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Distribution: yearly

  • [op-ed snap] Reset and reform

    Context

    With the Indian economy caught in the middle of a socio-economic upheaval, the government needs to make its focus on the economy clear and pronounced.

    India in the middle of a socio-economic upheaval

    • Weakening economy: The economy has been weakening for a couple of years now.
    • Social upheaval: The social upheaval is new but its seeds have been fermenting for a while.
    • Consequences of the two: The social and economic sides of an economy are not divorced from each other.
      • Each influences the other and the current quagmire threatens to unleash the worst type of feedback between the two.

    Consequences for the employment

    • Most severe consequence due to the interaction between the social and economic sides is unemployment.
    • Rising unemployment disproportionately affects the young.
    • India’s job market: India whose median citizen is in the 30s and which is inducting 10 million new young people to the job market every year.
    • Demographic dividend turning into a curse: This dynamic, popularly hailed as India’s demographic dividend, can rapidly turn into a demographic curse if the employment situation doesn’t improve.

    Falling investment rate, increased risk perception

    • Where will the jobs come from? The job creators are entrepreneurs, conglomerates, and multinationals.
      • It is in their nature to take investment risks as long as the returns are high enough.
    • Investment rates below 30: In India, investment rate fell well below 30 per cent a while back.
      • Falling returns: The returns on investment were not compensating entrepreneurs for the risk.
      • The recent social upheaval is only adding to the perceived risk.
    • Wait and see approach: The more investors adopt a “wait-and-see” approach, the worse the job situation will become.

    Way forward

    • Structural reforms: The government needs to announce a clear plan and timeline for structural reforms.
    • Prioritising domain competence in staff: The government has to start staffing technical positions by prioritising domain competence and empowering these hires with policy relevance.
    • Maintaining the integrity of institutions: The government need to maintain the integrity of institutions tasked with the regulation of corporations and banks, monetary policy management, data collection/dissemination and law enforcement.
    • Accommodate dissent: The government also needs to desist from trying to drown out protesting voices with state muscle power.

     

  • Explained: What is the NIA Act, and why is Chhattisgarh challenging it?

    The Chhattisgarh state govt. moved the Supreme Court against the 2008 National Investigative Agency (NIA) Act, stating it is violative of the Constitution. In its civil suit, the government told the apex court the NIA should have no power over state policing matters.

    What is the NIA Act, 2008?

    • The NIA Act, 2008 governs the functioning of India’s premier counter-terror agency.
    • It was introduced by then home minister P Chidambaram in the wake of the 26/11 Mumbai terrorist attacks and was passed in Parliament with very little opposition.
    • The Act makes the NIA the only truly federal agency in the country, along the lines of the FBI in the United States, more powerful than the CBI.
    • It gives the NIA powers to take suo motu cognizance of terror activities in any part of India and register a case, to enter any state without permission from the state government, and to investigate and arrest people.

    Objections made by CG

    • In its petition, the Chhattisgarh govt. said the Act is “ultra vires the Constitution” and “beyond the legislative competence of the Parliament”.
    • According to the state, the 2008 Act allows the Centre to create an agency for investigation, which is a function of the state police.
    • ‘Police’ is an entry in the State List of the Constitution’s 7th Schedule.
    • The petition says the 2008 Act takes away the state’s power of conducting an investigation through the police, while conferring unfettered, discretionary and arbitrary powers” on the Centre.
    • The provisions of the Act leave no room of coordination and pre-condition of consent, in any form whatsoever, by the Centre from the State govt. which clearly repudiates the idea of state sovereignty as envisaged under the Constitution.

    Changes made to the NIA’s powers last year

    • The 2019 NIA Amendment Act expanded the type of offences that the investigative body could investigate and prosecute.
    • The agency can now investigate offences related to human trafficking, counterfeit currency, manufacture or sale of prohibited arms, cyber-terrorism, and offences under the Explosive Substances Act, 1908.
    • The amendment also enables the central government to designate sessions courts as special courts for NIA trials.
    • The Unlawful Activities (Prevention) Amendment (UAPA), also passed in 2019, allows an NIA officer to conduct raids, and seize properties that are suspected to be linked to terrorist activities without taking prior permission of the DG of Police of a state.
    • The investigating officer only requires sanction from the Director General of NIA.

  • [op-ed of the day] GST may not have been revenue-neutral

    Context

    In theory, the shift to GST made eminent sense, yet in practice, some of these expectations have been belied.

    Why have GST collections not measured up to expectations?

    • This could be due to a combination of three factors:
    • First:  The tax rates under GST are lower than in the earlier regime-GST was not revenue neutral, to begin with.
    • Second: There has been massive tax evasion due to under-reporting, input credit scams and fake invoices
    • Third: A slowing economy has impacted firm revenues, and thus tax collections.

    GST should have been revenue-neutral but it is not

    • Fitment exercises not carried out: The fitment exercise should have been undertaken in a manner so as to ensure that collections pre and post GST are the same.
      • But, this fundamental principle was not adhered to, and other considerations dominated.
      • Revenue neutrality Vs. Multiple objectives: The GST council began its deliberations not with the single objective of revenue neutrality, but with multiple objectives in mind.
      • Closeness to existing tax: Council wanted to ensure that rates were close to the existing tax incidence (accounting for cascading); to ensure minimal impact on inflation.
      • Not regressive: The council also wanted the proposed rate structure was not regressive in nature.
      • The council wanted that items of mass consumption were not taxed at a higher rate.
      • Achieving all these objectives simultaneously proved a difficult task.

    The issue of tax evasion

    • It is difficult to arrive at firm estimates of the scale of the problem but there are some indications of its size.
    • In West Bengal, it was estimated that the value of goods (July 2017 to March 2018) entering a state appeared to be under-reported by around Rs 50,000 crore.
    • Rs 60,000 crore in Madhya Pradesh, and Rs 1,50,000 crore in Maharashtra.
    • Numerous cases of tax fraud and fake invoice scams have also been detected since then

    Problems involve and possible solutions

    • Invoice matching:  It is argued that invoice matching will help if implemented it from the beginning.
      • It could have helped plug the loopholes.
    • Issue of under-reporting: It is debatable whether invoice matching can end under-reporting (collusion) and fake invoices.
    • Limit of state capacity in handling cases: The Central and state administrations can intervene in only about 3 lakh cases in a year.
      • Their capacity to track lakhs of transactions on a daily basis is questionable.
    • Slowing economy: Already existing structural issues have been compounded by the slowing economy.

    Way forward

    • There are certain options available to the government.
    • First: Either recalibrate the expectation or carry on the efforts to plug the loopholes and the shortcoming in the system.
    • Second: Lower the cut-off for composition scheme. A higher level simply encourages business “splitting”.
    • Third: Reduce exemptions.
    • Fourth: The council must deliberate on the rate structure, bringing it in line with pre-GST levels.

  • [op-ed snap] A rough patch

    Context

    High inflation has reduced the fiscal space available for a rate cut.

    RBI target of 6% breached.

    • CPI at 7.35 %: Retail inflation, as measured by the consumer price index (CPI), has surged to 7.35 per cent in December 2019.
    • Latest inflation data seems to corroborate fears articulated by the Monetary Policy Committee (MPC) in its December meeting.
    • In the meeting, MPC refrained from cutting the benchmark repo rate.

    Consequences for the economy

    • Reduced scope for fiscal slippage: High inflation reduced the space for further easing of policy rates.
      • Even after clarity over the extent of the Centre’s fiscal slippage emerged.
    • Rise in yield for 10-year securities: The 10-year G-sec yields have reacted sharply to these developments, rising to 6.67 on Tuesday.
      • Offsetting operation twist: Rise in yield resulted in offsetting the impact of the RBI’s recent open market operations.
    • Inflation targeting under stress: The combination of weak economic activity and higher than expected supply-side inflationary pressures has put the inflation-targeting regime under test.

    Reasons for the inflation rise and chances of easing

    • Food prices rise: Much of the rise in the headline inflation number can be traced to higher food prices.
      • Food inflation has risen to a near six-year high of 14.12 per cent in December 2019, up from 10.01 per cent in the previous month.
      • Vegetable prices have surged to 60.5 per cent in December, contributing nearly 3.7 percentage points to the headline numbers.
    • Chances of ease in coming months: While vegetable crop cycles tend to be short, and supply-side pressures may ease in the coming months.
      • The stickiness in prices of protein items is likely to provide a floor for food inflation.

    Bleak outlook for inflation easing

    • No short-term return to normal level: Food inflation is unlikely to revert to previous levels in the short term.
    • Household inflation expectations, a key metric in the MPC’s assessment, are more responsive to food inflation, this will further exert upward pressure on MPC.
    • A factor of hostilities in the Middle East: The uncertainty over oil prices on account of hostilities in the Middle East, adds to the bleak outlook for inflation.

    Conclusion

    With limited fiscal space for a meaningful stimulus, the government intends to support the economy during this rough patch, and return growth to a higher trajectory.

     

  • Explained: Article 131, on which Kerala has based its challenge to the CAA

    • The Kerala government moved the Supreme Court against the Citizenship (Amendment) Act becoming the first state to challenge the law.
    • It filed a petition under Article 131 of the Constitution and asked for the law to be declared unconstitutional and in violation of Articles 14 (equality before law), 21 (protection of life and personal liberty) and 25 (freedom of conscience and free profession, practice, and propagation of religion).

    What is Article 131 of the Constitution?

    • The Article vests the Supreme Court with original jurisdiction over disputes occurring between states or between states and the Centre.
    • The original jurisdiction of a court means the power to hear a case for the first time, as opposed to appellate jurisdiction, in which the court reviews the decision of a lower court.
    • Unlike the original jurisdiction under Article 32 (which gives the top court the power to issue writs, etc.), the jurisdiction in Article 131 is exclusive, meaning it is only the Supreme Court which has this authority.
    • Under Article 226, the High Courts too have the power to issue writs, directions etc.

    Original jurisdiction

    • Article 131 reads, “Original jurisdiction of the Supreme Court. — Subject to the provisions of this Constitution, the Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute —

    (a) between the Government of India and one or more States; or
    (b) between the Government of India and any State or States on one side and one or more other States on the other; or
    (c) between two or more States,
    if and in so far as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends:

    • The said jurisdiction shall not extend to a dispute arising out of any treaty, agreement, covenant, engagement, sanad, or other similar instrument which, having been entered into or executed before the commencement of this Constitution.
    • However they continue in operation after such commencement, or which provides, that the said jurisdiction shall not extend to such a dispute.

    What kinds of disputes are covered under Article 131?

    • In ‘State of Rajasthan vs Union of India’, 1977, the Supreme Court ruled that the existence or extent of a legal right is a precursor before a suit under Article 131 is entertained. But mere wrangles between governments have no place in the scheme of that Article.
    • Similarly, in the 1978 case, ‘State of Karnataka vs Union of India’, which involved the Centre’s authority to order an inquiry into a state Chief Minister’s conduct, jurisdiction under Article 131 was held valid.
    • In the present case filed by Kerala, central legislation (CAA) is being challenged. In 2011, a two-judge Supreme Court Bench in ‘Madhya Pradesh v Union of India’ had held such a suit was not maintainable.
    • Later in 2013, another two-judge Bench in ‘State of Jharkhand v State of Bihar and Another’ disagreed with the previous verdict and referred the matter to a larger Bench. Kerala’s plaint relies on the 2013 verdict.

  • National Policy for the treatment of 450 ‘Rare Diseases’

    The Union Ministry of Health and Family Welfare has published a national policy for the treatment of 450 ‘rare diseases’.

    About the Policy

    • The Centre first prepared such a policy in 2017 and appointed a committee in 2018 to review it.
    • It was created on the direction of the Delhi High Court to the Ministry of Health and Family Welfare.
    • This was in response to writ petitions for free treatment of such diseases, due to their “prohibitively” high cost of treatment.
    • Hence, a policy was deemed necessary to devise a “multipronged” and “multisectoral” approach to build India’s capacity for tackling such ailments.

    Why need such a policy?

    • As per the policy, out of all rare diseases in the world, less than five per cent have therapies available to treat them.
    • In India, roughly 450 rare diseases have been recorded from tertiary hospitals, of which the most common are Haemophilia, Thalassemia, Sickle-cell anemia, auto-immune diseases, Gaucher’s disease, and cystic fibrosis.

    Features of the policy

    • While the policy has not yet put down a detailed roadmap of how rare diseases will be treated.
    • It has mentioned some measures, which include creating a patient registry for rare diseases, arriving at a definition for rare diseases that is suited to India, taking legal and other measures to control the prices of their drugs etc.
    • It intends to kickstart a registry of rare diseases, which will be maintained by the Indian Council of Medical Research (ICMR).
    • Under the policy, there are three categories of rare diseases — requiring one-time curative treatment, diseases that require long-term treatment but where the cost is low, and those needing long-term treatments with high cost.
    • Some of the diseases in the first category include osteopetrosis and immune deficiency disorders, among others.
    • As per the policy, the assistance of Rs 15 lakh will be provided to patients suffering from rare diseases that require a one-time curative treatment under the Rashtriya Arogya Nidhi scheme.
    • The treatment will be limited to the beneficiaries of Pradhan Mantri Jan Arogya Yojana.

    What are rare diseases?

    • Broadly, a ‘rare disease’ is defined as a health condition of low prevalence that affects a small number of people when compared with other prevalent diseases in the general population. Many cases of rare diseases may be serious, chronic and life-threatening.
    • While a majority of rare diseases are believed to be genetic, many — such as some rare cancers and some autoimmune diseases — are not inherited, as per the NIH.
    • According to the policy, rare diseases include genetic diseases, rare cancers, infectious tropical diseases, and degenerative diseases.

    Definition

    • India does not have a definition of rare diseases because there is a lack of epidemiological data on its incidence and prevalence.
    • While there is no universally accepted definition of rare diseases, countries typically arrive at their own descriptions, taking into consideration disease prevalence, its severity and the existence of alternative therapeutic options.
    • In the US, for instance, a rare disease is defined as a condition that affects fewer than 200,000 people.
    • The same definition is used by the National Organisation for Rare Disorders (NORD) in India.

  • Annual Status of Education Report (Rural) 2019

    The Annual Status of Education Report (ASER) 2019 (rural) was recently released by NGO Pratham.

    Highlights of the report

    • Only 16% of children in Class 1 in 26 surveyed rural districts can read text at the prescribed level, while almost 40% cannot even recognise letters.
    • Only 41% of these children could recognise two digit numbers.

    Private schools ahead

    • Of six-year olds in Class 1, 41.5% of those in private schools could read words in comparison to only 19% from government schools.
    • Similarly, 28% of those in government schools could do simple addition as against 47% in private schools.
    • This gap is further exacerbated by a gender divide: only 39% of girls aged 6-8 are enrolled in private schools in comparison to almost 48% of boys.
    • The report also found that a classroom could include students from a range of age-groups, skewing towards younger children in government schools.

    Determinants of learning outcomes

    • The ASER report shows that a large number of factors determine the quality of education received at this stage, including the child’s home background, especially the mother’s education level; the type of school, whether anganwadis, government schools or private pre-schools; and the child’s age in Class 1.
    • More than a quarter of Class 1 students in government schools are only 4 or 5 years old, younger than the recommended age.
    • The ASER data shows that these younger children struggle more than others in all skills.
    • Permitting underage children into primary grades puts them at a learning disadvantage which is difficult to overcome,” said the report.

    Role of Mothers

    • Among the key findings of ASER 2019 is that the mother’s education often determines the kind of pre-schooling or schooling that the child gets.
    • The report says that among children in the early years (ages 0-8), those with mothers who had completed eight or fewer years of schooling are more likely to be attending anganwadis or government pre-primary classes.
    • With 75% women in the productive age group not in the workforce, they can be better engaged in their children’s development, learning and school readiness.

    Key suggestions made by the report

    • ASER found that the solution is not to spend longer hours teaching children the 3Rs.
    • Counter-intuitively, the report argues that a focus on cognitive skills rather than subject learning in the early years can make a big difference to basic literacy and numeracy abilities.
    • The survey shows that among Class 1 children who could correctly do none or only one of the tasks requiring cognitive skills, about 14% could read words, while 19% could do single digit addition.
    • However, of those children who could correctly do all three cognitive tasks, 52% could read words, and 63% could solve the addition problem.

    Focus on productive learning

    • ASER data shows that children’s performance on tasks requiring cognitive skills is strongly related to their ability to do early language and numeracy tasks,” says the report.
    • This suggests that focussing on play-based activities that build memory; reasoning and problem-solving abilities are more productive than an early focus on content knowledge.
    • Global research shows that 90% of brain growth occurs by age 5, meaning that the quality of early childhood education has a crucial impact on the development and long-term schooling of a child.

  • [pib] BIS Gold Hallmarking

    Gold hallmarking is being made mandatory to ensure consumers are not cheated, are better informed about purity and corruption is removed.

    Gold Hallmarking

    • Bureau of Indian Standards (Hallmarking) Regulations, 2018 were notified w.e.f. 14.06.2018. BIS is running a hallmarking scheme for gold jewelry since April 2000.
    • The BIS Act 2016 has enabling provisions under Section 14 & Section 16 for mandatory hallmarking of Gold jewellery & artefacts by the Central Government.
    • This made it compulsory for all the jewelers selling  Gold jewellery and artefacts to register with BIS & sell only hallmarked Gold jewellery & artefacts.
    • The caratage is marked on jewelry in addition to fineness for convenience of consumers, e.g. for 22 carat jewelry, 22K will be marked in addition to 916, for 18 carat jewelry, 18K will be marked in addition to 750 and for 14 carat jewelry, 14K will be marked in addition to 585.

  • Centre eases CRZ rules for ‘Blue Flag’ beaches

    The MoEFCC has relaxed Coastal Regulation Zone (CRZ) rules that restrict construction near beaches to help States construct infrastructure and enable them to receive ‘Blue Flag’ certification.

    Why such move?

    • The Blue Flag certification, however, requires beaches to create certain infrastructure — portable toilet blocks, grey water treatment plants, a solar power plant, seating facilities, CCTV surveillance and the like.
    • However, India’s CRZ laws don’t allow the construction of such infrastructure on beaches and islands.
    • The new order allows for some constructions subject to maintaining a minimum distance of 10 meters from HTL (High Tide Line).

    Blue Flag certification

    • The ‘Blue Flag’ beach is an ‘eco-tourism model’ and marks out beaches as providing tourists and beachgoers clean and hygienic bathing water, facilities/amenities, a safe and healthy environment, and sustainable development of the area.
    • The certification is accorded by the Denmark-based Foundation for Environment Education.
    • It started in France in 1985 and has been implemented in Europe since 1987, and in areas outside Europe since 2001, when South Africa joined.
    • It has 33 stringent criteria under four major heads for the beaches, that is, (i) Environmental Education and Information (ii) Bathing Water Quality (iii) Environment Management and Conservation and (iv) Safety and Services.

    Blue Flag beaches

    • Japan and South Korea are the only countries in south and southeastern Asia to have Blue Flag beaches.
    • Spain tops the list with 566 such beaches; Greece and France follow with 515 and 395 Blue Flag beaches, respectively.

    In India

    • Last year, the Ministry selected 13 beaches in India to vie for the certificate.
    • The earmarked beaches are — Ghoghala beach (Diu), Shivrajpur beach (Gujarat), Bhogave beach (Maharashtra), Padubidri and Kasarkod beaches (Karnataka), Kappad beach (Kerala), Kovalam beach (Tamil Nadu), Eden beach (Puducherry), Rushikonda beach (Andhra Pradesh), Miramar beach (Goa), Golden beach (Odisha), Radhanagar beach (Andaman & Nicobar Islands) and Bangaram beach (Lakshadweep).

  • Police Commissionerate System

    The UP Cabinet has approved the Commissionerate system of policing for state capital Lucknow, and Noida.

    The Police Commissionerate System

    • The system gives more responsibilities, including magisterial powers, to IPS officers of Inspector General of Police (IG) rank posted as commissioners.
    • Under the 7th Schedule of the Constitution, ‘Police’ is under the State list, meaning individual states typically legislate and exercise control over this subject.
    • In the arrangement in force at the district level, a ‘dual system’ of control exists, in which the Superintendent of Police (SP) has to work with the District Magistrate (DM) for supervising police administration.
    • At the metropolitan level, many states have replaced the dual system with the commissionerate system, as it is supposed to allow for faster decision-making to solve complex urban-centric issues.

    Additional powers to Police

    • In this system, the Commissioner of Police (CP) is the head of a unified police command structure, is responsible for the force in the city, and is accountable to the state government.
    • The office also has magisterial powers, including those related to regulation, control, and licensing.
    • The CP is drawn from the Deputy Inspector General rank or above, and is assisted by Special/Joint/Additional/Deputy Commissioners.

    Where is the system in force?

    • Previously, only four cities had the system: Kolkata, Mumbai, Hyderabad and Chennai.
    • However, with rapid urbanisation, states felt an increasing need to replicate the system in more places.
    • The sixth National Police Commission report, which was released in 1983, recommended the introduction of a police Commissionerate system in cities with a population of 5 lakh and above, as well as in places having special conditions.
    • Over the years, it has been extended to numerous cities, including Delhi, Pune, Bangalore and Ahmedabad. By January 2016, 53 cities had this system, a PRS study said.
    • Depending on its success, the policing system may gradually be implemented in other districts as well.