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GS: 2


International relation:

A great American arms bazaar(The Hindu Editorial)

Context:

U.S. President’s attempt to rework arms transfer policy provides for an opportunity for India

What is the existing policy on arms sale in U.S.?

  • Arms transfers by U.S. happen primarily through Foreign Military Sales, Direct Commercial Sales, and Foreign Military Financing
  • These are controlled by stringent laws like Arms Export Control Act
  • Sale of arms is guided less by commercial considerations rather than strategic ones

Why is arms transfer important for U.S.?

  • It is a key leverage of global influence
  • It reduces the cost of procurement for the U.S. military by spreading the cost, and by employing 1.7 million people
  • the defence industry is a key component in U.S. economy and politics

What changes do President Trump want to bring?

  • Trump emphasizes commercial benefits of arms sale and de-emphasize the strategic angle
  • He wants to reduce the Foreign Military Financing to the least, except for Israel.
  • Further, he wants American partners to buy more weapons from it.
  • This is also a move towards reducing trade deficits with key partners such as South Korea and Japan.

How would this benefit India?

  • Change in U.S. arms policy is expected to change dynamics of India-U.S. defence trade
  • India is expected to be more comfortable with weapons purchases as commercial deals
  • For U.S. India could emerge as a reliable, non-proliferating buyer of its arms

Time for clarity(The Hindu Editorial)

Context:

The agreements and events that followed the Doklam standoff still remain mystery

What is in the news?

  • On 28th August, 2017, the Centre had issued a statement on a mutual decision for Indian and Chinese troops to disengage and withdraw from the part of the Doklam plateau disputed between China and Bhutan.
  • India was able to diplomatically resolve the standoff attaining its desire outcome of maintaining a status quo
  • However, the MEA which had maintained that there was no change in status quo, recently shifted its position and commented that the government has been using “established mechanisms” to resolve Doklam issue.
  • At Raisina Dialogue, Foreign Secretary has also commented that China is the major disruptor in the region
  • Further, the Army Chief has commented that it’s high time for India to shift its focus from western border with Pakistan to northern border with China
  • These comments have raised numerous concerns over China’s growing power in the Doklam region
  • It is high time that the Centre share details of what has been happening at Doklam and remove all the ambiguities over Doklam issue

Indian Constitution and Polity:

Disqualification of AAP MLAs approved(The Hindu)

Context:

President Ram Nath Kovind on Sunday accepted the recommendation of the Election Commission to disqualify the 20 MLAs of the Aam Aadmi Party(AAP), the ruling party in the national capital, for holding office of profit.

What’s the issue?

  • The controversy started in 2015, when the AAP came to power and appointed 21 lawmakers as parliamentary secretaries. One out of these 21, Jarnail Singh, left his position to fight elections from Punjab.
  • The question of their disqualification had then been brought up by a petition filed in June, 2015 before the President.
  • The Petition, filed, had sought their disqualification under Section 15 of the Government of National Capital Territory of Delhi Act, 1991.
  • In response, the Delhi Legislative Assembly had then passed the Delhi Member of Legislative Assembly (Removal of Disqualification) (Amendment Bill), 2015, excluding Parliamentary Secretaries from ‘office of profit’.
  • However, The President had refused to give assent.
  • Around same time, Delhi High Court struck down the posts of Parliamentary Secretaries
  • MLA’s then requested Election Commission to not entertain the plea as High Court already has struck down the posts
  • EC refused to entertain the plea and recommended the disqualification to president.
  • Which recently accepted by president.

What is “Office of Profit”?

  • An office of profit is a term used in a number of national constitutions to refer to executive appointments.
  • If an MLA or an MP holds a government office and receives benefits from it, then that office is termed as an “office of profit”.
  • A person will be disqualified if he holds an office of profit under the central or state government, other than an office declared not to disqualify its holder by a law passed by Parliament or state legislature.
  • A number of countries forbid members of the legislature from accepting an office of profit under the executive as a means to secure the independence of the legislature and preserve separation of powers.
  • The word ‘office’ has not been defined in the Indian Constitution or the Representation of the People Act of 1951. But different courts have interpreted it to mean a position with certain duties that are more or less of public character.

Who is a parliamentary secretary?

  • A Parliamentary Secretary assists a Minister, and the office usually comes with perks as well as a measure of political influence.

Constitutional provisions:

  • Experts argue that the post of parliamentary secretary is in contradiction to Article 164 (1A) of the Constitution which provides for limiting the number of Ministers in the State Cabinets to 15% of the total number of members of the State Legislative Assembly. But, the number of Cabinet Ministers in Delhi cannot exceed 10% of the total 70 seats — that is seven — as per Article 239AA of Constitution.

Capacity building for primary health care(The Hindu Editorial)

Context:

The National Medical Commission (NMC) Bill,2017 attempts to ensure an adequate supply of quality medical practitioners by revamping the medical education system in India.

How does the NMC attempts to ensure adequate supply of quality medical practitioners?

  • NMC bill has a provision for a bridge course to enable AYUSH practitioners to practice modern allopathic medicine in a limited way specifically in rural areas, where there are reduced number of medical practitioners.

What has been the debate over this provision?

  • The provision of allowing AYUSH practitioners to practice modern allopathic medicine has been a problematic clause in the NMC Bill and has been largely debated.
  • Critics have opined that this provision in the NMC Bill will put a large majority of rural India at health risk but also provides an opportunity to AYUSH practitioners to become a modern medicine practitioner using a ‘shortcut’.

What is the problem with the availability of quality medical practioners in India?

  • According to the Rural Health Statistics 2014-15 of the Ministry of Health & Family Welfare, there is huge shortfall of doctors and specialists in the rural healthcare system.
  • The physician-patient ratio is extremely low in primary health care centers.
  • This is mainly due to paucity of MBBS-trained primary-care physicians and the unwillingness of existing MBBS-trained physicians to serve rural populations

How would the provision in the NMC Bill help solve this issue?

  • In India, the AYUSH practitioners arguably provide some medical support to large section of the population deprived of healthcare facilities
  • The provision is considered to be important to ensure adequate supply of medical practitioners in India.
  • Training AYUSH practitioners to fill the gaps in healthcare delivery at primary level can improve the doctor-patient ratio and provide the poorest masses in remote areas some medical assistance.

Suggestions

  • Capacity-building of licensed AYUSH practitioners through bridge training is important to address India’s primary health care needs
  • However, training to AYUSH practitioners must be strictly be aimed to enable them dispense basic medical care and only in areas where qualified MBBS doctors are absent.
  • It is important to train these practitioners in providing the right care for minor diseases and identifying and referring serious conditions to specialists.

Profit and loss (The Hindu Editorial)

Context:

  • The disqualification of AAP MLAs for holding office of profit

AAP’s stand:

  • The party claims it was denied a hearing and alleges political motives behind the action.
  • It has questioned the timing of the decision, just ahead of the Chief Election Commissioner’s retirement.
  • Regardless of the charge of political malice, the correctness of the EC’s decision will be decided on legal grounds.
  • The courts will have to rule on the question whether the post of parliamentary secretary, which these MLAs were holding, is an ‘office of profit’.
  • They may also examine whether there was any violation of natural justice.

Issues involved:

  • The key question was whether the post was an office of profit even after the Delhi government made it clear that parliamentary secretaries would not be eligible for any remuneration or perquisites.
  • They were only allowed the use of government transport for official uses and office space in the respective ministries.

Office of Profit:

  • An office of profit is a term used in a number of national constitutions to refer to executive appointments.
  • If an MLA or an MP holds a government office and receives benefits from it, then that office is termed as an “office of profit”.
  • A person will be disqualified if he holds an office of profit under the central or state government, other than an office declared not to disqualify its holder by a law passed by Parliament or state legislature.
  • A number of countries forbid members of the legislature from accepting an office of profit under the executive as a means to secure the independence of the legislature and preserve separation of powers.
  • The word ‘office’ has not been defined in the Indian Constitution or the Representation of the People Act of 1951. But different courts have interpreted it to mean a position with certain duties that are more or less of public character.

Examples:

  • In Jaya Bachchan, the court said it was an office of profit even if one did not actually receive payment; it was enough if some pay was ‘receivable’.
  • In Raman v. P.T.A. Rahim, the court said only posts that are capable of yielding pecuniary gains, as distinguished from compensatory allowances, would be offices of profit.

O.P. Rawat to head poll panel(The Hindu)

Context:

  • The Union Law Ministry on Sunday appointed senior most Election Commissioner Om Prakash Rawat as the next Chief Election Commissioner (CEC).

Introduction:

  • Former Finance Secretary Ashok Lavasa was appointed as Election Commissioner to fill the vacancy created by Mr. Rawat’s elevation.
  • Mr Rawat will oversee elections in Tripura, Meghalaya and Nagaland scheduled next month.
  • Crucial States like Karnataka, Madhya Pradesh, Rajasthan and Chhattisgarh will also go to the polls under his watch.

Election Commission of India:

  • The Election Commission of India is an autonomous constitutional authority responsible for administering election processes in India
  • The body administers elections to the Lok Sabha, Rajya Sabha, state Legislative Assemblies in India, and the offices of the President and Vice President in the country.
  • The Election Commission operates under the authority of Constitution per Article 324, and subsequently enacted Representation of the People Act.
  • The Commission has the powers under the Constitution, to act in an appropriate manner when the enacted laws make insufficient provisions to deal with a given situation in the conduct of an election.
  • Being a constitutional authority, Election Commission is amongst the few institutions which function with both autonomy and freedom, along with the country’s higher judiciary, the Union Public Service Commission and the Comptroller and Auditor General of India.

Tenure of Election Commissioner:

  • Election Commissioners have a fixed term of six years but have to step down if they reach 65 years of age before their term expires.

GS: 3


Economy:

A misleading story of job creation(The Hindu)

Context:

India does not create 55 lakh new jobs every year, as claimed by a new report

Introduction:

  • The report titled “Towards a Payroll Reporting in India” authored by the Group Chief Economic Adviser of the State Bank of India and a professor from the Indian Institute of Management Bangalore
  • It used data from the Employees’ Provident Fund Organization (EPFO) which registers employees from the formal sector for provident fund benefits.

Main objectives of the report:

  • The main objective of the report was to make a case for a better payroll reporting system in India
  • It also made an extravagant claim that 55 lakh new jobs are created every year in India.

Highlights of the report:

  • It found that as of November 2017, there were 36.8 lakh new members in the age group of 18-25 years who registered with the EPFO vis-à-vis the previous year.
  • It assumed that any 18- to 25-year-old registering with the EPFO implies that he or she found a new job in the organised sector
  • It then extrapolated this November 2017 data to the full year of FY-2018 and boldly claimed that 55.2 lakh new jobs were created in FY-2018.

Indian economy was subjected to massive external forces:

  • The Indian economy was subjected to massive external forces of formalisation by the twin forces of demonetisation in FY-2017 and the GST in FY-2018.
  • Demonetisation resulted in thousands of employers retrenching a large part of their informal workforce paid in cash and registering the remaining employees as formal workers with benefits such as provident fund
  • The GST coerced thousands of small and medium businesses in the country to transition at least a part of their workforce from informal to formal employment
  • The costs of formalisation may have resulted in many firms cutting costs or even shutting down.

Conclusion:

India’s jobs situation is a very grim challenge that must be acknowledged, confronted and for which we must debate solutions. All evidence, confirmed by both governmental agencies and analysis by independent organisations like the Centre for Monitoring of Indian Economy and well-known labour economists, have clearly demonstrated how growth in new jobs (formal and informal) has slowed down dramatically. A serious issue such as lack of jobs for millions of youth cannot be wished away by hiding behind misleading data analysis and a media spin.

Flawed fiscal policy favours the affluent(The Hindu)

Context

  • The top 1% income earners received 6% of the total income in the early 1980s; it went up to 15% in 2000 and today stands at 22%.
  • Data from India’s Income Tax department showed that 59,830 individuals reported gross total income more than ₹1 crore.
  • Over 30,500 individuals reported earning salary income of over ₹1 crore.
  • Five individuals reported earning salary income between ₹100 crores and ₹500 crore.
  • Thirty two persons showed gross total income over ₹100 crore.
  • Only one individual showed the income over ₹500 crore.

Global comparison:

  • IMF research papers give country-wise figures of the share of the billionaires in the GDP of each country.
  • The worth of dollar billionaires is most skewed in Russia, the U.S. and India which are home to a substantial number of billionaires.
  • The World Inequality Report points out that inequality declined in China in the past decade and growth was faster compared to India.
  • China’s per capita income was five times that of India in 2016.

Reasons for growing inequality in India:

  • Low tax to GDP ratio.
  • Fiscal policies fail to reduce inequality levels because of low tax to GDP ratio.
  • Agricultural income is not taxed with 2,746 cases showing agricultural income of ₹1 crore and more in the last seven years.
  • The 10% tax on dividends above ₹10 lakh is a mirage; it should have been at least 25% with exemption for dividends up to ₹10,000.
  • Additional resource mobilisation is concentrated on indirect taxes with a slew of relief measures in direct taxes, benefiting only the rich.
  • The stock market boom calls for revisiting the present policy of exempting long term capital gains on shares held for 12 months and more.
  • India’s market to GDP ratio stands at 104%.
  • Inheritance tax, abolished in 1987, should be reintroduced.

‘Develop a U.S.-style online platform to sell bad loans’ (The Hindu)

Context:

  • The Reserve Bank of India (RBI) has called for putting in place an online trading platform on the lines of the system in the U.S., to sell distressed assets to ensure more transparency and better price-discovery.

Rationale behind this decision:

  • Such a platform could help create a thriving market for selling bad loans, which is plaguing the domestic banking system.
  • The banking system is saddled with more than Rs 10 trillion worth of bad loans as of September 2017.

Steps taken by RBI:

  • RBI since last June identified 40 largest stressed accounts and asked banks to refer them to various debt recovery tribunals.
  • In the financial stability report released recently, the RBI had warned that the bad loans could spike to 10.8% by March and 11.1% by September, 2018.

Stressed assets:

  • Stressed assets = NPAs + Restructured loans + Written off assets
  • Stressed assets are a powerful indicator of the health of the banking system.

What is an NPA?

  • A loan whose interest and/or installment of principal have remained ‘overdue ‘ (not paid) for a period of 90 days is considered as NPA.

Way ahead:

  • To create primary market liquidity to offload loans in the interest of asset reconstruction companies to have a secondary market for such assets.

Science and Technology:

New ‘tattoos’ lets your control objects remotely (The Hindu)

Context:

Scientists have developed ultra thin electronic skin tattoos that can help control virtual and physical objects with mere hand gestures

Introduction:

  • The extremely thin, almost invisible foil that sticks to the palm of the hand like a second skin, have sensors which provide people with a “sixth sense” for magnetic fields.
  • These sensors will enable people to manipulate everyday objects or control appliances with mere gestures, similar to how we use a smartphone now.
  • Using this technique, the researchers managed to control a virtual light bulb on a computer screen in a touchless way.
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