Categories
9 PM Daily NEWS Brief

9 PM Daily Current Affairs Brief – 15 January 2017



Front Page / NATIONAL [The Hindu]

  1. Aero India: The skies are afire, but it’s all calm on the ground
  2. SC is looking at triple talaq, not Uniform Civil Code: CJI

Editorial/OPINION [The Hindu]

  1. The long and winding road to justice
  2. Importance of goods and services
  3. The ecological balance-sheet

ECONOMY [The Hindu]

  1. Wholesale inflation surges to 5.25%

Live Mint

  1. The pathologies of redistributive resource transfers

NoteDownload the Summary of ECONOMIC SURVEY 2016-17 Here 


Front Page / NATIONAL [The Hindu]


[1] Aero India: The skies are afire, but it’s all calm on the ground


The Hindu

 

Context

Aero India 2017 seemed to be the largest ever — at least in size — with the exhibition area spread over more than 27,600 sq. m.

 

Little participation from foreign fighters

The first day of the five-day event, touted as Asia’s premier air show, saw very little participation of foreign fighters, planes and drones; while, aircraft and helicopters of the Indian Air Force took over in greater abundance

 

Duller exhibition halls

The number of exhibitors this time is 549, down by nearly 100 from the last edition. Those who have attended Aero India over the past few editions have attributed this to the lack of large deals on the horizon (2015 had seen defence companies vie for the lucrative multi-billion dollar Medium Multi-Role Combat Aircraft contract from the Indian Air Force)

 

Managing Waste

The five-day show at the air base at Yelahanka is expected to generate around 40 tonnes of waste, of which about 12 to 15 tonnes will be wet waste. Bengaluru-based startup Reddonatura will be handling the waste by deploying fully automatic composting machines


[2] SC is looking at triple talaq, not Uniform Civil Code: CJI


The Hindu

 

Context

Bench to decide on whether polygamy, ‘nikahhalala’ are violation of rights

 

What has happened?

The Supreme Court has clarified that it will decide on whether triple talaq and polygamy are violations of Muslim women’s rights and will have nothing to do with the requirement of a Uniform Civil Code.

 

What did the Bench say?

A Bench led by Chief Justice of India J.S. Khehar said,

  • The issue of Uniform Civil Code was “completely different” and had nothing to do with the issue at hand.
  • It would hear debates on the “legal” aspects of the practices of triple talaq, ‘nikahhalala’ and polygamy among Muslims and would not deal with the question whether divorce under Muslim law needed to be supervised by courts or court-supervise arbitration as it fell under the legislative domain

 

Backdrop

The Centre had earlier opposed the practice of triple talaq, ‘nikahhalala’ and polygamy among Muslims and favoured a relook on grounds of gender equality and secularism.

 

What is Uniform Civil Code (UCC)?

Uniform Civil Code (UCC) seeks to replace personal laws of different religions of India with a common set of rules to govern the citizens.

  • DPSP: Article 44 of the Directive Principles in India had made it a duty of the government to implement it
  • UCC would set common laws for public law and cover marriage, divorce, inheritance, adoption and maintenance

 

Read More: Take a look at this article


Editorial/OPINION [The Hindu]


[1] The long and winding road to justice


The Hindu

 

Context

Article talks about the outcome, aftermath & issues related to the State Of Karnataka v. SelviJ.Jayalalithaa& Otherscase

 

Outcome

All the accused have been convicted under the Prevention of Corruption Act

  • In September 2014, the former rendered the judgment, 18 years after inception of the case. He found that during the period 1991-1996, the extent of disproportionate wealth was to the tune of ₹58 crore. The main accused was sentenced to four years of imprisonment and asked to pay a fine of ₹100 crore. Ms. Sasikala, guilty of abetment, also got a four-year term with a fine of ₹10 crore

 

The Case

In 1996, Subramanian Swamy filed a criminal complaint under the Act, alleging accumulation of vast wealth through corrupt acts by the erstwhile Chief Minister abetted by her close aide.

 

Section 13(1)(e)

Under Section 13(1)(e) the burden lies on the prosecution to prove that the assets of the public servant are disproportionate to his or her known sources of income. Once done, there is a presumption of guilt. It is a provision designed to combat corruption by public servants, and for guilt or innocence to be quickly established.

 

Issues

  • Long delay: It took 18 years for the judgment of the trial court to be handed down. Jurisdictional objections and petitions were filed to delay the justice. Trial court failed to speedily dispose of such petitions resulting in delay. There is a need to ensure that these cases are fast-tracked

 

Rest of the article presents a history of events that finally culminated into SC judgement convicting all the accused

 

One can leave it or give it a cursory read.


[2] Importance of goods and services


The Hindu

 

Context

As the polls in Uttar Pradesh shift eastward, issues of economic delivery and the impact of demonetisation appear to be increasingly salient for voters

 

In the wake of upcoming UP polls, author presents a brief commentary on the perceived voter behavior and the actual ground reality wherein other factors like economic well-being & efficient delivery of public goods and services are being weighed equally by various communities, instead of voting solely on the basis of identity

 

Interested aspirants can give it a read if they want to.


 

[3] The ecological balance-sheet


The Hindu

 

Context

Greater focus is required to reverse both inadequate budgetary allocation for the Ministry of Environment and its under-utilization

 

Budgetary allocation increased

Author states that although the budget allocation to Ministry of Environment Forest &Climate Change (MoEFCC) has increased 18.88% from the last year, some vital areas which required immediate policy intervention from the state have been casually ignored

Author’s contention

Increased funding offset by absence of corresponding measures: In the current Budget, while there has been an increase in allocation to the MoEFCC, funding for renewable energy forms, solar use in rural areas, etc. has been reduced. The pluses of additional funding have been offset by paltry efforts at consolidating environmental conservation

 

Other problems: –

 

Meagre Budgetary allocation

Author points out that in the wake of increasing environmental challenges in India, MoEFCC has been allocated inadequate funds. He cites following pointers wrt budgetary allocation,

  • Superficial renaming: There has been superficial renaming of ‘Clean Energy Cess’ levied on coal, lignite and peat as ‘Clean Environment Cess’ with an increase in the rate of levy to ₹400 per tonne. This increase was done during previous budget
  • Lowly allocation to CPCB: Central Pollution Control Board has been allocated a measly sum of ₹40 crore and ₹74.30 crore. In the light of recent events like High levels of pollution in Delhi the funding is visibly unremarkable
  • Poor allocation to wildlife conservation projects:The treatment of wildlife conservation has been no different, with ambitious projects like Project Tiger having the budget slashed by ₹30 crore and Project Elephant receiving a marginal boost of ₹2.5 crore

 

Underutilization of Funds

A breakdown of the actual expenditure shows that out of the ₹850.02 crore dedicated to implementing the Centrally sponsored core schemes, the total outlay was only ₹566.38 crore

  • These Centrally sponsored schemes include Project Tiger, Project Elephant, Integrated Development of Wildlife Habitats and Conservation of Natural Resources and Ecosystems
  • For instance, Project Tiger has barely managed to utilise half the funds allocated to it. Similarly, underutilization of funds is a problem which affects State projects as well

 

Way forward

Author states that to rein in mindless industrial growth at the cost of environment, to address the problems of disappearing wildlife, increasing conflicts, deterioration of ecology and habitat destruction, scientific, sustained and intensive measures of conservation are required. A small step in this regard would be to acknowledge the role of the environment in budgetary allocations and ensure rational dedication of funds


ECONOMY [The Hindu]


[1] Wholesale inflation surges to 5.25%


The Hindu

 

Context

The index saw its growth accelerating from 3.39% in December 2016

 

What is WPI?

The wholesale price index is an index that measures and tracks the changes in the price of goods in the stages before the retail level. WPI shows the average price change of goods included in the index and is often expressed as a ratio or percentage, and the change is one indicator of a country’s level of inflation

 

Breaking down WPI

WPI compares the total costs of the goods being considered in one year with the total costs of goods in the base year. To illustrate, imagine 2010 is the base year. The total prices for that year are equal to 100 on the scale. Prices from another year are compared to that total and expressed as a percentage of change

 

For example, if the total price of the goods under consideration in 2010 was Rs 4,300, and the total for 2015 is Rs 5,000, the WPI for 2015 with a base year of 2010 is 116, indicating an increase of 16%

 

Note: WPI does not take into consideration the retail prices or prices of the services



Read More: WPI & inflation
What has happened?

The Wholesale Price Index grew 5.25% in January on the back of accelerating inflation in the crude oil and minerals sectors.

  • Index in December: 3.3%

 

Why, a substantial increase, in inflation?

This significant increase in inflation has come from a substantial increase in the prices of fuel and power and marginal increase in prices of manufactured goods (over previous month)

 

Rest of the article contains only stats and numbers

 

Give it a light read


Live Mint


[1] The pathologies of redistributive resource transfers


Live Mint

 

Context

The evidence suggests that all the pathologies associated with foreign aid appear to manifest in the context of intra-country transfers too

 

Two Indias

In the first few paragraphs, article points towards the existence of two Indias,

  • one which has grown rapidly due to better geography, namely coastal states like Gujarat, Maharashtra, Andhra Pradesh etc
  • The other India is the one whose development has been contingent on other development models based onaid given through special category status. Examples: North-East, Jammu and Kashmir, Himachal Pradesh and Uttarakhand

 

Adverse effects of aid

Survey states that in the international context, foreign “aid” has been shown to create a number of adverse effects

  • Resource dependency: Countries receiving aid have little incentive to increase their own resource base in the form of institutional development and enhanced tax base. This leads to systemic resource dependency
  • Can trigger Dutch Disease:Another potential downside of aid is that it could trigger the “Dutch disease”, named after the impact that discovery of natural gas in the North Sea had on the domestic economy in the Netherlands.

 

Dutch disease is the negative impact on an economy of anything that gives rise to a sharp inflow of foreign currency, such as the discovery of large oil reserves. The currency inflows lead to currency appreciation, making the country’s other products less price competitive on the export market. It also leads to higher levels of cheap imports and can lead to deindustrialization as industries apart from resource exploitation are moved to cheaper locations

 

Author’s contention

Are we seeing the signs of Dutch disease in India?

  • Author singles out Redistributive Resource Transfer (RRT) as a concept similar to ‘aid’

 

What are RRT?

Redistributive Resource Transfer or RRT to a state (from the Centre) is defined as gross devolution to the state adjusted for the respective state’s share in aggregate Gross Domestic Product(GDP). The top 10 recipients are: Sikkim, Arunachal Pradesh, Mizoram, Nagaland, Manipur, Meghalaya, Tripura, Jammu and Kashmir, Himachal Pradesh and Assam.

 

Two key differences b/w foreign aid & RRT

  • RRT are intra-country transfers and do not augment overall national disposable income like foreign aid does
  • The donor-recipient relationship is also very different because states benefiting from transfers are part of the national governance structures that determine them

 

Economic Survey 2016-17

Survey then points to some of the observations made in Eco Survey regarding RRT

  • RRT are substantial: Annual per capita RRT flows for all the North-Eastern states (except Assam) and Jammu and Kashmir have exceeded the annual per capita consumption expenditure that defines the all-India poverty lines, especially the rural one. In other words, RRT are substantial in magnitude
  • Outcomes of a higher RRT:Higher RRT seem to be associated with,
    • Lower per capita consumption
    • Lower gross state domestic product (GSDP) growth
    • Lower fiscal effort (defined as the share of own tax revenue in GSDP)
    • Smaller share of manufacturing in GSDP, and
    • Weaker governance

 

Observation: RRT curse

Eco Survey concludes from the above observations that all the ills associated with ‘foreign aid’ seem to manifest themselves in the context of intra-country transfers too i.e. existence of RRT curse

 

So,

 

Should RRT be dispensed away with?

No because in a federal system the Centre must play a redistributive role because it will always have to redirect resources to under-developed states. Rather, the Centre will need to ensure that the resources it redistributes are used more productively

 

Possible reasons for RRT curse

Eco survey points out that it is possible that the “RRT curse” originates from,

  • Poor connectivity and poor infrastructure—physical, financial and digital: Enhancing connectivity on a war footing (as the government has attempted for financial inclusion with the Pradhan Mantri Jan Dhan Yojana, or PMJDY, expediting the optical fibre network, etc.) will have a moderating effect

 

What can government do more beside enhancing connectivity?

Besides enhancing connectivity, government can modify the flow of RRTs in the following manner

  • Direct flows to households: One possibility will be to redirect a quantum of RRT directly to households as part of a universal basic income (UBI) scheme in relevant states. Targeting issues plague existing development interventions and transfers directly to households could eliminate a large majority of these problems.
  • Performance-contingent transfers: Future Finance Commissions could revert to the practice of the 13th finance commission of explicitly conditioning transfers on the tax effort of states so that states do not become resource dependent solely on RRTs
  • Governance-contingent transfers: Given that some high RRT recipient states have performed better than others, the capacity of states to utilize funds efficiently plays an important role. To encourage better governance, the fund transfer mechanism could include a few monitorable institutional indicators as criteria for resource transfers

 


 

Categories
9 PM Daily NEWS Brief

9 PM Daily Current Affairs Brief – 9 February



Front Page / NATIONAL

[1]. In a first, SC issues contempt notice against HC Judge Karnan

[2]. Centre to install 150 quake sensors in Uttarakhand

Editorial/OPINION

[1]. Growing insecurity in Afghanistan

[2]. Getting back home, safely 

ECONOMY

[1]. RBI opts for flexibility to ‘move in either direction’

[2]. Credit Policy: Is it a hit, miss or well left?

[3]. India to pitch global services accord to WTO chief Azevedo

[4]. Digital payment costs are a hindrance

Indian Express

[1]. Salt to the wound

Live Mint

[1]. RBI signals end of rate cut cycle


Front Page / NATIONAL


[1]. In a first, SC issues contempt notice against HC Judge Karnan


In a first, SC issues contempt notice against HC Judge Karnan


The Hindu

Context

Bench directs him to forthwith refrain from undertaking any judicial or administrative work and return all his official files to the Calcutta HC Registry

What has happened?

A seven-judge Bench of the seniormost judges of the Supreme Court, in an unprecedented move, issued contempt of court notice against sitting Calcutta HC judge C.S. Karnan for impeding justice administration and bringing discredit to the judicial institution of the country by writing scurrilous (making scandalous claims) letters about sitting and retired judges

  • The Bench has directed Justice Karnan to forthwith refrain from undertaking any judicial or administrative work and return all his official files to the Calcutta HC Registry.

Show-cause notice

The Bench, led by Chief Justice of India J.S. Khehar, ordered Justice Karnan to appear in person before it on February 13 to show cause to the court why contempt proceedings should not be taken against him.

Constitutional power

Supreme Court as the apex judiciary is empowered under Articles 129 read with its extraordinary powers under Article 142 (2) to punish a member of the High Court and subordinate judiciary for contempt.

Article 129: The Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself

Article 142: Enforcement of decrees and orders of Supreme Court and unless as to discovery, etc

  1. The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or orders so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe
  2. Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself

 


[2]. Centre to install 150 quake sensors in Uttarakhand


Centre to install 150 quake sensors in Uttarakhand


The Hindu

Context

India is looking to have more than six times the number of earthquake sensors in Uttarakhand to better understand the geology of the region and the evolution of Himalayan earthquakes

What has happened?

The National Centre for Seismology has got the approvalfor a project to install 100-150 seismometers in the Garhwal-Kumaon region [the key region in the Himalayas and known to be seismically active] for testing purposes and to better understand the geology of the region and the evolution of Himalayan earthquakes.

  • Cost: Though funds were still not available, the entire project would unlikely exceed ₹10 crore

Present situation

Currently, there are only about 20 stations, maintained by different research agencies that track earthquake activity

Garhwal-Kumaon region

This region is known to be seismically active because it lies at the junction of two tectonic plates — the Himalayan and the Eurasian Plate — pushing against each other

  • Major quakes in the region include the 1991 Uttarkashi quake of magnitude 6.8 that killed 700. It was followed by a quake of similar intensity that hit Chamoli in 1991 and killed 100.

Backdrop

On 6th Feb 2017, Rudraprayag district of Uttarakhand registered a 5.8 magnitude earthquake. Though it didn’t cause damage, seismologists say its magnitude was “significant,” and residents in several parts of north India felt the tremors. The latest development can be seen in this context.

 

 


Editorial/OPINION


[1]. Growing insecurity in Afghanistan


Growing insecurity in Afghanistan


The Hindu

Context

The blast near the Supreme Court premises in Kabul that left at least 20 people dead, underscores the growing insecurity in Afghanistan

Article highlights the increasing frequency of attacks by Taliban in Afghanistan, its gradual consolidation as a strong insurgent force and the consequent inability of the elected government to stand against it

Author suggests

To turn its fortunes around in the 15-year-old civil war,

  • Afghanistan needs to strengthen the administration: Mr. Ghani should initiate the administrative reforms he had promised and put up a stronger, united fight against terrorist groups
  • Seek out help: Kabul should seek more help and a higher level of commitment from other countries, including the U.S., in combating terror

 


[2]. Getting back home, safely 


Getting back home, safely


The Hindu

Context

Despite extensive experience in conducting evacuation operations of its citizens abroad, India still needs to institutionalize best practices

Issue: Capacity building in conducting evacuation operations

A stark improvement

In the first few paragraphs, author cites the extraordinary evacuation conducted in April 2015 under Operation Raahat& compares it with the shoddy evacuation scenario of 850 Indian nationals during civil war in South Yemen in 1986, describing how far we have come

 Significance of capacity building

The increasing size and complexity of the diaspora requires the government to expand capacity and improve procedures.

  • Size of diaspora: More than 11 million Indians now reside abroad and 20 million travel internationally every year
  • Political instability:As political instability rattles the West Asian region, which hosts more than seven million Indians, the government can no longer rely on heroic efforts by individual officials or quick-fix solutions

What needs to be done?

  • Learning from the experience: The government will need to build on its rich experience in conducting more than 30 evacuation operations since the 1950s.
    • Policy-oriented research: By supporting policy-oriented research at universities and think tanks to document the memory of senior officials, the government would also facilitate the transmission of their expertise to younger officials
  • Avoiding a jugaad: The government must avoid the jugaad approach. Every evacuation case is unique, given the specific nature and location of the crisis, but this should not preclude an analytical attempt to formulate a blueprint that lists core tasks for all operations
    • Preparing a manual: An inter-ministerial committee should prepare a manual with guidelines that establish a clear chain of command and division of competencies; identify regional support bases, assembly points and routes for evacuation; develop country-specific warden systems to communicate with expatriates; and establish evacuation priority and embarkation criteria

 Embarkation: Itis the process of loading a passenger ship or an airplane with passengers or military personnel, related to and overlapping with individual boarding on aircraft and ships

  • Training India’s diplomats: India’s diplomatic cadre must be given specific training to operate in hostile environments
    • To achieve this, the government could instruct the police or army to train Indian Foreign Service probationers to operate in war zones; conduct frequent evacuation simulations and emergency drills; and create rapid reaction teams of Indian security personnel to be deployed to protect diplomatic staff and installations abroad
  • Working closely with countries having a sizeable expatriate population: The success of future operations will also rely on New Delhi’s willingness to work together with friendly governments. India will have to invest in cooperative frameworks that facilitate coordination among countries that have large expatriate populations in West Asia, in particular Nepal, Bangladesh and Sri Lanka, and among leading powers with evacuation capacity in the Indian Ocean region.
  • Assigning a greater role to army: The government will have to assign a greater role to its armed forces, in particular by strengthening the Navy and Air Force’s capacity to operate in tandem with civilian authorities
    • Developing a NEO doctrine: It should, for example, direct the military to develop a non-combatant evacuation (NEO) doctrine, designate the Integrated Defence Staff as the nodal organisation to improve inter-services and civil-military coordination, direct the services to conduct more multilateral NEO exercises, and adapt military modernization plans to increase capacity for out-of-area deployment and evacuation.

Using technology

  • Inter-ministerial coordinating mechanism: To minimize redundancies, the government must institutionalize a permanent inter-ministerial coordinating mechanism for emergency evacuations, incentivise inter-agency cross-posting of officials dealing with diaspora affairs, and encourage State governments to create regional contingency plans.

 

  • Establishing a permanent civil reserve fleet: To avoid cost inflation and delays, the government must establish a permanent civil reserve air fleet that pools aircraft from all Indian airlines based on pre-established requisition and reimbursement procedures.
  • Monitoring the diaspora: The government will have to invest in new technologies to better monitor the diaspora’s profile and mobility. This can be achieved by
    • Encouraging more diplomatic missions to provide online consular registration forms
    • Developing an online registration system for overseas travelers
    • Utilizing social media
    • By making the Aadhaar card compulsory to facilitate biometric identity verification and reduce identity fraud during evacuation

 Managing public opinion during crisis: The government must expand efforts to manage public opinion and be able to conduct a quiet diplomacy that is crucial to safely extricate Overseas Indians from conflict zones. To reduce domestic pressures,

    • It should embed media representatives more frequently in such missions
    • Reassure the diaspora by ensuring that high-level political representatives are personally engaged
    • Avoid raising expectations by clearly distinguishing Indian citizens from people of Indian origin

Conclusion

Author concludes by stating that India has extensive experience in conducting evacuation operations, but to secure the lives and assets of Indians abroad, the government must avoid an ad hoc approach and seek to institutionalize best practices, improvecoordination and capabilities, both diplomatic and military


 


ECONOMY


[1]. RBI opts for flexibility to ‘move in either direction’


RBI opts for flexibility to ‘move in either direction’


The Hindu

Context

Bond yields climb after debt market participants are surprised by central bank’s shift to ‘neutral’ monetary stance

What has happened?

The Monetary Policy Committee of the Reserve Bank of India (RBI) has decided to keep the key policy rate, the repo rate, unchanged at 6.25% citing uncertainties caused by demonetisation

Rest of the article covers general points. You can give it a go-through


 


[2]. Credit Policy: Is it a hit, miss or well left?


Credit Policy: Is it a hit, miss or well left?


The Hindu

Context

For the already available beneficial impact of liquidity on cost of funds, RBI’s stance of no cut would have seemed harder on the economy

Highlights of the bimonthly policy

  • Accommodative to neutral: The tweaking of stance to “neutral” is this policy’s headline and is being seen as reducing the chances of a future rate cut
  • RBI’s formula: The other interesting highlight is RBI’s formula for transmission of policy rate to banks which lays stress on bank NPA resolution, recapitalization of banks and making small savings rates responsive to Government market borrowing rates

Liquidity

Author states that on the liquidity front, India has witnessed a sea of liquidity at banks courtesy DeMo, taking the excess liquidity in the system to a staggering 2 lac crappx


 


[3]. India to pitch global services accord to WTO chief Azevedo


India to pitch global services accord to WTO chief Azevedo


The Hindu

Context

India will make a presentation to World Trade Organisation (WTO) Director General Roberto Azevedo and India Inc. on New Delhi’s proposal for a global pact to boost services trade

Trade Facilitation in Services (TFS) Agreement

The proposed Trade Facilitation in Services (TFS) Agreement at the WTO-level aims to ease norms including those relating to movement of foreign skilled workers/professionals across borders for short-term work

Objectives of TFS

  • Portability of social security contributions: Ensuring portability of social security contributions
  • Ensuring non-restrictive fees: Making sure fees or charges for immigration or visas are reasonable, transparent, and non-restrictive (or impairing the supply of services) in nature
  • Creation of a single window mechanism for foreign investment approvals
  • Cross-border insurance coverage: Ensure cross-border insurance coverage to boost medical tourism, publication of measures impacting services trade and timely availability of relevant information in all the WTO official languages as well as free flow of data/information for cross-border supply of services

FA vs TFS

Government will specify that the proposed services pact is similar to the Trade Facilitation Agreement (TFA) in Goods adopted by the WTO Members in 2014 to ease customs norms for boosting global goods trade.

  • The proposed TFS pact is also about ‘facilitation’ – that is “making market access ‘effective’ and commercially meaningful and not about ‘new’ (or greater) market access.”

Barriers to services

World Bank data shows the growing share of services in the world economy, however, global trade flows in services remain subject to numerous border and behind-the-border barriers.

Read More: TFA


 


[4]. Digital payment costs are a hindrance


Digital payment costs are a hindrance


The Hindu

Context

Article lists the views of the TRAI chief that he expressed during the India Digital summit hosted by the Internet and Mobile Association of India

Views

  • The surge in digital payments in the country, driven largely by short-term incentives, will become sustainable if the costs of making such payments are addressed
  • No cost for cash: Everyone can provide incentives in the short run and see a rise and once those incentives go, they will decline. What is important from a citizen’s perspective is that cash doesn’t have any costs. If I have ₹100 in my pocket, I get ₹100 worth of goods. But if I have to pay somebody ₹1 or ₹2 for paying the same digitally, it’s not fair
  • Issue of cost: Digital financial transactions are not sustainable unless you address the issues of cost, convenience and confidence
  • Referring to the merchant discount rate (MDR) levied on transactions done through credit and debit cards, TRAI chief said there is no relationship between the charges and the ‘work done’ to justify them.
    • Drawing a parallel with the telecom sector, the regulator drew attention to ‘the work done principle’ used to determine how much one operator pays another as termination charges.
  • Building confidence: While people are getting more comfortable with digital payments, the TRAI chief said it is important to build confidence in the systems and ensure that all relevant software is tested for cyber-security and other security risks.
  • Reduced charges: The regulator has reduced the charges of USSD (Unstructured Supplementary Service Data)-based payments made on mobile phones.


Indian Express


[1]. Salt to the wound


Salt to the wound


Indian Express

Context

Government could have undone the damage of demonetisation through the budget. The opportunity has been missed in deference to the whims of global finance

 In the first few paragraphs, author has conveyed the sentiment that the Union Budget could have partially undone the damage inflicted by demonetization but it has failed to do so

Damage by demonetization

Author states the damage that has been done by demonetization move of the government

  • Contraction in aggregate demand
  • Slowdown of overall growth
  • Impact on the informal sector

Contractionary budget: An opportunity lost

Author states that by boosting demand in the economy through larger government expenditure, budget could have provided some relief but instead it took following step,

  • Rate of Growth halved: The rate of growth of total government expenditure has been halved, from about 12 per cent between 2015-16 and 2016-17 (RE) to just 6 per cent b/w 2016-17 (RE) to 2017-18 (BE). As a proportion of GDP, total expenditure is slated to fall between 2016-17 and 2017-18.

 Author’s contention

Union Budget could have given a spur to the economy by utilizing the deposits lying idle with the banks, as credit demand from borrowers has not picked up. Government should have issued fresh securities to the banks and used the money for spending but it would have contributed to the fiscal deficit (as govt needs to pay interest for the money borrowed from the banks in lieu of securities) and hence government didn’t do so

  • Donald Trump is busy imposing trade restrictions, and hence snatching employment through a “beggar-my-neighbour” policy from other countries, including India.
  • Countering Trump: Our country should be countering Trump’s protectionism and preventing job losses by imposing trade restrictions of its own, and in the shadow of such restrictions, increasing the domestic market through larger fiscal deficits, backed by requisite capital controls

 


Live Mint


[1]. RBI signals end of rate cut cycle


RBI signals end of rate cut cycle


Live Mint

Context

RBI has restored its credibility by emphasising its determination to bring down inflation closer to 4% and focus on macroeconomic stability

Issue: RBI keeps the repo rate unchanged in the 6th Bimonthly policy review

Right decision

As per author, RBI, emphasizing its determination to bring down inflation closer to 4% on a durable basis and focus on macroeconomic stability, has restored its credibility, which many felt the Indian central bank was losing

Backdrop

Since January 2015, the RBI has cut its policy rate by 175 basis points to 6.25%.

Ground for a rate cut

Author states that the biggest push for yet another rate cut at this point has been a sharp drop in retail inflation. It dropped to 3.41% in December from 3.63% in the previous month—its lowest since November 2014

Why RBI stuck to the previous policy rate?

  • Deflation: The drop in inflation has been primarily driven by deflation in the prices of vegetables and pulses and excluding food and fuel, inflation remained at 4.9% for four months at a stretch, since September
  • Crude prices: Among others, a rise in international crude prices has contributed to this. The MPC did not want to take any chances

Give the rest of the article a go-through


 


 

Categories
9 PM Daily NEWS Brief

9 PM Daily Current Affairs Brief – 12 January 2017



  • Front Page / NATIONAL [The Hindu]
  1. Air pollution a national problem
  2. Green tribunal orders test of cosmetics containing microbeads
  3. Talaq certificates issued by Chief Kazi has no legal sanctity, says Madras HC
  4. SC may hear plea on tax relief for political parties
  • INTERNATIONAL [The Hindu]
  1. Kenya for enhanced ties with India
  • Editorial/OPINION [The Hindu]
  1. Elections are not a referendum
  2. Fifty days later
  3. Missing the Asian tailwind?
  • ECONOMY [The Hindu]
  1. World Bank cuts India’s FY17 growth forecast
  2. NITI Aayog projects 8% growth rate
  • Indian Express
  1. The ordinance overreach
  2. What we need to guard
  3. Should Hear Them
  4. Rain shadow south
  • Live Mint
  1. Demonetisation and monetary policy

Click here to Download 9 PM Daily Brief PDF (12th Jan. 2017)


Front Page / NATIONAL [The Hindu]


[1] Air pollution a national problem


Issue:
Air pollution is at alarming levels in India.
Context:
A Greenpeace Report shows that 90% of the cities studied have pollution levels higher than prescribed standards.
Quick Bits:
• According to the analysis by Greenpeace for 2015 data, 154 out of 168 were found to have an average Particulate Matter(PM)level higher than the national standards.
• The analysis is made by Greenpeace by comparing PM10 levels.
• Air pollution problems are more aggravated in North and Central India than compared to South India.
• This is because of geographical facts like Himalayas, cool weather and big industrial clusters whereas South India has the benefit of mixing sea breeze.
• Fossil fuels were the biggest contributors to the particulate matter.
• Delhi has the most polluted air among all cities in India.
In Depth:
In North India:
• The 4 worst cities are Ghaziabad, Allahabad and Bareilly in Uttar Pradesh and Faridabad in Haryana.
• The average annual concentrations in these cities were found to be 4 times more than the standard.
In South India:
• All 10 of the least polluted cities were in the South and the East, 8 in Karnataka, one each in Odisha and Tamil Nadu.
• Hasan in Karnataka came close to the air quality standards prescribed by the World Health Organization.
• Chennai on the contrary despite being in the coast is found to have a very high PM10. A diesel powered public transport system and a power plant were the major factors behind this.
However Pollution should be treated as a national level problem says one of the authors of the report.


[2] Green tribunal orders test of cosmetics containing microbeads


Issue:

Cosmetics containing microbeads can be dangerous for aquatic life and environment.

What are microbeads?

  • Microbeads are tiny plastic substances measuring less than 5mm
  • They are used in soaps, toothpastes and beauty products.

Why Microbeads are used in Cosmetics?

  • They act as exfoliators i.e. agents which remove the dead cells on skin and teeth.

Context:

  • A plea in National Green Tribunal (NGT) has sought a ban on the usage of microbeads.
  • Consequently the NGT has directed the Central Drugs Standard Control Organization to test cosmetics containing microbeads.


Issue:

  • Triple Talaq is a Muslim social practice by which a man divorces his wife.
  • A Public Interest Litigation (PIL) petition is moved by a senior advocate in Madras High Court to declare the certificates of Kazis as illegal

Context:

  • The certificates issued by Kazis are done in an arbitrary manner without reconciliation and even without the knowledge of women concerned.

Explanation:

  • Kazis were once considered judicial authorities under Muslim Personal Law.
  • Their legal sanctity was abolished when the British regime established the courts.
  • The Kazi act of 1880 did not vest any powers of adjudication with Kazis.

 Arguments:

By the petitioner:

  • It creates confusion in the matrimonial proceedings
  • The facts that persuade a Kazi to issue a certificate has not been set out.

[4] Supreme Court may hear plea on tax relief for political parties


Issue:  

  • A writ petition has been filed to declaresome provisions in the Income-Tax Actof 1961 and the Representation of the People Actof 1951 as unconstitutional

What are those sections?

  • Section 13A of the Income-Tax Act of Section 29 of the Representation of the People Act.

What they do?

  • These sections give 100 per cent tax exemption to political parties.

Arguments:

  • The petition has questioned the logic behind the fact that ordinary citizens are taxed while the political parties enjoyed tax exemption.
  • In the recent demonetization move, the Finance secretary has exempted the political parties from any inquiry for deposit of old notes. The petition contended this move.
  • The petition also asked whether the Constitution recognizes the need for a political party membership for membership in Parliament and State Legislative Council and Assembly

The petitioner also complained that the parties does not do social and moral service but are only at the root of corruption.


INTERNATIONAL [The Hindu]


[1] Kenya for enhanced ties with India


 Context:

President Uhuru Kenyatta visited India for Vibrant Gujarat summit and he arrived in Delhi to meet our Prime Minister Narendra Modi.

In Depth:

Kenyatta has asked India to deepen its multilateral cooperation and invest in Kenya in Agriculture, Security and Health sectors.

Economy:

  • Kenya invited India to engage more actively in the COMESA (Common Market for Eastern and Southern Africa).
  • Both the countries arrived at an agreement on a Line of Credit of 100 million for agricultural mechanization
  • Both the leaders also reviewed progress on the commitments they agreed upon during our Prime Minister’s 2015 visit to Kenya. One example is Rift Valley Textiles Factory (RIVATEX) which is being upgraded at present with a fund of USD 30 million

Environment:

India invited Kenya to join the International Solar Alliance (ISA)

United Nations Reforms:

Both the countries agreed to work for reforms in United Nations Security council

  • A seat for Africa has been sought by Kenya and it supported India’s attempt to secure a seat in the Security Council
  • Africa despite its huge size and complexity does not have a seat in Security Council

Security:

  • Kenya sought India to work for a unified strategy to combat international security threats and money laundering
  • Both the sides agreed to work for an enhanced cooperation in areas of maritime security

India has also invited Kenya to participate in exhibitions like Aero-India and DEFEXPO.


Editorial/OPINION [The Hindu]


[1] Elections are not a referendum


Link

Context – The reduction of Assembly elections to a referendum diminishes the political competence of voters to decide what sort of a government they wish to be ruled by.

Issue

  • Many political parties are propagating the wins and losses in the upcoming electionsas the referendum over the demonetization policy.
  • Comparing elections with referendum is not viable.
  • And motive of the referendum should be to assess whether citizens are with r against policy.
  • Referendum doesn’t make sense after the policy has been implemented.
  • The United Kingdom held a referendum last year on whether citizens wish to leave or stay in the European Union.
  • The measure enabled citizens to influence subsequent policies of the government. They exercised political choice.
  • Ex-post facto referendums are in this sense meaningless.
  • If the BJP does not win in politically significant States, the policy of demonetisation will hardly be rolled back.

Implications of depicting elections as referendum

  • Reduction of State Assembly elections to a referendum diminishes the political competence of voters to decide what sort of a government they wish to be ruled by.
  • Elections, unlike referendums, are not an isolated instance.
  • They represent a decisive moment in long-term civic engagement with structures, institutions, and holders of power.
  • Voters have to decide whether the government has improved the conditions in which they eke out a livelihood, or worsened them.

Role of civil society

  • Citizens have right to know how government arrived at informed and reflective decisions on what should be done.
  • The site for the acquisition of political wisdom and competence is civil society
  • A non-partisan and non-hysterical media has a crucial role to play in the making of enlightened public opinion.
  • Social audits and report cards issued by civil society organisations, which keep anxious watch on acts of omission and commission by the government, are of equal importance.
  • The identification of crucial issues, analyses and recommendations by committed activists contribute greatly to the making of political judgment.
  • Hence the votes should not be treated as a yes to the policies implemented by the government.

[2] Fifty days later


Link

IssueAfter completion of 50 days Prime Minister Modi announced relief rather than achievements.

Introduction

On the New Year’s Eve, after completion of 50 days post demonetization, PM Modi announced a relief package for senior citizens, women, farmers and small businesses, essentially those the demonetisation has hit hard.

Usually relief is provided against calamities, accidents, disasters or economic slowdown.

It indicates that the demonetization plan didn’t go as per plan.

What was the process followed in the process of demonetization:-

  • On November 7,RBI received a letter from the government containing advice from the government for the RBI to withdraw the legal tender of Rs. 500 and 1000 notes.
  • The stated objectives weremitigation of:-
  1. Counterfeiting,
  2. Terror financing
  3. And black money
  • According to the government advice to RBI to place the matter before board urgently, board met the subsequent afternoon.
  • The meeting was attended by 3 of the 10 independent members.
  • After considering the proposal, RBI provided its approval.
  • Hours later, on the same evening, Mr. Modi obtained his Cabinet’s approval.
  • By the mid night, demonetization was brought into effect by the government.

Has it curbed the black money?

  • Raiding authorities discovered crores in the rationed new 2,000 notes across the country.
  • Suspension of at least four RBI employees and arrests of various bank officials show, the demonetisation has spawned new black markets.
  • In the short term it seems that black money market has not been effected by demonetization.

[3] Missing the Asian tailwind?


 Link

Context – How India can surpass China in growth and development

Some historical facts

Till 1757, India was the richest country with its wealth based on textile export.

The loot by British oiled the Industrial Revolution (textile production), and brought about colonization and impoverishment.

In 1950, India was richer than China; now it is a fifth the size of the Chinese economy.

Status of India in Asia

  • “Look East Policy” enunciated in 1992 was not been successful.
  • While India has invested $500 million in chabahar port of Iran, China has invested $46 billion in the China-Pakistan Economic Corridor (CPEC).
  • Despite investments in Afganistan, India has not been an important country for them.
  • Only Bhutan can be considered to be in our “sphere of influence”.

Influence of China’s One Belt, One Road (OBOR) initiative

  • Russia and the Central Asian countries are linking their infrastructure to China’s One Belt, One Road (OBOR).
  • Chinese investment is also attractive to Europe, Malaysia, Thailand, Myanmar.
  • India alone in continental Asia does not support the OBOR, which spans:-
  • More than 65 countries, three-quarters of known energy resources,
  • Envisages an investment of $4 trillion
  • And is estimated to cover two-thirds of the global population and GDP.

US vs China

  • The re-emergence of China has limited the ability of the U.S. in setting the global agenda as usual.
  • US initiatives like ‘Trans-Pacific Trade Partnership’ and opposing in South China sea to deter China have been failed.
  • But there is lesser chances of trade war between both countries due to their structures, with China’s low labor cost manufacturing and US’s using high-efficiency robotics.
  • As the U.S., Russia and China have strengths in individual sectors, their relations may well get better.

Power realignment

  • New US president is moving away from military alliances to ramping up military superiority based on technological leadership making UN redundant.
  • A deal with Russia recognising spheres of influence in Europe and West Asia would make NATO redundant.
  • New US president is focusing more on the trade deals rather than the security concerns.

Should India Consider joining OBOR?

  • With the changes in the global scenario and importance of the world powers, India should also consider changing its strategies.
  • China’s national goal is to double its 2010 GDP and per capita income by 2020 for which the OBOR is considered essential.
  • China is keen that India join that initiative, providing the opportunity to reset relations.
  • We should become a partner in the OBOR adding a “Digital Sustainable Asia” component.

Participation in the OBOR and treating the Line of Control as a “soft border” will be the bold vision needed to exorcise the ghosts of 1757.


ECONOMY [The Hindu]


[1] World Bank cuts India’s FY17 growth forecast


Link

Context – The World Bank has lowered its growth forecast for India to 7 per cent from 7.6 per cent in 2016-17.

Reasons of slowdown

  • Slowdown in consumption and manufacturing due to demonetisation
  • An ongoing decline in private investment
  • And credit constraints due to impaired bank balance sheets.
  • Weak industrial production and manufacturing

Reforms that can help growth rebound

  1. Bankruptcy and insolvency code,
  2. The liberalization of FDI norms across sectors,
  3. The passage of the Goods and Services Tax (GST) Amendment Bill,
  4. And the agreement between the government and the Reserve Bank of India on a monetary policy framework
  5. Infrastructure spending should improve the business climate and attract investment in the near-term.
  6. The ‘Make in India’ campaign may support India’s manufacturing sector, backed by domestic demand and further regulatory reforms.”

Short term problems of demonetization

Demonetization could cause major problems in the short term, like:-

  • Slowing reforms
  • And affecting smaller economies dependent on the Indian economy
  • Disrupting business and household economic activities.
  • Effect on trade and remittance channels could also affect growth rates in smaller economies such as Nepal and Bhutan.

[2] NITI Aayog projects 8% growth rate


 Link

Context – NITI Aayog has estimated a growth rate of 8% for 2016-17.

Introduction

  • The 12th Plan is the last five-year Plan
  • From 2017-18, the Centre would adopt a three-year action plan and a fifteen-year vision document.

Positives for the economy

  • A large number of reforms by the present government over the past two years created a ‘strong foundation’ for such a growth trajectory

Areas to be considered

  • NITI Aayog stated that much needed to be done to spell out tax laws clearly so that future investors can assess their liabilities with reasonable certainty.
  • “Urgent attention” was needed for simplification of regulatory cum administrative procedures.
  • A key lacuna in the Indian growth story has been slow growth of manufacturers in general and labour-intensive manufacturing in particular.
  • Sectors in which India lags behind are electronics, food processing, leather, and textiles and garments.

Indian Express


[1] The ordinance overreach


Link

Context – Supreme Court in Krishna Kumar Singh’s case, has reiterated the principle that re-promulgation of ordinances is a fraud on the Constitution and a subversion of the democratic legislative processes.

The reason given for that is that re-promulgation represents an effort to overreach the legislative process.

What was the issue?

  • The Enemy Property (Amendment and Validation) Ordinance was first promulgated on January 7, 2016, with the ostensible objective of:-
    • o Plugging loopholes in the principal act
    • o And to ensure that the enemy properties worth thousands of crore do not revert to the legal heirs.
  • And this Enemy Property ordinance has been re-promulgated 5th time in the last of 2016.
  • The ordinance was issued to frustrate the judgment of the Supreme Court in the case of Raja Amir Mohammad Khan of Mahmudabadwho won a long and arduous legal battle for his properties.

Rules related to ordinances

  • An ordinance under Article 123 of the Constitution shall cease to operate at the expiry of six weeks from the reassembly of the Parliament.
  • It may also cease to operate before the expiry of the period of six weeks if a resolution disapproving it is passed by Parliament.

Effect of the ordinance

  • Government has attempted to nullify the judgment, decree or order of any Court by inserting Section 8A (1) in the ordinance.
  • Section 8A (1) empowers the custodian to dispose of “enemy properties” whether by sale or otherwise notwithstanding any judgment, decree or order of any court, tribunal or authority.
  • The government, by re-promulgating the Enemy Property ordinance for a record fifth time, has converted the emergent power under Article 123 into a source of parallel law-making

What was the SC judgement?

  • Supreme Court, in Union of India and Anr. v. Raja Mohd. Amir Mohd. Khan had held that:-
  • “The Respondent who was born in India and his Indian citizenship not being in question cannot by any stretch of imagination be held to be an enemy or enemy subject”.
  • The ordinance removes the substratum of the judgment of the Supreme Court which is binding law under Article 141 of the Constitution.

Why this attempt was wrong?

  • This attempt by the government to re-promulgate ordinances in the absence of parliamentary approval, is contrary to the intent of our founding fathers and the mandate of the Constitution.
  • Constituent Assembly (CA) during the debates was of the opinion that the said power ought not to be exercised merely to circumvent a failure to muster support in the legislature.
  • Situations where ordinance route may be taken:-
    • o Article 123 and 213 of the Constitution will be taken in emergent circumstances when the legislature is not in session
    • o and extraordinary circumstances warrant the exercise of authority
  • The satisfaction of the president at the time of the promulgation of an ordinance is within the purview of judicial review.
  • Parliamentary supremacy and the power of judicial review are the cornerstone of our democratic republic.
  • And these types of re-promulgations are threat to the sovereignty of the parliament.

[2] What we need to guard


Link

Context

The US Supreme Court has deduced rights of privacy and parenthood.

A similar approach has been adopted by Irish courts in the Republic of Ireland

Approach by Indian SC

India’s SC has also deduced fundamental rights which are not specifically mentioned in theconstitution.

This step of SC was based on the principle that certain unarticulated rights are implicit in the enumerated guarantees.

Examples:-

Freedom of the press has been deduced on the ground that it is implicit in the guarantee of freedom of speech and expression.

The right to travel abroad and return to one’s country has been spelt out from the expression “personal liberty” in Article 21 of the Constitution.

The Court has also ruled that right to education until the age of 14 is a fundamental right emanating from the all-pervasive Article 21.

What our constitution makers believed?

Our Constituent Assembly believed that:-

  • Fundamental rights are not merely a gift from the state to its citizens.
  • Individuals possess basic human rights independently of any Constitution.
  • A Constitution does not “confer” fundamental rights. It confirms their existence and accords them protection.

Restrictions on the fundamental rights:-

  • No fundamental right is absolute.
  • Every Constitution provides for restriction of fundamental rights in general public interest.
  • However, the restriction imposed should not be excessive or disproportionate.

Supreme Court judgement

State of Madras v. V.G. Rao in March 1952 emphasized that:-

If the impugned legislation violated a fundamental right it would have to be struck down because as regards “fundamental rights”, the Court has been assigned the role of a protector.

Attacks on the fundamental rights and

Fundamental right of freedom of expression and personal liberty are the favorite targets of authoritarian regimes.

Serious violations of fundamental rights occur during emergencies.

Excuse given is that fundamental rights are required to be suspended temporarily in order that the nation may survive.

Achievements of PIL

A notable step towards protecting the fundamental rights of the individuals is the instrument of PIL.

  • Numerous prisoners languishing in jails inordinately awaiting trial have been released;
  • Persons treated like “serfs” and held in bondage have secured freedom and have been rehabilitated;
  • Conditions of inmates in care homes and in asylums for the insane; and of workers in stone quarries and brick kilns, have been ameliorated.

PIL has a salutary effect on administration which knows that it has to conform to the discipline of fundamental rights.


[3] Should Hear Them


Link

Context:-Governor of RBI will soon be briefing the committee on finance on the impact of demonetization and giving evidence to the public accounts committee on the monetary policy of the country.

In the past too, in June 2016, RaghuramRajan had briefed the finance committee on the state of the economy, the role of RBI and the banking sector in the country.

Structure and responsibilities of the committees:-

  • The public accounts committee of Parliament has been in existence since 1921, while the departmentally related committeeswere given final shape in the early nineties.
  • Members of Parliament from both houses are part of these committees.
  • They scrutinize:-
  • Legislative proposals initiated by a ministry,
  • Government demands for grants, annual reports,
  • Long-term policy documents presented to Parliament

These committees do the heavy lifting of parliamentary oversight of government functioning.

Committees are empowered to call witnesses to give evidence and produce required documents.

Proceedings behind closed doors:-

  • These committees meet in the private.
  • Their meetings are only open to the members or anyone who is invited.
  • The deliberations of the committee are confidential.
  • Evidence tendered before it is usually kept secret and made public only after the committee presents its report.

Benefits of privacy

  • It promotes the free exchange of ideas between participating MPs.
  • The absence of cameras live telecasting its proceedings discourages political grandstanding.

Open proceedings in western countries

  • This logic of free exchange of ideas does not apply for keeping the testimony of individuals before committees’ secret.

For example

  • In the US, statements made before committees of Congress are open to the public and are also telecast live.
  • The chairman of the Federal Reserve, Janet Yellen, routinely testifies before committees of the House of Representatives.
  • In the United Kingdom, the House of Commons publishes a calendar of select committee meetings which are open to the public.

Examples of open proceedings in India

Last year, a committee of the Delhi Vidhan Sabha looking at irregularities in sports administration bodies of cricket and hockey allowed the press to view its proceedings.

In 2008, the Goa Vidhan Sabha had also opened up its committee meetings to both the public and press.

In the 13th Lok Sabha, the chairman of the joint committee examining the Stock Market Scam briefed the press at the end of each committee meeting.

How it should be done?

The proceedings of the committees can be opened in multiples ways:-

  • Lok Sabha and Rajya Sabha television to telecast the testimony of witnesses.
  • Publication of the transcript of testimony.
  • Allowing the general public to view evidence proceedings of committees.

Rules of parliament

  • Rule 269 of the rules of procedure of the Lok Sabha gives the chairman of a committee the discretion to allow evidence presented before it to either be treated as confidential or made public.

Way ahead

  • It takes a minimum of three months to finalise the report of a parliamentary committee.
  • The current rules can be amended to enable uploading of the evidence given before the committees before the final report is published.
  • These changes will have to be tempered to assure individuals that they can testify freely before committees.

[4] Rain shadow south


 Link

Issue:-Recently, Tamil Nadu declared a drought.

North-East monsoon failure

  • North East monsoon with 45.2 percent below normal rainfall has failed in southern peninsula, including Tamil Nadu.
  • This is the worst since the 48.3 per cent deficit recorded in 2011.
  • South India’s combined reservoir levels were 22 percentage points less than the average water availability over the past 10 years, in the end of 2016.

Double blow

  • Tamil Nadu, Kerala and south interior Karnataka and coastal Karnataka had already reported respective shortfalls of 19 per cent, 34 per cent, 21 per cent and 21 per cent during the southwest monsoon.
  • Corresponding deficits of 62 per cent, 61 per cent, 70 per cent and 63 per cent reported for the northeast season makes matters worse for these regions.

Effects

  • There are serious implications of this failure for crops like paddy and coconut and will impact milk and sugar production, especially in Karnataka.
  • It may also accentuate inter-state river disputes, especially the sharing of Cauvery waters.
  • Tamil Nadu had targeted 14.5 lakh hectares under rice in 2016-17, but barely seven lakh hectares was under the plough by January 5.
  • The shortfall will also impact livelihoods and have repercussions on the mechanisms to deal with crop failure.

Live Mint


[1] Demonetisation and monetary policy


Introduction:

The reasons for demonitisation are non-economic. The recent demonetisation in India can be viewed as part of experiments with monetary policy around the world. It undermines the independence of Central Banks

In Depth:

The Global Growth:

  • Global growth has remained largely uneven before the Industrial Revolution and without technological innovations the average growth rate is less than 1% per annum
  • The periods of growth were not continuous. They had sharp declines in between as well
  • Global growth rose dramatically to average 3.8% between 1950 and 2014.

The following factors are responsible for this growth in world economy

  • Initially America came out of Great Depression during world war economic efforts
  • Later Europe and Japan during Post war economic reconstruction and boom
  • The growth was sustained by the development of East Asia,
  • More recently China and India contributed to the growth

The remarkable fact that the global economy has not seen a single year of negative growth after 1950 can be ascribed to advances in monetary policy.

Changes in Economic Policies:

  • The macroeconomic policy was initially limited by the gold standard. But in 1970, the world dropped the gold standard and added currencies as a new tool for expanding and contracting money supply at will. This resulted in Hyperinflation.
  • As financial markets developed, advanced economies moved away from monetary aggregates to the overnight policy interest rate as the chief instrument to modulate the demand and supply of money

Three separate developments exposed the vulnerability of central banks

  • Globalization
  • Ageing and declining productivity growth
  • Monetary Policy overreach

Quantitative Easing:

The Bank of Japan deployed quantitative easing (QE) to stimulate growth when policy interest rates became zero. QE helped stabilize financial markets in 2008-09, but later they became less effective

Conclusion:

Unconventional monetary policies have produced the best results but it had negative consequences. Macroeconomic policies must be combined with structural policy and reform to make them effective. Central banks must return to a time when monetary policy did not have much role and was focused on financial markets and growth stability.

 

 


 

Categories
9 PM Daily NEWS Brief

9 PM Daily Current Affairs Brief – 11 January 2017



  • Front Page / NATIONAL [The Hindu]
  1. SC orders audit of 30 lakh NGOs
  2. NGT panel to inspect major waste generators
  3. Make solar rooftops mandatory
  4. Cash for land is just not done: SC
  5. Effects of Endosulfan devastating: SC
  • Editorial/OPINION [The Hindu]
  1. Taking ‘Cold Start’ out of the freezer?
  2. Mind the gender gap
  3. Reaching out to Africa
  • ECONOMY [The Hindu]
  1. India opposed to inclusion of ‘new issues’ in WTO
  2. Benefits of demonetisation uncertain in long run
  3. H1B visa reform to increase IT firms’ margin pressure
  • Indian Express
  1. Central To The Market
  2. An autonomy policy
  • Live Mint
  1. Time to revamp the tax administration
  2. Demonetisation and budgets

Click here to Download 9 PM Daily Brief PDF (11th Jan. 2017)


Front Page / NATIONAL [The Hindu]


[1] SC orders audit of 30 lakh NGOs


The Hindu

Context

SC issues directions to the government regarding funding of NGOs

What has happened?

SC has issued directions to the government to audit nearly 30 lakh NGOs which received public funds but consistently failed to explain how they spent the money.

Only few NGOs file returns

Though public funds to the tune of thousands of crores are spent on NGOs and voluntary organisations annually, the CBI submitted that only about three lakh of about 32 lakh NGOs file their balance sheets with the government.

 SC’s observations

  • Mere blacklisting: SC said that the only action so far against those who have failed to file their balance sheets is blacklisting. It is necessary to start criminal and civil action by the Central government and CAPART (Council for Advancement of People’s Action and Rural Technology)
  • Unaware of General financial rules: At one point, the court was taken aback when it found that despite the large amounts drawn from State coffers and given to NGOs, the government seemed to be unaware that General Financial Rules, 2005 mandate a regulatory mechanism for them. “This is your [government] money and you have no record of how they [NGOs] use it?” Chief Justice Khehar asked the government

SC ordered that

  • Prosecution: It ordered that any NGO found to have cooked its books or indulged in misappropriation should be subject to immediate criminal prosecution. Besides, the government should initiate civil recovery proceedings against such rogue organisations
  • Frame guidelines: By next hearing, the government should have framed guidelines for their accreditation, the manner in which these organisations should maintain their accounts and the procedure for recovery in case they fail to submit their balance sheets.

 Compliance report

The Supreme Court demanded that the government file a compliance report by March 31, 2017.


[2] NGT panel to inspect major waste generators


The Hindu

Context

The NGT expressed concern that public authorities lacked infrastructure and appropriate technical capacity to handle such huge quantity of waste

What has happened?

The National Green Tribunal (NGT) has constituted a committee to inspect major waste generators in the Capital, including five-star hotels, malls, hospitals, educational institutions with hostels and housing societies.

Members of the committee

The panel will include

  • Representatives of the ministries of Environment and Urban Development, Director General of Health Services, MCI, the DDA, the civic bodies, the Delhi government, the CPCB, the Railways and the DPCC
  • The committee also comprises four independent experts

NGT’s concern

The NGT expressed concern that public authorities lacked infrastructure and appropriate technical capacity to handle such huge quantity of waste

NGT Bench observed that

  • Mass generators of waste cannot be equated to households generating trash: Generators of mass municipal solid waste and sewage must ensure strict enforcement of the municipal solid wastes (Management and Handling) Rules, 2000.

[3] Make solar rooftops mandatory


The Hindu

Context

CSE: Solar panels on rooftops should be made mandatory for new residential societies.

 What has happened?

Solar panels on rooftops should be made mandatory for new residential societies, recommended the Centre for Science and Environment (CSE) in a policy brief

CSE’s findings

  • After studying the electricity consumption of five residential societies in Delhi, Jaipur and Ghaziabad, the CSE found that by switching from diesel generator (DG) sets to solar power for backup, the facilities would be saving lakhs of rupees every year
  • Discoms were aiding rooftop solar systems to meet the obligations for renewable energy,but most of these were being installed on institutional and commercial buildings
  • Need for awareness& giving financial incentives: RWAs did not appear to be interested in investing in the solar infrastructure despite potential savings. There was a need for greater awareness of solar power options among Resident Welfare Associations (RWAs). Fiscal incentives, including rebate on building tax, could be considered in order to encourage the switch to solar power

CSE recommended

  • Make solar rooftops a norm: Solar rooftops should become a part of the applications for construction approvals, with the builders keeping a certain portion of the plinth area “shadow-free” to aid solar panels
  • Complete ban on DG sets: A total ban on DG sets in new multi-storied houses should be considered. This would not apply to the essential common areas
  • Financial support to Discoms: Solar rooftop can cut discoms revenue since their most profitable customers may partly or fully migrate to solar. Therefore, it is vital that discoms be financially supported to encourage them to push solar rooftop
  • Incentivizing the shift from DG sets: Though there is a capital subsidy of 30 per cent for solar rooftop systems that are connected to the grid, there is a need to give incentives for switching from DG sets to solar systems with battery backup.

[4] Cash for land is just not done: SC


The Hindu

Context

SC agrees to hear the plight of the landless victims of the SardarSarovar Project

 What has happened?

Agreeing to hear the plight of the landless victims of the SardarSarovar Project in detail, the Supreme Court on Tuesday observed that giving cash instead of land to farmers who lost their fertile lands to the mega dam project is “tentatively” not acceptable

Petitioner’s contention: Land for land

Appearing for Narmada BachaoAndolan, advocate Sanjay Parikh said that the farmers are left with neither land nor livelihood despite there being binding orders from the Supreme Court upholding their right to land.

  • Mr. Parikh had submitted that as per the Narmada Tribunal Award and the Supreme Court verdicts, all adult sons were indisputably entitled to five acres of cultivable and irrigable land, and any discrimination would lead to the violation of the constitutional rights of the oustees.

Detailed hearing

CJI agreed for a detailed hearing on January 19thafter government sought authorities sought time for preparation

Backdrop

It should be noted that earlier the apex court had dismissed an application by the Madhya Pradesh government and the Narmada Valley Development Authority for a modification of the apex court judgments of 2000 and 2005 upholding land rights for adult sons of the SardarSarovar Project-affected farmers

  • SC Bench said that the State’s application suffered from gross delay, after having been filed several years since the Supreme Court gave its verdict on the issue.

[5] Effects of Endosulfan devastating: SC


 The Hindu

Context

Important decision on Endosulfan by SC

What has happened?

Describing the effects of Endosulfan as “devastating,” the Supreme Court has directed the Kerala government to release the entire compensation to over 5,000 victims, mostly newborns, and their families in 3 months

Bench’s directions

A three-judge Bench led by Chief Justice of India J.S. Khehar said

  • The State of Kerala can initiate legal proceedings to recover the compensation money from pesticide companies responsible for the production and sale of the highly controversial but cheap agrochemical
  • The State government can also approach the Central government

Previous SC directions

In 2011, the Supreme Court ordered the immediate ban of Endosulfan while disregarding pleas of over 150 private export companies.

  • It had said “any decision affecting human life, or which may put an individual’s life at risk, must call for the most anxious scrutiny

 What has Kerala government done so far?

Kerala has earmarked over ₹ 180 crore for the payment of compensation to victims, some of whom are terminally ill from the effects of the pesticide which was aerially sprayed on cashew plantations adjoining habitats where the victims are located

  • Compensation paid: The State has paid cash compensation ranging from ₹ 2 lakh to ₹ 5 lakh to the victims. It said the entire rehabilitation scheme, including a multi-speciality hospital, would cost over ₹ 500 crore
  • Kerala government has requested centre to spare Rs 486 crore

Read More: The Hindu article on devastation caused by Endosulfan


Editorial/OPINION [The Hindu]


[1] Taking ‘Cold Start’ out of the freezer?


The Hindu

Context

General BipinRawat’s reference to Cold Start raises vital questions about what he means by the phrase and whether he was authorized to speak on the matter by the government.

What has happened?

Gen Rawat, the new army chief, in an interview given to India Today, has acknowledged the existence of army’s Cold Start strategy or doctrine

 Military doctrine

A military doctrine helps standardize operations, facilitating readiness by establishing common ways of accomplishing military tasks. Its objective is to foster initiative and creative thinking and links theory, history, experimentation and practice.

 What is Cold Start doctrine?

Cold Start is a military doctrine developed by the Indian Armed Forces for use in a possible war with Pakistan.

  • The main objective of the Cold Start Doctrine is to launch a retaliatory conventional strike against Pakistan inflicting significant harm on the Pakistan Army before any international community could intercede, but not in way Pakistan would be provoked to make a nuclear attack
  • Cold Start Doctrine was developed as the limitations of the earlier doctrine – Sundarji Doctrine – was exposed after the attack on the Indian Parliament

Crux of cold start

  • Pakistan must not enjoy the luxury of time. Cold Start aims for eight “Battle Groups”, comprising independent armoured and mechanised brigades that would launch counterattacks within hours.
  • These Battle Groups will be fully integrated with the Indian Air Force and naval aviation, and launch multiple strikes round the clock into Pakistan.
  • Each Battle Group will be the size of a division (30,000-50,000 troops) and highly mobile unlike the strike corps.
  • Ominously for Pakistan, the Battle Groups will be well forward from existing garrisons. India’s elite strike forces will no longer sit idle waiting for the opportune moment, which never came in the last wars
  • Although its operational details remain classified, it appears that the goal would be to have three to five Battle Groups entering Pakistani territory within 72 to 96 hours from the time the order to mobilise is issued
  • Also, rather than seek to deliver a catastrophic blow to Pakistan (i.e., cutting the country in two), the goal of Indian military operations would be to make shallow territorial gains, 50-80 km deep, that could be used in post-conflict negotiations to extract concessions from Islamabad
  • Cold Start also works to undermine the much smaller Pakistani economy. According to the Pakistani media, the threat of the Indian Cold Start doctrine and increase in India’s defence budget has prompted the Pakistan government to sharply increase its defence budget, further increasing the strain on that country’s fragile economy.

Beauty of cold start

The beauty of Cold Start is it may never have to be used. It screws with the Pakistani military’s mind and forces the generals to spend time and scarce resources on finding ways to stop an Indian blitzkrieg

What if Pakistan uses tactical nuclear warheads on Indian armed columns progressing towards its cities under Cold Start?

If at all Pakistan uses tactical nuclear warheads on Indian armored columns thundering towards its cities, it would end up devastating its own Punjabi heartland. Most Pakistani cities are close to the border and would become uninhabitable while India would lose only a small part of its army

Gist of Cold start

In simple terms, Cold Start aims at finishing off with Pakistan before our political leadership loses its nerve and starts thinking of a truce or before international mediation stops war midway.

  • In normal times the mobilization time of Indian army’s strike corps takes time as it is located in central India. Cold Start aims to reduce the time to few hours

 Genesis of Cold Start

The perceived failure to mobilise the army’s Strike Corps in a timely fashion after the December 2001 attacks on Parliament was the impetus for Cold Start

Stance of Indian government

Official stance on Cold start has been the subject of extensive debate and controversy since it was first discussed in 2004. The idea has never been formally accepted by the Indian government

How Cold Start prompts Pakistan to build upon its nuclear arsenal?

The “threat” posed by Cold Start has been repeatedly cited by Pakistani authorities as proof of India’s hostile intentions which in turn has provided a justification for Pakistan to build up its nuclear forces, both increasing the sheer size of its nuclear arsenal (which carries its own risks of theft and nuclear terrorism) and developing lower-yield nuclear warheads and short range missiles, so-called tactical nuclear weapons, which are aimed at deterring — or in the worst case, defeating — a limited Indian military incursion

Can Indian Army pull it off?

Author states that there is no public evidence that India remotely has the capability to adopt or execute such a doctrine.

  • The army simply lacks the materiel and organisation to implement the more aggressive versions of Cold Start
  • It is not at all clear, for example, that the Indian Army at present possesses sufficient superiority in numbers of troops and armored vehicles in the vicinity of the International Border to be able to overcome the Pakistan Army’s defensive and geographic advantages in a short conflict
  • Obsolete equipment and critical shortages of ammunition and air-defence assets raises serious questions about the army’s ability to implement a Cold Start-style operation at all
  • Sustaining offensive operations in Pakistan requires joint operations with the air force. Not only does the Indian Air Force lack the kind of close air support capability Cold Start would require, but army-air force cooperation is marred by inter-service dysfunction.

 Author’s contention

Author points out that,

  • Reviving cold start may markedly escalate tensions in bilateral relations with Pakistan without necessarily delivering a clear benefit, since there is still no evidence that India has the required capabilities to implement anything resembling Cold Start.

Conclusion

Author concludes by saying that it is time for both the army and the government to clarify what precisely its conventional doctrine is by identifying its operational and strategic objectives and how it fits into India’s larger strategy to deter major militant attacks on the homeland.


[2] Mind the gender gap


The Hindu

Context

Despite the successes, better implementation and planning are needed to ensure that these policies percolate right down to the last woman in the most remote parts of the country.

Issue: Addressing gender disparity via Gender Responsive Budgeting (GRB)

Gender equality

Justifying her stance that the world is slowly recognising the importance of gender issues, author directs our attention to the fact that Gender equality is one of the 17 goals amongst the Sustainable Development Goals, to “transform our world”.

  • Moreover, women safety and empowerment were two out of many core issues around which the 2014 LS elections in India were fought

Budgetary concerns

Author states that the lack of targeted resources is often stated to be the biggest reason behind the sluggish progress in furthering the gender agenda. Therefore, it is important that India’s budget priorities reflect its commitment to invest in women and girls.

Problems

Here are few of the recognised challenges

  • Women’s declining labour participation
  • Under-representation in Parliament
  • Skewed child sex ratio
  • Prevalent gender-based violence

Scale of the problem in India

  • A poor rank: The World Economic Forum’s annual Global Gender Gap Report ranked India 87 in terms of gender equality in economy, education, health, and political representation

Gender Responsive Budgeting (GRB)

Author points out that to solve the above problems, India adopted the GRB in 2005

  • Rationale: The rationale for gender budgeting arises from recognition of the fact that national budgets impact men and women differently through the pattern of resource allocation. Women, constitute 48% of India’s population, but they lag behind men on many social indicators like health, education, economic opportunities, etc. Hence, they warrant special attention due to their vulnerability and lack of access to resources. The way Government budgets allocate resources, has the potential to transform these gender inequalities.
  • Gender-responsive planning and budgeting ensures that fiscal resources are generated and allocated in a way that affects women and men equitably

Gender Budgeting

Every annual budget since 2005 has included a statement that lists out two parts. Sixteen states have also embraced this exercise. There is

  • Part A, which reflects ‘Women Specific Schemes’, namely, those which have 100 per cent allocation for women
  • Part B, which reflects ‘Pro Women Schemes’, namely, where at least 30 per cent of the allocation is for women

GRB & improvement in indicators

Studies substantiate the positive link between GRB and improved indicators for women.

  • IMF Study: For instance, a recent International Monetary Fund (IMF) study found that States that employ GRB also show better female to male school enrolment ratios. Further, it was observed that GRB also has a positive impact on infrastructure spending

Problems

  • Declining & Stagnant allocations: Author states that in recent years the allocations have either remained stagnant or have been declining

Budget 2016-17: Author cites the 2016-17 Budget to prove her above point.

  • While the Ministry of Women and Child Development and National Commission for Women saw nominal increases, the scheme meant for implementing the Domestic Violence Act did not receive any allocation
  • Decline in ministries and departments under GRB: There was a decline in the number of ministries and departments that fall under GRB
  • Decentralization of funding under GRB: The budget also initiated the decentralization of funding in GRB, thus shifting the onus for budgeting and implementation from the Central Ministry to State counterparts. While this did empower the States to come up with women-specific policies as per their respective challenges, the obvious downside was the risk that States could choose to not prioritise gender in their budgeting

What more needs to be done?

Author states that despite successes, better implementation and planning are needed to ensure that these policies reach right down to the last woman in the most remote parts of the country.

  • More than mere symbolism: GRB must be viewed as an essential tool to tackle societal inequality that hinders progress instead of a symbolic exercise for pleasing the emerging women constituency
  • A more expansive approach: Author states that currently GRB identifies schemes that are exclusively dedicated to women. This approach has restricted the benefits of GRB to a select few schemes. A much better approach would be to look at all the existing schemes via GRB perspective.

For example:Sectors such as energy, urban development, food security, water supply and sanitation continue to operate in isolation, despite having causal interrelationships with women’s empowerment.

Way ahead

Author states that gender budgeting alone is not sufficient to tackle deep-rooted gender disparities.However, policies can be more effective if budgeting takes a broader, gendered approach which includes planning targeted interventionsand monitoring and evaluation mechanisms to ensure implementation.

  • Flexible policies: Policies should also be flexible to change based on feedback from the intended recipients
  • Incentivizing states: It would also help if the Central government could, through an incentive mechanism, encourage State governments to take up GBR as a priority in their budget layouts.

[3] Reaching out to Africa


 The Hindu

Context

Conclusion of India-Africa Forum summit

Issue: India-Africa Forum Summit

Significance of the summit

That 41 heads of state and government from 54 countries in Africa were present at the India-Africa Forum Summit in New Delhi, itself demonstrates the importance both sides attach to mutual ties.

  • The summit, which concluded on Thursday, was the largest gathering of foreign dignitaries in New Delhi since the 1983 Non-Aligned Summit.

Africa: important trade partner

Africa is an important trade partner for India.

  • Indian energy companies have assets in African countries, and New Delhi exports consumer and capital goods and medicines to the continent
  • India-Africa trade was worth almost $70 billion in 2014-15, and Indian companies invested some $30-35 billion in the continent over the past decade
    • Higher trade: Chinese trade with Africa is much higher, to the tune of, $200 billion in 2014-15.
    • Huge Chinese investment: Besides, China has invested more than $180 billion in Sub-Saharan Africa alone in areas ranging from energy to infrastructure during the period 2005-2015.

Author suggests

  • Perfecting the policy: India may not have the resources to beat the level of Chinese investments, but it can certainly do a lot more with proper policy approaches, faster project execution and improved bilateral relations.
    • Recent announcement of the $10 billion concessional credit to Africa by India is a right step in this direction
  • UNSC reforms: Author states that there’s a convergence of interest for reforming the Security Council. India’s claim is that as the second most populated country and the largest democracy in the world, it deserves a permanent seat in a reformed Security Council. India has also noted that Africa, with more than a quarter of the members of the UN, is not represented in the powerful UN body. Against this background, it is imperative for both sides to speak in “one voice” for Security Council reforms
  • Cashing in on the goodwill: Stronger ties with Africa fit into India’s traditional foreign policy setting. The goodwill India enjoys in the continent is a result of the principled anti-colonial positions the country took in the post-Independence era. India should cash in on that goodwill to build a stronger economic and political partnership with Africa in the new century.

Read More: India-Africa Forum Summit


ECONOMY [The Hindu]


[1] India opposed to inclusion of ‘new issues’ in WTO


The Hindu

Context

Ahead of a special meeting of trade ministers on the sidelines of the forthcoming World Economic Forum at Davos, India opposed attempts by some developed nations to introduce ‘new issues’ into the formal agenda of the World Trade Organisation (WTO)-level negotiations

World Economic Forum

The World Economic Forum (WEF) is a Swiss nonprofit foundation, based in Geneva

  • Brief history: The forum was founded in 1971 by Klaus Schwab, a German-born business professor at the University of Geneva. First named the “European Management Forum”, it changed its name to the World Economic Forum in 1987 and sought to broaden its vision to include providing a platform for resolving international conflicts.
  • Mission: Recognized by the Swiss authorities as an international body,its mission is cited as “committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas”
  • Annual meet at Davos: The Forum is best known for its annual meeting at the end of January in Davos, a mountain resort in the eastern Alps region of Switzerland. The meeting brings together some 2,500 top business leaders, international political leaders, selected intellectuals, and journalists for up to four days to discuss the most pressing issues facing the world

Note: WEF brings out the yearly Global Competitiveness report

What has happened?

Ahead of the annual meet at the Davos, that is scheduled to take place between January 17 and 20, India has opposed attempts by some developed nations to introduce ‘new issues’ including e-commerce and investment into the formal agenda of the World Trade Organisation (WTO)-level negotiations on liberalisation of global trade.

Backdrop

India had on earlier occasions too rejected the attempts of the developed world to make such ‘new issues’ part of the ongoing Doha Round talks saying it will ‘dilute’ the ‘development agenda’ of the negotiations.


[2] Benefits of demonetisation uncertain in long run


The Hindu

Context

Short-term pain of the government’s demonetisation exercise could outweigh long-term gains that it said were still ‘uncertain.

What has happened?

Fitch, a rating agency, in a report titled, “Benefits of demonetisation are highly uncertain”, has said that the short term pain of the demonetization might outweigh the uncertain long-term gains of the move

Observations made in the report

In its report, the rating agency has said that,

  • Since demonetisation was a one-off event, people in the informal sector would still be able to use the new high-denomination notes and other options, like gold, to store their wealth
  • There are no new incentives for people to avoid cash transactions. The informal sector could soon go back to business as usual
  • There were uncertainties over the impact on the banking sector as demonetisation could also affect the ability of some borrowers, especially SMEs, to service their loans, with negative effects on bank asset quality
  • The positive impact on funding conditions will depend on deposits remaining in banks beyond the next few months. There is nothing to prevent them being withdrawn again
  • The intentions behind demonetisation were positive and in keeping with broader reform efforts, but the short-term pain might outweigh the uncertain long-term gains.

[3] H1B visa reform to increase IT firms’ margin pressure


 The Hindu

Context

IT firms’ margins will come under more pressure if the US government clears the H1B visa reform Bill — ‘Protect and Grow American Jobs Act’

Proposal

The key proposal in the Bill is to

  • Increase the salary of H1B visa holder to USD 100,000 (Rs 66 lakh) from USD 60,000 per annum The salary level that has been proposed is significantly higher than the average employee cost of Indian IT companies of under Rs 1 million (ranges between Rs 3 lakh to Rs 5 million)
  • The removal of an exemption of having a master’s degree: The removal of the exemption of possessing a master’s degree to qualify for a H1B visa if implemented will reduce the talent pool qualifying for such visas and in turn result in either increased employee cost for hiring employees with higher qualification or subcontract work, both of which would increase the cost of operations and result in lower profit margins

Backdrop

Indian IT companies generate around 55-60 per cent of the revenue from the US. The onsite proportion of revenue exceeds the offshore portion.


Indian Express


[1] Central To The Market


Indian Express

Context

Long-term investments in social sector are essential for growth, political stability.

Give it a go-through once.


[2] An autonomy policy


 Indian Express

Context

Demonetisation process raises troubling questions over the way government has treated RBI. Central bank needs to assert

A fairly simple article. It throws light on one of the many aspects of demonetization move by the government. One of those is the damage done to the autonomy of the RBI and the perceived impact on its credibility.

Why is credibility of the central bank critical?

It is critical because the stability of the economy is hinged on it and not just in the eyes of global investors and rating agencies, but also from the perspective of the entities the RBI regulates.

Conclusion

Author concludes by saying that RBI needs to reclaim the space vital to health of the institution.


Live Mint


[1] Time to revamp the tax administration


Live Mint

Context

The tax department will now have to mine a vast volume of data to zero in on accounts that have been used to deposit unaccounted cash.

Issue: Demonetization’s aftereffects

Costs & benefits

Author states that the cost and benefits of the demonetization are still being debated

  • Costs: In terms of costs, economic indicators such as auto sales and purchasing managers’ indices indicate that economic activity has been hit by the cash crunch. However, the data on tax collection suggests that the impact could be limited
  • Benefits:When it comes to benefits, assessing the real gains in terms of original intended purpose of the move i.e. to attack the black money stored in cash, would be a tricky process. And the burden of it will fall on a tax administration that is ill-equipped for it
    • Success of the move: Author states that the success of demonetization in terms of arresting black money would depend on the number of old notes not returned to the banking system because,
      • Such notes reflect the black money that couldn’t be laundered or couldn’t be deposited into banking system on account of it being illegal

Note: It should be noted here that above fact doesn’t mean that all the notes that have returned to banking system are not a part of black money

Difficulties before ta administration

Author states that it will now be the responsibility of the tax administration to sift through volumes of data to detect unaccounted deposits made in the bank accounts during the demonetization exercise. This will not be easy because,

  • Increase in workload and prospective litigation: It will substantially increase the workload and can lead to litigation
  • Pressure on tax infrastructure: The department will have to handle the entire exercise with care and avoid causing discomfort to honest taxpayers. This will put enormous pressure on the existing capability and infrastructure of the tax department

Existing situation

A recent Mint report noted that

  • Pending cases: About 390,000 direct tax cases are pending across various forums and an internal committee has suggested that the department should reduce scrutiny to give more attention to litigation management

Addressing tax evasion

Author state that without addressing the problem of tax evasion, any attempt to broaden the tax base will be futile. He suggests,

  • Enhancing tax administration’s capability: Government must work on a medium-term strategy to enhance the capability of the tax administration
  • Big Data analytics: Author suggests using big data analytics like using data generated by the consumption patterns of individuals to identify tax evasion
  • Boosting compliance: Simplifying the tax structure and lowering tax rates would help boost compliance.

Reducing generation of black money

  • Reforming laws: The government will simultaneously need to work on laws and regulations to reduce the generation of black money in the system. For instance, as has been noted by several experts, high stamp duty in real estate encourages under-reporting, which results in the creation of black money
  • Political finance: Bringing transparency to political funding and financing will also help in reducing the generation of black money.

Conclusion

Author states that government has taken the various steps to deal with black money but if it is to build on any of the benefits that have accrued so far, it must make the structural changes to the tax administration needed to minimize the generation of black money and make detection of tax evasion an ongoing process.


[2] Demonetisation and budgets


Live Mint

Context

All in the mind: ArunJaitley will soon be presenting the 2017-18 budget and his well-laid plans may have to incorporate demonetisation-induced changes.

Article speaks about the prospective announcements that could be made during the annual budget

Give it a go-through.


 

Categories
9 PM Daily NEWS Brief

9 PM Daily Brief – 21st December 2016


 

  • Front Page / NATIONAL[The Hindu]

  1. Can courts make life terms more rigorous, asks SC
  2. NCRPB tells States to submit action plan to curb pollution
  • INTERNATIONAL [The Hindu]

  1. India, Kyrgyzstan seek a global pact against terror
  • Editorial/OPINION [The Hindu]

  1. An unkind postscript
  2. Time for a policy shift
  • ECONOMY [The Hindu]

  1. Credit costs hinder cashless economy
  • Indian Express

  1. Good signalling
  • Live Mint

  1. Formulating an Act Manipur policy
  2. Reforming healthcare in India

Click here to Download 9 PM Daily Brief PDF (21st Dec. 2016)

Front Page / NATIONAL[The Hindu]


[1] Can courts make life terms more rigorous, asks SC


The Hindu

Context

The Supreme Court will examine whether courts are statutorily empowered to make life imprisonments harsher for convicts by adding the term “rigorous” while delivering a sentence of life imprisonment.

What has happened?

A Bench of Justices P.C. Ghose and U.U. Lalithas said that it would consider whether the Criminal Procedure Code (CrPC) or any other penal law empowered the courts to add the term ‘rigorous’.

Backdrop

The Supreme Court decided to hear on this aspect while considering the appeal filed by Ram Kumar Sivare, who is serving rigorous life term in a Chattisgarh jail, for murder.

  • The State High Court had upheld the trial court judgment convicting and awarding life term to Sivare and Bhuneshwar Prasad for stabbing to death Anil Bhoyar on January 5, 2010 near a government hospital in Durg district of Chhattisgarh following a quarrel over a minor issue

Petitioner’s contention

Challenging the High Court verdict in the murder case, Sivare’s lawyer and senior advocate Parmanand Katara, contended that the judgment pronounced by the lower courts was “unconstitutional and ultra-vires” as penal and procedural laws do not empower them to qualify the life sentence awarded to a convict with the term “rigorous”.


[2] NCRPB tells States to submit action plan to curb pollution


 The Hindu

Context

NCRPB said that air pollution in Delhi is a matter of serious concern and Delhi, along with Uttar Pradesh, Haryana, Rajasthan and Punjab should act in unison to mitigate the suffering of the people.The Board will soon file an affidavit before the Delhi High Court regarding the matter.

What has happened?

In the light of deteriorating air quality, the National Capital Region Planning Board (NCRPB) has asked Delhi and adjoining States to submit action plans to control air pollution in the Capital.

 Affidavit to HC

The Board will soon file an affidavit before the Delhi High Court regarding the matter. The CPCB said that an action plan to curb pollution was prepared under the directions of the Supreme Court in November, which could be part of the affidavit to be filed by the NCRPB.

Increase tree cover

Delhi, Haryana, Uttar Pradesh and Rajasthan have been asked to increase forest and tree cover in the NCR in a phased manner to 20 per cent of total geographical area while expressing concern over the present cover of just 3.30 per cent in 2012, declining from 4.30 per cent in 1999.

Naturally Conservation Zones

The NCRPB made it clear that NCZs are the major natural features identified as environmentally sensitive areas, which include the extension of Aravalli ridge in Delhi, Haryana and Rajasthan, forest areas, the rivers and tributaries of Yamuna, Ganga, Kali, Hindon and Sahibi, sanctuaries, major lakes and water bodies such as Badkal lake, SurajKund and Damdama in Haryana Sub-region and Siliserh lake in Rajasthan.

Prepare Regional Plan-2041

The Board also authorized the NCRPB Secretariat to initiate preparation of Regional Plan-2041 for the National Capital Region.

 More inter-State links

The Board also discussed 14 inter-State links with the aim of facilitating seamless travel in the NCR, which includes Kalindi by-pass road from Ashram Chowk to Faridabad by-pass, development of Mehrauli–Guragaon Road as NH-236 to ease traffic on NH-8 and connecting Nelson Mandela T-Point at Vasant Kunj with the existing Gurgaon-Mehrauli Road to reduce travel time.


INTERNATIONAL [The Hindu]


[1] India, Kyrgyzstan seek a global pact against terror


 The Hindu

Context

India and Kyrgyzstan finalized plans for joint military exercises, and reiterated the need for a global convention against terrorism

Matter: KyrgyzstanPresident’s 4-day visit to India

Things finalised

  • Following a bilateral summit at Hyderabad House, the delegations finalised plans to hold the annual joint military exercises named “Khanjar-IV” in February-March
  • The “Khanjar-II” exercises were held in March 2015 in Kyrgyzstan and “Khanjar-III” in March-April 2016 in Gwalior

Joint statement

A joint statement which marked the end of the visit took note of the IT support that India had provided to the Kyrgyz military institutions, including building three IT centres in the past two years

  • the high-altitude Kyrgyz-Indian Mountain Training Centre being built in the city of Balykchi, which will be used to train Indian military personnel
  • Both sides reiterated the demand for global counter-terror norms to fight terrorism in Asia, and called for the adoption by the United Nations of the draft Comprehensive Convention on Combating International Terrorism.

Editorial/OPINION [The Hindu]


[1] An unkind postscript


The Hindu

Context

The Governor of the Reserve Bank of India, Urjit Patel, said there was a ‘confluence of thought’ in the government and the central bank to deal with black money by removing existing Rs.500 and Rs.1000 notes as legal tender.

Article talks about the new restrictions imposed by RBI upon depositing old tender

 New conditions announced

Anyone depositing Rs. 5,000 or more into a bank account will have to satisfactorily explain to two bank officials why this was not done earlier

Exception:

  • Those opting to disclose unaccounted income under the new amnesty scheme, the Pradhan Mantri Garib Kalyan Yojana, face no restriction on depositing old notes.
  • Finance Minister has suggested that such explanations will not be required for anyone making a deposit for the first time

Why this move is an unfair one?

As per author there may be genuine reasons for people not to have deposited the old tender at the banks till now including their faith in the earlier announcements that old tender could be deposited until December 31st.


[2] Time for a policy shift


The Hindu

Context

The unorganized manufacturing sector should be reoriented towards non-household units to provide efficiency gains.

Small vs large units

In the first few paragraphs author mentions that in the context of the manufacturing and agriculture sectors, the debate on small versus large dominated the intellectual space for several decades.

He states that,

  • Usually thought to be efficient: Small units are usually thought to be efficient in terms of resource use and management, and technically more efficient
  • Lack of access to resources: Small units do not have access to several kinds of resources, particularly in relation to credit and marketing facilities, and are not able to reap the economies of scale. Thus, large units may reveal better performance indicators and may have an edge in market competition.

What is a manufacturing sector?

The Manufacturing sector comprises establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.

Unorganized manufacturing sector (UMS from here on)

Authors state that UMS, which is composed of both household and non-household units, accounts for a majority of the total manufacturing employment in India

  • Type of units: Small in size

Authors point out that to ensure decent wages to the workers in this sector and to ensure pro-poor growth, the units in this sector have to be made economically viable.

 Organised vs Unorganised units

Comparing economic viability: Authors state that one way of the economic viability of unorganised manufacturing units is to consider the performance index in terms of ‘technical efficiency’ relative to the organised sector units

What is technical efficiency?

It is the ability of an industrial unit to transform inputs into output judged against the best practice units in the same industry

Results of research

Studies done by the authors and many other scholars point out that,

  • Within the unorganised sector, units seem to reveal similar characteristics in terms of performance indicators, while organised sector units are much better performers
  • Unorganised sector units are not able to benefit in the process of rapid economic growth. The demand side factor or agglomeration-specific factor does not impact on the performance of unorganised sector enterprises in a favorable way
  • Organised sector units respond positively to a rise in income in the region where they are located, which possibly can be explained in terms of quality differences in the products manufactured by the organised and unorganised sectors
  • With a rise in income, demand for products shifts away from the unorganised to the organised sector
  • Ancillarisation:the process of ancillarisation is expected to benefit unorganised sector units indirectly by creating greater opportunities through inter-sector linkages, the increasing role of labour intermediaries and payment of wages on piece rate basis do not seem to be facilitating this process

 What is Ancillarisation?

The following requirements are to be compiled by an industrial undertaking for being regarded as ancillary industrial undertaking:

  1. “An industrial undertaking which is engaged or is proposed to be engaged in the manufacture or
  2. production of parts, components, sub-assemblies, tooling or intermediaries or
  3. the rendering of services & the undertaking supplies or renders or proposes to supply or
  4. Render not less than 50% of its production or services, as the case may be, to one or more other industrial undertaking & whose investment in fixed assets in plant & machinery whether held on ownership terms or on lease or on hire purchase, does not exceed Rs 10 million.”
  • The level of infrastructure also does not exert a positive impact on the performance of the unorganised sector, while the efficiency of the organised sector improves with a rise in the availability of infrastructure.

Overall conclusion

On the whole, unorganised sector enterprises exist to provide means of survival only, which is especially true for household units.

Steps that can be taken

  • Improving product quality: Designing policies to help improve the product quality within the unorganised sector
  • Improving access: steps need to be initiated for improving their accessibility to infrastructure provisions. There are many unorganised sector units, particularly ones that are operated by households, which are located in remote rural areas.

Issues with unorganised units

  • Inability to expand: Unorganised manufacturing units cater only to local markets and are not able to expand their market size in a significant way
  • Inadequacy of infrastructure
  • Absence of credit and marketing facilities
  • Issue of electricity pricing. 

Other findings

Authors point out that findings of some past research on the efficiency of India’s unorganised manufacturing sector point to

  • Higher technical efficiency of small industrial units in urban areas than their counterparts in rural areas reflecting advantages due to the location
  • Smart City programme: Authors state that this programme designed to boost urbanisation is expected to make unorganised manufacturing more economically viable. How?
  • Access to investment: Several small towns (census towns) which have been recognised as urban by Census 2011 but still do not have urban local bodies are not able to draw investment meant specifically for urban areas. Once they are treated as a part of urban areas, unorganised sector units in such localities will benefit significantly
  • Sub-contracting: Since engagement in sub-contracting activity enhances to some extent technical efficiency of unorganised manufacturing units and the incidence of sub-contracting is relatively greater in urban areas, it follows that a process of rapid urbanisation will help.

 Problem with household units in unorganised manufacturing sector

Authors state that household units suffer from following problems,

  • Less efficient: Household-based units with only family labour are known to be much less efficient than non-household manufacturing units, also known as ‘establishments’ which are relatively bigger in employment size and make use of non-family hired labour
  • Poor performance in labor standards: In terms of labour standards, household units perform far worse than unorganised non-household units

Important Question

Therefore, an important policy question is whether the unorganised manufacturing sector should be helped to restructure increasingly from household units to establishments. Such a transformation will provide efficiency gains to unorganised manufacturing, but may come at the cost of some loss in employment.


ECONOMY [The Hindu]


[1] Credit costs hinder cashless economy


 The Hindu

Context

Imposed indirectly on merchants, these are passed on to customers through increased sale price.

What has happened?

On November 18, Reserve Bank of India (RBI) issued a circular asking banks to waive charges levied on transactions by merchant establishments using point of sale (PoS) terminals. “Customer charges, if any, being levied on all such transactions (are) waived till December 30, 2016, subject to review,”

What are Customer Charges or MDR?

In this case, the Customer Charges also known as Merchant Discount Rate. It refers to the rate charged to a merchant by a bank for providing debit and credit card services.

Merchants have not passed on the waiver to the consumer. Why?

Q: Why is there a reluctance on the part of the banks to waive the fee, even if it is meant for a limited period?

Current MDR

  • For debit cards: 1 per cent per transaction
  • For credit cards: The rate could go up to 2.5 per cent

Who gets how much?

The charge is borne by the merchant and goes to the issuer bank (the bank that has issued the card), the acquirer banks (the bank that installed the PoS terminal) and payment gateways such as Mastercard, Visa and Rupay. The issuer bank gets the maximum share of the MDR.

Case of a debit card

Let us take the case of debit cards. Debit cards are issued to customers who have a savings bank account and the money from that account gets debited immediately after the card is swiped for a transaction.

When a depositor keeps the funds in the savings account for which she earns 4 per cent, the bank, in turn, lends that money which can earn it at least 6.5 per cent, a risk-free rate.

  • Cost savings: Issuing a debit card to the customers saves cost for the bank. RBI studies have found that if a customer visits a bank branch for a transaction, the cost incurred by the bank is in the range of Rs.30-32, but when the customer visits automated teller machines, the cost comes down to Rs.14-15 per transaction

Q: Why does a bank need to charge a merchant for debit card transactions; a charge that acts as a disincentive for the merchant to install the machine?

Credit cost, imposed indirectly on the merchants is, in turn, passed on to all customers through increased selling price of goods and services

Thus, credit-less digital payments cross-subsidise the hidden cost of credit embedded in the payment system

Point of Sale terminals (PoS) growth

Following the demonetisation exercise, installation of PoS terminals has seen an exponential growth.

  • SBI: State Bank of India (SBI), for example, saw 3.75 lakh transactions every day in the PoS terminals before November 9 amounting to Rs.94 crore per day. After demonetisation the number increased to 16.43 lakh transactions amounting to Rs.324 crore per day

Q: Would waiving off the charge completely prove optimal?

  • Complete waiver detrimental: According to a top central banking source, while there is scope for further rationalising the charges, waiving them off completely could be detrimental to decisions on further investments by banks.

 MDR should be at optimal level

The committee, set up to present a roadmap for digital payments, headed by finance secretary RatanWatal, said in its report that the MDR rate should be at an optimal level. As per the report,

  • Keeping it optimal: The MDR must be low enough to ensure that merchants adopt the payment method, and encourage customers to use such payment methods. At the same time, the MDR must be high enough to cover costs, and incentivize issuers and acquirers to keep acquiring greater number of merchants
  • Regulatory caps: Regulatory caps placed upon MDR may ultimately hamper the growth of the payments industry
  • Market drive approach: Setting of MDR should be market-driven.

Indian Express


[1] Good signalling


 Indian Express

Context

EPFO cutting rates is a step in the right direction. There must be no roll-back.

Article talks about the decision of EPFO to cut interest rate and why this move is the right one in the current situation.

Give it a go through once.


Live Mint


[1] Formulating an Act Manipur policy


Live Mint

Context

Development in the region cannot be seen as an incidental benefit to a national foreign policy.

Issue: India’s Act East policy with a special focus on Manipur

Act East policy

India’s “Look East” policy was reoriented to “Act East” policy in 2014

The policy intends to

  • Create a better relationship with South-East Asian countries
  • The policy at its core focuses on using India’s eastern border states to improve trade relations with South-East Asia.

Weak link

Author states that the weakest link in the Act East policy is the dismal state of the states along the North Eastern border.

 Why Manipur?

Manipur, which shares 355km of its border with Myanmar and remains India’s most economically viable border to the south-east.

Backdrop

Manipur’s contentious merger with India and subsequent land and identity issues have resulted in a cycle of violence and insurgency movements within the state. The lack of competent governance institutions, infrastructure and economic growth has further intensified the inadequacies within the state.

  • Impact of AFSPA: Author points out that the Armed Forces Special Powers Act in Manipur, which has been in place since 1958, has continued to alienate the local population, and act as a deterrence for modernization of state police and counter-insurgency forces.
  • Tribal trouble: Existing tensions between the majority Meitei ethnic group who occupy the valley and hill tribes like the Kukis, Nagas and Zomis have added to the trouble
  • Outer forces: Vested interests within the state and outside interests have intensified existing tensions by calling for a stricter definition of who can be a resident, calling for control of outsider entry into the state, and greater autonomy for the hill district
  • Increased speculation: The signing of the Naga framework accord between the National Socialist Council of Nagalim (Isak-Muivah) and the National Democratic Alliance government in 2015 has also increased speculation about the territorial disintegration of Manipur as Manipur’s northern districts have been long claimed by Nagas as part of the greater Nagalim territory.
    • Creation of new districts: The creation of the seven new districts (on 9 December), with at least three districts dividing the Naga-dominated areas in northern Manipur, has given new life to this tension, resulting in the continuation of a two-month economic blockade and now a curfew.

What state and central governments can do?

The Union and state governments must come together to act on these issues

  • Phased removal of AFSPA&implementation of the Sixth Schedule, which gives autonomy to tribal districts, rather than an inner-line permit which will restrict the entry of people, will give people greater control. 

What is an Inner Line Permit?

Inner Line Permit (ILP) is an official travel document issued by the Government of India to allow inward travel of an Indian citizen into a protected area for a limited period. It is obligatory for Indian citizens from outside those states to obtain a permitfor entering into the protected state.

  • Ceding administrative control to small groups: Tribal groups currently in conflict with the state over land should be given administrative control of that area which will remove any incentive for rise of small insurgent groups and will shift the responsibility for maintaining peace from state to the groups themselves.

Manipur & Myanmar

  • More than a shared border: Manipur has historical and cultural contiguity with Myanmar, apart from having a clear navigable, active trading route with Myanmar
  • Securing the trade route: The roadway between Moreh in India and Tamu in Myanmar is the core of trade and connectivity to South-East Asia. India’s planned trilateral highway starts from Moreh and is designed to cross Myanmar, extending all the way to Mae Sot in Thailand. Legalizing, securing, and streamlining this existing natural trade route will ensure economic connectivity remains, and benefits the state
    • Developing Moreh as a Smart City: Focus on developing Moreh as a smart city will help improve infrastructure and will also be a vital step in its development as the main trading point on the India-Myanmar border
  • Stopping illegal cross border imports: Manipur, after Mizoram, remains the port of choice for drugs and arms originating from the golden triangle on the Myanmar, Laos, Thailand border.Better security infrastructure, a narcotics agency with more powers, better equipment, a modernized border force, and streamlining of trading posts can help stop illegal cross border imports.

Conclusion

Manipur, along with other eastern states, needs to be made a stakeholder in any foreign policy that involves acting east. Development in the region cannot be seen as an incidental benefit to a national foreign policy. An Act East policy that uses the growth and regional impact of a stronger, better-governed Manipur will have far greater impact on India’s commitment to its eastern neighbors.

Read More: Golden Triangle


[2] Reforming healthcare in India


Live Mint

Context

India’s largely unorganized healthcare sector is focused on curing sick people rather than preventing sickness itself

Triple disease burden of India

Authors state that India is facing a triple disease burden as of now,

  • Maternal and child health
  • Infectious
  • Non-communicable diseases

Question

What prevents India’s healthcare system from delivering world-class services, especially for the over 800 million people of rural India?

  • Low funding of healthcare sector
  • Health insurance covers less than 5% of total health expenditure. The formal private network is a miniscule component of India’s health sector and is focused on secondary and tertiary care for urban India

Present situation

Burden on the individuals: Over 60% of healthcare expenditure in India is incurred by individuals whenever they seek care

Informal healthcare providers: Money is spent on seeking healthcare services from several informal providers and on purchasing large quantities of irrational medicines directly from pharmacies.

As a result, India’s largely unorganized healthcare sector is focused on curing sick people rather than preventing sickness itself.

 So, why not create a free market for healthcare sector?

This won’t work because

  • High degree of variability: Unlike other expenses, those on healthcare tend to have a high degree of variability and are most often unexpected
  • Negligent behavior: Seldom people think about their health when they are in absolutely fine condition. Health becomes a prime issue only when we are suffering from an ailment. Due to these factors, health insurance is never on the radar of a common citizen in India
  • Complete dependence on doctors: A common citizen is not even aware of his/her health status and is completely dependent on the medical practitioner for advice

All of the above factors explain as to why a free market model cannot work in healthcare sector and why this sector is state regulated

Principles behind a successful health system

A careful study reveals three essential principles that are central to the design of each of these successful health systems:

  1. Pre-payment with pooling: Countries have either used higher taxation levels to achieve this or have required residents to mandatorily purchase some form of health insurance. Britain is an example of a largely tax-financed health system while Germany is largely reliant on mandatory health insurance. Japan mandates citizens to enrol with one of its several insurers for universal coverage. The money thus collected is then aggregated into large pools which are able to absorb the high level of variability of health expenditure.
  2. Concentrated purchasers with organized providers: The second principle is that these pools are managed by one or more large agencies, which use pooled money to pay for healthcare for their members, and thereby discipline both providers and consumers. Britain uses public trusts, Germany sickness funds, Japan uses multiple insurers and Thailand adopts a single national health security office which buys only from primary care-led integrated providers.
  • Distinction between the roles of the purchaser of health services and the providers of healthcare: In several countries, there is a distinction between the roles of the purchaser of health services and the providers of healthcare. In such examples, a public trust or designated organization could receive pooled finances, acting as a purchaser.
  • Mix of public & private:Providers could be a mix of public and private accredited facilities that compete for contracts based on high-quality services and on a capitation basis. Health insurers provide a wider suite of innovative products, covering outpatient and primary care. This enables the shift towards a futuristic healthcare design where payments to healthcare providers are based on achievement of outcomes.
  1. The government’s role as an active shaper and steward of the entire health system: The third and most crucial design principle in all effective health systems is that the government plays an active role in designing and supervising the entire health system, instead of focusing only on the management of a health system owned by itself

Way forward

In the 1960s, countries such as Thailand, Brazil and South Korea had health statistics similar to or worse than India’s in 2010, but transformed the status quo over four decades. In India, each state represents a different social, economic, and cultural environment, and will need a customized approach towards its health systems’ redesign.

Conclusion

Each state in India can take lessons from these design principles to build a strong healthcare system


 

Categories
Newspaper

Must Read News Articles – December 2


Archives


must-read


The Hindu


Front Page / NATIONAL

Delhi High Court reverses ban on combination drugs: Quashing the ban on 344 Fixed Dose Combination (FDC) drugs, Delhi High Court has said that the Centre had acted in a haphazard manner and did not take the advice of the statutory bodies under the Drugs and Cosmetics Act before issuing the notification.

‘Don’t shut the door on jallikattu’: Urging the Supreme Court not to shut the door on jallikattu, the Centre has said that the tradition is inextricably linked to the rural life of Tamil Nadu.

Anthem redux: How it came back in play: The Supreme Court ruled that all cinemas in the country must play the national anthem prior to the screening of a film, with all doors closed.

Health Ministry to file appeal, points to parallel plea in SC: The Ministry wants all 454 petitions concerning fixed dose combinations (FDCs) to be heard at one place.

Imposed only reasonable restrictions, govt. tells SC: Affidavit in SC denies any lack of preparedness in implementing the demonetisation policy.


INTERNATIONAL


We’re willing to wait for talks: Pak. envoy Basit: Pakistan is sending Mr. Aziz to Amritsar to attend the Heart of Asia conference on Afghanistan on December 4. It will be his first foreign ministerial visit to India in several years.

U.S. for closer defense ties with India: The National Defense Authorization Act 2017 is scheduled to be passed by the U.S Congress next week. U.S has already recognized India as a “major defense partner”


Editorial/OPINION


Patriotism by diktat: it is hard to understand the rationale for the Supreme Court’s order that every cinema hall should play the national anthem before the exhibition of a film.

HIV: The self-test option: With the World Health Organisation (WHO) releasing guidelines on HIV self-testing, a major obstacle in improving access to diagnosis has been cleared.

Contours of a challenge: The manner of enforcement of demonetisation has visited many consequences upon the people. If it chooses to review them, the judiciary would be overreaching its authority.

The message from Amritsar: The Heart of Asia conference is likely to confirm a new phase in India-Afghanistan ties.


ECONOMY


Taxman says 85%, experts opine 83.25%: The tax law amendments to implement the latest voluntary Income Disclosure Scheme has left tax practitioners puzzled about the effective rate of tax and penalty that will be imposed on those who fail to avail of what is being considered the last chance at amnesty for holders of black money.


Science and Technology


India’s first private moon mission next year: The mission’s aim is to land this spacecraft on the moon, have it travel at least 500 metres and beam high-definition video, images and data back to the earth. Were it to be successful, it would likely pip ISRO’s proposed moon-lander mission – Chandrayaan 2.


Indian Express


The Amritsar opportunity: Sartaj Aziz’s participation in the Heart of Asia Conference on Afghanistan is a chance for India and Pakistan to defuse tensions, so that they can get back to talking with each other.


Live Mint


Understanding Pakistan’s new terror strategy: Rawalpindi’s intent is very clear: attack the “occupying forces” of India in Jammu and Kashmir.

Demonetisation without replacement: This is exactly the kind of policy which negates structural reform in the Indian economy and discourages investment.