February 2020
M T W T F S S
« Jan   Mar »
 12
3456789
10111213141516
17181920212223
242526272829  

Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

[op-ed of the day] A sneeze, a global cold and testing times for Chinaop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Dealing with outbreaks of infectious disease.


Context

The World Health Organization (WHO) has declared the coronavirus outbreak a global emergency, as the outbreak continues to spread outside China.

Coronavirus outbreak and Chinese response

  • What is coronavirus? Normally, coronavirus is a large family of viruses that are often the source of respiratory infections, including the common cold.
    • A small number of common infecting virus: Most of the viruses are common among animals and only a small number of them infect humans.
    • Mutation of animal base virus: Sometimes, an animal-based coronavirus mutates and successfully finds a human host.
  • Dangers of rapid urbanisation: Rapid urbanisation that forces animals and humans into closer proximity (as in the “wet market” in Wuhan) creates a perfect petri dish from where such zoonotic outbreaks can originate.

Concern for India

  • Reported case in Nepal and cause of concern for India: For India, the most critical is cases being reported in Nepal since India and Nepal share an open border though so far.
  • All tests undertaken in India have been negative.
  • A tweet by the Ministry of Health and Family Welfare on January 30 said that one positive case of a novel coronavirus patient

Understanding the new virus

  • The possible mode of transmission: According to the World Health Organization, during previous outbreaks due to other coronavirus, human-to-human transmission occurred through droplets, contact and fomites (objects or materials which are likely to carry infection, such as clothes, utensils, and furniture).
  • This suggests that the transmission mode of the 2019-nCoV can be identical.
  • The transmission even in incubation period: More significant is the new understanding that the virus is contagious even during incubation, that is even before a patient exhibits any symptoms.
    • This characteristic amplifies

Experience from the past outbreaks

  • Comparison with SARS: Comparisons are being drawn the Severe Acute Respiratory Syndrome) outbreak in 2002-03.
    • Zoonotic case: SARS is also a zoonotic case, part of the coronavirus family with clues pointing to horseshoe bats in China as the likely source.
    • Late reporting by China in SARS:
    • The first incidents were reported in Guangdong province in November 2002 but WHO was officially informed only after three months.
  • Different response this time: Comparison with SARS: Comparisons are being drawn the Severe Acute Respiratory Syndrome) outbreak in 2002-03.
    • Zoonotic case: SARS is also a zoonotic case, part of the coronavirus family with clues pointing to horseshoe bats in China as the likely source.
    • Late reporting by China in SARS: The first incidents were reported in Guangdong province in November 2002 but WHO was officially informed only after three months.
    • Different response this time: This time around, the Chinese government has been more open but the question being asked is whether it has been open enough?
    • The difference in time to develop vaccine: For SARS, it took 20 months from the genome sequencing to the first human vaccine trials; for the 2019-nCoV, authorities in the U.S. are working on a deadline of 90 days.

Lessons from Kerala in Nipah outbreak

  • Managing an outbreak with few casualties: Kerala managed to curtail the Nipah outbreak with few casualties.
    • Nipah is also zoonotic and made the jump from fruit bats to humans.
    • Though there were 17 deaths in India, effective quarantine measures by local authorities prevented the spread.
  • Infectious disease on the rise: Infectious diseases including those of the zoonotic variety are on the rise in India.
    • In addition, regions in India suffer from seasonal outbreaks of dengue, malaria and influenza strains.
    • The nation-wide disease surveillance programme needs to be strengthened.

Conclusion

India should brace itself for the possible outbreak of infectious diseases and frame policies to deal with such outbreaks in fast and effective ways.

 

 

 

 

 

 

 

 

 

Climate Change Impact on India and World – International Reports, Key Observations, etc.

[op-ed snap]Partners in actionop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Green Growth Equity Fund

Mains level : Paper 3- Climate change, Steps taken by India to mitigate the impact, collaboration in innovation with other countries.


Context

Both India and the UK are exploring how best to develop the technology and investment needed to spur the transition from fossil to renewable fuels and make this a beneficial trajectory for everyone.

Areas of collaboration with the UK

  • Resilience to climate change: To build resilience to climate risks, the U.K. is working with the Mahatma Gandhi National Rural Employment Act to build flood defences and river structures to encourage aquifer replenishment.
  • Monsoon forecasting: Together with India’s Ministry of Earth Sciences, we are gathering land, sea and atmospheric data to help deliver a decisive step forward in monsoon forecasting.
  • Electric mobility: On electric mobility, a major joint venture between UK’s EO Charging and India’s Yahhvi Enterprises will deliver world-class smart charging infrastructure for electric vehicles across India.
  • Finance of Green Growth Equity Fund: On finance, the U.K. government committed 240 million pounds of anchor capital in the Green Growth Equity Fund.
    • Its first investment going to Ayana Renewable Power, which is developing 800MW of solar generation capacity.

India’s efforts to tackle climate change

  • India’s size and ecological diversity have placed it on the frontlines of global warming.
  • India walking the talk on climate change: It is on course to deliver the target of 40 per cent electricity generation from non-fossil fuels by 2030.
  • ISA: India has already demonstrated this personal commitment on the world stage with the India-led International Solar Alliance.
  • CDRI: India also announced the global Coalition for Disaster Resilient Infrastructure, both of which the UK a part of.
  • India and the UK can also work together on
    • Resilience and adaption.
    • Clean energy.
    • Green finance and nature-based solutions.
    • Infrastructure development.
    • Sustainable energy and smart cities.

Conclusion

India and the UK need to make sure that the present partnership on climate and the environment go from strength to strength in the future.

Foreign Policy Watch: India – EU

India abroad: On diplomats firefighting negative references to Indiaop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- India's foreign relations with the EU and concerns raised over CAA in EU parliament.


 

Context

The European Union Parliament’s discussion recently on India’s Citizenship (Amendment) Act or CAA, is a cause of concern.

Reactions in the West over the act

  • In the U.K. and the U.S.:  Parliamentarians in the U.K. and U.S. Congressmen, including Democratic presidential contenders, have asked India to “reconsider” the law and to “engage” with the protesters.
  • Resolution in the EU parliament: The EU parliamentarians went a step further.
    • Six critical resolutions: The EU parliament put out six different and extremely critical resolutions.
    • One of the six articles spoke of the possible risk by the CAA and the proposed National Register of Citizens, of creating “the largest statelessness crisis in the world”.
    • A sixth less critical resolution, but which worried about the “brutal crackdown” on protesters, was dropped.
  • Diplomatic outreach by India
    • After India’s intense diplomatic outreach, the parliamentarians agreed to put off voting on the resolution until after External Affairs Minister and the PM visit Brussels.
    • The hope is that with the U.K. scheduled to leave the EU on January 31, interest in the anti-CAA resolutions will wane.
    • Finally, the government has held that the CAA is India’s internal law.

India’s Reaction

  • The sovereign right of India: While the government is right about India’s sovereign right, it would be deluding itself if it thinks any of these explanations are passing muster with the EU parliamentarians.
    • Dilution of case against foreign interference: The government diluted its own case against foreign interference when it facilitated a visit by EU MEPs to Srinagar last year.
    • By engaging the EU MEPs to avoid a vote in the EU Parliament this week, and offering to explain the reasons behind CAA, the government is diluting it further.
  • Need to stop reference to Pakistan: New Delhi must also consider the impact of its repeated reference to Pakistan as the sole mover of any motion against it at world legislatures and fora.
    •  626 MEPs of the total 751 were members of the groups that originally drafted the six resolutions, and it seems unlikely that Islamabad could have achieved such a majority.

Diplomatic toll

  • Cumulative toll: The government must reflect on the cumulative toll on its diplomatic heft following international alarm over the CAA, plans for an NRC and the dilution of Article 370.
  • Instead of pushing a positive agenda for India or handling global challenges, Indian diplomats seem to be overwhelmed keeping out any negative references to India at official fora.

Conclusion

India must take steps to address the concerns raised at the global level over the act and also prepare itself for the possible impact of such actions.

 

 

 

Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

Key Highlights of Economic Survey 2019-20DOMRPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Read the attached story

Mains level : Not Much


 

The Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman presented the Economic Survey 2019-20 in the Parliament today. The Key Highlights of the Survey are as follows:

Wealth Creation: The Invisible Hand Supported by the Hand of Trust

[Covered in a separate newscard]

Survey posits that India’s aspiration to become a $5 trillion economy depends critically on:

  1. Strengthening the invisible hand of the market.
  2. Supporting it with the hand of trust.

Pro-business versus Pro-markets Strategy

  • Survey says that India’s aspiration of becoming a $5 trillion economy depends critically on:
  1. Promoting ‘pro-business’ policy that unleashes the power of competitive markets to generate wealth.
  2. Weaning away from ‘pro-crony’ policy that may favour specific private interests, especially powerful incumbents.
  • Pro-crony policies such as discretionary allocation of natural resources till 2011 led to rent-seeking by beneficiaries while competitive allocation of the same post 2014 ended such rent extraction.

Strengthening the invisible hand by promoting pro-business policies to:

  1. Provide equal opportunities for new entrants.
  2. Enable fair competition and ease doing business.
  3. Eliminate policies unnecessarily undermining markets through government intervention.
  4. Enable trade for job creation.
  5. Efficiently scale up the banking sector.
  • Introducing the idea of trust as a public good, which gets enhanced with greater use.
  • Survey suggests that policies must empower transparency and effective enforcement using data and technology.

Entrepreneurship at the Grassroots

  • Entrepreneurship as a strategy to fuel productivity growth and wealth creation.
  • India ranks third in number of new firms created, as per the World Bank.
  • New firm creation in India increased dramatically since 2014:
  1. 2 % cumulative annual growth rate of new firms in the formal sector during 2014-18, compared to 3.8 % during 2006-2014.
  2. About 1.24 lakh new firms created in 2018, an increase of about 80 % from about 70,000 in 2014.
  • Survey examines the content and drivers of entrepreneurial activity at the bottom of the administrative pyramid – over 500 districts in India.
  • New firm creation in services is significantly higher than that in manufacturing, infrastructure or agriculture.
  • Survey notes that grassroots entrepreneurship is not just driven by necessity.
  • A 10 percent increase in registration of new firms in a district yields a 1.8 % increase in Gross Domestic District Product (GDDP).

Impact of education on entrepreneurship

  • Literacy and education in a district foster local entrepreneurship significantly:
  1. Impact is most pronounced when literacy is above 70 per cent.
  2. New firm formation is the lowest in eastern India with lowest literacy rate (59.6 % as per 2011 Census).
  • Physical infrastructure quality in the district influences new firm creation significantly.
  • Ease of Doing Business and flexible labour regulation enable new firm creation, especially in the manufacturing sector.
  • Survey suggests enhancing ease of doing business and implementing flexible labour laws can create maximum jobs in districts and thereby in the states.

Divestment in public sector undertakings

  • The Survey has aggressively pitched for divestment in PSUs by proposing a separate corporate entity wherein the government’s stake can be transferred and divested over a period of time.
  • The survey analysed the data of 11 PSUs that had been divested from 1999-2000 and 2003-04 and compared the data with their peers in the same industry.
  • Further, the survey has said privatized entities have performed better than their peers in terms of net worth, profit, return on equity and sales, among others.
  • The government can transfer its stake in listed CPSEs to a separate corporate entity.
  • This entity would be managed by an independent board and would be mandated to divest the government stake in these CPSEs over a period of time.
  • This will lend professionalism and autonomy to the disinvestment programme which, in turn, would improve the economic performance of the CPSEs.

Golden jubilee of bank nationalization: Taking stock

  • The survey observes 2019 as the golden jubilee year of bank nationalization
  • Accomplishments of lakhs of Public Sector Banks (PSBs) employees cherished and an objective assessment of PSBs suggested by the Survey.
  • Since 1969, India’s Banking sector has not developed proportionately to the growth in the size of the economy.
  • India has only one bank in the global top 100 – same as countries that are a fraction of its size: Finland (about 1/11th), Denmark (1/8th), etc.
  • A large economy needs an efficient banking sector to support its growth.

The onus of supporting the economy falls on the PSBs accounting for 70 % of the market share in Indian banking:

  1. PSBs are inefficient compared to their peer groups on every performance parameter.
  2. In 2019, investment for every rupee in PSBs, on average, led to the loss of 23 paise, while in NPBs it led to the gain of 9.6 paise.
  3. Credit growth in PSBs has been much lower than NPBs for the last several years.

Solutions to make PSBs more efficient:

  • Employee Stock Ownership Plan (ESOP) for PSBs’ employees
  • Representation on boards proportionate to the blocks held by employees to incentivize employees and align their interests with that of all shareholders of banks.
  • Creation of a GSTN type entity that will aggregate data from all PSBs and use technologies like big data, artificial intelligence and machine learning in credit decisions for ensuring better screening and monitoring of borrowers, especially the large ones.

Doubts regarding GDP Growth

  • GDP growth is a critical variable for decision-making by investors and policymakers. Therefore, the recent debate about accuracy of India’s GDP estimation following the revised estimation methodology in 2011 is extremely significant.
  • As countries differ in several observed and unobserved ways, cross-country comparisons have to be undertaken by separating the effect of other confounding factors and isolating effect of methodology revision alone on GDP growth estimates.
  • Models that incorrectly over-estimate GDP growth by 2.7 % for India post-2011 also misestimate GDP growth over the same period for 51 out of 95 countries in the sample.

Fiscal Developments

  • Revenue Receipts registered a higher growth during the first eight months of 2019-20, compared to the same period last year, led by considerable growth in Non-Tax revenue.
  • Gross GST monthly collections have crossed the mark of Rs. 1 lakh crore for a total of five times during 2019-20 (up to December 2019).
  • Structural reforms undertaken in taxation during the current financial year:
  • Change in corporate tax rate.
  • Measures to ease the implementation of GST.
  • Fiscal deficit of states within the targets set out by the FRBM Act.
  • Survey notes that the General Government (Centre plus States) has been on the path of fiscal consolidation.

External Sector

Balance of Payments (BoP):

  • India’s BoP position improved from US$ 412.9 bn of forex reserves in end March, 2019 to US$ 433.7 bn in end September, 2019.
  • Current account deficit (CAD) narrowed from 2.1% in 2018-19 to 1.5% of GDP in H1 of 2019-20.
  • Foreign reserves stood at US$ 461.2 bn as on 10th January, 2020.

Global trade:

  • India’s merchandise trade balance improved from 2009-14 to 2014-19, although most of the improvement in the latter period was due to more than 50% decline in crude prices in 2016-17.
  • India’s top five trading partners continue to be USA, China, UAE, Saudi Arabia and Hong Kong.

Exports:

  • Top export items: Petroleum products, precious stones, drug formulations & biologicals, gold and other precious metals.
  • Largest export destinations in 2019-20 (April-November): United States of America (USA), followed by United Arab Emirates (UAE), China and Hong Kong.
  • The merchandise exports to GDP ratio declined, entailing a negative impact on BoP position.
  • Slowdown of world output had an impact on reducing the export to GDP ratio, particularly from 2018-19 to H1 of 2019-20.
  • Growth in Non-POL exports dropped significantly from 2009-14 to 2014-19.

Imports:

  •  Top import items: Crude petroleum, gold, petroleum products, coal, coke & briquittes.
  •  India’s imports continue to be largest from China, followed by USA, UAE and Saudi Arabia.
  •  Merchandise imports to GDP ratio declined for India, entailing a net positive impact on BoP.
  • Large Crude oil imports in the import basket correlates India’s total imports with crude prices. As crude price raises so does the share of crude in total imports, increasing imports to GDP ratio.

Logistics industry of India:

  • Currently estimated to be around US$ 160 billion.
  • Expected to touch US$ 215 billion by 2020.
  • According to World Bank’s Logistics Performance Index, India ranks 44th in 2018 globally, up from 54th rank in 2014.

Direct investments and remittances:

  • Net FDI inflows continued to be buoyant in 2019-20 attracting US$ 24.4 bn in the first eight months, higher than the corresponding period of 2018-19.
  • Net FPI in the first eight months of 2019-20 stood at US$ 12.6 bn.
  • Net remittances from Indians employed overseas continued to increase, receiving US$ 38.4 billion in H1 of 2019-20 which is more than 50% of the previous year level.

External debt:

  • Remains low at 20.1% of GDP as at end September, 2019.
  • After significant decline since 2014-15, India’s external liabilities (debt and equity) to GDP increased at the end of June, 2019 primarily by increase in FDI, portfolio flows and external commercial borrowings (ECBs).

Monetary Management and Financial Intermediation

Monetary policy:

  • Remained accommodative in 2019-20.
  • Repo rate was cut by 110 basis points in four consecutive MPC meetings in the financial year due to slower growth and lower inflation.
  • However, it was kept unchanged in the fifth meeting held in December 2019.
  • In 2019-20, liquidity conditions were tight for initial two months; but subsequently it remained comfortable.

Prices and Inflation

Inflation Trends:

  • Inflation witnessing moderation since 2014
  • Consumer Price Index (CPI) inflation increased from 3.7 per cent in 2018-19 (April to December, 2018) to 4.1 per cent in 2019-20 (April to December, 2019).
  • WPI inflation fell from 4.7 per cent in 2018-19 (April to December, 2018) to 1.5 per cent during 2019-20 (April to December, 2019).

Drivers of CPI – Combined (C) inflation:

  • During 2018-19, the major driver was the miscellaneous group
  • During 2019-20 (April-December), food and beverages was the main contributor.
  • Among food and beverages, inflation in vegetables and pulses was particularly high due to low base effect and production side disruptions like untimely rain.

Cob-web Phenomenon (Cyclical fluctuations in inflation) for Pulses:

  • Farmers base their sowing decisions on prices witnessed in the previous marketing period.
  • Measures to safeguard farmers like procurement under Price Stabilization Fund (PSF), Minimum Support Price (MSP) need to be made more effective.

Volatility of Prices:

  • Volatility of prices for most of the essential food commodities with the exception of some of the pulses has actually come down in the period 2014-19 as compared to the period 2009-14.
  • Lower volatility might indicate the presence of better marketing channels, storage facilities and effective MSP system.

Essential Commodities Act is outdated

  • The Centre’s imposition of stock limits in a bid to control the soaring prices of onions over the last few months actually increased price volatility, according to the ES.
  • The finding came in a hard-hitting attack in the report against the Essential Commodities Act (ECA) and other “anachronistic legislations” and interventionist government policies, including drug price control, grain procurement and farm loan waivers.
  • The Centre invoked the Act’s provisions to impose stock limits on onions after heavy rains wiped out a quarter of the kharif crop and led to a sustained spike in prices.
  • However the Survey showed that there was actually an increase in price volatility and a widening wedge between wholesale and retail prices.
  • The lower stock limits must have led the traders and wholesalers to offload most of the kharif crop in October itself which led to a sharp increase in the price volatility.

Agriculture

  • Agricultural productivity is also constrained by lower level of mechanization in agriculture which is about 40 % in India, much lower than China (59.5 %) and Brazil (75 %).
  • With regard to the agri sector, the Survey argued that the beneficiaries of farm loan waivers consume less, save less, invest less and are less productive.
  • It added that the government procurement of foodgrains led to a burgeoning food subsidy burden and inefficiencies in the markets, arguing for a shift to cash transfers instead.

Food Management

  • The share of agriculture and allied sectors in the total Gross Value Added (GVA) of the country has been continuously declining on account of relatively higher growth performance of non-agricultural sectors.
  • GVA at Basic Prices for 2019-20 from ‘Agriculture, Forestry and Fishing’ sector is estimated to grow by 2.8 %.

Services Sector

Increasing significance of services sector in the Indian economy:

  1. About 55 % of the total size of the economy and GVA growth.
  2.  Two-thirds of total FDI inflows into India.
  3. About 38 per cent of total exports.
  4. More than 50 % of GVA in 15 out of the 33 states and UTs.

Social Infrastructure, Employment and Human Development

  • The expenditure on social services (health, education and others) by the Centre and States as a proportion of GDP increased from 6.2 % in 2014-15 to 7.7 % in 2019-20 (BE).
  • India’s ranking in Human Development Index improved to 129 in 2018 from 130 in 2017:
  • With 1.34 % average annual HDI growth, India is among the fastest improving countries
  • Gross Enrolment Ratio at secondary, higher secondary and higher education level needs to be improved.
  • Gender disparity in India’s labour market widened due to decline in female labour force participation especially in rural areas:
  • Around 60 % of productive age (15-59) group engaged in full time domestic duties.

Sustainable Development and Climate Change

  • India moving forward on the path of SDG implementation through well-designed initiatives
  • SDG India Index:
  1. Himachal Pradesh, Kerala, Tamil Nadu, Chandigarh are front runners.
  2. Assam, Bihar and Uttar Pradesh come under the category of Aspirants.
  • India hosted COP-14 to UNCCD which adopted the Delhi Declaration: Investing in Land and Unlocking Opportunities.
  • COP-25 of UNFCCC at Mandrid:
  1. India reiterated its commitment to implement Paris Agreement.
  2. COP-25 decisions include efforts for climate change mitigation, adaptation and means of implementation from developed country parties to developing country parties.
  • Forest and tree cover:
  1. Increasing and has reached 80.73 million hectare.
  2. 56 % of the geographical area of the country.
  • The numbers of stubble-burning incidents in 2019 were the least in four years, the Economic Survey says.
Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

Thalinomics: the Economics of a plate of food in IndiaDOMRPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Thalinomics

Mains level : Read the attached story


 

  • The Economic Survey 2019-20 states that affordability of vegetarian Thalis improved 29 per cent from 2006-07 to 2019-20 while that for non-vegetarian Thalis by 18 per cent.
  • Affordability of Thalis vis-à-vis a day’s pay of a worker has improved over time, indicating improved welfare of the common person.
  • The Survey says that food is not just an end in itself but also an essential ingredient in the growth human capital and therefore important for national wealth creation.

The term ‘Thalinomics’

  • The conclusion has been drawn on the basis of “Thalinomics: the Economics of a plate of food in India” – an attempt to quantify what a common person pays for a Thali across India.
  • Price data from the Consumer Price Index for industrial workers for around 80 centers in 25 States and UTs from April 2006 to October 2019 has been used for the study.
  • Using the dietary guidelines for Indians, the price of Thalis is constructed.
  • The Survey states that across India and also the 4 regions- North, South, East and West- it is found that the absolute prices of a vegetarian Thali have decreased significantly since 2015-16 though the price has increased in 2019.
  • This is owing to the sharp downward trend in the prices of vegetables and dal in contrast to the previous trend of increasing prices.
  • As a result, an average household of 5 individuals that eats two vegetarian Thalis a day, gained around Rupees 10887, on average per year, while a non-vegetarian household gained Rupees 11787, on average per year.

Shift in Thali dynamics

  • The Survey states that 2015-16 can be considered as a year when there was a shift in the dynamics of Thali prices.
  • Many reform measures were introduced since 2014-15 to enhance the productivity of the agricultural sector as well as efficiency and effectiveness of agricultural markets for better and more transparent price discovery.
Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

Strategy for boosting Wealth CreationDOMRPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Prospects of ethical wealth creation and its redistribution


  • The big idea from the Economic Survey 2019-20 is the need to push towards increasing the number of wealth creators in the Indian economy.
  • The Survey states that to achieve the goal of becoming a $5-trillion economy, the invisible hand of markets will need the support of “the hand of trust”.

Wealth Creation

  • Essentially, this means that regulation and rules in the economy should be such that they make it easy to do business but not turn into crony capitalism.
  • The Survey states: “The invisible hand needs to be strengthened by promoting pro-business policies to:
  1. Provide equal opportunities for new entrants, enable fair competition and ease doing business,
  2. Eliminate policies that unnecessarily undermine markets through government intervention,
  3. Enable trade for job creation, and
  4. Efficiently scale up the banking sector to be proportionate to the size of the Indian economy.”

How can this be done?

  • The Survey introduces the idea of “trust as a public good that gets enhanced with greater use”.
  • In other words, it states that policies must empower transparency and effective enforcement using data and technology to enhance this public good.
  • A key element here is the need to increase the opportunities for new entrants.
  • “Equal opportunity for new entrants is important because… a 10 per cent increase in new firms in a district yields a 1.8 per cent increase in Gross Domestic District Product (GDDP)”.
  • According to the Survey, the right policy mix can boost job creation.

Levers for furthering Wealth Creation

The Survey identifies several levers for furthering Wealth Creation, which are:

  • entrepreneurship at the grassroots as reflected in new firm creation in India’s districts;
  • promote ‘pro-business’ policies that unleash the power of competitive markets to generate wealth as against ‘pro-crony’ policies that may favour incumbent private interests;
  • eliminate policies that undermine markets through government intervention, even where it is not necessary;
  • integrate ‘Assemble in India’ into ‘Make in India’ to focus on labour intensive exports and thereby create jobs at a large scale;
  • efficiently scale up the banking sector to be proportionate to the size of the Indian economy and track the health of the shadow banking sector;
  • use privatization to foster efficiency. The Survey provides careful evidence that India’s GDP growth estimates can be trusted.

Is this push for wealth creators new?

  • This is an extension of what PM said during his Independence Day speech in August last year, where he stressed on the need for the country to view “wealth creators” differently.
  • Those who create wealth for the country, those who contribute in the country’s wealth creation — they all are serving the nation as well.
  • We should not look at wealth creators with apprehension and doubt their intentions; we should not look down upon them.
  • The PM had also said there was a need in the country to give such wealth creators due respect and credit.
  • He had said that this change is required because “If no wealth is created, no wealth can be distributed”.

Focus on Ethical Wealth Creation

  • The Survey emphasised on the importance of ‘Ethical Wealth Creation’, as the key to making India $5 trillion economy by 2025.
  • Krishnamurthy V. Subramanian, the Chief Economic Adviser of Ministry of Finance has done a commendable job in producing a thought-provoking masterpiece on ‘ethical wealth creation.
Make in India: Challenges & Prospects

Integrating “Assemble in India” into Make in IndiaDOMRPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Make in India

Mains level : Expected outcomes of the said integration


Giving a new dimension to ‘Make in India’, the Economic Survey 2019-20 suggested that the government should integrate ‘Assemble in India for the world’ into ‘Make in India’ to boost exports and generate jobs.

Assemble in India

  • Survey says India has unprecedented opportunity to chart a China-like, labour-intensive, export trajectory.
  1. By integrating “Assemble in India for the world” into Make in India, India can:
  2. Raise its export market share to about 3.5 % by 2025 and 6 % by 2030.
  3. Create 4 crore well-paid jobs by 2025 and 8 crore by 2030.
  • Exports of network products can provide one-quarter of the increase in value added required for making India a $5 trillion economy by 2025.

How to harness the situation?

  • The US-China trade war is causing major adjustments in global value chains and firms are scouring alternative locations for operations.
  • Even before the trade war began, China’s image as a low-cost location for final assembly of industrial products was rapidly changing due to labour shortages and increases in wages.
  • These developments present India an unprecedented opportunity to chart a similar export trajectory as that pursued by China and create unparalleled job opportunities for its youth.
  • As no other country can match China in the abundance of its labour, we must grab the space getting vacated in labour-intensive sectors.

Key suggestions made by the Survey

Survey suggests a strategy similar to one used by China to grab this opportunity by:

  1. Specialization at large scale in labour-intensive sectors, especially network products.
  2. Laser-like focus on enabling assembling operations at mammoth scale in network products.
  3. Export primarily to markets in rich countries.
  4. Trade policy must be an enabler.
Police Reforms – SC directives, NPC, other committees reports

Anticipatory BailSC Judgements

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Anticipatory Bail

Mains level : Purpose of the Anticipatory Bail


  • The Supreme Court has ruled that no time restriction should ordinarily be fixed for anticipatory bail and that it can continue even until the end of the trial.
  • The protection granted under Section 438 of the CrPc should not invariably be limited to a fixed period deciding a reference made to it following “conflicting views of some other benches of the court.

What is anticipatory bail?

  • A Law Dictionary describes ‘bail’ as procuring “the release of a person from legal custody, by undertaking that he shall appear at the time and place designated and submit himself to the jurisdiction and judgement of the court.”
  • As opposed to ordinary bail, which is granted to a person who is under arrest, in anticipatory bail, a person is directed to be released on bail even before arrest made.

Section 438 of the CrPC, 1973, lays down the law on anticipatory bail:

  • Sub-section (1) of the provision reads: “When any person has reason to believe that he may be arrested on an accusation of having committed a non-bailable offence, he may apply to the High Court or the Court of Session for a direction under this section; and that Court may, if it thinks fit, direct that in the event of such arrest, he shall be released on bail.”
  • The provision empowers only the Sessions Court and High Court to grant anticipatory bail.

Rationale behind anticipatory bail

  • Anticipatory bail became part of the new CrPC in 1973 (when the latter replaced the older Code of 1898), after the 41st Law Commission Report of 1969 recommended the inclusion of the provision.
  • The necessity for granting anticipatory bail arises mainly because sometimes influential persons try to implicate their rivals in false cases for the purpose of disgracing them or for other purposes by getting them detained in jail for some days.
  • Apart from false cases, where there are reasonable grounds for holding that a person accused of an offence is not likely to abscond, or otherwise misuse his liberty while on bail, there seems no justification to require him first to submit to custody, remain in prison for some days and then apply for bail.”
  • In the 1980 Gurbaksh Singh Sibbia vs State of Punjab case, a SC bench ruled that S. 438 (1) is to be interpreted in the light of Article 21 of the Constitution (protection of life and personal liberty).

Conditions while granting anticipatory bail

  • While granting anticipatory bail, the Sessions Court or High Court can impose the conditions laid down in sub-section (2).
  • 438(2) reads: When the High Court or the Court of Session makes a direction under sub-section (1), it may include such conditions in such directions in the light of the facts of the particular case, as it may think fit, including —
  1. a condition that the person shall make himself available for interrogation by a police officer as and when required;
  2. a condition that the person shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer;
  3. a condition that the person shall not leave India without the previous permission of the Court;
  4. such other condition as may be imposed under sub-section (3) of section 437, as if the bail were granted under that section.”
Genetically Modified (GM) crops – cotton, mustards, etc.

Yellow RustPrelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Yellow rust, Pusa Yashasvi

Mains level : Not Much


 

Yellow Rust was detected in wheat crops in parts of Punjab and Haryana.

Yellow Rust

  • Yellow Rust disease appears as yellow stripes of powder or dust on leaves and leaf sheaths of the wheat crop. This yellow powder comes out on clothing or fingers when touched.
  • This occurs when the rust colonies in the leaves drain the carbohydrates from the plant and reduce the green leaf area.
  • In India, it is a major disease in the Northern Hill Zone and the North-Western Plain Zone and spreads easily during the onset of cool weather and when wind conditions are favourable.
  • Rain, dew and fog favour the disease’s development.

Impact of the disease

  • The disease can spread rapidly under congenial conditions and affects crop development, and eventually the yield.
  • Yield due to the disease can affected by between 5 and 30 per cent.
  • According to the IIWBR advisory, if farmers observe yellow rust in patches in their wheat fields, they should spray fungicides.

Other facts: Pusa Yashasvi

  • Last year, a new variety of wheat called HD-3226 or Pusa Yashasvi was released by the Indian Agricultural Research Institute.
  • It had higher levels of resistance against major rust fungi such as the yellow/stripe, brown/leaf and black/stem.
Capital Markets: Challenges and Developments

Dividend Distribution Tax (DDT)Priority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : DDT

Mains level : Not Much


 

Finance Minister announced abolition of DDT to be paid by companies in her budget speech.

What is DDT?

  • A dividend is a return given by a company to its shareholders out of the profits earned by the company in a particular year.
  • Dividend constitutes income in the hands of the shareholders which ideally should be subject to income tax.
  • However, the income tax laws in India provide for an exemption of the dividend income received from Indian companies by the investors by levying a tax called the DDT on the company paying the dividend.

Who were required paid DDT?

  • Any domestic company which is declaring/distributing dividend is required to pay DDT at the rate of 15% on the gross amount of dividend as mandated under Section 115O of the Income Tax Act.
  • DDT was also applicable on mutual funds.

Why it is scrapped?

  • Every MNE investing in India is faced with the question of tax-efficient repatriation of profits that accumulate here.
  • The dividend that the holding company would receive would have already suffered substantial tax in India, although indirectly.
  • The foreign company would normally be required to pay tax on the dividend so received in its home jurisdiction.
  • DDT being a tax in the Indian company and the foreign company not paying taxes directly on such dividend income in India, it would not be able to claim foreign tax credit in its home jurisdiction.
  • This resulted in a double whammy for foreign companies as, at a group level, they suffered double taxation.