Read the analysis of rest of the articles


GS 2

Government policies


A judgment for the ages & It’s a losing battle for privacy: SC:

Context:

  • The potential contours of the right to privacy are really the
    critical question in the case before the Supreme Court. The government has
    pushed the Supreme Court into a dangerous exercise; drawing the boundaries of the right to privacy.

Context of the case

  • The court’s questions came even as petitioners banked on Union Finance Minister Arun Jaitley’s statement in Parliament that privacy is ‘probably’ a fundamental right and ‘part of individual liberty’.
  • The statement was made on March 16, 2016 during the presentation of the Aadhaar Bill.
  • A nine-judge Bench led by Chief Justice of India J.S. Khehar wrapped up the marathon hearing of the reference on the question whether privacy was a fundamental right or not, and reserved its judgment on 2nd August, 2017.
  • The verdict is expected to be pronounced before August 27, before the retirement of Chief Justice Khehar.

Border peace must for China ties: India &India may have cut troops in Doklam, claims China:

Context

  • The Chinese Foreign Ministry issued a 15-page statement, claiming that India has scaled down its forces in Doklam, but demanded that New Delhi pull back all its troops to end the military standoff in the area.

India’s position

  • India’s reaction to the detailed 15-page official statement, reiterated Beijing’s claim on the Doklam region, has been upright.
  • There has been no reduction in the presence of troops in the Doklam. At least 300 soldiers and 30 tents continued to remain in Doklam.
  • India considers peace and tranquility on the border as the “prerequisite” for Bilateral ties.
  • India still stand firm about not withdrawing military forces from Doklam.
  • India said its forces had intervened in Doklam in the “tradition of maintaining close consultation on matters of mutual interest” with Bhutan.
  • China complaints that by the end of July, there were still over 40 Indian border troops and one bulldozer illegally staying in the Chinese territory.
  • China pointed out that Indian troop presence in the Doklam, or Dong Lang, area near the India-China-Bhutan tri-junction had peaked to 400 personnel at one point.

Events unfolded as per Chinese press

  • On 16 June 2017, the Chinese side was building a road in the Dong Lang area.
  • On 18 June, over 270 Indian border troops, carrying weapons and driving two bulldozers, crossed the boundary in the Sikkim Sector at the Duo Ka La (Doka La) pass and advanced more than 100 metres into the Chinese territory to obstruct the road-building, causing tension in the area.
  • In addition to the two bulldozers, the trespassing Indian border troops, reaching as many as over 400 people at one point, have put up three tents and advanced over 180 metres into the Chinese territory.
  • China claims that they did not cross the boundary in its road-building, and it notified India in advance in full reflection of China’s goodwill.
  • The Chinese side reiterated that India must unconditionally pull back its troops, a position Beijing has adopted since the beginning of the crisis.
  • The incident took place on the Chinese side of the delimited boundary.
  • Therefore, India should immediately and unconditionally withdraw its trespassing border troops back to the Indian side of the boundary, according to Chinese government.
  • This is a “prerequisite” and basis for resolving the incident as per Chinese Government.

GS 3

Indian Economy. Planning, Growth and Employment


WCO to unveil norms for e-commerce trade:

Context:

Customs body aims to address digital, illegal trade

Introduction:

  • The World Customs Organization (WCO) will soon bring out guidelines on ‘cross-border e-commerce’, which will focus on preventing illegal trade as well as addressing the challenges stemming from the ‘digital divide’, according to the WCO Secretary General Kunio Mikuriya.

Focus areas

  • WCO will address issues related to digital divide by looking into what is blocking e-commerce trade, and what kind of enabling environment is needed to support developing countries so that they benefit more from e-commerce.
  • The new guideline would include provisions to prevent illegal trade and illicit financial flows
  • This would be ensured through measures that would help strengthen information exchange between Customs administrations of countries as well as collaboration with other government a
  •   It will be a “game changer” in global trade that is benefiting small firms and consumers.

Working groups:

  •  The WCO has a Working Group on e-Commerce and four sub-groups.
  • To develop guidelines on cross-border e-commerce, the work packages identified are- Trade facilitation and simplification of procedures, Safety and security, revenue collection and measurement and analyis.
  • According to UN body ‘UNCTAD’, the value of online trade jumped from $ 16 trillion to $ 22 trillion between 2013 and 2015.
  • According to WCO’s Study Report on Cross-Border E-Commerce, the continuous increase in online trading has raised questions regarding regulations, consumer protection, revenue collection and national security.

Key points:

  • The WCO highlighted that more sophisticated equipment was needed to combat illicit trading through low-value shipments in postal, express and cargo streams
  •  Pre-arrival information on the consignment and the consignee could be of great importance in detecting and intercepting illicit trade.
  • The improvement of non-intrusive inspection equipment and increase in the number of trained staff could help to enhance the detection rate of illicit goods.

Banks should reduce rates for existing borrowers too: RBI:

Context:

The RBI reduces the policy rate while flagging multiple concerns on the economy

Introduction:

  • As some of the upside risks to inflation have not materialize, the Reserve Bank of India on Wednesday decided to cut the key policy rate or repo rate by 25 basis point(bps),taking it to its lowest  in six –and-half year
  • The Reserve Bank of India governor Urjit Patel said he expected lender to pass on lower loan costs to borrowers who had not received the full benefits of the reduction in the policy rate.

RBI initiatives:

  • The Reserve Bank of India also plans to review the MCLR and Base Rate mechanisms to address the issue of inadequate monetary transmissio
  • The banking regulators pointed out that bank mainly reduced rates for segments where competition was high as in the case of home loans and personal loans
  • The central bank has reduced the repo rate by 200 bps since January 2015
  • The RBI decision largely dependent on the three factors GST, Demonetisation and Oil, consensus largely forecasted that a rate cut is on the anvil.

Reasons for rate cut

  • Apart from softness in food and fuel prices, the apex bank also noted interestingly that the inflation in transport and communication services were depressed by the pricing war in the telecommunication space
  • Pricing power for industry also remains subdued as per the RBI survey
  • Implementation of farm loan waiver by state may result in fiscal slippages as well as the timing of the state implementation of the 7th CPC
  • Versus the last policy, RBI recognizes that growth, industrial production and private capex are very sluggish, indicating weakness.

Impacts:

  • On new lending, the transmission has been much stronger, specially in those segments where there is lot of competition-housing loans, personals loans where the NBFCs also play a big part
  • While banks cut the marginal cost of funds based lending rate (MCLR) sharply in January by to 90 bps the reduction in the base rate, which was the earlier loan pricing regime, was much lower
  • MCLR has been operational only from April 2016, a large proportion of loans are still linked to the base rate and such borrowers have not benefited to the extent of the new borrowers
  • The difference between the base rate and MCLR, for some banks, is as high as 90-100 bps
  • The RBI said that it will address Base Rate rigidity to improve transmission
  • By cutting the policy repo rate by 25 basis points, the Reserve Bank of India has opted to play safe while nominally acceding to the clamour for softer lending rate
  • There is no clarity on whether and when State governments will implement salary and allowance increases following the Centre’s implementation of the seventh pay panel related hikes.
  • The RBI governor expressed concern that CPI inflation might inch up to 4% by Q4. They might cut again when CPI inflation undershoots their estimates, which has been the case in the recent past
  • A shift to ‘accommodative’ stance would have better from the sentiments perspective
  • This is detrimental to credit expansion and economic growth
  • The RBI governor expressed concern that CPI inflation might inch up to 4% by Q
  • There is lack of incremental private sector investments, job creation is being hampered.

Key points:

  •  It is important to note that India has the second highest real interest rate in Asia presently
  •  On the state of the economy, the Monetary Policy Committee was of the view that there is urgent need to reinvigorate private investment, remove infrastructure bottlenecks and provide a major thrust to the Pradhan Mantri Awas Yojana for housing needs of all
  • On their part, the Government and the Reserve Bank of India are working in close coordination to resolve large corporate borrowers and recapitalize public sector banks within the fiscal deficit target.
  • An important point is that the RBI has not changed the policy stance, which continues to be neutral
  • Among the market development initiatives announced by RBI, it is noteworthy to mention the separate limit in IRF(Interest Rate Futures) to the extent of Rs 5000 cr for FPI
  • RBI also plans to review the MCLR and Base Rate mechanism to address the issue of inadequate monetary transmissions.
  • Steps are being taken to close out the gap of information asymmetry between borrowers and lenders by having a comprehensive PCR (Public Credit Rating) for which RBI plans to set up a task force.

Challenges:

  • RBI has been facing challenge of non-transmission for a while, but a silver lining is developing at the macro level where the Forex reserves of India are becoming big.
  • Forex reserves eventually will ensure fall in currency premiums and that will result in foreign capital flowing into the economy at substantially lower rates.
  • Markets are overheated but reluctant to fall, a huge pile of cash getting built in the system and waiting to be deployed, that will act as a shock absorber at every weakness.
  • Global borrowing rates are subdued and currency risks now tapering off will result in lower rates offered in India.

Conclusion:

Long term money should be committed at these levels as well. Barring any global event, the outlook is positive.


Trai and CCI: no turf wars, please: (Live Mint, Editorial)

Context

  • Recent debate on turf wars between the competition regulator and sector-specific regulators in India has risen due to a letter by the the chairman of the Competition Commission of India (CCI), D.K. Sikri, to his counterpart at the Telecom Regulatory Authority of India (Trai), R.S. Sharma.

Arguments made by Sikri

  • Sikri in his letter argued that the CCI is better placed to look into matters related to predatory pricing than Trai.
  • This letter comes against the backdrop of a consultation paper floated by Trai in February, where the telecom sector regulator sought to deal with predatory pricing issues in the telecom sector.
  • Hitherto, the understanding was that ex-ante competition matters fell in the domain of Trai, and ex-post matters such as predatory pricing were the turf of the CCI.

What is the fuss all about?

  • Predatory pricing is a strategy where the dominant market player prices its products or services below costs to undercut its rival.
  • It is easy to see that with its unmatched resources, the dominant player can sustain losses in the short run, only to recoup the same in the long run when the suffers.
  • It is of great importance that only a dominant position holder can be punished for engaging in predation.
  • In turn, dominant position is determined based on market share.
  • A firm is considered to be a dominant position holder if the market share is significantly high (generally above 50% in the European Union), barriers to entry are also high, and there is no countervailing buyer power.

Ensuring Fair competition

  • The limited mandate of Trai is also to promote competition.
  • Trai also tries to ensure fair competition through means other than acting against predatory pricing.
  • The way CCI works and acts against predatory pricing in the present scheme of legislative mandate is bound to leave an enforcement gap through which cases like Reliance Jio can leak.
  • These are the gaps that Trai can try fixing ex-ante to ensure fair competition.
  • Trai could either limit the duration of promotional offers, which include below cost pricing, or it could increase the interconnect usage charges (IUC) from the current 14 paise per second to a point where below cost pricing becomes unmaintainable.
  • Trai realizes that with promotional offers, the present scheme of promotional offers may result in unfair and anti-competitive measures.
  • In the same consultation paper, Trai has sought stakeholders’ views on defining relevant market. It is true that the telecom regulator also requires delineating relevant market.

Competition law framework

  • While the telecom regulators resort to the competition law framework to delineate relevant market.
  • It is possible that the telecom body and competition body reach different results.
  • It can because of different perceptions of substitutability between products or services that are the subject matter of enquiry.

Science and Tech


Heart of the matter: (Indian Express, Editorial)

Context

  • The article ‘Address this blockage,’ by Cherian and Kumar acknowledges that the capping of stent prices has made them affordable, but flawed arguments have been used to suggest that there may be adverse consequences to patients and the indigenous stent industry.

Major arguments

  • One key argument against price capping is that the “latest generation” of stents will not be available to the Indian public at price mentioned.
  • This is a deceitful assertion. Successive “generations” of stents in the current era represent small improvements in design which have no documented impact on outcomes that are most important to patients (rates of reblockage, heart attacks or death).
  • Currently, the best performing stents are available in the country at or below the current ceiling price.
  • Suggestions like “patients hoping to have advanced stents may have to travel abroad” is a misrepresentation.
  • The second major area of controversy has been the impact of price capping on the indigenous stent industry.
  • While others suggesting a uniform cap on prices unfairly favouring Indian stent manufacturers, the above article claims that it is likely to adversely impact indigenous research and innovation.
  • The actuality is that the uniform price cap has reduced the price differential between the foreign-made and Indian-made stents.
  • While the foreign-made stents have been carefully tested for safety and efficacy in a large number of patients, most Indian stents have undergone perfunctory studies to meet the threshold for approval in India.
  • Therefore, the uniform stent price will, in the long run, likely disincentives Indian stent manufacturers from conducting the research required to make them major international players.
  • Cherian and Kumar also suggest, that as a result of the reduction in stent prices, there is a “disturbing increase” in stenting multiple arteries.
  • This is passing off an anecdote as scientific truth and can only be confirmed or refuted by national level data.
  • Overuse and inappropriate use of procedures is more a result of unregulated, fee-for-service healthcare delivery and should not be blamed on reduced prices.
  • Implementing a uniform price cap is the most pragmatic approach available to put an end to widespread price-gouging.

What is required to be done?

  • Continued vigilance is needed to guard against unintended consequences.
  • The benefit of the reduction in price may not be transferred entirely to patients.
  • Several hospitals can juggle prices of the other components of their angioplasty “package charges” so that the overall price to the patient does not reduce.
  • Seen from a profit maximization perspective, it should be expected that stent manufacturers will make the ceiling price their target price.
  • New stents can get be introduced into the market which are priced at the ceiling even if their actual market price may be lower.
  • A more nuanced approach, which takes into account safety and efficacy metrics from arduous studies, should inform stent pricing.
  • It would make indigenous stents internationally competitive and allow entry to true technological advances.

Importance of Stents

  • The importance of stents lies in the treatment of coronary artery disease.
  • Drugs remain the cornerstone of treatment for stable patients.
  • The use of coronary stents in these patients is only for relief of chest pain that is not controlled with medicines.
  • Only about one-fifth to one-third of patients require stenting or bypass surgery over a period of five years.
  • Stents can be life-saving for patients during a heart attack if implanted in a timely manner.

Prelims Related News


Seven species of grasshoppers found:

Context

  • A small-granulated dark black and brown coloured pygmy grasshopper measuring about 9.07 mm was discovered in the forests of Chhattisgarh last month as by the Scientists from the Zoological Survey of India (ZSI).

The new discovery

  • It was collected from moist deciduous forests in Korba district, the species has been named Coptotettix korbensis.
  • The details of the new species has been published in international science journals Zootaxa and Annales de la Societe Entomologique de France.

Other findings

  • The short-horned grasshopper Epistaurus tinsensis was brought to light few months ago.
  • The species was collected from the Barnawapara Wildlife Sanctuary in Raipur.
  • Epistaurus tinsensis has a yellowish brown body with dense long silvery pubescence and is slightly larger than the recently discovered species.
  • There five others were discovered in 2016.
  • Four of the new discoveries were pygmy grasshopper Euparatettix dandakaranyensis from Bastar district of South Chhattisgarh, Poekilocerus geniplanus and Hedotettix angulatus from Barnawapara Wildlife Sanctuary and Ergatettix subtruncatus from Durg district of Chhattisgarh. Heteropternis raipurensis, a species of short-horned grasshopper, was discovered from Raipur district.

Exciting discoveries

  • Both pygmy and short-horned grasshoppers belong to Orthoptera (an order of Insecta).
  • One major difference between them is pronotum (prominent plate-like structure that covers all or part of the thorax of some insects). This extended backwards to cover abdomen in the pygmy, which is not the case with the short-horned.
  • Kailash Chandra, Director of ZSI, said the faunal diversity of the Chhattisgarh forests have not been explored earlier because of the difficult terrain and left-wing extremism.
  • Collection of a lot of specimens of insects from 2011 have been done and an agreement with the Chhattisgarh government is also on papers.
  • There are total of 1,033 species of Orthoptera in India, including 285 short-horned and 135 pygmy grasshoppers.
  • These discoveries are interesting as grasshoppers have economic and ecological interest.
  • They form an important link in the food chain and their predators include reptiles, amphibians, and birds and help directly in the protection of endangered species of birds, reptiles, amphibians and fishes.

 

Print Friendly, PDF & Email

Did you like what you read?

Enter your email address below to get all our updates in your inbox the moment it is published. Once you enter your email address, you will be subscribed immediately.


We do not spam you, so you can easily unsubscribe anytime, by clicking on unsubscribe link in the email.