbon budget. So, based on equity and climate justice, there share from now onwards should be restricted.

India is in jeopardy. Why?

On the one hand a climate deal is a necessity to ensure that the task of emission reduction and the burden of adaptation is not solely borne by the Indian population.

On the other hand, a weak deal would mean India and the developing countries would have to face serious repercussions pertaining to their developmental efforts based on the usage of global carbon budget which is a scarce and limited resource.

What should India’s strategy be?

  • Claim a reasonable and fair share: India should stake a claim on a fair and reasonable share of the global carbon budget. India also needs to confront the perception in the West, and among many environmentalists, that this is a demand for the unrestricted use of coal. Coal is indispensable as the last resort energy source in this pursuit.
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  • Common but differentiated responsibility: India should step forward to support the principle of equity and common, but differentiated, responsibilities, also known as CBDR (Common but differentiated responsibilities)
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Conclusion

Securing a part of, India and the developing countries’ developmental future within the framework of global environmental sustainability is the challenge, and India cannot afford to drop the ball at this juncture.

[2]. How the valley is changing

Context: Author in this article has tried to bring forward the fallacy in the strategy of the successive governments in Delhi and what the future course of action should be if India wants to improve its relationship with Kashmir.

Strategy of economic packages:

The successive governments at the centre have failed to understand that the strategy of economic packages to bridge the gap between Delhi and Kashmir is no longer going to work as it did for quite some time in the past. The valley has changed, is changing and this change is being affected by various factors.

Regional factors

  • Pakistan’s new role: Given the changed nature of the politics of Kashmir, Pakistan is feeling emboldened today to raise its stakes in Jammu and Kashmir. There are other factors as well such as the China-Pakistan Economic — as also military — Partnership, which has added to Pakistan’s confidence to meddle in Jammu and Kashmir. The increasing ‘noises’ from Pakistan of involving the ‘other stakeholder,’ viz. Kashmiris, in reaching a settlement on Kashmir must not hence be treated as a mere reiteration of Pakistan’s long-standing trivial complaint.
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Geo-political factors

  • Greater Radicalisation of Kashmiri youth: Threat of greater radicalisation of Kashmiri youth in the Valley, a transformation that can have serious consequences is also looming large. Kashmir’s Sufi Islam faces a grave threat from these more radical elements.
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New threat in Kashmir

IS and its impact: Radicalisation rather than militancy and alienation should thus be seen as a new threat in Kashmir.

The Islamic State of Iraq and Syria, which is a component of the ‘Salafist-Jihadist’ movement, has been steadily advancing eastwards — from civil war-wracked areas of Syria and Iraq to Afghanistan and Pakistan.

It has also carried out some attacks in Bangladesh. The ISIS has certain notions about what it refers to as the Islamic State of Khorasan. This incorporates many areas such as Uzbekistan, Turkmenistan, Afghanistan, Pakistan and north-west India. Kashmir falls within this arc.

If the youth in Jammu and Kashmir become victims of a new Salafised version of Islam, the consequences for entire India would be grave

Conclusion

Radicalisation is happening but India should try to prevent such radicalisation from attaining a far larger dimension, by taking steps to limit the attraction of such radicalist and extremist ideas among the local youth. To merely repeat the ‘mantra’ of alienation as being the result of underdevelopment would cost the country dear.

[3]. Why we must not grudge them a pay hike?

What has happened?

7th Pay commission has recommended that the salary of central government employees should be raised by 24% (approx). Media and several analysts have given their negative reactions to this pay hike.

Author in this article argues that the pay hike at the most is a modest one when comparing the hikes in the private sector and Indian economy can easily absorb the fiscal impact. Moreover, government can’t run without money. Government servants need to be paid and the recommendations of 7th Pay commission (SPC) are indeed for the good.

How SPC arrived at its recommendations?

SPC based its recommendations on the norms laid down by the 15th Indian Labour Conference (ILC) in 1957. The ILC had said that the minimum wage should cover the basic needs of a worker and his family, that is, a spouse, and two children who are below the age of 14.

How SPC has determined the basic needs?

  • It has accepted food requirements specified by a famous nutritionist.
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  • It has added requirements like Provisions for clothing, fuel and lighting, education, recreation, festivities, medical expenses, and housing. There is an addition of 25 per cent to the total of the above to provide for the skill factor (the basic needs having been determined for an unskilled person)
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Increase in the pay is modest

Based on these norms, the SPC arrives at a minimum wage of Rs. 18,000 for a government employee. This is 2.57 times the minimum pay in the Sixth Pay Commission. This is the second lowest increase recommended by any Pay Commission since the first one, and it is way below the 54 per cent increase following the last one.

 Impact on the government

  • Impact on finances: The impact of the pay hike on the Central government (including the railways) will amount to 0.65 per cent of GDP. This is less than the impact of 0.77 per cent of GDP on account of the Sixth Pay Commission.
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  • Decrease in Pay, Allowances and Pensions: Pay, allowances and pension (PAP) as a proportion of government expenditure has been declining sharply. In 1998-99, PAP was 38 per cent of revenue expenditure. The SPC estimates that this figure has fallen to 18 per cent in 2015-16. So, in financial terms, the workforce in government has been effectively downsized by nearly half over the past 17 years.
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  • Small size of the core: The ‘core’ of the government is actually very small in India. The SPC substantiates its point by comparing India’s Central government workforce with that of the federal government workforce in the U.S. In 2012, the civilian workforce in the U.S. was 21.3 lakh. In India, the corresponding figure in 2014 was 17.96 lakh.
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Is government bound by the SPCs recommendations?

No. Government can opt for higher pay hikes as happened with the 6th Pay Commission.

What is fiscal deficit?

The difference between total revenue and total expenditure of the government is termed as fiscal deficit. Rise in fiscal deficit can give a boost to growth in short term. Why? If the increase in public expenditure made possible by large fiscal deficit is used for productive investment, especially for investment in infrastructure and rural development, it will boost produc­tion and help increase employment opportunities in the economy.

Impact on growth

  • Higher wages can stimulate a fiscal deficit thereby increasing short term growth
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  • Sectoral boost: greater income in the hands of government employees could favourably impact sectors such as the real estate, automobiles and consumer goods
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[4]. Pressing for space

What has happened?

On November 16, a day marked as National Press Day, three newspapers published blank spaces on their editorial pages. They were protesting against a notice served by the Assam Rifles to the editors of newspapers in Nagaland, warning them on coverage of the banned National Socialist Council of Nagalim (Khaplang). The editors were told they could be violating the Unlawful Activities (Prevention) Act (UAPA), 1967.

Assam rifles’ stand

It points to a clause in the UAPA, under which the press can be made accountable in the interests of the sovereignty and integrity of the country

Press Council of India’s reaction

It has taken suo motu note of the case and served notices to Paramilitary forces & the state government.

Can PCI do so?

Yes. The PCI has the power to review any development likely to restrict the supply and dissemination of news of public interest and importance

The above case raises the question of freedom of speech and the safeguards such freedom requires to do its job in a rightful way.

What should be done to ensure a free press?

Free reportage: Every effort should be made to check the authorities’ use of the law to curb reportage and opinion just because it challenges their line. Sovereignty and integrity of India can be made the grounds to silence the genuine criticism of the government and the security forces by the press.

Other measures: There also needs to be a more broad-based appraisal of other ways and means by which freedom of the press is sought to be restrained, and what remedial measures there should be

[5]. Japan’s counter to China’s Silk Road

Background: Silk Road initiative by China which is a part of the One Belt One Road project has been watched closely by Japan. In response to it, Japan is now ready with its framework to compete on the export of the infrastructural projects.

What is One Belt One Road (OBOR) project?

  • Economic land belt: At the heart of One Belt, One Road is the creation of an economic land belt that includes countries on the original Silk Road through Central Asia, West Asia, the Middle East and Europe
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  • Maritime road that links China’s port facilities with the African coast, pushing up through the Suez Canal into the Mediterranean.
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brief 3
OBOR Project (Image source: https://www.clsa.com/special/onebeltoneroad/)

What is the Silk Road?

The Silk Road is a historically important international trade route between China and the Mediterranean. Because silk comprised a large proportion of trade along this road, in 1877, it was named ‘the Silk Road‘ by Ferdinand von Richthofen, an eminent German geographer.

brief 4
The Silk Road

 

Increasing Chinese influence

China’s new infrastructure drive has been backed by the,

  • Establishment of the $100 billion Asian Infrastructure Investment Bank.
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  • $40 billion Silk Road infrastructure fund
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  • Setting up the New Development Bank under the banner of the five-nation forum, BRICS, with an initial capital of $50 billion.
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Why the unfolding economic rivalry between China and Japan is good news for India?

Counter to China: Japan’s new activism will allow Delhi to ease some of the perceived threats from China’s growing economic presence in the subcontinent and beyond.  Delhi had to join the AIIB, though reluctantly so that it is not isolated by China but when Beijing proposed to develop infrastructure linking sub-continent with China, Delhi was visibly perturbed. Japan could take India out of this situation by providing an economic and infrastructural boost.

What Japan is arguing?

Japan has following arguments,

Quality: Japanese believe their quality of work is much better than China. Their emphasis on quality is clear from the fact that Prime Minister Shinzo Abe stressed on investing $110Million in Asia over next five years to develop quality infrastructure taking a direct hit at China.

Hidden costs: Japan also warns against the hidden costs of Chinese proposals that will come to haunt many of the projects being launched under the OBOR initiative.

Sri Lankan example: There is an ongoing debate in Sri Lanka, where the new government in Colombo has sought to review the terms and conditions of the various mega projects that the Rajapaksa regime had signed with Chinese companies.

Revival of ADB: Japan has refused to join AIIB and it is trying to rejuvenate the Asian Development Bank (ADB). In Kuala Lumpur over the weekend, Abe outlined a plan to liberalise the ADB’s terms of lending.

An experienced customer

In terms of infrastructure development beyond its borders, Japan is an old player at the table as compared to China which is relatively new.

Japanese technology and finance have been at the forefront of building road and rail corridors and airports, including in China.

 Japan International Cooperation Agency (JICA) & India

Japan’s overseas assistance arm, the Japan International Cooperation Agency (Jica), has supported many such projects in India, including the Delhi Metro and the Delhi-Mumbai corridor.

Japan is now using its past experience and the development aid to ward off the Chinese drive to expand its economic and political influence in Asia.

India, now in cooperation with Japan can participate in bold new initiatives so that it does not feel isolated or threatened by China’s expansive economic policy

[6]. Cash Transfers: Look before you leap

Background: With introduction of cash transfers to minimise manual intervention, there has been demands to use the same for other government programmes, ranging from food subsidy to conditional transfers like the mid-day meal programme for children. Examples of Brazil and Mexico are given to support this argument.

Usage of DBT for delivery of other government services raises some tricky issues,

  • Role of the state: It is the role of state to provide services like education, health etc. If we shift to DBT in these cases, it will tantamount to state withdrawing from its responsibility of providing necessary services to maintain social standards. Where a large number of beneficiaries are involved it is best if the responsibility is left to the state.
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  • End-usage of cash transfer: If government switches to DBT in case of PDS then there is no guarantee that the same would still be utilised for the purpose of buying food. There might be other necessities in the household that would be fulfilled through the cash. A cash transfer incase of mid-day meal will stop the child from being sent to school, which will affect the future of the household.
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Conclusion

It appears that our economy is not yet ready to replace physical delivery of state services with cash, given the large population being covered as well as the low levels of income of those who are accessing the same


Economic Digest


[1]. Bad debts of banks at unacceptable level: Finance Min

What has happened?

Finance minister at a meeting with the bankers to review their July-Sept performance, said that non-performing assets of Indian banks were at an ‘unacceptable’ level but the situation is expected to improve as the government and the central bank were taking corrective steps.

Sectors facing maximum stress

  • Iron and steel
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  • Textile
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  • Power
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  • Sugar
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  • Aluminium
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  • Construction
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Steps by the government

  • The government is also in the process of framing a bankruptcy code — aimed to tackle wilful default
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  • Bankruptcy bill is also going to be tabled in winter session of the parliament. It will increase the banks’ abilities to get failed creditors to exit.
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Reforms announced in the power sector will relieve the problems with the distribution companies. Also, highways sector has started moving.

[2]. The need for unifying agricultural markets

Context: Rising food inflation i.e. rising price of food items means that agriculture needs structural reforms instead of random raids on hoarders and the usual export bans.

Creation of a unified agricultural market

NITI Ayog is working on a blueprint for the creation of a unified agricultural market. It is expected to bring about much-needed uniformity in prices across agricultural markets in the country.

Existing system

The present Agricultural Produce Market Committee (APMC) Act forces force farmers to sell their produce only to government-designated mandi.

Shortcomings of this system

  • Restrictive in nature: The mandis restricted the economic freedom of farmers even as they were captured by local political elites who rig auctions.
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  • Rise in prices: Multiple charges levied within the mandis—such as market fees, licensing fees and commission—pushed up prices of agricultural commodities
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  • Inadequate infrastructure
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To deal with the above situation model APMC Acts were circulated within states in 2003 but they have remained mere blueprints.

Karnataka: A model

Karnataka’s Rashtriya e-Market Services Pvt. Ltd (ReMS), a joint venture with NCDEX Spot Exchange Ltd, is a good working example of what the model APMC Act envisaged.

  • First, to ensure ease of doing business, it integrated 51 of the 155 main market yards and 354 sub-yards into a single licensing system.
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  • Second, for improving efficiency and transparency, it introduced automated auction and post-auction facilities (weighing, invoicing, market fee collection and accounting).
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  • Third, to guarantee quality, examining facilities were made available in the markets.
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  • Finally, in collaboration with NCDEX, it linked all APMCs in the state electronically, and enabled the discovery of a single state price for every commodity on a single platform
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 Benefits from Karnataka model

Power to the farmer: It gave the farmer the power to accept, reject and bid the prices for his commodity on the basis of a transparent system.

Increased revenue: It increased the revenues of APMCs,

Other benefits: It helped in effective management of its funds and assets, and curbed corruption.

Central Sector Scheme for Promotion of National Agricultural Market

  • In July 2015, the cabinet committee on economic affairs earmarked an amount of 200 for this scheme.
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  • The scheme seeks to integrate 585 regulated markets in the country through a common e-platform and will also allow access for private markets.
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Conclusion

Agriculture is in the state list of the Constitution, and the unified agricultural market can be executed only in collaboration with the states.

The states have already taken the lead in policy innovation, be it labour laws in Rajasthan, land acquisition reforms in Tamil Nadu or land pooling for urbanization in Andhra Pradesh. The Karnataka model of agricultural markets reforms should be seen as a similar case—a state innovation that can guide New Delhi

[3]. What are Foreign Institutional Investors (FIIs)?

An investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

By: ForumIAS Editorial Team

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Categories
9 PM Daily NEWS Brief

9 PM Daily Brief – 23 November 2015

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

 


National


[1]. ASEAN to ease travel, mobility of labour

What is ASEAN?

Association of South East Asian Nations (ASEAN) is a political and economic organization of ten Southeast Asian countries. It was formed on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Since then, membership has expanded to include Brunei, Cambodia, Laos, Myanmar (Burma), and Vietnam.

What has happened?

    • ASEAN declared a community – The Association of Southeast Asian Nations (ASEAN) was proclaimed a community through a declaration signed by the ASEAN leaders at its 27th Summit in Kuala lumpur
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    • ASEAN 2025: Forging ahead – Leaders at the summit endorsed a road-map for consolidation, integration and cohesiveness as a community
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What these declarations mean to the general people?

Such declarations entailing close co-operation between the member nations mean,

    • Increased economic opportunities
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    • Increased job opportunities and access to quality jobs
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    • Ease of intra-ASEAN travel and mobility of labour
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    • Better protection against pandemic, natural calamities, transnational crimes and trans-boundary challenges due to enhanced co-operation between the member nations and more so because of being declared as a community now.
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[2]. Hollande’s takeaway will be the Rafale deal

Background: India and France are working to finalise the agreement for direct purchase of 36 Rafale jets before the visit of President Fancois Hollande on Republic day as a chief guest.

During his visit to Paris in April 2015, PM had announced the direct purchase of Rafale jets as quickly as possible due to critical operational necessity of the Indian Air Force (IAF).

 Main issues in the deal,

Offset clause: The main sticking point in the negotiations was the offset clause. Under this clause a companies are to invest 30% of the value of the contract back in the country. It applies to the deals under Rs 300 Crore. For this deal it has been fixed at 50% by the government.

Changes: IAF wanted some structural changes to the aircraft to incorporate the indigenously built “Astra” beyond visual range (BVR) missiles.

Why this deal is important?

IAF needs to maintain a combat edge against China and Pakistan by arresting its depleting force levels. It has said it would need around 108 Rafale jets to fulfil that purpose. So, there might be a purchase of more fighter jets in line.

Why IAF’s fighter strength has depleted?

Reason: MiG 21s and MiG 27s have been phased out and induction of indigenous light combat aircraft has been delayed time and again

[3]. India ready to work with Malaysia for the war memorial

Context: PM is in Malaysia to attend India-ASEAN & East Asia Summits and bilateral visit

 What has happened?

Paying homage to the “countless” Indian soldiers who laid down their lives in World War II, the Prime Minister said his govt. was prepared to work with the Malaysian government to build a war memorial for them at the site of the Battle of Kampar in Perak

[4]. Can India deliver in South-East Asia?

Context: 10th East Asia Summit held at Kuala Lumpur, Malaysia. As per author, India needs to engage with the region as a whole more substantively.

 India’s role

India needs to emerge as a leader in the east Asian and the south-east Asian region to balance the rise of China.  In order to do so it needs to shed its diffidence of sitting on the fences.

India is slowly and steadily building towards that role now.

An example: India has aired its views on the South China sea dispute by calling to the UN convention on sea of 1982 and has also agreed to co-operate with the U.S to ensure freedom of navigation. Recently, in its joint statement with the Philippines, India referred to the South China Sea as the West Philippine Sea, a term that Manila has been using since the escalation of its maritime dispute with China.

Contrast to China’s policies: India, unlike China’s aggressive policies, has resolved its maritime dispute with the Bangladesh through international arbitration

Defence co-operation: Defence cooperation is soaring with regional countries ranging from Japan, Vietnam, the Philippines and Singapore to extra-regional powers such as the US and the UK.

 How India has made itself relevant in the region?

    • India has been a full dialogue partner of the Association of Southeast Asian Nations (ASEAN) since 1995, a member of the ASEAN Regional Forum, the regional security forum, since 1996, and became a founding member of the East Asian Summit launched in December 2005
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    • India has also cultivated extensive economic and trade linkages with various countries in the region and simultaneously increased defence co-operation too
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    •  Free trade agreement (FTA) with ASEAN: India and ASEAN marked their 20 years of partnership with a commemorative summit in New Delhi in December 2012. The highlight of the summit was the conclusion of talks on services and investment, which is expected to increase bilateral trade to $200 billion by 2022 and lead to talks on the Regional Comprehensive Economic Partnership, which also includes Australia, China, Japan, South Korea and New Zealand.
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Conclusion

Smaller states in the region are now looking to India to balance China’s growing influence and America’s anticipated retrenchment (reduction) from the region in the near future. And larger states see this as an attractive engine for regional growth.

It remains to be seen if India can indeed live up to its full potential, as well as to the region’s expectations.

[5]. Hold your ground in Paris

Context: On November 30th 2015 Paris will host the gathering of 21st session Conference of Parties (COP-21) to the United Nations Framework Convention on Climate Change (UNFCCC).

 What is UNFCC?

The United Nations Framework Convention on Climate Change (UNFCCC) is an international environmental treaty (currently the only international climate policy venue with broad legitimacy, due in part to its virtually universal membership) negotiated at the United Nations Conference on Environment and Development (UNCED), informally known as the Earth Summit, held in Rio de Janeiro from 3 to 14 June 1992.

Objective: The objective of the treaty is to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

 What is COP?

The COP is the supreme decision-making body of the Convention. All States that are Parties to the Convention are represented at the COP.

 Aim of COP-21:

It is to craft a universal and legally binding treaty to reduce the emissions of greenhouse gases (GHGs) and contribute to mitigating the human component of the complex phenomenon of climate change.

Countries had been asked to submit INDCs (Intended Nationally Determined Contributions).

What are INDCs?

They are the national road maps on reducing Green House Gases (GHGs)

India’s commitment: India’s plan is ambitious, pledging to reduce the intensity of GHG emissions by up to 35% by 2030

India has also committed to altering its energy mix to ensure up to 40% of electricity is produced from non-fossil fuel sources

India should not bow to any pressure tactics that ask India more ambitious targets. It would be disastrous to tie our own hands with strict and improbable reduction targets. To fuel growth, until technology makes it possible, fossil fuels have to be used, emissions will exist too. We should try to make the environmental impact of our development as minimum as possible


International


——-

 


Opinions & Editorials


[1]. Clues from the Mali attack

What has happened?

Bamako, the capital city of Mali was attacked by terrorists. The group, AL-Mourabitoun, which has taken responsibility of this attack and has further, said that the attack was staged in co-operation with al-Qaeda.

What this means?

The recent attacks on Paris and then the attacks in Mali do not bode well for the rest of the world. Why?

It shows that IS and the al-Qaeda are engaged in a battle of control. Al-Qaeda is trying to match the terror capabilities of IS. This means that there might be a rise in the terrorist activates in the coming days around the world.

Problems in Mali

Mali has remained a training ground for Jihadists for quite some time but how did this whole problem began and gradually escalated, can be explained as follows,

Libyan revolution – Before we begin let us have a little background on Libya till the killing of Gaddafi.

1969: The Gaddafi era began. Libya was ruled by King Idris before being deposed by Colonel Muammar Gaddafi in a coup in 1969. He followed a pan-Arab agenda meaning he attempted to form mergers with other Arab countries and nationalised Libyan economy including the oil industry.

2011, February- Inspired by revolts in several Arab countries like Egypt and Tunisia, Benghazi, the second largest city of Libya broke out in protests. These protests spread to the other cities leading to clashes between security forces and anti-Gaddafi rebels.

2011, October – Gaddafi is captured and killed

brief (1)

During, Libyan revolution NATO invaded Libya in the name of helping the rebels. Gaddafi had ethnic tuaregs in his forces. They fled to Mali when Gaddafi regime was destroyed and took with them as many weapons as they could. They reached Mali, joined the rebel Tuareg forces in the North and launched a full-blown attack on the government. Al-Qaeda gradually captured the entire North Mali.

International response

What the West did?

In a typical knee-jerk reaction, West resorted to counter-terror operations without even understanding the situation completely. France sent its troops in 2013 to fight the rebels. They drove the militants from major towns in North but could not defeat them. Militants went to their hide outs in the desert and to this day they keep on attacking civilians. Attack on Bamako is one such example.

What the West should have done?

Ethnic Tuaregs from Gaddafi’s forces joined the rebel forces in Mali. So, the first logical step would have been to stabilise the Libyan state of affairs, end the civil war there and establish a proper government control over there.

Secondly, Malian government should have been strengthened with all the support being provided to it to assert its control and authority over its land.

The way forward

Instead of a regional approach, a broader approach wherein the weapon supplies to rebels is checked, their financial sources stopped and Libya is stabilised, should be the way forward

[2]. Improving the craft of prediction

A little background

Most exit polls in the Bihar elections in 2015 showed a tight contest between the BJP and the Grand Alliance but the results have been way off the mark. Considering the difference in what was predicted and what actually happened, there are the lessons that we can learn from Bihar polls.

 What is an exit poll, opinion poll, entrance poll?

An election exit poll is a poll of voters taken immediately after they have exited the polling stations. An exit poll asks for whom the voter actually voted.

Opinion poll – It asks for whom the voter plans to vote.

Entrance poll – A poll conducted before actual voters have voted.

Who invented it?

Marcel van Dam, Dutch sociologist and former politician, is credited with having invented the exit poll, and being the first to implement an exit poll during the Dutch legislative elections on February 15, 1967.

Lessons to be learnt

  •  Voting preferences of Indians is very volatile meaning a decision to vote for a particular party is usually made on the voting day itself. Therefore, any pre-poll survey, though, useful in painting a picture of the situation does not provides with the whole scenario.
A
  • Shifting alliance arrangements make it hard to predict the outcome of an election. Shift in the vote banks from previous alliances like JD(U)+BJP to new Grand alliance is pretty complex phenomenon thereby making the business of prediction even more difficult.
A
  • Caste-demographics – Voting surveys in India esp in Bihar would be more accurate if more data about caste demographics is there. Caste survey in India was last conducted in 1931 by the British. 2011 Indian census only provides data about the OBCs, Upper castes, Extremely backward classes (EBCs). So, a survey might be over-representing a particular caste like upper caste in a survey and be way off mark in its prediction.
A
  • Wrong methodology, a built-in sampling bias – From previous few years alliances led by BJP have been given a clear lead in the exit-polls. An important point to note here is that the voter who airs his opinion as to whom he voted and agrees to be interviewed outside the polling station tends to be from more socially powerful groups
A

Conclusion

There has been a debate as to whether such surveys and opinion polls should be allowed or not and the agencies involved should disclose their methods and create awareness in the public, informing them that the data on which the polls are formed are not necessarily wrong but the predictions can still go off the mark.

Surveys that are conducted by rigorous random sampling techniques are still the most methodical means of measuring public opinion in India. With another election behind us, pollsters now must take the opportunity to learn from their results and improve their craft. The public should also take the opportunity to learn about how to interpret polls more intelligently.

[3]. Why the IS survives?

What has happened?

On November 13, 2015 Paris was attacked by IS which took responsibility of the attacks on November 14th. Three teams, including at least seven participants, attacked six sites in Paris, including the surroundings of the iconic Stade de France, where French President Francois Hollande was attending a soccer match; the Bataclan, a popular theatre where a concert was taking place that evening; and the terraces of several cafés where people had assembled on a particularly mild November night. The attacks left 129 people dead and 352 injured.

 Immediate reaction & further steps

France termed this as an act of terrorism and bombed Raqqa the Syrian city known to shelter IS headquarters.

Further steps taken by France are,

    • Reinforcement of France’s domestic security forces,
A
    • The extension of the emergency to three months,
A
    •  A change of the French constitution in order to better fight terrorism within the rule of law.
A
    • Francois Hollande also called for a meeting of the UN Security Council.
A

Why the chances of defeating the IS seem bleak?

No single coalition: French President’s hopes for a single international coalition to fight against Islamic State so far seemed to have been dashed. The coalition if formed would still be a ‘something for something’ affair. Moreover, the local parties like Assad has nothing to gain from the disappearance of IS, so he is never going to participate in anti-IS coalition.

Different countries different interests

Turkish government – This country is now itself a victim of the IS but it is more interested in tackling or containing the Kurd separatism

The Kurds and Iran see the IS as a factor of division within the Arab world but they are willing to contain it, not eliminate it.

Saudi Arabia – It sees IS as a useful instrument against Iran and will not do anything against it.

The divisive question

Russian and Iran are operating through Hezbollah in Syria. They are against U.S and any other country of the world playing any role in Syria‘s political affairs. Thus, fate of Assad hangs in balance unless some agreement is held between the major global giants regarding this situation. Due, to this confusing state of affairs, no nation would want to send in their troops against IS under an anti-IS coalition.

Well planned attacks

Though Paris attacks only generated a wave of hate amongst the population of the world against the IS but the sheer scale on which the attacks have been conducted and a narrative of victory is likel to attract disillusioned youths from the Europe

[4]. PM Narendra Modi’s second time in the land of Lee Kuan Yew

Context: PM is on his second visit to Singapore.

Who is Lee Kuan Yew?

Lee Kuan Yew, informally known by his initials LKY, was the first Prime Minister of Singapore, governing for more than three decades from 1959 to 1990, including through Singapore’s independence from Malaysia in 1965.

Lee’s rule was criticised, particularly in the West, for curtailing civil liberties (public protests, media control) and bringing libel suits against political opponents. He argued that such disciplinary measures were necessary for political stability, which together with rule of law, were essential for economic progress

Singapore & India

Design of Amravati: Singapore has designed the master-plan for the development of the new Andhra Pradesh capital Amravati.

 Science and technology: Indian chambers of commerce have identified science and technology as well as education as two sectors where there is vast potential for Singapore to invest in India.

 Investment: Singapore is the second-largest investor in India. Indian companies have also made a beeline to open offices in Singapore thanks to its tax-friendly environment and its unparalleled advantage of hosting other global corporations which are based in the city-state.

Diaspora: Indian Singaporeans, a majority of them being Tamils, comprise 9% of the population and have often overachieved in terms of representation in government and parliament in the Lion City They ensure a balance in Singapore’s strategic outlook in Asia.

Defence co-operation: With defence cooperation, especially in the maritime and counter-terrorism realms, also being upgraded, it is not an exaggeration to claim that Modi is laying the foundation for a robust, modernisation-centred strategic partnership.


Economic Digest


[1]. Implications of Yuan’s rise

Background: China wanted the reserve currency status for Yuan way back in 2009. At that point of time Chinese monetary officials had advocated replacing U.S dollar with a group of currencies administered by the IMF but nobody took them seriously.

What has happened?

The international Monetary Fund (IMF) is poised to approve the inclusion of China’s renminbi (or Yuan as it is called) as a reserve currency.

What is a reserve currency?

A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate.

 What are Special Drawing Rights (SDRs)?

You can think of SDRs as an artificial currency used by the IMF and defined as a “basket of national currencies”. The IMF uses SDRs for internal accounting purposes. SDRs are allocated by the IMF to its member countries and are backed by the full faith and credit of the member countries’ governments.

Significance of including Yuan as a reserve currency

When the Yuan is formally inducted into the SDR portfolio it will be the first new currency to be so honoured since the euro was created.

 Benefits to China

    • The flexibility in settling all its international obligations with its own currency.

Benefits to Other countries

    • Diversification: they can diversify their forex reserve portfolios to include renminbi. That would once again be recognition of China’s economic strengths.

Despite of having 7 reserve currencies, world financial order is heavily tilted towards the U.S dollar. About 62 per cent of international currency assets are held in dollars. What is wrong in that?

    • Even a miniscule rise in the American interest rate or even a talk about it is enough to cause huge upheavals in the markets of developing countries such as India’s.
    • There are limits to the Federal Reserve’s capacity to meet liquidity shortages in the global economy. It can only supply the global economy until a specific point
A

World financial system can’t be left to the vagaries of American politics

[2]. Insolvency resolution in India plagued by wide range of problems: report

What are stressed assets?

Stressed assets are the ones on the way to become NPAs, where interest has not been serviced for 1-2 quarters.

What is an NPA?

NPA are the loans overdue for more than 90 days.

What is insolvency?

When an individual or organization can no longer meet its financial obligations it is termed as insolvent. Insolvency means the liabilities are greater than assets, in simple words.

What has happened?

A report by Global consultancy Alvarez and Marsal has delineated that,

    • Total stressed assets in India have surged fivefold from 2011 to 2015
A
    • There are problems in the way such assets are being handled
A
    • Average time of insolvency resolution in India is 4.3years
A

What industry has to say?

It deems execution difficulties as the biggest challenge with respect to revival of a stressed asset.

Some execution difficulties include,

    • Inabilities to raise working capital as lenders are unwilling to put additional capital at risk.
A
    • Difficulties faced in replacing the existing management.
A

In regulatory space,

Debt Recovery Tribunal (DRTs have been created to help financial institutions recover dues speedily without being subjected to the lengthy procedures of usual civil courts,) and the Debt Recovery Appellate Tribunal don’t have sufficient resources to deal with the volume of applications filed every year.

Regarding legal infrastructure to deal with insolvency and bankruptcy,

The report recommends that the proposed National Company Law Tribunal (NCLT is a proposed quasi-judicial body in India that will govern the companies in India. It will be established under the Companies Act, 2013 and is a successor body of the Company Law Board) should have a separate bench for handling bankruptcy cases.

What is a quasi-judicial body?

A quasi-judicial body is an entity such as an arbitrator or tribunal board, which has powers and procedures resembling those of a court of law or judge.

[3]. RBI likely to keep interest rate unchanged in December 2015

What has happened?

Repo Rate might remain unchanged during the December policy review.

What is Repo rate?

Repo rate is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.

Why RBI might keep Repo rate unchanged?

    • High retail inflation
A

By: ForumIAS Editorial Team

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Categories
9 PM Daily NEWS Brief

9 PM Daily Brief – 21 November 2015

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

 


National


[1]. Shadows in the city of light

What has happened?

On the evening of 13th Nov 2015 a series of co-ordinated terrorist attacks took place in Paris and its northern suburb Saint Denis. The places these attacks targeted – the Stade de France where a football match was on, some popular bars in central Paris, and the famous Bataclan concert hall – were centres of popular culture and recreation.

France had been on high alert since the Charlie Hebdo shooting incident  and a series of related terrorist incidents in January 2015.

The silent questions

This terrorist act has given rise to many silent questions, like,

  • Will this incident spur racial hatred and divide the French society on racial lines? – As of now the people of Paris have stood in unison with the each other and not allowed the spread of irrational fears over a specific religion.
  • Will the French concept of secularity be weakened? – French concept of secularism sees church and state to be separate. Under this concept only in 2004, French government had passed a law to reassert its right to ban the use of religious symbols like headscarves, skullcaps and crosses in the schools
  • Will this incident give an opportunity to the far right National Front in the French politics to propagate fears over Islam, terrorism and immigration?

The reality

Day after the incident, political divisions and fault lines began to emerge concerning the issue of terrorism which may further give rise to social division. French society though unified in its response to terror acts stands divided if observed closely.

French society has a long history of immigration with the Muslim world. The truth is that the French immigrant Muslims have low educational and employment skills resulting in an unemployment rate of over 17% as compared to national average of 9%.

Such a situation gives opportunity to radical elements to capitalise on the feeling of alienation that this part of the society feels.

Emergency measures

French government’s new constitutional changes to beef up internal security have also elicited a strong sense of concern.

French president has received a parliamentary approval for an extension of national emergency by 3 months. He is hoping that changes once passed will give a constitutional backing to several emergency measures like, anyone suspected of being a threat to public order can be placed under house arrest.

Search operations can be conducted by the police without a magistrate’s warrant; websites and social media can be blocked; and organisations banned.

This has prompted reactions from various quarters. Fears of the dilution of the founding values of French republic namely, Liberty, equality and fraternity, are being aired.

How this incident shapes the French politics and the future international anti-terrorist strategy are the few things which one should observe carefully

[2]. An expected raise

What has happened?

The 7th Pay commission has recommended a 23.55% overall increase in the salary of the government employees. This increase in the salary will result in an additional expenditure of Rs 1.02lakh crore. The 6th pay commission had recommended a 40% increase in the salaries as at that time the economic condition was much better and stronger than today.

What is Pay commission?

The central government constitutes the pay commission every 10 years to revise the pay scale of its employees and often these are adopted by states after some modifications.

 Performance Related Pay (PRP)

7th pay commission has suggested the inclusion of Performance Related Pay (PRP) mechanism for all central government employees. Under PRP employees shall be paid performance incentive on basis of some preset guidelines. This has been suggested to inculcate a result oriented mindset amongst government employees.

New pension schemes

The 7th Central Pay Commission has also suggested remove the parity between the pensions of the past retirees and the new ones by implementing new pension scheme on lines of one-rank-one-pension (OROP) model.

Impact on the States

In the past, states have tended to implement the recommendations of the 7th pay commission. Doing so will put a burden on State’s fiscal resources.

Impact on the economy

With increase in salaries government expects that people shall spend more, which will give a much needed boost to the manufacturing sector.

On the other hand side, increased flow of money can also give rise to inflation(increase in prices). Infact, an increase in pay after the implementation of recommendations of the pay commission in the past has almost always resulted in a simultaneous increase in inflation

[3]. Why India should join the war against IS

What has happened?

In the wake of terrorist strike in Paris by the IS, there are signs of major re-alignments in the interests of the global powers. U.S is considering the possibility of joining Russia in the efforts to eliminate IS.

What India should do?

As per author, India has been fighting the battle against terror long before the 9/11 attacks made terrorism a household name in the west. To effectively deal with terrorism India need to join hands with the global powers and be a part of the global alliance that is taking shape in the wake of recent international terrorist attacks.

What India is doing?

Our PM has proposed an action plan to deal to with terror. It revolves around the strategy of isolating and containing sponsors and supporters of terrorism & delinking terrorism from religion.

The agenda

  • Isolation of anti-India elements: Isolate the staunchly anti-India elements in Pakistan’s army and the ISI by making India an economic powerhouse and a magnet for foreign investment for countries like China and some in East Asia.
  • Joining the global anti-terror alliance: Use the opportunity presented by the IS attack to be part of a powerful coalition of nations against terror, and use the goodwill and support generated to further put pressure on Pakistan.

 

[4]. SC to decide if exotic pet birds have a right to fly

What has happened?

In 2011, Gujarat High court had passed an order declaring that caging of birds amounted to illegal confinement and curbing of their fundamental right to move. The High Court had ordered to release all caged birds. This meant that anyone could file complaints against bird sellers and pet shop owners and have them booked under the Prevention of Cruelty to Animals Act and the Wildlife Protection Act.

This High court order has been challenged in the SC and SC has admitted the challenge.

The other side

  • Safeguards exist: Those who have challenged the Gujarat High court order believe that adequate safeguards have already been provided under the Prevention of Cruelty to Animals Act, 1960, and Wild Life Protection Act, 1972, to protect these birds. There was no requirement for any kind of licence or permission for keeping exotic birds.
  • Role in improving health: They also argue that birds play an important role in improving health problems and are psychologically comforting to human beings

&nbsp:
The core issue

The major issue involved here is the right to livelihood of the pet owners all over the country and on the other hand, the right of the birds to live freely.

[5]. Here comes the Agribot

What has happened?

A mechanical engineering graduate from Telangana has created an Agribot to help farmers and ease their work while tilling the land.

What is a bot?

A bot is a robotic device which can perform automated tasks. In this case the bot has been designed to help farmers in their agricultural activities, hence the name Agri-bot.

What can Agribot do?

The ‘Agribot’ can,

    • Plough the field – The Agribot can plough a field in half an hour. Normally, a farmer takes half a day to plough his field. Thus, Agribot will save lots of time and effort on the part of farmers.
    • Water the field
    • Sow seeds for a fixed period of time, with the help of a timer
    • Predicts weather
    • Move on any type of soil

 

[6]. Geographic Information System (GIS)

 What is GIS?

A geographic information system (GIS) is a computer system for capturing, storing, checking, and displaying data related to positions on Earth’s surface. GIS can show many different kinds of data on one map. This enables people to more easily see, analyze, and understand patterns and relationships

 Data and GIS

Data in many different forms can be entered into GIS. Data that are already in map form can be included in GIS. This includes such information as the location of rivers and roads, hills and valleys. Digital, or computerized, data can also be entered into GIS. An example of this kind of information is data collected by satellites that show land use—the location of farms, towns, or forests

 GIS maps

Once all of the desired data have been entered into a GIS system, they can be combined to produce a wide variety of individual maps, depending on which data layers are included. For instance, using GIS technology, many kinds of information can be shown about a single city. Maps can be produced that relate such information as average income, book sales and voting patterns

 Past instances where GIS has been successfully used

  • Prevention of spread of viral disease in Kerala: The images of coconut trees in Kerala, obtained from remote sensing satellites, helped tackle the spread of a viral disease a few decades ago.
  • Addressing epidemic outbreaks: In light of recent rains in Chennai, tools like GIS would be very useful in addressing the outbreak of post-flood epidemic. The breeding space for diseases can be identified through GIS and necessary healthcare measures can be taken

International


[1]. Mali battles gunmen in Capital as Islamists hit Iraq, Yemen

What has happened?

A week after the IS militants killed 129 people in Paris, terrorists have attacked Mali. They attacked Radisson Blue hotel in Bamako, the capital city of Mali. The hotel was hosting guests and diplomats when heavily armed gunmen started shooting indiscriminately.

Why the attack happened?

The terrorist group which claimed responsibility said that these attacks were carried out in retaliation for government aggression in Northern Mali. The group also demanded the release of prisoners in France.

 Connection with France

In 2012, France had launched a military campaign against Islamic extremists in the northern Mali. The campaign, Operation Serval, was widely considered a success in driving jihadists from Mali’s northern towns. Mali was a French colony previously (it became independent in 1960) and it was on its request that above operation was launched.

Operation Barkhane: The U.N. deployed a peacekeeping mission, MINUSMA, and the French mission was succeeded in August 2014 by Operation Barkhane, a broader French anti-terror mission targeting Islamists in the Sahel, with a 3,000-strong force headquartered in Chad.

IS militants in Syria said that the French intervention in Mali in 2012 was another reason they attacked Paris.

More info:

http://edition.cnn.com/2015/11/20/africa/mali-terror-seven-things/index.html

Opinions & Editorials


Nothing Over Here Today


Economic Digest


[1]. Centre committed to boost public spending on infrastructure

Context: Centre is committed to boosting public spending on infrastructure in the coming years so that allied sectors get a boost, leading to greater employment generation.

What are Allied sectors?

Sectors or industries which are dependent or connected to each other are termed as Allied sectors. Cement and steel are allied sectors and an investment boost in the infrastructure would invariably boost these sectors as they both are connected.

Example: We need cement to build infrastructure like buildings, bridges etc. Similarly, these infrastructural activities cannot be carried out without making use of steel. So, a boost in one boosts another sector.

What do analysts think?

Analysts are sceptical regarding such a commitment because,

  • Increase in wage bill: 7th pay commission recommendations of increased pay would lead to an increase in wage bill of centre.
  • Reduction in corporate taxes: There have been talks of expected reduction in corporate taxes.

Both of the above factors will pressurise the government to reduce public spending (including infrastructure) to reduce the fiscal deficit.

What is fiscal deficit?

When a government’s total expenditures exceed the revenue that it generates (excluding money from borrowings), it is termed as fiscal deficit.

[2]. Indian Cess service

What has happened?

Government has implemented a Swachh Bharat cess of 0.5% on all the taxable services. It will result in an increase of service tax rate from the current 14% to 14.5 %. Eating out, telephony and travel will become expensive due to this cess. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives.

What is a cess?

Cess is a form of tax.

The problem with cesses

Unlike the taxes collected by the central government, cesses and surcharges are not shared with the states. That goes against the principle of co-operative federalism.

Also, once a cess is imposed it never gets withdrawn like The Salt Cess of 1953 still continues though it earned a meagre R3.85 crore in FY15.

What is co-operative federalism?

One important question or issue before a nation is how to distribute the powers amongst itself and the states so as to create an equitable arrangement. This is termed as federalism.

One method of dividing this power is through cooperative federalism, in which the national government (often the legislature) enjoys almost unlimited authority to force the smaller parts of government (typically the states) to administer and enforce national policies. Central government can influence behaviours and policies of the state government through financial aids and funding.

Cesses are not shared with the states, thus violating the principles of sharing as envisaged in Co-operative federalism.
By: ForumIAS Editorial Team

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Categories
9 PM Daily NEWS Brief

9 PM Daily Brief – 20 November 2015

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

 


National


[1]. Pay panel moots 23.5% hike, to cost govt. Rs 1.02 lakh cr.

News: 7th central pay commission submits its report to the Union finance minister

What is the Central Pay Commission?

  • The Central Pay Commission is a recommendatory body constituted by the Government to make recommendations for pay and allowance of Central Govt employees. A pay commission is constituted every ten years. Currently, the seventh pay commission has been constituted. Its chairman is Justice A K Mathur.

What has been recommended?

  • Increase in the Pay, allowances, and pension for government employees [16 per cent increase in basic pay, a 63 per cent increase in allowances and a 24 per cent hike in pension] – signifying an overall increase of 23.55%
  • An annual increase of 3% in the basic pay

Why this is serious business?

  • Because a hike in salaries of Central govt employees means substantial burden on Govt’s exchequer.
  • State governments are also under pressure to provide equivalent hike to state government employees for which they may or may not have adequate money
  • Govt employees constitute a large portion of the organised workforce. Increase in salary of so many people at the same time injects a lot of money in the people’s hands. Demand supply economics tells us that inflation may rise to address the demand supply equilibrium.

Total Monetary impact on central government (MI) – Rs 1.02 Lakh Crore =0.6% of the GDP
Recommendations supposed to come into force on – January 1, 2016

[2]. India and China link Home Ministries to counter terror

News: India and China have decided to establish a ministerial mechanism that would, for the first time, link the two home ministries, filling a vital gap in the overall institutional architecture of the bilateral ties.

The decision was taken following Home Minister Rajnath Singh’s talks with Guo Sheng Kun, China’s Public Security Minister. This step will take the security collaboration between the two countries to the next level.

What other things were discussed?

Counter-terror collaboration in the light of Paris terror attacks
Intelligence sharing: Decision was taken on an agreement on intelligence sharing meaning exchange of information on terrorist activities, terrorist groups and linkages.
Opening of communication lines: Communication lines between the two establishments would also be opened in to ensure smooth information flow in case of hostage and hijack situations

[3]. SC banks on collegium to fill judicial vacancies

News: SC wants to fill in the vacancies in the high court via collegium system

What is collegium system?

Collegium system was created in 1990 by the two judgements of SC. Under this system the decisions related to the appointment of judges to higher judiciary and their transfers are taken by a collegium.

Members of the collegium:

CJI,

4 senior most judges of supreme court

3 members of concerned high court (in the matter related to high court) including chief justice of high court.

The interesting part: Supreme Court had earlier declared the NJAC as unconstitutional and invalid. The SC now is now saying that we will fill up the current vacancies via the earlier existing collegium system.

 

Vacancies in High court now stand at 40%

[4]. First batch of enclave residents from Bangladesh arrives in West Bengal

News: Former enclave dwellers from Bangladesh arrive in India as per the Indo-Bangladesh land boundary agreement

The first batch of people who have been living in erstwhile Indian enclaves in Bangladesh, who opted to come to India, arrived in West Bengal’s Cooch Behar district.

Those who arrived are the residents of the two enclaves in the Lalmohirhat district.

Where have they been kept?
At the Mekhliganj Enclave Settlement Camp

Facilities being provided to them,

  • Food
  • Medical care
  • Aadhaar cards: Counters have been put for biometric registration and opening bank accounts for them. Administration is ensuring that each and everyone of them is issued an Aadhar card.

 
Why have they come to India?

Under the Land boundary agreement between India and Bangladesh the Bangladeshi enclaves in India and Indian enclaves in Bangladesh were transferred on July 31, 2015.

An observation:

Not a single person from the erstwhile Bangladesh enclaves in India decided to go to Bangladesh. On the other hand, about 980 persons from Indian enclaves in Bangladesh have decided to move to India.

[5]. Pak beats India in curbing terror funding

News: Pakistan has beaten India in cracking down on entities and individuals involved in terrorist financing as per a report by Financial Action Task Force (FATF).

India is a full-member of the FATF, along with the U.S., France, Germany and the United Kingdom among others.

What is FATF?

The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The FATF is a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in the areas of money laundering, terrorist financing and other related threats.

Objectives:

The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

What did FATF do?

It conducted a fact-finding initiative to determine whether all jurisdictions in the global anti-money laundering and counter-terrorist financing network have implemented key measures to cut off terrorism-related financial flows, in accordance with the FATF recommendations. The report has been submitted to G20 leaders for their perusal.

What FATF’s report says?

While India took action against 37 entities and individuals till August this year, Pakistan booked 117 people, the report by the Financial Action Task Force (FATF) said. China took action against 29 entities, while Sri Lanka cracked down on 437 individuals..

Valid observation:

Vladmir Putin, Russian president has blamed some G20 member nations of supporting ISIS and funding it financially. If the accusations are true then will they act on such reports? I leave it to the good judgement of the reader.

You can find Putin’s revelations in the following article: http://ir-ia.com/news/putin-blames-some-g20-member-of-financing-isis/

More about FATF: http://www.fatf-gafi.org/about/


International


[1]. Life-saving medicines in short supply in blockade-hit Nepal

News: A crisis could erupt due to shortage of medicines created in the wake of political protests Nepal.

Facts: Nepal imports 60% medicines from India. The remaining locally made drugs also get most of the raw material and packaging from India. Most of the fuel comes from India.

The issue: Ethnic Madhesis are protesting against Nepal’s new constitution. They have staged vigorous political protests. The blockades at the main border crossing with India are not allowing the trucks carrying medicines to reach the interior of Nepal.

India’s role: India has cultural ties with the ethnic Madhesis and has thereby restricted the inflow of fuel and other goods to Nepal.

The impact: Doctors in Nepal have said that patients could start dying after two weeks, if the present situation continues.

Fuel rationing has led to buses and trucks cutting down services. People travel on rooftops and taxis charge four times the normal rate.

[2]. What’s next for Syria’s Assad?

News: Global outrage against ISIS has led to a renewed focus on ending the jihadists’ ability to operate from a war-torn base in Syria.

What has happened?

ISIS wants to capture power in Syria. Syria’s President is Assad who wants to retain power. Until now, only Russia and Iran were supporting Syrian government (Assad ) . The Western countries ( USA + all European powers ) were against Assad and were acting against him and against the Syrian army.

With Paris bombing, ISIS is now the common enemy of both Syria ( already being helped by Russia ) and France. For France it doesn’t make any sense to oppose Assad who is fighting against ISIS already . France is now clear that it will fight ISIS now and tells USA , UK that ISIS is the real enemy and not Assad (for now). But USA feels that Assad has to go. USA is in a fix because all throughout it had been hurting Syrian army which is fighting ISIS. Russia also claims that USA was helping ISIS fight Syria.

Assad and IS

Assad has lost much of its country to IS. Refugees are heading en-masse towards Europe. On the top of it, his brutal military response has made him the persona non grata (a diplomatic term meaning an unwelcome person) in most of the world. But the military response has largely been against rebels ( read ISIS )

Choosing between Assad and IS

Many world leaders are now voicing their opinions on the lines of choosing between lesser of the two evils. Seeing the latest Paris attacks Assad fits the bill as of now. Cutting a deal for him is being proposed.

Britain, Spain support this proposition while U.S and the allies don’t want that the benefit of dislodging IS from its territory should go in any way to Assad.

The way forward

An arrangement in which Assad is part of a transition government that has a role in the priority of defeating ISIS but then quietly makes way, is being touted as a temporary solution to this problem.

Russia and Iran have been the key patrons of Assad. So, it would be necessary for them to play a vital role if any such transition is to be made in the future.

Opinions & Editorials


[1]. Holding power to account

What is RTI?

Right To Information Act was passed in 2005 under which the citizens can request for relevant government information thus empowering the general public, promoting transparency and accountability in the working of the Government.

RTI completes 10 years

RTI Act has completed 10 years of its implementation. As per information commission’s reports there are at least 50lakh RTI applications filed in India every year. For the last decade at least 2% of India’s population has used RTI Law. Those are extraordinary numbers considering the fact that usage of RTI requires a pro-active approach. People have put RTI to a sustained use.

 Why RTI has been so popular in India?

  • A measure of hope: We as humans thrive on hope. We need hope and crave for it. The human desire for dignity, equality, public ethics, and the capacity to enforce these even to some extent needs an outlet. RTI, in many ways, offers that measure of hope.
  • Demanding answers: People see RTI as a tool through which they can demand answers from the government. Elections and re-elections have time and again dis-appointed them with the same charade of corrupt politics being repeated again and again. In such situation, people view RTI as a powerful weapon to elicit information from the elected regarding the promises they made vis-a-vis the delivery of such promises

 
Impact of the RTI

  • A culture of asking questions: The Act has begun to encourage a culture of asking questions. We are far from being an open society, but the RTI is opening our minds to what such a society might be.
  • A Deterrent: RTI has been successful in transforming itself into a deterrent for the officialdom. Officials now have the friendly ghost of the RTI implanted in their psyche

 

[2]. A way to judicial independence

 

Context: Striking down of the NJAC (National Judicial Accountability Commission) Act and the 99th Amendment Act as unconstitutional by the SC has re-ignited the debate on the process of appointment of judges to the higher judiciary.

Government wanted to eliminate the collegium system and replace it with NJAC as it thought collegium had no accountability, was non-participatory and non-transparent.

This matter has gained importance because judicial independence is critical to a democracy as it helps in the realization of the Rule of Law and protection of human rights.

Independence and appointment

Appointment procedures should ensure the security of personal independence of judges.

A transparent procedure can be evolved to prescribe the norms and standards expected of candidates.

They can be nominated by retired judges, senior advocates, bar councils or bar associations, etc., testifying to their possession of qualifications prescribed. The applications can be received and a system of shortlisting them based on comparative merit can be designed.

Technical committee: There can be a technical committee of retired judges to shortlist the applications and to respond to objections/grievances in the initial stage of selection. This part of the procedure should be open to Right to Information Act queries as well.

Need for a secretariat:

Collegium verification: The collegium will then sit to verify and decide the final selection of candidates who deserve to be appointed.

Personal interaction: Naturally, personal interaction through interviews may be necessary at this stage to prepare the final list.

Validity of the list: The list may be valid for a two-year period and the process can be repeated every two years.

Psychological testing: There are standardized psychological tests to measure the extent of integrity, independence, sense of equality and other values essential for adjudicative independence.

The whole process can thus be made transparent and fair and less prone to abuse. Naturally, the process is long, time-consuming, technical and professional, which sitting judges of the collegium cannot undertake by themselves. Hence the need for a permanent secretariat.

Full court representation

Judicial independence is an individual and collective responsibility. So, it is but logical to include the full court in the selection, appointment and transfer processes of judges. Collegium system can be extended thereby accommodating all judges on a rotational basis.

Would this be sufficient?

No because it takes five to 10 years for an advocate to transform himself/herself into becoming a competent judge. The duration can possibly be reduced through institutionalized education and training.

In addition, the time for an All India Judicial Service has come and the government should legislate for the purpose.

[3]. Planning for the next flood

Issue: Cyclonic storms on Tamil Nadu’s 1,076-km coastline are not unusual, and at least once in two years there is some disaster or the other. The common thread running through every such instance is that all claims of preparedness are invariably exposed as either hollow or woefully inadequate.

 What the government does?

Once the disaster has happened, government mobilizes the material and human resources successfully.

What happened in Chennai and Why?

The inundation in Chennai and its neighbouring districts exposed all the flaws in government’s urban planning, housing and real estate policy and water management.

  • The drainage system was either too weak or non-existent. Compounding the problem of urban waste clogging drains was widespread encroachments that have whittled down the carrying capacity of many water channels.
  • A big factor behind the flooding is the rampant construction of buildings on water bodies, wetlands and areas that were originally floodplains. Large tracts of land in the suburbs have seen a real estate boom.

Prevention of such disasters and what government should be doing?

Instead of post-disaster response government should also focus on creating a balance between the vested real estate interests and that of the environmental concerns because only then such disasters can be prevented. Some other steps that can be taken are,

  • Curbs on occupation of water bodies
  • Pre-monsoon desilting of drains and water channels.
  • Keeping water bodies free of construction and habitation

keeping water bodies free of construction and habitation

[4]. Perfect storm

Vagaries of weather: Chennai’s streets being inundated with water even as drought stalks much of the country. Tamil Nadu, Kerala, southern and coastal Karnataka, Rayalaseema and south coastal Andhra Pradesh receiving copious rainfall during the ongoing northeast monsoon season (October-December), while it is dry weather all the way from north Karnataka and Telangana upwards across virtually the rest of India. The dry spell has been continuing from the 2nd half of the south-west monsoon (June-September).

The impact:

  • Kharif and Rabi crops have been affected
  • Farmers’ woes: Last year also the monsoon had failed & coupled by the fact that Rabi crop also got destroyed due to hailstorms in March, this years’ failure will mean farmers would now have to suffer 4 continuous bad harvests.

 
How this agrarian crisis that has erupted due to abrupt weather and collapse of a decade-long global commodity boom can be dealt with?

  • Instituting a proper farm income insurance scheme, protecting against both crop loss and adverse price movements
  • The large sums spent on subsidies that only encourage inefficient resource use need to be redirected towards farm income support and public investments in irrigation, roads or R&D.

[5]. Is access to transport slowing participation of women in India’s workforce?

News: Women’s participation in the economy is not on par with that of men. Can distance and the difficulty to commute be among them?

Other workers’: All workers except cultivators, agricultural labourers and household workers are treated as other workers.

Gender disparity vis-a-vis distance from workplace:

  • Share of women is relatively higher among those who don’t have to travel and declines as the distance to the place of work increases
  • State-wise differences: The gender gap is higher in rural areas and there are significant state-wise differences. Bihar and Uttar Pradesh are among those with the highest gender gap in employment on account of distance.

 
Explaining the disparity

Household work and responsibilities: The distance to the place of work adversely affects women’s chances of getting employment. Even if she can arrange for paying transport costs, the extra time involved may become a deterrent since women have to take care of most of the household work.

Social customs: Social customs can also play a role. Unlike the women-dominated garment industry in southern states, there are very few women-dominated industries in the north. This might be because even migrant women in north India find it difficult to break social taboos and travel for work.

Access to transport: Better access to modes of transport might be preventing women to travel greater distances as well. More women workers travel on foot than men workers in both rural and urban India

The way forward

A gender sensitive transport policy needs to be envisioned to make sure that women have proper access to not only transport but a safer transport system.

 


Economic Digest


[1]. Making the transition to a cashless economy

Talking point: Indian banks are making it difficult for digital wallets issued by private sector companies to be used on the respective bank websites.

This attitude of banks needs to be checked if India intends to move towards a cashless economy.

Why a cashless economy?

A reduction in the use of cash has several benefits,

  • Reduction in Black money: It will attack the problem of black money by leaving behind a transaction trail.
  • Efficient fund transfers: There will be greater efficiency in welfare programmes as money is wired directly into the accounts of recipients.
  • Reduced transaction costs: There will be efficiency gains as transaction costs across the economy should also come down.

 
Situation in India: India is currently a heavily cash dominated market with a high number of currency notes in circulation. India had 76.47 billion currency notes in circulation in 2012-13 compared with 34.5 billion in the US.

Reason:

  • Low Financial connectivity: One big reason many Indians use cash intensively is that half of them do not have bank accounts.

 
What can be done?

  • Robust payment mechanism: A robust payments mechanism to settle digital transactions is also needed, though the National Electronic Funds Transfer and Real Time Gross Settlement services have been a good start.
  • Shedding the conservatism: The Indian central bank will also have to shed some of its conservatism, part of which is because it has often seen itself as the protector of banking interests rather than overall financial development.
  • Equal access to network: The payments system in any country should be thought of as a network. It will grow rapidly only when network effect kicks in i.e. more people begin to use digital cash in response to more people using digital cash. The result is an exponential growth trajectory. But this can happen only if all users have equal access to the network.

[2]. Getting the investment environment right

Context: It seems the government is focussing specifically and separately on the foreign investors to attract foreign capital while neglecting the general investment environment.

Instead of focussing on liberalization of FDI norms to send a signal to investors government should focus on improving general investment environment. Foreign investors need not be wooed separately.

Following steps can be taken,

  • Retrospective taxation can be removed to eliminate any uncertainty
  • Re-examination of the issues caused by the new legislation on black money would also have been useful pro-investment signals.
  • J. Nayak committee: The third area could have been about accepting the full gamut of recommendations of the P.J. Nayak Committee on banking reforms and announcing a timeframe for their implementation.
  • Fast paced economic growth: if the country can grow its economy sustainably briskly, investors would come automatically

 
Reforms: Reforms in governance, education, healthcare and agriculture should be given equal importance as well

[3]. GIAN to Help Improve Rankings of Indian Institutes

Context: Our higher educational institutions like IITs have consistently failed to register themselves amongst the top institutes of the world. GIAN initiative might provide a platform to our institutions to make that possible.

What is GIAN?

GIAN is Global Initiative of Academic Networks (GIAN) . The GIAN initiative will enable international faculty members to engage with the premier engineering schools and other institutes of higher learning. This is an attempt to improve the academic and research network of the institutes in the country and improvement in ranking would be one of the by-products.

GIAN will also help in improving ranking of India’s premier institutes as Indian institutes have lagged behind overseas schools with respect to the numbers of international faculty and students which is among the six criteria that determine overall rankings

 Aim: The GIAN initiative is aimed at tapping the talent pool of scientists and entrepreneurs internationally, to encourage their engagement with the institutes of higher education in India so as to augment the country’s existing academic resources, accelerate the pace of quality reform, and elevate India’s scientific and technological capacity to global excellence.

Conclusion: GIAN should not just be seen as a tool to improve rankings. It should be seen as the first step towards improving the level of research and global collaboration in the IITs. The government and the IITs must do more to improve the quantity and quality of research. Perhaps it’s time to implement the Kakodkar Committee’s road map to achieve this end.

[4]. RBI paves the way for M&As in the banking

Context: Earlier RBI had set a cap of 5% on the ownership and 10% cap on the voting rights so that no single holder gets a dominant position in running a bank. Now, the Reserve Bank of India has thrown open the doors for mergers and acquisitions in the banking industry by signalling that it is open to persons owning more than 10% stake in a bank.

Central bank has also placed some conditions like,

  •  It should be in the public interest’
  • It should be done in the desirability of diversified ownership

 

  • In case of an single applicant: The applicant’s integrity, reputation and track record in financial matters and compliance with tax laws, will be the parameters to judge that he aligns with the `fit and proper criteria’ as mandated by RBI
  • In case of a corporate entity: Where the body involved is a corporate then its track record or reputation for operating as per standards of good governance, its financial strength and integrity along-with the assessment of individuals and other entities associated with it shall also be checked

 

 

By: ForumIAS Editorial Team

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