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9 PM Daily NEWS Brief

9 PM Daily Current Affairs Brief – 10 February 2017


Archives : 9 PM Briefs



Front Page / NATIONAL

[1]. IEDs kill more commoners than VIPs: NSG

Editorial/OPINION

[1]. Prudence amid uncertainty

[2]. TPP is dead, but its legacy lives on

ECONOMY

[1]. Centre to raise EPFO’s equity investments to 15%

[2]. SEBI to form panel to facilitate crowdfunding

[3]. Centre to send experts to expedite talks at WTO

Indian Express

[1]. Unprepared for Paris

Live Mint

[1]. Charting the near-term policy road map


Front Page / NATIONAL


[1]. IEDs kill more commoners than VIPs: NSG

 

The Hindu

 

Context

Data show 55% of these devices are set off in public places; in 2016, only 7% of the attacks were targeted at VIPs

 

Who are the primary targets of terrorists? VIPs? Security forces? Or ordinary people?

A detailed data analysis carried out by the National Security Guard, a counter-terror and

counter-hijack force, show it is the unarmed civilians who often fall victim to IED (improvised explosive device) blasts set off by terrorists across India. The VIPs are the least targeted.

  • Between 2012 and 2016, anywhere between 49% and 72% of the attacks annually have been targeted at ordinary civilians. In contrast, attacks targeting VIPs were in the range of 1% to 7%

 

Target distribution

In 2016, only 7% of the IED attacks were targeted at the VIPs. In comparison, 55% of all IED explosions across India in 2016 were targeted at public places. The remaining 37% were against security forces

 

Left-wing Extremism: A major contributor

The States affected by Left-wing extremism contributed the most number of IED blasts at 159, followed by the north-eastern States at 59 and Jammu and Kashmir at 31.

 

Justification of VIP security

The Centre justifies VIP security in the name of “security threats”, which are assessments made primarily through the Intelligence Bureau

 


Editorial/OPINION


[1]. Prudence amid uncertainty

 

The Hindu

 

Context

The central bank’s Monetary Policy Committee has opted to sit pat on rates and choose to give itself time to “assess how the transitory effects of demonetisation on inflation and the output gap play out”

 

Issue: Policy change by RBI’s Monetary Policy Committee (MPC) from “accommodative” to “neutral”

 

What has happened?

In the recent bimonthly policy review, MPC decided to keep the policy rates unchanged i.e. a change of stance from accommodative (rate cut) to neutral (no change)

 

What do the RBI’s decision reflect?

A cautionary stance indicates that the economy has not only suffered short-run disruptions but the long-term effect may be far more enduring and hard to predict than anticipated by the government

 

Downward revision of growth

The policy review has also projected the second successive downward revision in economic growth as measured by the Gross Value Added for the current year ending in March, with the pace of increase in GVA now forecast at 6.9%, from 7.1% in December and 7.6% prior to the November demonetisation

 

[2]. TPP is dead, but its legacy lives on

 

The Hindu

 

Context
The Trans-Pacific Partnership was dead long before Donald Trump signed his executive order. But its damaging aspects, like stringent IP provisions, have just migrated to other agreements.

 

Issue: TPP’s damaging provisions wrt access to medicines

 

What is TPP?

Twelve countries that border the Pacific Ocean signed up to the TPP in February 2016, representing roughly 40% of the world’s economic output.

  • Aim: The pact aimed to deepen economic ties between these nations, slashing tariffs and fostering trade to boost growth. Members had also hoped to foster a closer relationship on economic policies and regulation
  • The agreement was designed so that it could eventually create a new single market, something like that of the EU
  • But all 12 nations needed to ratify it, before it could come into effect
  • Member states: Japan – the only country to have already ratified the pact – Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.
  • Abandoning TPP was a key element of the election campaign of the new US president elect Donald Trump & as soon as he entered office, US pulled out of TPP

 

How big a deal was TPP?

Pretty big. The 12 countries involved have a collective population of about 800 million – almost double that of the European Union’s single market. The 12-nation would-be bloc is already responsible for 40% of world trade.

  • The deal was seen as a remarkable achievement given the very different approaches and standards within the member countries, including environmental protection, workers’ rights and regulatory coherence – not to mention the special protections that some countries have for certain industries

 

Without the US does TPP definitely fail?

To take effect, the deal would have had to be ratified by February 2018 by at least six countries that account for 85% of the group’s economic output. The US would need to be on board to meet that last condition.

  • Some countries, including New Zealand, have suggested some sort of alternative deal may be possible without the US.
  • But Japan’s Prime Minister Shinzo Abe has said a TPP without the US – and its market of 250 million consumers – would be “meaningless”

 

Is this the same thing as TTIP?

No. The Transatlantic Trade and Investment Partnership, now generally known as TTIP, is a deal to cut tariffs and regulatory barriers to trade between the US and member states of the EU. Negotiations here are at an earlier stage. But given President Trump’s hostility towards trade deals in general it’s unlikely to be plain sailing for that one either.

 

 

TPP’s damaging provisions: IPR

The agreement’s damaging ambitions were most evident in the proposed provisions concerning intellectual property

  • Explicit provision for Biologics: The TPP provided explicit protections for ‘biologics’ (drugs manufactured in a living organism, rather than through chemical synthesis), the first trade agreement to do so
  • Extended data exclusivity: The agreement mandated the protection of clinical test data submitted for marketing approvals, with pharmaceutical data obtaining five to eight years of protection. This provision, called ‘data exclusivity’ or ‘marketing exclusivity’, prevents a generic company from relying on the clinical test results of the originator in order to prove the efficacy of its drug
    • Argument given:It was justified using the argument that clinical trials are the most expensive part of drug development and hence there is a necessity to provide drug developers the ability to limit access to that data so as to incentivise research
  • Weaker patent standards: Such standards would allow a greater number of secondary or ever-greening patents on pharmaceuticals
  • Harsher intellectual property enforcement

 

Note: Many leading public health organisations termed the TPP the worst trade agreement on access to medicines

 

Why Data Exclusivity is hurtful?

Though, on the surface, the provision looks reasonable, data exclusivity is a deeply uncompetitive policy that serves to undermine generic competition.

  • Stronger restriction than patent protection: In fact, it is possibly a stronger restriction than patent protection itself. Patent protection, unlike data exclusivity, can be challenged if the product is not sufficiently novel (new), or violates existing national standards for obtaining patent protection, thereby clearing the way for generic competition. (This is, in fact, what happened to Novartis in India over Glivec, an anti-cancer drug)
  • Unfeasible clinical trials: For the generic version of medicines to be able to come to the market, it is essential that the generic version be able to use the proof of efficacy and safety that is generated by the clinical trial. The restriction on the use of test data would therefore require a generic company to undertake clinical trials by itself, which is both unfeasible (in terms of expense) and unethical (since it would expose patients to trial protocols, during which some patients would have to receive a placebo when a proven cure is available)
    • No generics for the period of data exclusivity:As a result, in a country like India, even in a situation where there is no patent barrier, data exclusivity would allow for a period of five to eight years during which there is no plausible way that market access could be allowed for generics, thereby reducing access to cheaper medicines for the population

 

 

 

The Legacy of TPP

Author states that although US has pulled out of TPP, but the lines along which it was being negotiated reflects poorly on the US trade policy vis-à-vis public health and Intellectual property (IP). TPP can have further damaging impacts,

  • Impact on other agreements: The potentially damaging provisions of TPP can migrate to other global agreements like RCEP. Countries involved in RCEP are now trying to conclude the talks as soon as possible. RCEP includes several of IP provisions included in TPP. This should be of great concern for access to medicines globally, as countries involved in the RCEP negotiations include key generic drug-producing countries, including India
  • Pressure on India’s patent regime likely to continue: U.S. withdrawal from the TPP may change the U.S.’s approach to trade and intellectual property more in form than in substance, by switching from trade agreements that include several countries to bilateral free trade agreements (FTAs). In this process, the U.S. is more than likely to continue its vigorous campaign against perceived “violators” of U.S. intellectual property. The pressure exerted by the Obama administration on the public health safeguards in Indian patent law over the past eight years are likely to continue, if not worsen.
  • Subversive US Trade Policy to continue: Despite the public health impact of the TPP’s provisions, it is unlikely that these concerns will guide U.S. trade or foreign policy. President Trump’s remarks in early January emphasized his desire to end “global freeloading” stating that “foreign price controls reduce the resources of American drug companies to finance drug and R&D innovation… our trade policy will prioritize that foreign countries pay their fair share for U.S.-manufactured drugs, so our drug companies have greater financial resources to accelerate development of new cures.”

 

Conclusion

Author concludes by stating that in the light of ever increasing efforts of the developed world to limit the access to medicines, India needs a far greater government commitment to the use of the public health safeguards in the indigenous patent law to survive this era and ensure the health of the country’s citizens


ECONOMY


[1]. Centre to raise EPFO’s equity investments to 15%

The Hindu

 

Context

The Employees’ Provident Fund Organisation (EPFO) will increase its equity investments to 15% of its incremental corpus next fiscal year from 10% at present

 

What has happened?

The Employees’ Provident Fund Organisation (EPFO) will increase its equity investments to 15% of its incremental corpus next fiscal year from 10% at present. It had earlier increased the investments in exchange traded funds (ETF) from 5% to 10% of its corpus

  • Although the EPFO is permitted to invest up to 15% of its incremental corpus in equity and related instruments, it began by investing 5% in ETFs in August 2015 and increased it further to 10% last year.

 

[2]. SEBI to form panel to facilitate crowdfunding

 

The Hindu

 

Context

Constitution of an advisory committee by SEBI on financial technology or fintech-related issues

 

What has happened?

The Securities Exchange Board of India (SEBI) is forming an advisory committee on financial technology or fintech-related issues, which would look at safeguards that can be put in place to facilitate crowdfunding of ‘genuine’ ventures and mobilise more household savings into the financial markets

 

Membership of the committee

The committee shall have representatives and experts from different sections of fintech industry

 

SEBI Chairman’s views

  • Enabling access in small towns: To harness technology to enable persons in small towns with small amounts to invest in a retirement fund, we are going to form an advisory committee on fintech that will be led by some very strong business leaders from the industry
  • “If you want to raise money in the bond market, one has to file a draft red herring prospectus, make lots of disclosures, get a credit rating and appoint a debenture trustee,” he said, adding that even England and New Zealand that have allowed crowdfunding of ventures have imposed ‘restrictions.’

 

Holding discussions

SEBI is holding fresh discussions with representatives of start-ups and venture capital funds to assess why a single start-up hasn’t been listed yet on the special platform created by the regulator for mature ventures looking to go public

 

[3]. Centre to send experts to expedite talks at WTO

 

The Hindu

 

Context

Article mentions the latest development vis-à-vis India’s efforts to expedite talks at WTO

 

What has happened?

The Centre will send an expert team to the World Trade Organisation headquarters in Geneva next month to ensure that negotiations on food security issues and the proposed global services pact are expedited

 

Backdrop

The latest development follows WTO DG Robert Azevedo’s two-day visit to India

 

Note: India’s concerns with respect to introduction of new issues into the formal agenda of WTO-level negotiations has already been discussed in previous briefs.


Indian Express


[1]. Unprepared for Paris

 

Indian Express

 

Context

Failure of thermal power plants to meet emission standards does not speak well of India’s climate commitments

 

Backdrop

In the run-up to the Paris climate change meet in 2015, the government stressed on reducing the share of this fossil fuel in the country’s energy mix and using it in a climate friendly manner

  • The latter meant reducing the emissions from thermal power stations. Over 140 such stations were assigned targets for improving energy — and thus, emissions — efficiency. That the government now finds these standards too stringent could raise questions about India’s commitment to its Paris targets

 

Point to be noted: Coal, a major culprit for climate change, powers more than 80 per cent of the electricity consumed in the country

 

Why reducing emissions from thermal plants is critical for India?

  • Although India’s energy targets reflected in INDCs (Intended Nationally Determined Commitments) submitted under Paris accord stress on renewable sector, the country will still require thermal power plants to generate 60 per cent of its energy requirements in 2030. That makes reducing emissions from these coal-fired plants crucial to the country’s Paris commitments. That makes reducing emissions from these coal-fired plants crucial to the country’s Paris commitments
  • India shown in poor light on a global scale: There are still 3 years before India has to comply with its Paris climate targets. The failure of thermal power plants to comply with the emission norms does not show the country’s preparedness in good light. Most thermal power plants in the country work at efficiencies below 33 per cent.

 

Roadblocks

Author states that the following factors are presenting a roadblock in the effort to reduce climate footprint of thermal power plants in India,

  • Lack of coordination amongst government agencies: n June 2015, when new emission norms for thermal plants were being discussed, the National Thermal Power Corporation reasoned that these norms were too strict. The government set aside the objections of the biggest player in the sector when it submitted its INDC document to the United Nations Framework Convention of Climate Change. The environment ministry is also not without blame. It gave clearances to new plants without specifying the new standards, well after it had the norms in place

Live Mint


[1]. Charting the near-term policy road map

 

Live Mint

 

Context

Since the macro fundamentals are a lot more stable than they were a few years ago, the government can now concentrate on structural reforms

 

Yet another article which relates to the recent decision of Monetary Policy Committee to not change the policy rates

 

It gives an idea about impending challenges

 

Give it a go-through once


 

Categories
9 PM Daily NEWS Brief

9 PM Daily Brief – 15th December 2016


  • Front Page / NATIONAL
  1. RS passes Disabilities Bill with more benefits
  • INTERNATIONAL
  1. NSG waiver has attendant risks, govt. tells Lok Sabha
  • Editorial/OPINION
  1. Demonetisation’s deflationary shock
  2. Rights for the rightful owners
  • ECONOMY
  1. Cabinet clears Bill to give autonomy to 12 major ports
  • Indian Express
  1. 1971 in 2016: India’s relations with Bangladesh
  • Live Mint
  1. The challenges to free movement of labour
  2. Examining the funding deficit of the judiciary
  3. Demonetisation push to labour reforms

Click here to Download 9 PM Daily Editorial PDF (15th Dec. 2016)

Front Page / NATIONAL


RS passes Disabilities Bill with more benefits


 The Hindu

Context

The Rajya Sabha has passed the Disabilities Bill with the list of ‘disabilities’ expanded from seven to 21 and the quantum of reservation increased for people suffering from disabilities from three per cent to four per cent in government jobs.

Disability: A state list subject

Can Parliament legislate on a state subject?

Parliament’s jurisdiction to enact this Bill flows from Article 253 of the Constitution which allows Parliament to enact legislation to give effect to international agreements. Parliament has the power to enact this Bill despite the fact that relief of the disabled comes under Entry no. 9 of the State List.

New benefits included

  • List of disabilities expanded: The list now includes 21 disabilities than previous 7. It recognises that persons with psychosocial and intellectual disabilities like autism and Down’s Syndrome also have a right to education and employment. The types of disabilities now include mental illness, autism spectrum disorder, cerebral palsy, muscular dystrophy, chronic neurological conditions.
  • Quantum of reservation increased: The quantum of reservation increased for people suffering from disabilities from three per cent to four per cent in government jobs
  • Higher education quota: In higher education institutions, the quota has been increased from three per cent to five percent
  • In line with UN convention: The Bill also gives effect to the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD) and related matters.
    • In 2007, India became a signatory to the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD). The UNCRPD requires signatory states to make appropriate changes in law and policy to give effect to rights of disabled persons
  • Imprisonment provisions: It provides for imprisonment ranging from six months to two years, along with a fine ranging from Rs. 10,000 to Rs. 5 lakh, for discriminating against differently abled persons.

Definition of disability

In the Bill, disability has been defined based on an evolving and dynamic concept.

Strengthening of regulatory offices

It also strengthens the office of chief commissioner and state commissioners for Persons with Disabilities, which will act as regulatory bodies.

Read more: Disabilities Bill (The Hindu Article)


INTERNATIONAL


NSG waiver has attendant risks, govt. tells Lok Sabha


 The Hindu

Context

India wants full membership of the Nuclear Suppliers Group (NSG) as the current arrangement with the elite club carries “attendant risks”, the government told the Lok Sabha

Backdrop

The NSG took a consensus decision in September 2008 to permit its members to engage in civil nuclear cooperation with India despite India not being a party to the Nuclear Non-Proliferation Treaty (NPT)

  • India has been trying to upgrade the “waiver” into a full member status and the government accordingly made two attempts this year to become member of the elite organisation.

NSG waiver to India: Element of Unpredictability

India is currently engaged in nuclear trade with international partners based on a waiver from the NSG in 2008. The waiver is in the form of a concession without according India the status of a full member and therefore has an element of unpredictability and attendant risks in the long run for India’s long-term nuclear power programme

Benefits of full membership of NSG

Full membership of the NSG would,

  • Enable India to have enhanced and predictable global access to nuclear technology, fuel, materials and components required for our expanding civil nuclear programme
  • Would advance energy security, contribute to India’s growth strategy based on clean energy to combat climate change, and strengthen global nuclear non-proliferation

Present situation

China is against according India a full membership status. As of now, NSG will take up India’s membership issue at its next plenary session in June 2017.

Read More: NSG, NPT


Editorial/OPINION


Demonetisation’s deflationary shock


The Hindu

Context

That the Centre’s decision to withdraw high-denomination banknotes was going to impact economic activity in the short term was never in doubt.

Effects of Demonetization

  • Deflationary effect: Retail inflation has reduced due to a reduction in demand of variety of goods and services
  • Major contributor: The major contributor to the slowdown in price gains was the food and beverages group, where inflation eased to 2.56 per cent largely due to a slowdown in the prices of vegetables, a highly perishable commodity.

Give the article a go through once.

Note: Demonetization has been covered many times in previous briefs. Hence, we are now including only new points wrt this topic in 9pm briefs.


Rights for the rightful owners


 The Hindu

Context

On the tenth anniversary of the historic passage of the Forest Rights Act, tribal resistance to defend their rights is growing even as government after government tries to dilute its provisions.

Issue: 10 years of Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act [FRA for short]

Let us learn a little about this Act

Forest Rights Act

The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (FRA for short), recognizes the historical injustice meted out to scheduled tribes and other traditional forest dwellers. It seeks to secure traditional rights over forest land and community forest resources, and establish democratic community-based forest governance.

FRA recognizes 14 pre-existing rights of forest dwellers on all categories of forestland, including Protected Areas (PAs). The major rights are:

  • Individual Forest Rights (IFRs) and Community Rights (CRs) of use and access to forest land and resources;
  • Community Forest Resource (CFR) Rights to use, manage and govern forests within the traditional boundaries of villages
  • Empowerment of right-holders, and the Gram Sabha, for the conservation and protection of forests, wildlife and biodiversity, and their natural and cultural heritage (Section 5, FRA)

Rights under the Act

  • Title rights – ownership to land that is being farmed by tribals or forest dwellers subject to a maximum of 4 hectares; ownership is only for land that is actually being cultivated by the concerned family, meaning that no new lands are granted.
  • Use rights –to minor forest produce (also including ownership), to grazing areas, to pastoralist routes, etc.
  • Relief and development rights –to rehabilitation in case of illegal eviction or forced displacement; and to basic amenities, subject to restrictions for forest protection.
  • Forest management rights –to protect forests and wildlife.

Eligibility

Eligibility to get rights under the Act is confined to those who “primarily reside in forests” and who depend on forests and forest land for a livelihood. Further, either the claimant must be a member of the Scheduled Tribes scheduled in that area or must have been residing in the forest for 75 years.

Author states that despite of many inadequacies, FRA is a potent tool but attempts to dilute it are being made by the present government.

Attempts at dilution

  • Legislation to dilute FRA: Government has brought a series of legislation that undermine the rights and protections given to tribals in the FRA, including the condition of “free informed consent” from gram sabhas for any government plans to remove tribals from the forests and for the resettlement or rehabilitation package

Amendments: The amendments to the Mines and Minerals (Development and Regulation) Act, the Compensatory Afforestation Fund Act and a host of amendments to the Rules to the FRA which undermine the FRA have been pushed by the government

  • Public hearing requirement: The requirement of public hearings and gram sabha consent has been done away with for mid-sized coal mines
  • In Telangana, in total violation of the FRA, the government has illegalised traditional methods of forest land cultivation
  • The Jharkhand government has brought amendments to the Chotanagpur and also the Santhal Pargana Tenancy Acts which eliminate rights of gram sabhas and permit tribal land to be taken over by corporates, real estate players, private educational and medical institutions in the name of development, without tribal consent
  • In Maharashtra the government has issued a notification of “Village Rules” which gives all rights of forest management to government-promoted committees as opposed to the gram sabha
  • Policy-based dilution: Author points out instances wherein projects of private sector on forest land have been cleared in the name of ease of doing business. In many of such projects the displaced families have not even received pattas (Land ownership documents) as directed by FRA.
    • Polavaram project: In the multipurpose Polavaram project in Andhra Pradesh alone, now given a national status by the Central government, 2 lakh hectares of forest land will be submerged affecting around 85,000 families, more than half tribals, including 100 habitations of particularly vulnerable tribal communities
  • Deliberate rejection of claims: Author states that there is a deliberate rejection of tribal claims to lands or community’s claim to Community Forest Resources. Neither individual pattas nor pattas for community forest resources are being given. According to one analysis, between May 2015 and April 2016, eight out of every 10 claims were rejected
    • Sharp contrast: Although 98 per cent of the approximately 1.9 lakh tribal claims had been approved by the gram sabhas, the bureaucrats in the sub-divisional committee and above brought the acceptance down to just 38 per cent. This is in sharp contrast to a Left-led State such as Tripura, where 98 per cent of tribal claims have been recorded and titles given.

Role of the judiciary

Author states that the same judiciary which has passed landmark judgements like,

  • Samata judgement
  • Niyamgiri judgement

, has also clubbed together a number of hostile petitions to the FRA and is giving them a sympathetic hearing

Viewing tribal struggle as law & order problem

Till 1985, the department of “Tribal Affairs” was under the Home Ministry. Tribal rights and struggles for justice were viewed as a “law and order issue”. Under the present dispensation this retrograde approach seems to have been resurrected

Conclusion

Author concludes by stating that on 10th anniversary of FRA, tribal resistance is growing all over the country to defend their rights under FRA and other related issues.

Read More: FRA, Niyamgiri case, Samata judgement, Ministry of tribal Affairs


ECONOMY


Cabinet clears Bill to give autonomy to 12 major ports


 The Hindu

Context

The Union Cabinet has approved the draft MajorPort Authorities Bill, 2016 to replace the existing Major Port Trusts Act, 1963 in a bid to empower 12 major ports to perform with greater efficiency on account of full autonomy in decision-making

Provisions of the Bill

  • All PPP operators will be free to fix tariffs based on market conditions
  • Powers to fix tariff: The role of Tariff Authority for Major Ports has been redefined. Port Authority has now been given powers to fix tariff which will act as a reference tariff for purposes of bidding for PPP projects
  • Reducing the size of the board: The Bill proposes to reduce the size of the board of the Port

Authority from 17-19 to 11 members. As per ministry, a compact board with professional independent members will strengthen decision-making and strategic planning

  • Members of the board: The Board will include representatives of respective state governments, Railways Ministry, Defence Ministry and Department of Revenue along with a member representing employees of the Major Ports Authority
  • The Board of the Port Authority has been allowed to fix the scale of rates for other port services and assets including land
  • Setting up an independent review board: An independent review Board has been proposed to carry out the “residual function of the erstwhile TAMP (Tariff Authority for Major Ports) for major ports, to look into disputes between ports and PPP concessionaires, to review stressed PPP projects and suggest measures” to revive such projects.
    • It has been proposed to give the Board full powers to enter into contract, over planning and development, fixing of tariff except in national interest, security and emergency arising out of inaction and default.
    • Present situation: The present law requires the Centre’s approval in 22 such cases.

Indian Express


1971 in 2016: India’s relations with Bangladesh


 Indian Express

Context

Article offers an insight into India’s relations with Bangladesh over the years.

Occasion: The occasion is Vijay Diwas where Bangladesh Home Minister accompanied by a delegation of more than 70 muktijoddhas and their families will participate in ensuing celebrations.

What is Vijay diwas?

Vijay Diwas is commemorated every 16 December in India as it marks its military victory over Pakistan in 1971 during the Indo-Pakistani War of 1971, who were alliance of Bangladesh Mukti Bahini. The end of the war also resulted in the unilateral and unconditional surrender of the Pakistan Army and subsequent secession of East Pakistan into Bangladesh

Indo-Bangladesh engagement

  • Settling the LBA: The initial version of LBA was signed in 1974. After 11 years the revised version was signed in June this year thereby settling a long pending dispute between two countries.
  • Unresolved water issues: Author points out that the water issues though remain unsettled but they are not as much of a sticking point as in the past.
  • Progress on economic front: There have been encouraging developments on the economic front. Bilateral trade has risen to more than $7 billion from $2.5 billion in this period
  • Geopolitical collaboration:  Bangladesh features prominently in India’s Act East Policy and both countries are willing to look beyond the SAARC by being part of groupings such as BCIM (Bangladesh-China-India-Myanmar) and BIMSTEC (the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) that extend South Asia’s connectivity with Southeast Asia and China.

Chinese loan to Bangladesh

In October, Chinese President Xi Jinping visited Dhaka and extended loans worth $24 billion to Bangladesh, more than 10 times what India gives Bangladesh

Conclusion

India’s relations with Bangladesh have gone well, but much more needs to be done.

Read More: Mukti Bahini


Live Mint


The challenges to free movement of labour


Live Mint

Context

As populism reigns in Western economies, India must push back against labour protectionism.

Issue: Labor protectionism

Anti-immigrant sentiment

Global events like BREXIT & election of US president Donald Trump have given credence to the theory that there is a global sentiment against globalization and hence immigration of labor, at least in the countries to which the above two events refer to.

So, in the first few paragraphs author has presented the reader with a scenario wherein we could see a prospective tightening of immigration policies in the near future.

Future Uncertainty after Trump’s election

Uncertainty about the future Trump administration’s H-1B visa policy has made Indian IT companies wary

  • The US government increased visa fees for the L1 and H-1B categories last year, which hurt Indian IT professionals.

UK: Tightening immigration norms

Over in the UK, meanwhile, Prime Minister Theresa May has vowed to bring down net migration figures and the easiest way to do this is, of course, to go after international students.

  • As home secretary back in 2012, May had scrapped the UK’s policy of allowing foreign students to work in the country for up to two years after graduation. This seems to have had an adverse impact on the number of Indian students enrolling in UK universities—from 68,238 in 2010, this figure has now fallen to 11,864 in 2016.

Economic Empiricism: What!!!

Economic empiricism refers to principle in economics wherein economists use data to test theories and to determine what is causing things to happen in the world. Author states that this principle seems to have been thrown out the window

  • Actual contribution of immigrants to Britain’s economy: Christian Dustmann of University College London and TommasoFrattini of the University of Milan, for instance, have shown that contrary to the popular perception of immigrants being a drain on public resources, they have made a positive contribution of more than £4 billion to Britain between 1995 and 2011

Concessions to India by UK

In the light of tightening of immigration norms, author states that pressure on Indian government would increase.

  • During recent visit by British PM Theresa May to New Delhi, she did not move from its position but agreed to make concessions for Indian businesspersons visiting the UK.
  • Registered Traveler Scheme: On 13 December, the parliamentary under-secretary of state at the foreign and Commonwealth office with special responsibility for the Asia-Pacific region said that May would like India to be the first country to be offered the “Registered Traveler Scheme” which allows business travellers expedited clearance at the UK border.

Future course of action

In the wake of above situation, what should New Delhi’s stand be?

  • A step in the right direction: India has made a good start at the World Trade Organization (WTO), arguing that the US has violated its obligations under the General Agreement on Trade in Services (GATS) and the GATS Annex on Movement of Natural Persons Supplying Services.
    • This is the first time that a WTO member has challenged the immigration laws of another member as a GATS violation, and if the matter moves to the formal dispute settlement panel phase—it is currently in the first consultation phase —the trade body may recommend that the US amend its policies. The recommendation won’t be binding, but if the US doesn’t comply, it may be subject to WTO-authorized trade retaliation
  • Easing visa policies and norms: Author states that existing Indian regulations not only make it cumbersome for foreign firms to set up shop in the country—as is evident from India’s poor performance in the ease of doing business rankings—but make employment a difficult prospect for skilled foreign nationals as well.
    • Education Sector: Author points out that this is an opportunity for Indian government to fill in the large number of vacancies that lie pending in various universities & colleges across country
    • Defence manufacturing: India’s defence manufacturing sector is lagging behind but with a renewed focus of the present government on improving the current situation, foreign workers can play an important role in developing a new ecosystem by bringing in technical know-how and best practices from around the world.

Examining the funding deficit of the judiciary


Live Mint

Context

More judges, more courts, more computers alone may not do much to improve the efficiency of courts or access to justice.

Issue: Budgetary allocation to judiciary

What has happened?

Few days back CJI made a statement about how the judiciary is not receiving enough funds once again brings to the fore the friction between the judiciary and the government.

Demand is not new

Author states that the demand for more resources to the judiciary is not new

  • Law Commission’s observation: Back in the 1980s, the 127th Law Commission had lamented the poor quality of infrastructure with which the courts have to make do in their functioning. And that administration of justice is not regarded as part of developmental activity

Current situation

India currently spends around 0.01 per cent of GDP in judiciary

What is a sovereign function?

A function which cannot be performed by private parties. Only state performs it.

Comparison with other sovereign functions

Sovereign Function Allocation
National Defence 2.26 % of GDP
Health 4.7% of GDP (in 2014)

The judiciary is funded mostly by the states—who historically haven’t had too much to spend at their discretion given the Centrally-sponsored schemes of the Union government

State Allocation
Maharashtra 2.8%
Gujarat 0.6%

 

Report of the Task Force on Judicial Impact Assessment

Author states that it was against this background that Report of the Task Force on Judicial Impact Assessment had recommended,

  • Creation of a judicial impact office in Delhi and state capitals to estimate the extra case load and extra expenditure on the courts to be incurred on account of Central and state legislation, respectively
  • Improving data gathering techniques

Unspent funds

Out of the special grant of Rs5000 crore by the 13th Finance Commission for improving judicial infrastructure and services, almost 80% remained unspent

  • Department of Justice after detailed consultations with states submitted its proposal of Rs 9000 crore to 14th Finance commission, which was endorsed by the commission. Consequently, 14th FC report asks states to utilize additional funds provided to them through tax devolution to meet requirements of the courts. 

How much is judiciary costing to India?

Conservative estimates by DAKSH (a Bengaluru-based civil society organization working on solving pendency in courts) are that about 0.5% of the GDP is incurred by litigants only on attending to court hearings, excluding legal fees. It could be as much as 1.5% to 2%.

Author puts forth a question,

Will more budgetary allocations enable the judiciary to achieve its purpose of administering timely justice to all? 

Author doesn’t thinks so as he cites the 2004 paper by Arnab K. Hazra and Maja B. Micevska which shows that the large number of judges per capita is negatively related to congestion rates (pending cases).

You can find the paper here

 Way forward

Author states that efficiency of courts can only be improved by re-engineering, re-imagining court processes, widespread use of technology and reforms in substantive law.

  • A beginning can be made by improving the budgetary process

Demonetisation push to labour reforms


Live Mint

Context

Article presents a critical evaluation of the factors that have contributed to keeping approximately 83% of India’s labour force informal, despite 25 years of modest growth in a seemingly liberalized economy

Size of informal economy

The most authentic estimates of the size of informal labour market in India are from the National Sample Survey Office, which holds employment-unemployment rounds every few years

Organized v unorganized employment Ratio
2004-05 13:87
2011-12 17:83
  • Observation 1: The data shows little has changed over the years in the nature of employment, as size the of the informal labour market remained significantly high and predominant in the economy overall
  • Observation 2: The growth in organized employment was, however, overwhelmingly informal in nature. So, even within the organized sector of the Indian economy, formal employment declined significantly and informal employment rose with time. Most jobs created in the high growth period of the last decade have been informal in nature, even in the organized sector
  • Observation 3: Within the unorganized sector, nearly all the increase was, expectedly, informal in nature

Some more observations

Fallen

  • Share of agriculture in total employment has fallen from approximately 60% to less than 50%

Unaffected

  • The share of manufacturing remained largely unaffected at approximately 12%

Increased

  • The share of the non-manufacturing sector (construction) which has nearly doubled from 6% to 12%,
  • The share of the services sector rose from 23% to 27%
  • Informal employment in the non-agricultural sectorincreased by 27%

 Conclusion based on above data

In the light of above information author concludes that the benefits of Indian economic growth are concentrated among a few, while a growing proportion of the population has been relegated to living as working poor.

What are the reasons for such a situation?

Reasons

  • Lack of labor reforms: Lack of labour reforms has been identified as the main culprit that has kept employment in India low and informal. Poor labor laws have resulted in India’s manufacturing sector being stunted

 What does lack of labor reforms mean?

Lack of labour reforms has generally meant multiple labour legislation that deter hiring of labour

A puzzling situation

Author states that even in states that have carried out a considerable degree of labor reforms like Gujarat and Andhra Pradesh, the jobs that were created were overwhelmingly informal in nature

So, what is the solution to this puzzling problem?

Author states that there is a need to make serious efforts at facilitating a widespread environment that will develop a formal culture in India’s labour markets. Demonetisation has the potential to become one such serious policy intervention.

How can demonetization help?

Despite high growth, most sectors chose to employ labour informally because it lowered their overall costs. Routing wages and salaries away from cash payments and towards formal channels such as bank accounts, electronic and mobile payments will create a formal culture of employment. Demonetisation is forcing employers in the country to reconsider employment contracts.

  • Push from financial institutions: There needs to be a simultaneous push from the formal financial institutions such as banks, payment interfaces such as National Payments Corporation of India and other private firms to facilitate the adoption of new payment methods. Each firm will have to assess what the short-term costs of going formal entail while achieving efficiency to remain in business in the long run. This can only be great for their employees and the economy overall.