Daily Current Affairs for IAS & UPSC Preparation

All current affairs available date-wise and month-wise. Watchout for Back2basics and Notes4students.


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FDI in Indian economy Finance and Banking

[op-ed snap] Red tape herring?

source

Note4Students:

Mains Paper 3: Economy | Growth

The Modi government came to power by giving an election promise of ‘Minimum Government, Maximum Governance’. All eyes are now on government that how willing it is and what measures it is taking to fulfill that promise. Read the op-ed to gain insights about FDI approval processes and other related measures.

From UPSC perspective, following things are important:

Prelims level: FIPB, Anti corruption law and FDI limits in various sectors of economy.

Mains level: What are the factors that lead to delays in decision making process in government, how can this be resolved and other related topics.


 News:

  1. As promised in Budget speech, The Union Cabinet has approved ‘phasing out’ of the Foreign Investment Promotion Board (FIPB)

What will be modus operandi now?

  1. The Department of Industrial Policy and Promotion under the Commerce Ministry is now expected to formulate a standard operating procedure to process foreign direct investment applications in 11 sectors that are still not in the automatic FDI approval list
  2. The department would have to be consulted by line ministries, which have been empowered to take ‘independent’ decisions on investments proposed in their domains

End of red tapism:

  1. Government belief- The government believes that once FIPB is history, red-tapism will shrink, ease of doing business will improve and investors will find India more attractive
  2. Present scenario- But over 90% of investment flowing in country already does not require an FIPB nod as it comes in through the automatic route, so decision is more symbolic in nature
  3. Litmus test- The efficacy of this move will be determined by the ability of individual ministries (and sectoral regulators which may be involved in the ultimate decision) to exercise ‘discretionary’ powers without fear, favour or the cover provided by a collective decision-making body

Cautious Bureaucracy:

  1. Bureaucrats are likely to remain cautious till the government carries out changes it has promised to the anti-corruption law to protect them from the wrath of auditors and investigative agencies for bona fide decisions taken in the line of duty
  2. This may cause delay in taking decisions

Reason may be cumbersome rules, not the FIPB:

  1. Cumbersome rules, not the FIPB, have been responsible for a less than enthusiastic response from foreign investors in some sectors
  2. Global insurers can hold up to 49% ownership in Indian ventures but only if Indians retain management and control over these entities — this is an onerous definition of control that has inhibited deal-making
  3. Despite allowing 100% FDI in food retail, rules prohibit foreign players from using a small fraction of their shelf space for non-food items, affecting investment plans
  4. Archaic land acquisition and labour laws continue to make it difficult for large factories to come up.

B2B

  1. The Foreign Investment Promotion Board (FIPB)is a national agency of Government of India, with the remit to consider and recommend foreign direct investment (FDI) which does not come under the automatic route. It acts as a single window clearance for proposals on foreign direct investment (FDI) in India. The Foreign Investment Promotion Board (FIPB) was housed in the Department of Economic Affairs, Ministry of Finance. FIPB will be abolished in financial year 2017-18, as announced by Finance Minister Arun Jaitley during 2017-2018 budget speech in Lok Sabha.
NITI Aayog : The New Development Agenda Indian Polity

[op-ed snap] NITI Aayog and the emperor’s clothes

source:

Note4Students:

Mains Paper 3: Economy | Indian Economy Issues relating to planning

NITI Aayog was seen as a new ray of hope that would totally transform policy making scenario and bring the country out of the Soviet influenced planning processes. But NITI Aayog hasn’t been able to fulfill all such hopes. The op-ed discusses all such issues and can be bookmarked to be used in Mains answers.

From UPSC perspective, following things are important:

Prelims level: NITI Aayog, Its structure, mandate and other related topics.

Mains level: What are the issues that have been making NITI Aayog a near replica of Planning commission, what are the changes required and way forward.


Context:

  1. One of the key decisions taken by the government on assumption of office was to dismantle the Planning Commission, and replace it with a new body, the National Institution for Transforming India (NITI) Aayog
  2. NITI Aayog was expected to act as the principal government think tank and adviser to the Prime Minister on key policy issues, which can really transform India

Expectations unfulfilled:

  1. Issues with Planning Commission- The Planning Commission was a non-legislative body, with significant powers to allocate finances to states, but marred by bureaucratic processes and devoid of fresh thinking
  2. Main reason of failure- It failed to keep its ear to the ground, and did not take into account the divergent demands and capacities of states
  3. The creation of NITI Aayog was expected to be a game changer, to infuse new vigour and rigour in the policy planning process, involve key stakeholders, and address the failures of the previous plan body
  4. Anticipations- It was anticipated that it would prioritize the challenges faced by the economy and hit the ground running to address them in a transformational manner
  5. Work done- During the last two-and-a-half years, NITI Aayog has worked on several agendas, such as the promotion of digital payments, reforms in agriculture, education and railways, helping states undertake social sector reforms
  6. Autonomy still not available? While all these issues were important, and the suggestions made by NITI Aayog critical, it appears that the institution’s agenda and priorities are being set by government diktat rather than an organic, independent thought process
  7. Less clarity- For instance, while recognizing the importance of competition, it walked with the government on promoting digital payments through select entities, and kept mum when government policies distorted competition
  8. Work that remains to be done- NITI Aayog is yet to institutionalize a checks and balances mechanism to caution the government about the claims it makes, and apprise policymakers of the ground realities

Three-year action agenda- better than five year plans?

  1. NITI Aayog recently released a draft three-year action agenda, which is part of a 15-year vision and seven-year strategy document, which are yet to be released in public domain
  2. What is covers? The action agenda covers a wide range of issues, including the fiscal framework, agriculture, industry, services, transport, digital connectivity, public private partnership, energy, science, technology, governance, taxation, competition, environment, forests and water
  3. What is actually expected? When dealing with imminent challenges, such a wide-ranging approach is not expected
  4. For example, while covering pertinent issues and providing important recommendations such as “Price Deficiency Payment” to remove distortions in the existing minimum support price mechanism in the farm sector, there is limited clarity on how, by whom, and the timelines within which such suggestions would be implemented
  5. Collation of several policy-related recommendations- The action agenda appears more like a document collating several policy-related recommendations provided by experts and government-formulated committees over the years
  6. Good ideas would remain on paper- It puts limited or negligible focus on implementation challenges, bureaucratic reforms and government-citizen interaction, which is core to several good ideas remaining on paper and being left unimplemented

What should have been done?

  1. Rather than focusing on policy-level recommendations, NITI Aayog would have done better had it dealt with implementation-related challenges
  2. Steps that were needed- A clear action agenda on how policies should be implemented, the creation of a feedback loop, taking into account changes on the ground, and fixing accountability of babus, would have been welcome
  3. It should have focused on process reforms
  4. Cost-benefit analysis- Costs of implementing recommendations like creation of coastal employment zones must be compared with expected benefits in the medium term.

B2B

 

New bridge will spur a revolution: Modi

source:

Note4students

Mains Paper 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

The newscard brings out details on India’s largest bridge.

Prelims Level: remember the name of the bridge, and its location, river, etc.

Also note down the advantages of this bridge.


Context: Prime Minister Narendra Modi inaugurated the country’s longest bridge

Aim

  1. To make the northeast a trade hub for southeast Asia
  2. It will serve as the foundation for a new economic revolution
  3. It will help India in its efforts to become a superpower

Where is the bridge?

  1. It is built over the Lohit river in Assam
  2. The 9.15 km-long bridge is named after Dadasaheb Phalke awardee and legendary lyricist-singer Bhupen Hazarika who hailed from Sadiya

Attempts towards northeast region

  1. As a part of Act East Policy, the Prime Minister said he wanted the northeast region to be well-connected for economic activity
  2. For this, stress is being laid on development of infrastructure
  3. Efforts are out in to make the northeast a tourism centre
  4. Lakhs of tourists would also come to Kamakhya temple and improve the economy

Advantages of the bridge

  1. The bridge will save money and reduce travel time
  2. It comes as a foundation for the beginning of a new economic revolution
  3. The bridge will reduce distance by 165 km
  4. Travel time will reduce by seven to eight hours and open new doors for economic development
  5. The bridge will bring development to Assam and Arunachal Pradesh
  6. The bridge has been designed to allow movement of tanks with importance accorded to quick movement of military troops and artillery

EPFO may slash PF contributions to 10 per cent

Note4students

Mains Paper 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, following things are important:

Prelims level: Structure of CBT and EPFO. What is Exchange Traded Funds?

Mains level: Important Development for Trade Unions and Work Force of India.

News

  1. What: The Central Board of Trustees (CBT) of Employees’ Provident Fund Organisation (EPFO) is likely to consider a proposal to reduce the share of mandatory contribution by employees and employers to 10 per cent each from 12 per cent of the income as of now
  2. Also, the CBT is likely to discuss raising the investment limit in Exchange Traded Funds (ETFs) to 15 per cent from 10 per cent
  3. View of Trade Unions: Trade unions have decided to oppose the proposal saying this will dilute these social security schemes

Back2basics

EPFO

  1. The Employees’ Provident Fund Organisation, is an Organization tasked to assist the Central Board of Trustees, a statutory body formed by the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 and is under the administrative control of the Ministry of Labour and Employment, Government of India.
  2. EPFO assists the Central Board in administering a compulsory contributory Provident Fund Scheme, a Pension Scheme and an Insurance Scheme for the workforce engaged in the organized sector in India.
  3. It is also the nodal agency for implementing Bilateral Social Security Agreements with other countries on a reciprocal basis. The schemes cover Indian workers as well as International workers (for countries with which bilateral agreements have been signed.

Exchange traded fund

 

source:

An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features

The cycles of distress in Indian agriculture

Note4students

Mains Paper 3: Agriculture | Land reforms in India

From UPSC perspective, following things are important:

Prelims level: Peasants agitations in Modern History

Mains level: Article gives an historical overview of Problems faced by Indian Farmer.

News

Context

  1. Article provides a brief historical background about Indian agriculture

Anniversary of Two famous agitations(anniversary of any historic event means it becomes a hot topic for both UPSC prelims and mains exam).

  1. It is now 100 years since Mahatma Gandhi mobilized the indigo cultivators of Bihar’s Champaran district
  2. It is also 50 years since the peasants of Naxalbari in West Bengal began their violent uprising against landlords

Other Peasant Revolts in Indian Modern History

  1. Modern Indian history has been marked by several peasant revolts that were based on underlying economic fault lines
  2. The Deccan riots in the mid-19th century were perhaps the first challenge to colonial rule since 1857
  3. It is useful to remember that at least two of the major political movements launched by Gandhi were timed with a massive deflation in the prices of agricultural commodities—after World War I, and then during the Great Depression

Why has India not seen similar episodes in the past few decades?

  1. There are two possible interlocking reasons.
  2. First, Indian agriculture has moved on from feudalism. The tight hold that landlords had over peasants has eased
  3. The possibilities of getting non-farm jobs in the rural areas on the one hand, and migration to cities on the other has also contributed in stopping these kinds of peasants uprising.
  4. Second, the Indian state has, since the Green Revolution, taken at least some of the risk out of agriculture by providing farm inputs at subsidized costs as well as providing guaranteed prices for certain types of farm produce
  5. The major farmer or peasant protests since the 1980s have thus been focused on getting more benefits from the government rather than making any fundamental changes in the way agriculture is organized

The Way Forward

  1. The system of state support is now buckling under fiscal pressure
  2. There is little offered by way of alternatives
  3. One alternative is to reduce the number of people employed in agriculture,  as argued by B.R. Ambedkar in a brilliant academic paper he wrote in 1918.
  4. The second alternative is to free Indian agriculture from price controls, restrictions on movement of farm produce, commercial risks due to volatile prices, and the lack of access to global markets
  5. Farmers are trapped in a new cycle of distress at a time when the fiscal capacity of the government is weak.

 

 

Drought, rural distress and support to farmers Agriculture

New curbs on cattle slaughter

source

Note4students

Mains Paper 3: Agriculture | Economics of animal-rearing

The newscard expresses concern on the impact on exports and industry by the recent ban on cattle slaughter. Few takeaways:

Prelims Level: Remember the title and new rules laid down.

Mains Level: Make note of the impact of the new rules on industry specially beef exports and leather exports.


Context: The Centre has banned the sale of cattle for slaughter at animal markets across the country

What are the new rules?

  1. A notification, titled the Prevention of Cruelty to Animals (Regulation of Livestock Markets) Rules, 2017 have been enacted.
  2. It stated that those who wish to sell cattle — bulls, cows, buffaloes, steers, heifers and camels — may do so only after they formally state that the animals have not been ‘brought to the market for sale for slaughter’
  3. To inhibit smuggling, animal markets may not function within 25 kilometres of a State border and 50 kilometres of an international border

Verification of buyers

  1. Buyers of cattle at animal markets will have to verify they are agriculturalists
  2. They need to declare that they will not sell the animal/s for a period of six months from the date of purchase
  3. The rules, notified by the Ministry of Environment, Forest and Climate Change on May 23, demand that buyers ‘follow the State cattle protection and preservation laws’ and ‘not sacrifice the animal for any religious purpose’
  4. They also prohibit cattle purchased from animal markets being sold outside the State, without permission

Attached agencies

  1. Monitoring committees at the State and district levels will be set up to implement the rules and monitor the functioning of animal markets
  2. Such markets will be identified and registered
  3. Any new market that is set up will need the approval of the District Animal Market Monitoring Committee

Concerns

  1. Representatives from meat and livestock industry have expressed serious concern about the impact of the notification
  2. 90% of buffaloes are sourced from mandis by middlemen for sale in slaughterhouses against a mere 10% that is bought directly from farmers
  3. While the Centre is empowered to frame rules, implementation of the regulation of livestock falls under the State government’s ambit

The hazards of farm loan waivers

source:

Note4students

Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

From UPSC perspective, following things are important:

Prelims level: Not Much

Mains level: Gives an overview how farm loan waiver scheme is detrimental to the development of credit markets. This is a very important topic for Mains.

News

Context

  1. The BJP’s electoral manifesto had committed to write off loans of small and marginal farmers, which would approximately cost the government Rs37,000 crore
  2. According to initial reports. Intervention in the credit market through household debt relief has been a fiscal policy adopted by many governments both at the Central and state level for many years

Argument in support of debt-waiver programmes

  1. The support for debt-waiver programmes comes from the theoretical argument that a high level of outstanding debt reduces the incentive for the debtor to exert effort to repay
  2. However, repeated debt-waiver programmes might alter the expectations of debtors about enforcement of future credit contracts

Bad effects of Debt-waiver programmes

  1. If farmers expect governments to intervene and free their collateral from banks, in case of default, they are likely to reduce productive investments and spend more on consumption
  2. Past empirical research analysing the 2008 nationwide Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS) found that it led to a delay in loan repayment, increase in defaults, and no significant productivity gains.
  3. In spite of the evidence against the effectiveness of the ADWDRS programme, many states continue to announce their own state-level debt-waiver schemes.
  4. It is possible that state-level debt-waiver schemes could address state-specific indebtedness problems that a generic national-level programme like ADWDRS could miss

Uttar Pradesh farm loan waiver scheme

  1. The Uttar Pradesh Rin Mafi Yojana (UPRMY) is one such programme that was announced immediately after the ADWDRS programme in November 2011

Consumption and investment behaviour of eligible vs non-eligible households

  1. Study finds that households which qualified for the waiver spent approximately Rs8,000 more on consumption per year than households that did not qualify for the waiver.
  2. Of greater concern is that qualifying households also spent significantly more on social events such as weddings, family occasions, and so on, even when there was no significant difference in farm productivity between qualifying and non-qualifying households
  3. Given that households in the same district face similar agricultural shocks, no improvement in farm productivity for households qualifying for loan waiver indicates a failure of the programme to achieve its desired goals

Implications for design of loan waiver programmes

  1. Research provides evidence that a blanket waiver scheme is detrimental to the development of credit markets
  2. Repeated debt-waiver programmes distort households’ incentive structures, away from productive investments and towards unproductive consumption and wilful defaults
  3. These wilful defaults, in turn, are likely to disrupt the functioning of the entire credit system

The Way Forward

  1. A well-designed loan-waiver programme could enhance the overall well-being of the households by improving their productive investments, as opposed to distorting their loan utilization and repayment patterns.
  2. One possibility is to formulate eligibility rules that depend on historical loan-utilization, investment, and repayment patterns.
  3. Another option is to explore alternative policy interventions like agricultural insurance.
  4. The desired intervention could then be the one, which nudges households into investing more now and increase long-term productivity
Environmental Conservation and Mitigation strategy Conservation & Mitigation

Missing the coastal growth opportunity

source

Note4students

Mains Paper 3: Environment | Conservation, environmental pollution and degradation, environmental impact assessment

From UPSC perspective, following things are important:

Prelims level: What are CRZs, particulars of Environment protection act

Mains level: Important for both environment and development point of view. Article shows how wrong implementation of environment laws can obstruct development projects.

News

Context

  1. Article talks about how Coastal Regulation Zone norms are an example of a top-down, heavy-handed, legislative diktat from Delhi that ignores local dynamics
  2. Burdensome laws, accompanied by the onerous rules and regulations they impose, restrict economic activity in the entire country
  3. Due to these, India’s coastal regions have witnessed tepid growth in terms of size and economy.

Suffering due to the Environment (Protection) Act (EPA)

  1. The coastal regions suffer from the additional liability of having to comply with far-fetched coast protection norms originating under the Environment (Protection) Act (EPA)
  2.  Passed under the powers conferred on the Central government by Section 3 of the EPA, the Coastal Regulation Zone (CRZ) rules were first notified in 1991 and were further amended in 2011

What is CRZ?

  1. As per the norms created by the Central government, a CRZ is the land area from the high-tide line to 500m inland.

Exceptions in norms for Prohibited activities in CRZ

  1. There is a long list of proscribed activities within this zone, such as the setting up of new industries, expansion of existing industries, establishment of fish processing units, warehouses, land reclamation, etc.
  2. Although the norms carve out exceptions within these prohibited activities for certain undertakings, such as building ports or reconstructing dwelling units for local communities, it interestingly carves out a singular exception for the development of a greenfield airport proposed at Navi Mumbai.
  3. The regulation is replete with such curious exceptions to some specific cases, which raise questions pertaining to the criteria that was followed to determine permissible and non-permissible activities
  4. Going even further with the regulatory tangle created by these CRZ guidelines, the norms demarcate the zones into different numbered categories—CRZ I, CRZ II, CRZ III and CRZ IV
  5. This demarcation, it seems, is based primarily on the level of previous construction or developmental activity that’s been conducted in a region now within the regulated zone of either 500m or 100m

Issues

  1. The multiplicity of definitions, exceptions, permissible and impermissible activities not only lead to high regulatory and legal expenditure in obtaining project clearances, there is all-round confusion in implementation as well

 The execution of the CRZ rules

  1. The execution of the CRZ rules falls within the domain of several coastal zone management authorities created by the state governments for this purpose
  2. The authorities have to prepare coastal zone management plans based on the complicated regulation which also lists the guidelines that the authorities must follow in preparation of the plans

The Way Forward

  1. Even though the CRZ rules stand amended as on 6 January 2011, the new rules have done little to ease the regulatory burden imposed on a wide array of economic and development activities that may be pursued in coastal regions
  2. The Central government must assert its political will and rescind these regulations, leaving the task of administering coastal zones to the already created state coastal zone management authorities
  3. State governments in coastal regions will be better suited to devise laws concerning coast development, given their substantial political interest in the matter and superior knowledge of state goals as well as needs
  4. The Central government must restrict its role to advising state governments on the prospective benefits and costs of any regulation that the states propose
Low Priority News Items For UPSC, IAS Exam and Why

[26thMay 2017] Low priority news items of the day

The [Low priority news items of the day] series of posts are aimed at increasing transparency wrt. mature aspirants and educating young aspirants (on what to leave/ assign lower priority and why).


Low priority news items of the day:

Bail or jail

That bail is the norm and jail the exception is a principle that is limited in its application to the affluent, the powerful and the influential.

We have already done news card on this issue yesterday.

 

U.N. rejects Pak. charge of attack on observers

The United Nations has dismissed the Pakistan Army’s claim that its military observers came under attack from Indian troops near the Line of Control, saying there was “no evidence” of them being targeted.

Only important part of this news-card is shared here.

Agricultural Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc. Agriculture

Farm subvention scheme on crop loans to continue at 7%

Note4students

Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

From UPSC perspective, following things are important:

Prelims level: Particulars of interest subvention scheme

Mains level: Very Important Scheme. Article gives specific data about government’s work in agriculture sector.

News

  1. What: the Ministry of Agriculture and Farmers’ Welfare has initiated the process for continuation of the Interest Subvention Scheme
  2. According to the Reserve Bank, farmers will continue to get short-term crop loan of up to Rs 3 lakh at subsidised interest rate of 7 per cent and the rate could go down to 4 per cent if they repay promptly in 2017-18
  3. Background: Under the interest subvention scheme, a subvention of 2 per cent per annum is provided for short-term crop loan up to Rs 3,00,000 per farmer provided the lending institutions make available short-term credit at the ground level at 7 per cent per annum to farmers
  4. An additional interest subvention of 3 per cent per annum is available to the “prompt payee farmers

Government tweaks startup definition, benefits to now flow for 7 years

source:

Note4students

Mains Paper 3: Economy | Development and employment
The newscard has information on start ups. There is a change in the definition of startup that you should look into

Prelims Level:  Remember the change in definition, UPSC might put up a question on this, Do not miss the sub-heading Exception to the rule.

Mains Level: The Role of DIPP, etc. are important from Mains PoV.


Context

  1. The government has introduced minor changes to the startup definition
  2. It says, a business not older than seven years will now qualify for benefits under the Startup India Action Plan

What is the change?

  1. So far, only companies up to five years from the date of incorporation were eligible for concessions under the plan announced last year
  2. As per the new definition, an entity shall be considered as a startup if its turnover is less than Rs 25 crore and has not completed seven years from the date of its incorporation/registration

Exception to the rule?

  1. In the case of startups in the biotechnology sector, the period shall be up to 10 years, the commerce and industry ministry said
  2. It also said that an entity shall be considered as a startup if it is working towards innovation, development or improvement of products or processes or services
  3. It will also be considered a startup if it is a scalable business model with a high potential of employment generation or wealth creation

When does a company cease to be a startup?

  1. An entity shall cease to be a startup on completion of seven years from the date of its incorporation/ registration
  2. Or if its turnover for any previous year exceeds Rs 25 crore

Role of DIPP

  1. To obtain tax benefits, a startup should obtain a certificate of an eligible business from an inter- ministerial board of certification
  2. This shall be constituted by the Department of Industrial Policy and Promotion
  3. The DIPP reserves the right to revoke the recognition certificate and certificate of an eligible business for tax benefits immediately without any prior notice or reason
  4. The process of recognition as a startup would be through an online application made over the mobile app/portal set up by the DIPP

Importance of this changed definition

  1. The definition is important for budding enterprises to avail government-sponsored venture funding and tax and other benefits

Why the change?

  1. Certain sections of startups had criticised the old definition saying defining such firms as those that are less than five years old was restrictive
  2. The scope of definition has been broadened to include scalability of business model with potential of employment generation or wealth creation
  3. The changes are an effort to ensure ease of starting up new businesses to promote the startup ecosystem and build a nation of job creators instead of job seekers

Back2basics

Click here to know more about DIPP

RTI – CIC, RTI Backlog, etc. Governance

[Op-ed snap] Love to hate the RTI

source:

Note4students

Mains Paper 2: Governance | Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential

From UPSC perspective, following things are important:

Prelims level: Particulars of RTI Act.

Mains level: This article gives a concise explanation about the current problems of RTI implementation in India.


News

Context:

In this article the writer breaks the prevailing myth that RTI has become a tool for harassing public officials by black-mailers.

The writer divides applicants of RTI in the following categories:

  1. Those who file RTI applications with the hope of exposing corruption or arbitrariness in governance
  2. Those who file RTI applications repeatedly to correct a wrong they think has been done to them
  3. Those who use the RTI to blackmail people
  4. Those who use the Act to harass a public official to get some undue favour
  5. According to writer, the fourth category must be discouraged. Information commissioners can do this fairly easily
  6. In Writer’s experience, less than 10 per cent of the applications belong to the last two categories

Supreme Court on RTI

  1. Some years ago, the Supreme Court said the RTI “should not be allowed to be misused or abused, to become a tool to obstruct national development and integration, or to destroy peace, tranquility and harmony among citizens”
  2. The SC has also said the RTI may take up 75 per cent of an officer’s time.

issue

  1.  Public authorities are not castigated for flouting their obligations under the Act, but citizens are upbraided for exercising a fundamental right
  2. The powerful are upset with the RTI and hence, try to discredit it by talking about its misuse

The way forward

  1. India is rated among the top five nations in the world in terms of provisions of the RTI Act and ranked 66 in terms of implementation.
  2. The law must not be amended.
  3. Also, the frivolous attitude towards the Act has built the impression that the RTI needs to be curbed and activists can be targeted. This must stop.

Service providers must shun discriminatory phone tariffs

Note4students

Mains Paper 2: Polity | Statutory, regulatory and various quasi-judicial bodies.

The newscard has information on an important directive given by TRAI to telecom operators. Takeaways:

Prelims Level: Read the b2b on TRAI and note down the main issue that was there

Mains Level: You should remember this case so that you can quote it in your answer as an example


Context

  1. Telecom Regulatory Authority of India (TRAI) on Thursday sought to prevent service providers from offering discriminatory tariffs to the same category of subscribers
  2. TRAI also told them to file their tariff within seven days of introducing the rates
  3. This move aimed at protecting the interests of consumers

How did the issue arise?

  1. TRAI stated that it had received complaints that some service providers were introducing tariffs without filing it with the regulator
  2. Reliance Jio had filed a complaint with TRAI alleging ‘arbitrary discrimination between the subscribers of same class’ by Bharti Airtel
  3. This lead to violation of tariff rules

How was the discrimination?

  1. The notice said, as per the terms and conditions at Airtel website the ‘Free Data for 12 months worth Rs. 9,000’ offer can be availed only by the subscribers with new 4G handsets
  2. It could be used with 4G handsets that have previously not been used on Airtel’s network
  3. It was alleged that this discriminated subscribers holding 4G handsets on the Bharti Airtel network, prior to the cut-off date

Back2basics

Telecom Regulatory Authority of India (TRAI)

  1. It is the regulator of the telecommunications sector in India
  2. TRAI’s mission is to create and nurture conditions for growth of telecommunications in India to enable the country to have a leading role in the emerging global information society
  3. One of its main objectives is to provide a fair and transparent environment that promotes a level playing field and facilitates fair competition in the market
  4. TRAI regularly issues orders and directions on various subjects such as tariffs, interconnections, quality of service, Direct To Home (DTH) services and mobile number portability

[op-ed snap] The mega challenge of job creation

source:

Note4Students:

Indian Economy and issues relating to development and employment.

From UPSC perspective, following things are important:

Prelims level: Not much remember key terms like disguised unemployment, NSS.

Mains level: Very important since jobless growth has become a key feature of the Indian economy since last 2 decades. UPSC has also asked a question on jobless growth in 2014 and 2015 mains.

Context:

  1. The challenge of creating jobs has moved to the centre of the political stage all over the world, and India is no exception.
  2. However, the scale of the problem in India is not easy to measure.

Confusing figures:

  1. The latest National Sample Survey (NSS) data for 2011-12 show unemployment was only 2.2% of the labour force, which is very low
  2. Not a big problem? On this metric, unemployment in India is much less of a problem than in other countries
  3. The job rush- On the other hand, we often hear reports of hundreds of thousands of applications every time a few hundred low-level government jobs are to be filled.

The scale of the problem:

  1. Misleading figures- The low unemployment rates are misleading because many of those shown as employed are actually engaged in low-paid jobs that they take up only because there is no alternative
  2. Economists call this “disguised unemployment” or “underemployment”
  3. In the same way, hundreds of thousands of applications for a few government jobs are misleading because the applicants are not all unemployed { Take UPSC as example 😉 }
  4. Why this happens? Since government jobs at the lower levels pay much better than the market rate, those employed in the private sector want to switch to government jobs if they can

Educated youth face more problems:

  1. The unemployment rate for 18-29-year-olds as a group is 10.2%, but for illiterates it is only 2.2%, rising to 18.4% for graduates
  2. As more and more educated youth enter the workforce in future, we can be sure that unless the quality of jobs available for them improves dramatically, dissatisfaction will mount

Structural changes that are needed:

At the macro level, three structural changes are needed to tackle the problem.

First change- The workforce employed in agriculture must decline.

  1. In 2011-12, agriculture accounted for 18% of gross domestic product (GDP) and it absorbed about 50% of the workforce.
  2. If the economy as a whole grows at 7.5% per year over the next 10 years, and agricultural growth accelerates to 4%, the share of agriculture in GDP will fall to around 11% by 2027-28.

Second change-  Reduce the expectation from manufacturing as a provider of non-agricultural jobs.

  1. We have to recognize that technological change is likely to make manufacturing less employment generating than in the past
  2. Present scenario- At present, manufacturing accounts for about a quarter of total non-agricultural employment. Another quarter comes from non-manufacturing industry (mining, electricity and construction) with services accounting for the remaining half.
  3. Sectors to focus on- Most of the growth needed in non-agricultural employment will have to come from construction and the services sector, including health services, tourism-related services, retail trade, transport and logistics and repair services.

Third change-  Shift from informal sector employment to formal sector employment

  1. The NSS data for 2011-12 showed about 243 million people employed in the non-agricultural sector, and as many as 85% of these were in the “informal sector”, including both self-employment and wage employment
  2. A shift away from the unorganized/informal sector to the organized/formal sector is desperately needed if we want to meet the expectations of the young

Policy implications:

  1. Multiple interventions required- No single policy initiative can achieve all the structural changes listed above and multiple interventions are needed at different levels
  2. Rapid growth effect- Rapid growth has to be central to any employment strategy for the simple reason that a faster growing economy will generate more jobs
  3. Exporting simpler consumer goods- The biggest opportunity for generating more employment in manufacturing lies in exporting simpler consumer goods to the world market, an area which China has long dominated, but which it is now likely to exit, as its wages rise
  4. How well we can do this depends upon our ability to compete with others such as Bangladesh, Vietnam (Remember Economic survey also discussed this issue? – Read it here– click2read)
  5. Encourage small and medium enterprises- Small and medium enterprises generate much more employment than large capital-intensive enterprises
  6. There are too few middle-sized firms, employing between 100 and say 1,000 workers, and it is these firms that can upgrade technology, increase productivity, and demonstrate competitiveness in world markets

Policies required for development of SME sector:

  1. Lowering of corporate tax rates and abolition of incentives that favour more capital-intensive units
  2. Better public infrastructure, especially access to quality power supply at reasonable rates
  3. Improved logistics
  4. Greater ease of doing business
  5. Better access to finance
  6. Ample availability of skilled labour and more flexible labour laws
  7. Development of skills through a combination of apprenticeships and training institutes run by the private sector, with an eye to the demand for skills in the market

India’s advantage:

  1. Geographical- We have the advantage of being located in Asia, which is the fastest-growing region in the world and which has not turned inward
  2. RCEP membership- An early conclusion of the Regional Comprehensive Economic Partnership (RCEP) agreement with the Association of Southeast Asian Nations (Asean) + 6 should be reached for
  3. GST- The imminent introduction of the goods and services tax (GST) will help by providing a level playing field for domestic producers competing with imports in the domestic market
  4. This is because the same tax will also be levied on all imports, which is not the case today because imports escape state indirect taxes
  5. Start-ups- They are a new phenomenon and India has made a good beginning in this area
  6. Technically skilled and business-oriented youth should be encouraged to explore the entrepreneurship option, and create jobs, rather than looking for secure wage employment
  7. A large proportion of start-ups will fail and they should be allowed to do so, without government stepping in compulsively to shore them up all the time
  8. Those that succeed will expand and generate much more employment than the employment lost in the failures
Ministry of Petroleum and Natural Gas: Schemes, Policies & Missions Energy

OPEC, non-OPEC extend oil output cut by nine months to fight glut

source:

Note4Students:

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

Oil has always remained a controversial issue and has shaped the present day geopolitics to a large extent by the way of various wars directly or indirectly related to oil. It also affects economies across the world as almost every country is dependent on oil- by either production or consumption. Expected rise in oil prices can affect India adversely as it is dependent heavily on oil imports.

From UPSC perspective, following things are important:

Prelims level: OPEC member nations, Shale gas, other alternatives to oil.

Mains level: Effects of rise in oil prices on India, India’s renewable energy push and other related topics.


 News:

  1. OPEC and non-members led by Russia decided to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude after seeing prices halve and revenues drop sharply in the past three years

Fiscal boost to producers:

  1. In December 2016, the Organization of the Petroleum Exporting Countries agreed its first production curbs in a decade and the first joint cuts with 11 non-OPEC producer nations, led by Russia, in 15 years
  2. OPEC’s cuts have helped to push oil back above $50 a barrel this year, giving a fiscal boost to producers
  3. Many of them rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets
  4. Oil’s earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries including Venezuela and Nigeria

Guinea new member:

  1. Equatorial Guinea has now joined the organization, reducing the number of participating non-OPEC nations to 10
  2. OPEC members Nigeria and Libya would still be excluded from cuts as their output remained curbed by unrest

OPEC’s dilemma:

  1. OPEC also faces the dilemma of not pushing oil prices too high because doing so would further spur shale production in the United States, the world’s top oil consumer
  2. It now rivals Saudi Arabia and Russia as the world’s biggest producer of shale gas.

B2B

OPEC

Organization of the Petroleum Exporting Countries  is an intergovernmental organization of 13 nations as of 2017, founded in 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, Venezuela), and headquartered since 1965 in Vienna. As of 2015, the 13 countries accounted for an estimated 42 percent of global oil production and 73 percent of the world’s “proven” oil reserves, giving OPEC a major influence on global oil prices that were previously determined by American-dominated multinational oil companies.

 

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