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GS-1


Geophysical phenomena

Mapping the not-so-normal monsoon: (The Hindu)

Context

  • The retreating south-west monsoon for 2017 has turned out to be normal for the second consecutive year. But there are various grey factors attached to the normal monsoon this year.

What is considered normal rainfall?

  • Indian Meteorological Department deems a season ‘normal’ if the all-India quantum of rain falls within a 10% range of its long-period average of 887.5 mm.
  • India has received a total 841.3 millimetres (mm) of rain in the south-west monsoon season from June 1 to September 30 this year.
  • The 2017 monsoon fell short of the number only by 5%. In fact, the cumulative rainfall numbers this year aren’t very different from 2016 when the country recorded 862 mm of rain.

What effect does a good rainfall have on crops?

  • In the year 2016-17, India harvested a record crop of cereals (252.7 million tonnes) and managed a quantum jump in its output of both pulses (16.3 million tonnes in 2015 to 22.9 million tonnes in 2016) and oilseeds (25 to 32 million tonnes).
  • A good harvesting like that of 2016 – 17 contributed to a significant bump-up in the agriculture sector of the GDP which grew 4.9% in FY17 compared with 0.7% in FY16.
  • The spatial and the temporal distribution of rains becomes the main reason behind making and breaking crop prospects. The 2017 monsoon on this score was unusual.

What are the expectation for the year 2017-18?

  • Expecting a repetition of the impressive performance from last year is not realistic.
  • In 2016, the monsoon started slow, but picked up pace in the latter half of the season. But this year’s monsoon has behaved in exactly the opposite fashion.
  • Year 2017 started with excess rains of about 4% and 2% against normal seasonal patterns in June and July, the months of August and September have seen all-India rainfall fall 12-13% short of normal levels.
  • Good rains in the months of June and July may have contributed to good sowing and coverage of the kharif crops. But deficit rains in August and September could impact the eventual output by pruning crop yields.
  • The rainfall in the last two months of the south-west monsoon prescribe the reservoir storage and soil moisture, setting the tone for the plantation of the winter crops.
  • The kharif crop, the rabi season has been equally important to the country’s agricultural prospects in recent years. Rabi output often matches or even exceeds the kharif output.
  • Oilseeds are also predominantly winter crops. Therefore, dry spells in the latter half of this monsoon, taken with deficient rains in key rabi growing regions, can make for less than rosy rabi prospects.

Why is weather forecasting important?

  • The purpose of a weather forecast is to provide as accurate as possible prediction of what the weather will be like in the near future.
  • Weather forecasting is important to most aspects of day to day life, including aviation, boating, other modes of transportation, farming, tourism, sports, etc.
  • Weather is a natural phenomenon and it can only be studied using predictions based on regular pattern.
  • In absence of accurate weather forecasts there are high chances of damage to life and property. The certainty helps people to be aware of the calamities approaching.
  • The more warning people have the better they can prepare and the least likely they are to die due to such natural disasters.
  • Pilots need to know the weather to plan their flights, sailors need to know what the weather will be like to plan their activities, and farmers need to know what the weather will be like to help them plan watering, fertilizer and pesticide application, and harvest activities, to name a few.

India Meteorological Department (IMD) AND IT’S FUNCTIONING

  • Indian meteorological department also referred to as MET department is an agency of the Ministry of Earth Sciences of the Government of India.
  • It is the principal agency responsible for meteorological observations, weather forecasting and seismology.
  • It is headquartered at Pune and operates observation centres at various other places.

INDIAN SATELLITES INVOLVED IN WEATHER FORECAST

Weather satellites:

  • There are two basic types of weather satellites: those in geostationary orbits and those in polar orbits.
  • Geostationary satellites: these satellites orbit very high above the earth at an altitude of 35,800 km and take the same time to orbit the earth as the earth takes to revolve once. From earth, therefore, the satellite appears to stay still always above the same region all the time.
  • These satellites give ‘real-time’ images and hence, a series of photographs from these satellites can be displayed in a sequence to show cloud movement.
  • Polar orbit satellites: This type of satellite orbits in a path that closely follows the Earth’s meridian lines, passing over the north and south poles once each revolution. These circle at a much lower altitude at about 850 km. This means that they can photograph clouds from a much closer level and provide more detailed information about violent storms and cloud systems.

Uses:

  • Radiation measurement from earth surface
  • Fishermen can find out valuable information about the temperature of the sea from measurements of these satellites.
  • Infrared sensors on satellites can monitor crop conditions, areas of deforestation and regions of drought.
  • Satellites can detect volcanic eruptions and the motion of ash clouds.
  • Ice-mapping, snow storms in the Arctic and Antarctica and the mountain chains-Monitoring of Global Warming
  • Observation of Auroras
  • Water and air pollution can be pinpointed
  • Oil spills can be detected.

Weather Satellites in India (those in service):

  • INSAT system: the Indian National Satellite system was commissioned with the launch of INSAT-1B in 1983 and ushered in a revolution in India’s television, radio and meterological broadcasting. Of the 24 satellites so far launched, 11 are still in operation.
  • INSAT-3C
  • INSAT-3D
  • INSAT-3E
  • KALPANA-1
  • MEGHA-TROPIQUE

SYSTEMS INTERFERING WITH THE INDIAN MONSOON

El-nino: El-Nino is the warm phase of the El-nino Southern Oscillation or ENSO and is associated with a band of warm water that develops in the central and east-central equatorial Pacific. It is accompanied by high pressure in the western pacific and low pressure in the eastern pacific.

El-nino modoki: It is a coupled ocean-atmosphere phenomenon in the tropical pacific. Conventional El-Nino is associated with strong anomalous warming in the eastern equatorial pacific while El Nino Modoki is associated with strong anomalous warming in the central tropical pacific and cooling in the eastern and western tropical pacific.

Indian ocean dipole: The Indian Ocean Dipole or the Indian nino is an irregular oscillation of the sea-surface temperatures in which the western Indian Ocean becomes alternately warmer and colder than the eastern part of the ocean. Monsoon in India is generally affected by the temperatures between the Bay of Bengal in the east and the Arabian sea in the west.

GS-2


Constitutional and quasi-judicial Bodies

Why flagship BPL health insurance scheme is in rather poor health: (Indian Express, Explained)

Context:

Even after eight years it was launched, Rashtriya Swasthya Bima Yojana remains futile and unproductive.

What is Rashtriya Swasthya Bima Yojana?

  • The RSBY, the health insurance scheme for BPL (Below Poverty Line) families was launched for the workers in the unorganized sector in the FY 2007-08.
  • It became fully operational from 1st April 2008.
  • RSBY had been initiated and launched by the Ministry of Labour and Employment, Government of India to provide health insurance coverage for Below Poverty Line (BPL) families. The objective of RSBY is to provide protection to BPL households from financial liabilities arising out of health shocks that involve hospitalization. Beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000

It had two-fold objectives:

  • To provide financial protection against catastrophic health   costs by reducing out
  • To improve access to quality health care for below poverty line households of pocket expenditure for hospitalization and other vulnerable groups in the unorganized sector
  • It provides for IT-enabled and smart –card-based cashless health insurance, including maternity benefit on a family floater basis to BPL families (a unit of five) and 11 occupational groups in the unorganized sector.
  • Since 1st April, 2015, the Scheme Rashtriya Swasthya Bima Yojana (RSBY) has been transferred to Ministry of Health & Family Welfare on “as is where is” basis. Ministry of Health & Family Welfare is administering and implementing the scheme through a decentralized implementation structure at the State level.

Rashtriya Swasthya Bima Yojana-Analysis

The scheme has won plaudits from the World Bank, the UN and the ILO as one of the world’s best health insurance schemes. Germany has shown interest in adopting the smart card based model for revamping its own social security system, the oldest in the world, by replacing its current, expensive, system of voucher based benefits for 2.5 million children. The Indo-German Social Security Programme, created as part of a co-operation pact between the two countries is guiding this collaboration

However, recently, the performance of the scheme has come under criticism for the following reasons

1.One of the reasons behind no significant reduction in out-of-pocket health expenses for insured families was that patients were often asked to buy medicines and diagnostics.

  1. Despite rising healthcare costs, the scheme continues to be capped at Rs 30,000 since 2008.
  • There has not been any revision, while the costs of hospitalisation have almost doubled.
  1. Beneficiaries have been persuaded by providers to utilise in-patient services that were not covered by RSBY, or denied care.
  2. The scheme has had no significant impact on the cost of outpatient services which significantly burden patients financially compared to inpatient services.

Problems faced by the health sector in India:

  1. India’s abysmally low public spending on health-care tops the list of drawbacks.
  • The infant mortality rate in India in 2015 was 38, according to the World Bank—far better than the 165 in 1960 but lagging comparable countries such as Bangladesh (31), Indonesia (23) and Sri Lanka (08).
  • And the situation in even worse in some large states such as Uttar Pradesh, where around 50 out of every 1,000 children die before they reach the age of five.
  1. Another problem with India’s healthcare system is acute manpower shortage.
  • The country has only about one doctor for every 1,700 patients whereas the World Health Organization (WHO) prescribes at least one for every 1,000 patients.
  1. The third problem is that a vast majority of people do not have health insurance in a country.
  • India’s inability to find a workable model for taxation or insurance has left its poor particularly vulnerable.
  • Poor standards of health,sanitation and hygiene.

What is the possible way forward?

  • The Medical Council of India (MCI) will have to reform the entire medical education system if these gaps of medical facilities have to be filled.
  • The corruption and nepotism in the MCI that is often brought to the fore should be addressed.
  • The health infrastructure needs to be strengthened and the condition of government hospitals needs to be improved as these are the ones that serve the far flung areas.
  • The health care costs need to be regulated across the private and public sectors and made more affordable.
  • The Council should also make sure that there is enough manpower to reach out the rural areas.
  • In the meantime, more healthcare providers need to be brought into the system, including nurses, optometrists, anaesthetists and AYUSH (ayurveda, yoga and naturopathy, unani, siddha and homoeopathy) workers.
  • Nurses especially can and should be empowered so that they can take off some of the load from physicians.
  • A public-private sector cooperation model as suggested by Niti Aayog’s Model contract, should be brought into practise.

China swears by 1890 treaty with Britain: (The Hindu)

Context

Recently defence minister Ms. Nirmala Sitharaman’s had made first high-level visit to Nathu la post after the 73-day standoff at Dokalam which ended on August 28 following a mutual agreement.

Nathu La

Nathu La is a mountain pass in the Himalayas. It connects the Indian state of Sikkim with China’s Tibet Autonomous Region. The pass, at 4,310 m (14,140 ft) above mean sea level,forms a part of an offshoot of the ancient Silk Road. Nathu means “listening ears” and La means “pass” in Tibetan.On the Indian side, the pass is 54 km (34 mi) east of Gangtok, the capital of Sikkim. Only citizens of India can visit the pass, and then only after obtaining a permit in Gangtok.

Nathu La is one of the three open trading border posts between China and India; the others are Shipkila in Himachal Pradesh and Lipulekh (or Lipulech) at the trisection point of Uttarakhand–India, Nepal and China.

Sealed by India after the 1962 Sino-Indian War, Nathu La was re-opened in 2006 following numerous bilateral trade agreements. The opening of the pass shortens the travel distance to important Hindu and Buddhist pilgrimage sites in the region and was expected to bolster the economy of the region by playing a key role in the growing Sino-Indian trade. However, trade is limited to specific types of goods and to specific days of the week.

Nathu La is the last post separating the border between the Sikkim on the Indian side and Tibet on the Chinese side. Sitharaman’s trip was the first high-level visit to the area after the 73-day standoff between Indian and Chinese troops at Dokalam in the Sikkim sector of the border which ended on August 28 following a mutual agreement between India and China.

Of the 3,488-km India-China border which stretches from Jammu and Kashmir to Arunachal Pradesh, a 220-km section falls in Sikkim. The two

sides have so far held 19 rounds of Special Representatives’ talks to resolve the dispute

1890 U.K – China treaty

  • The treaty was signed in Calcutta on March 17, 1890.
  • Article I of the Treaty talks about the boundary of Sikkim and Tibet in physical detail. “The boundary of Sikkim and Tibet shall be the crest of the mountain range separating the waters flowing into the Sikkim Teesta and its affluents from the waters flowing into the Tibetan Mochu and northwards into other rivers of Tibet.”

China’s reaction

  • China referred to the 1890 U.K.-China treaty which it claims demarcated the Sikkim sector of the India-China border and urged India to abide by its provisions.
  • The Sikkim section of the China-India border has been demarcated by the historical boundary.
  • The 1890 Britain-China treaty which Beijing referred to during the Doklam standoff stating that as it had defined the Sikkim section of the boundary with Tibet, the border in that area had been settled.

Is it a valid treaty?

  • Nehru explicitly states in the letter that the 1890 treaty defined only the northern part of the Sikkim-Tibet border and not the tri-junction area that brings Bhutan into play.
  • Delhi has been unable to explain to the Indian public the background about the Chinese ‘trick’ regarding the 1890 Convention repeatedly quoted by the Chinese authorities.
  • The spokesperson of the Chinese ministry of foreign affairs in Beijing vociferously managed to convince many that it was a valid treaty.However, the fact that the main stakeholders, Tibet and Sikkim (and Bhutan for the trijunction), were not even consulted, made it an ‘Imperial Treaty’ with no validity (in any case, the survey of the trijunction was done several decades after the agreement was signed; so China can’t justify ‘fixing’ the trijunction by quoting this treaty).

Navigating a changing world: (The Hindu, Editorial)

Context:

The 14th edition of India-EU Summit held recently in New Delhi on October 6.

Introduction:

  • The EU was represented by President of the European Council, and President of the European Commission. While the India was represented by Prime Minister Narendra Modi.
  • The summit marked the 55th anniversary since the establishment of EU-India diplomatic relations.
  • The leaders reviewed the wide-ranging cooperation under the India-EU Strategic Partnership. Recognising that India and the EU are natural partners, the leaders reaffirmed their commitment to further deepen and strengthen the India-EU Strategic Partnership based on shared principles and values of democracy, freedom, rule of law and respect for human rights and territorial integrity of States.

Positive outcomes of summit:

  • India and EU reaffirmed their commitment to a “rules-based” international order and a “multipolar” world.
  • This is significant because U.S. moving towards reneging on several international deals.
  • Two sides have agreed to enhance cooperation at multilateral and bilateral interactions.
  • Under the FTA, the issue of data adequacy and greater market access was discussed at length.
  • The leaders committed to work in a result-oriented and mutually beneficial manner to further strengthen the India-EU Strategic Partnership by deepening their trade cooperation, enhancing investment flows in both directions and broadening dialogue and engagement on global and regional issues, including climate change, as well as migration and the refugee crisis, and resolved to further strengthen their bilateral and multilateral cooperation in these areas.
  • The leaders commended the strong engagement of the European Investment Bank in India in a wide range of key sectors, in particular in the field of climate action and renewable energy.

Foreign Policy and Security Cooperation:

  • The leaders reaffirmed their commitment to an open, free, secure, stable, peaceful and accessible cyberspace, enabling economic growth and innovation.
  • They agreed that India and the EU, as the world’s largest democracies, need to support a rules-based international order that upholds agreed international norms, global peace and stability, and encourages inclusive growth and sustainable development in all parts of the inter-connected and multipolar world.
  • The leaders strongly condemned the recent terrorist attacks in many parts of the world, underlining their common concern about the global threat posed by terrorism and extremism.
  • The two sides reaffirmed their commitment to strengthening global non-proliferation efforts as highlighted at the India-EU Non-proliferation and Disarmament Dialogue in New Delhi on 18 July 2017.
  • India and the EU reaffirmed their commitment to enhance maritime security cooperation in the Indian Ocean and beyond. Both sides noted the recent joint manoeuvres (PASSEX) between the EU Naval Force and the Indian Navy off the coast of Somalia, as a successful example of naval cooperation
  • Both sides agreed to enhance the India-EU space cooperation, including Earth observation.
  • India and the EU reiterated the importance they attach to human rights cooperation, including on gender equality and women empowerment in all spheres of life
  • India and the EU reaffirmed their support for the continued full implementation of the Joint Comprehensive Plan of Action (JCPOA) regarding the Iranian nuclear issue
  • Regarding the situation in Syria, India and the EU reaffirmed the primacy of the UN-led Geneva process and called for full support for the intra-Syrian talks with a view to promoting a political solution in Syria
  • Both sides underlined the importance of ASEM as an informal platform for connecting Asia and Europe. Both sides also agreed to give new impetus to ASEM in the run up to the next ASEM Summit to be hosted in Brussels, where the focus would be on tackling global challenges together.

Terrorism, Rohingya discussed:

  • Adopting a Joint Statement on Cooperation in Combating Terrorism, both sides agreed to take decisive and concerted actions against globally proscribed terrorists and terror entities, including Hafeez Saeed, Zaki-ur-Rehman Lakhvi, Dawood Ibrahim, Lashkar-e-Tayibba, Jaish-eMohammad, Hizb-ul-Mujahideen, Haqqani Network, Al Qaeda, ISIS (Da’esh) and their affiliates.
  • India and EU also discussed the Rohingya crisis and urged Myanmar to implement the Kofi Annan-led Rakhine Advisory Commission’s recommendations and work with Bangladesh to enable the return of the displaced persons from all communities to Northern Rakhine State.

Deadlock areas:

  • The India-European Union Trade pact, the Broad-based Trade and Investment Agreement (BTIA), have not progressed during the 14th India-EU Summit held in New Delhi on October 6.
  • Summit was unable to set in motion the stalled negotiations for concluding the proposed Free Trade Agreement (FTA), or Broad Based Trade and Investment Agreement (BTIA).
  • Conclusion of the FTA was the top most agenda of the European leaders, but India was more eager to discuss issues related to counter-terrorism and security.

Trade discussion:

  • Among the reported causes for the failed talks is a disagreement on whether the protection of foreign investments will be part of the BTIA or dealt with in a stand-alone treaty.
  • Another issue holding up the trade talks has been the EU not granting “data secure” certification to India — a condition that facilitates the cross-border transfer of personal data, key to a number of companies’ services, especially in the IT industry.
  •  India does not have a stand-alone data privacy law yet and the state recently went to great lengths to create a false dichotomy between development and privacy during the right to privacy hearings in the Supreme Court, including, by (unsuccessfully) arguing that privacy was an elitist concern.
  • Other sticky points in the negotiations have been India wanting a greater ease of movement of temporary skilled workers to provide services in the EU.
  • This EU and other developed nations have been historically reluctant about moving forward on this issue and this has become more challenging with the rise of populism and protectionism in Europe.
  • The EU wanting greater market access for its automobiles and its wines and spirits.
  • The EU is, commendably, at the forefront of protecting citizens’ rights as regards what happens to their data online.
  • It would certainly be a shot in the arm for consumer rights and privacy standards in the digital age if India were to adopt and implement strict standards for handling data, an outcome desirable in itself.

U.S’s shifting position:

  • The inauguration of Donald Trump as U.S. President and consequent retreat of America from its leadership role in the West has provided a significant external stimulus to the EU’s identity shift.
  • Mr. Trump has said he is going to “decertify” the nuclear deal with Iran — a deal that the EU is keen to uphold — and his administration has given notice of intent to withdraw from the Paris Accord.

Why India needs to cement its bond with the EU?

  • India and the EU should continue to welcome each other’s leadership roles in the world, because of commonly shared values.
  • The EU is India’s largest trade partner and it is also, like India, wary of China’s political (the summit declaration makes a reference to freedom of navigation principles) and economic dominance.
  • The EU is concerned about China flooding global markets with inexpensive steel and its response to China’s Belt and Road Initiative has been lukewarm, but the strength of China’s relationship with EU member states themselves is heterogeneous, with China trying to make inroads into Eastern and Central Europe through infrastructure investments.
  • With around €100 billion in bilateral goods and services trade last year, India and the EU have a lot to gain from a trade deal.
  • It will certainly pay for both India and the EU to keep each other close as they feel their way around the emerging international order.

Conclusion:

  • The European Union and India are natural partners. Every year, millions of Europeans come to India to discover this great country’s many marvels. There is even a local cricket team in my native Luxembourg, made up largely of Indian players.
  • India is one of the world’s fastest growing economies; the EU is the world’s biggest open market and the world’s second largest economy.
  • As the world’s two largest democracies, it is now time for Europe and India to infuse their relationship with a liberal vision for a transformed global order

GS-3


Indian Economy. Planning, Growth and Employment

It’s time for bold economic thinking: (The Hindu)

Context

  • Despite India’s rapid economic growth and forex reserves more than $400 billion, the state of the economy has been described to be ‘sinking’

What is the present economic scenario?

  • India’s oil imports in FY13 was $164 billion and by FY17 it was only $83 billion, lowering the current account deficit as a percentage of GDP from 4.8% in FY13 to just 1.1% in FY17.
  • The stock market is at an all-time high in anticipation of a surge in earnings which is yet to materialize.
  • The RBI, in its latest monetary policy report, lowered the projected growth rate for FY18 from 7.3% to 6.7%
  • Both the demonetization episode of 2016 and the introduction of GST in July have imposed short-term costs in the form of lowering of growth rate in the current fiscal.

How well has the government reforms worked so far?

  • The current government has shown limited appetite for serious financial sector reform.

Bad loan problems

  • It has been long on rhetoric such as ‘Indra Dhanush’ and has evinced little resolve to deal with the massive non-performing loans problem.

The recent RBI move to refer large stressed accounts to the National Company Law Tribunal to deal with the Insolvency and Bankruptcy Code which will likely lead to two consequences:

  • The resolution will take a very long time
  • The recoveries will be much lower than what would have been possible by way of one-time payments

Low investment confidence

  • The lack of speedy resolution of the stress in PSU banks and corporate balance sheets has eroded business confidence leading to lower investment and poor job creation.
  • The government announcement of a stimulus package may deal with the problem cosmetically rather than address it at its root.
  • The aim to ring-fence boards and executive of PSU banks from probes by the three Cs, CBI, CVC and CAG, will impose a cost on the economy by delaying resolution of distressed loans and causing more losses to PSU banks.

Tax laws

  • The regime for direct and indirect tax compliance in India is undergoing a fundamental shift for the better in a way that has not happened before.
  • This is certainly going to expand the ‘production possibility frontier’ of the economy.

High savings culture

  • The high savings in India are currently not directed to productive, long-term investments as corporates have still not been able to repair their balance sheets.
  • The AC Nielsen Consumer confidence index for India in Q2 2017 was 128, declining 7 percentage points compared with Q42016, while global consumer confidence rose 3 percentage points during this time interval.
  • Despite the fall, Indian consumers are still the second most optimistic among the 63 countries surveyed by AC Nielsen.

What needs to be done now to get back on the high growth track?
Five-step plan against undisclosed funds

  • The current crisis to introduce an amnesty scheme, a la Indonesia, to allow tax payers to voluntarily disclose hitherto undisclosed income kept domestically and abroad can be used.
  • The Indian government should announce a one-time program temporarily by when anyone can disclose previously undisclosed income held within the country and abroad, for which they will pay a small, one-time fine of 4%, while 50% of the domestic holdings
  • The amounts thus invested will be locked for seven years with a compound interest of 4% per annum.
  • Post redemption, the amounts and the interest thereon can be used freely for any lawful purposes in India.

Curbing black money

  • Criminal prosecution should be instituted against Indian residents holding large sums of undisclosed income.
  • By highlighting the automatic exchange of financial account data with nations such as Singapore and Switzerland, it can ensure that the scheme is taken seriously.

The work done so far by the SIT on money stashed abroad and the information obtained through Panama leaks could be a good input to test and start the scheme.

Focusing on bad loans

  • Ensure that the full extent of the NPA problem is recognized latest by December 31 and that banks make necessary provisions in this regard.
  • The consequent shortfall in equity capital adequacy for PSU banks should be met through recapitalization by March 31.
  • The boards of PSU banks should be recast by bringing in persons with demonstrated professional experience and achievement.
  • The selection of CEOs of PSU banks and determination of their tenure and compensation package should henceforth be the exclusive domain of their boards.
  • Boards should be fully empowered decide on loan resolution by way of real restructuring, with or without haircut, and one-time payment.
  • Clear guidelines should be established for such screening and vetting.

Infrastructure investments

  • The money needs to be channelized in order to accelerate infrastructure investments, especially in agricultural storage/ support infrastructure, in post-harvest processing, water efficiency technologies, extension services etc. to make agriculture more productive.

Facilitate new export engines

  •  Facilitate new export engines with ‘Make in India’ and ‘Serve in India’ initiatives on defense exports and medical tourism.

Course correction: (The Hindu, Editorial)(sonya) & A better GST: (Indian Express, Editorial)

Context

  • The risk-taking nature among Indian businessmen seems to weaken to the point due to the introduction of new Goods and Services Tax (GST) where new investment project announcements during July-September were the lowest for any quarter in over 13 years.

What alterations are taking place?

  • The new alterations relate to coverage and compliance norms with a view to easing the burden of paperwork and stretched cash flows imposed on smaller businesses and exporters.
  • The new GST Council has lowered the rates on 27 items.
  • Prime Minister Narendra Modi has said that the Council’s decisions at its 22nd meeting has been taken to overcome the GST system’s apparent shortcomings and to fulfill the promise to fix the problems faced by traders in the first quarter of GST.

What are the reasons behind it?

  • This has been the courtesy of the new Goods and Services Tax (GST) regime. The problems encountered is in complying with the new GST reform.
  • It relates to both filing of returns and the cumbersome procedures for claiming refunds for taxes paid on input purchases.
  • It is evident that the firms, especially the smaller ones, are facing a genuine compliance burden.

How is the government trying to solve the issues?

  • Now the businesses with an annual turnover of less than Rs 1.5 crore have been permitted to file quarterly returns, instead of every month.
  • The turnover threshold for availing of the so-called composition scheme has been raised from Rs 75 lakh to Rs 1 crore.
  • The reverse charge mechanism under which receivers of goods and services are liable to pay tax on supplies by unregistered vendors has been deferred till March 31, 2018.
  • Exporters have been promised that all held-up refunds of integrated GST paid on exported goods will be expeditiously cleared.
  • The creation of a proposed “e-wallet” facility from April 1 in the form of an advance refund or notional credit will hopefully address the severe working capital blockage currently being experienced by exporters.

Way ahead

  • Firms with an annual turnover of up to Rs. 1 crore paying a flat and low tax, and the six-month suspension of the reverse charge mechanism will require large firms to deduct tax on supplies from firms outside the GST net.
  • This would help spur fresh confidence among small firms and help expand the tax base.
  • The promise of faster tax refunds for exporters facing a working capital crunch too is re-assuring.

Resources aplenty, no jobs: (The Hindu, Editorial)

Context

The inevitable widespread adoption of next generation technologies such as robotics, artificial intelligence etc  indicates a future of mass unemployment, and concentration of wealth in the hands of a few enterprises capable of providing minuscule job openings.

Some facts

  • Five high-technology firms find themselves among the list of the top seven most valuable companies in the world, employ approx 700,000 people only among them.
  • The Labour Bureau stating that India added just 1.35 lakh jobs in eight labour-intensive sectors in 2015, against a backdrop of almost 1.5 crore annually entering the job market

Impact

  • May  create of a plenitude of frustrated people who would be easy prey to the sway of radical nationalists and populists.
  • It will decrease demand of low skilled labour.
  • It will lead to concentration of wealth in few hands.
  • It will create inverse relationship between economy and employment.
  • It will create great demand for vocational education.

Way forward

  • In india the informal economy employs more than 90% of our workforce. Efforts to structure the informal sector, by encouraging them to adopt modern-day tools and best practices, and by giving them adequate access to capital for expansion, would stimulate the economy and the job market.
  • India has massive basic infrastructural capacity requirements. Government should  plan and spend, along with the creation of an environment that would encourage private investments into these potentially large-scale projects, that could create immediate openings for millions in sectors like construction, India’s second largest employer.
  • If leveraged to create essential and permanent assets, employment-guaranteeing schemes like MGNREGA would also effectively absorb a large slice of job seekers.

Conclusion

Redefining the existing economic planning, employment and resource-allocation models, to get them in sync with this technology-accelerated age, is the need of the hour.

Causes of unemployment

  1. Economic growth not adequate with employment opportunity
  2. Over-population
  3. Low industrialisation
  4. Immobility of labour
  5. High use of technology for mass production

Schemes related to employment

  1. Make in India
  2. Startup India
  3. Smart cities
  4. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
  5. National Skill Development Mission
  6. Swarna Jayanti Shahari Rozgar Yojana (SJSRY)  

Moving towards better corporate governance: (Live Mint, Editorial)

Context:

21-member Committee on corporate governance headed by banker Uday Kotak has submitted its report to the Securities and Exchange Board of India (SEBI).

Introduction:

  • The SEBI Panel recommendations on corporate governance will enhance transparency and effectiveness in the way boards of listed companies function.
  • The panel was constituted by SEBI in June 2017. It was given four months to submit its recommendations.

Reasons of constituting panel:

  • Many Indian companies are groaning under the weight of excess debt.
  • Majority of banks also has a mountain of bad loans on its balance sheet.
  • Few of the expensive acquisitions made in the previous decade have paid off for shareholders.
  • Presently, the Indian economy is facing a problem of corporate governance as they are about the vagaries of the business cycle.
  • Enhancing transparency and effectiveness in the way boards of listed companies function.
  • Proper timelines for effective implementation and regulation.
  • To protect the interest of small shareholders.
  • Achieving corporate governance.

Key recommendations:

1-      Improving governance:

  • The committee has recommended changes that will make corporate affairs more transparent as well as improve the standard of corporate governance in listed companies.
  • Committee member Krishnamurthy Subramanian, suggest way to achieving this is by strengthening the three gatekeepers- the board, the auditors, and the regulator.
  • The committee has made recommendations that will help improve governance and enhance investor confidence.
  • The committee has focused on areas such as the size and composition of the board, number of independent directors, and their role, and disclosure and dissemination of information.

2-      Independent directors:

  • The committee has recommended that a listed company should have a minimum of six directors, at least one independent woman director, and a minimum 50% of the directors should be non-executive.
  • The committee has also suggested measures so that independent directors inducted in the board.
  • Independent directors plays very important role because they protect the interest of all stakeholders, especially the small investors.
  • The committee has recommended that at least half of the board members should be independent directors.
  • It has recommended that listed companies should have to give detailed reasons if an independent director resigns.

3-      Chairperson and Managing director:

  • The committee has also recommended the separation of roles of chairperson and managing directors, and the chairperson should be a non-executive director.

4-      Board meetings:

  • The committee has suggested that the number of board meetings in a year should be increased from four to five.
  • Aspects such a succession planning, strategy and broad evaluation should be discussed at least once a year.

5-      Small investors:

  • The committee has advocated several changes that will help small investors.
  • It has recommended that disclosures by companies to stock exchanges and on their own websites should be in a format that allows investor to find information with ease.

6-      Listed companies:

  • The committee has recommended that all listed companies should publish cash flow statements on a half-yearly basis.
  • This will help the common investors- who don’t have access to financial databases.

7-      Credit ratings:

  • Updated list of all credit ratings obtained by the listed entity must be made available at one place, which would be very helpful for investors and other stakeholders.

8-       Risk management and IT committee:

  • Top-500 listed companies should have risk management committee of boards for cyber security. In addition, listed  entities must constitute an information technology committee that will focus on digital and  technological aspects

9-      Miscellaneous:

  • The committee has also recommended that SEBI should have the power to act against auditors if the need arises.

What is corporate governance?

  • Corporate governance is about promoting corporate fairness, transparency and accountability.
  • Corporate Governance deals with how a corporate is governed
  • It is a set of system, processes and principles which ensure that a company is governed in the best interest of all stakeholders.
  • It also helps in protection of shareholders interest, commitment of values and ethical conduct of business.

What are Objectives of Corporate Governance?

The objectives of the corporate governance include:

  • Attaining disclosure and transparency in corporate structures as well as organizations.
  • Fixing accountability of the controllers and managers towards the shareholders and others. This also includes bringing the interests of investors and manager into line and ensuring that firms are run for the benefit of investors.
  • Fixing the corporate responsibility towards various stakeholders
  • Create a framework for long term trust between the corporate and external providers of capital
  • Rationalize the management and risk monitoring
  • Efficient decision making
  • Integrity and probity in the financial reports.

Corporate Governance and India:

  • The Corporate Governance was launched in India in the mid 1990’s.
  • Confederation of Indian industry came up with the first voluntary code of corporate governance, followed by Kumar Mangalam Birla committee constituted by SEBI, Naresh Chandra committee report 2002 and Narayana Murthy committee report submitted in 2003.

What need to be done in order to bring corporate governance into play?

  • Corporate social responsibility is important in this regard. It helps in bringing social accountancy of firms towards the society at large while in turn pitching in their bit to help the government achieve socio-economic-political goals. It is significant in the following manner:
  1. Clarity: Regarding the priorities of government thereby enabling corporates to channel the funds accordingly
  2. Autonomy: To direct the receive to spend the fund
  3. Incentives: Lack of incentives for complying with mandated provision.
  4. Cooperation: Lack of cooperation and guidance from local bureaucracy to enhance the effectiveness of funds.

However, there are certain reinforcements that CSR bring in for corporates:

1. Goodwill: helps in brand building and loyal customers and greater retention of employees

2. No penalization: Government has not enforced any penalties in case of breach of targets thus avoided hurting the interests of donors.

Conclusion:

Corporate governance is very essential for overall growth of the companies. Therefore, CSR is noble initiative to improve societal conditions especially to foster unity and inclusivity. Greater synergy by addressing the concerns of donor will go a long way in making far more effective.

India’s great leap into services: (Live Mint, Editorial)

Context:

The emergence of e-commerce platform is an example of how digital revolution can lower transaction costs, increase productivity as well as make it more inclusive.

India and China comparison:

China and India are two of the fastest growing economies in the world. But they are following very different growth paths:

  • China is an exporter of manufactured goods.
  • India has acquired a global reputation for exporting services, leapfrogging the manufacturing sector

Services sector in India

  • Services contribute more than manufacturing to India’s output growth, productivity growth and job growth. India’s growth pattern resembles that of the US.
  • This raises big questions that can services contribute more than manufacturing to output growth, productivity growth and job growth.
  • The new industrial revolution and digital technological changes have changed the growth drivers in developing and developed countries.
  • These technological changes have enabled services to be the new driver of growth.
  • The digital revolution, by lowering transaction costs in services and overcoming problems of asymmetric information, has made services more dynamic than in the past.
  • The emergence of e-commerce platforms is an example of how digital revolution can lower transaction costs, increase productivity as well as make it more inclusive.
  • Internet-based businesses or services, fixed up-front costs can be high initially, but once the physical infrastructure is in place, each additional customer, user, or transaction incurs very little extra cost.
  • Developing countries are relying more on services and less on manufacturing as drivers of growth and job creation.
  • The relationship between income and economic structure has shifted over time, with countries across the income distribution uniformly increasing the share of labour in service sector.
  • While global growth convergence in manufacturing was a clear and strong trend some decades ago, it is no longer as strong in recent decades.
  • Service show stronger growth convergence in recent decades.

Services-led growth

  • Drivers of structural transformation and growth, either services-led growth or manufacturing-led growth, are similar but also changing.
  • These include trade policy, urbanization, and investments in physical and human infrastructure, and are country-specific.
  • Global trade in goods has never fully recovered since the global financial crisis of 2007-08.
  • Services, which account for more than 70% of global output, are still in their infancy. The long-held view that services are non-transportable, non-tradable, and non-scalable no longer holds for a host of services that can be digitized.
  • The globalization of services provides new opportunities for India to find niches beyond manufacturing, where it can specialize, scale up, and achieve explosive growth.
  • As the services produced and traded across the world expand with globalization, the possibilities to develop based on services will continue to expand.
  • Global internet usage has grown globally. But this growth is much faster in developing countries. India alone adds one million new users every month to a booming mobile phone market.
  • Unlike, in the manufacturing sector, investment in human infrastructure, education and skills, matter much more.
  • India needs accelerated investments in both physical and human infrastructure to support new drivers of growth and job creation.
  • A young population is generally more connected with technological changes. So, India’s demographic dividend should be an asset for the digital revolution and services-led growth.
  • Job growth is important, as ten million more people will join the labour force every year in India and Agriculture and manufacturing create fewer jobs today compared to the past.

Digital revolution:

  • Expansion of digital technology can play a big role in improving rural access to banking.
  • Financial inclusion can be achieved through last-mile connectivity.
  • Financial services will help in medium-size cities, small towns, and villages to become new drivers of growth.
  • The digital revolution means it is possible for the services sector to deliver rapid growth and jobs more sustainably than the manufacturing sector.

Government’s initiatives for digital revolution:

  • The Governments’ Digital India initiative is also proving a number of schemes for the benefit of the farmer. Some of the schemes in the agriculture sector include, ‘mkisan’, ‘farmer portal’, ‘Kisan Suvidha app’, ‘Pusa Krishi’, ‘Soil Health Card app’ , ‘eNAM’, ‘Crop Insurance Mobile APP’ , ‘Agri Market app’ and ‘Fertilizer Monitoring App.
  • Keeping in mind women’s safety, applications like ‘Nirbhaya app’ and ‘Himmat app’ have been launched that facilitate sending of distress calls. There are also apps for law enforcement agencies, courts and judiciary.
  • Thus, several initiatives by Government in various sectors are not only an attempt to revolutionise the society but also focus on utilizing the digital technologies to elevate the down trodden and bridge the gap between the different social strata.

Conclusion:

  • Digital revolution in India is significant as it promises to bring a multi-dimensional metamorphosis in almost all sectors of the society including service sectors. From digitization in governance to better health care and educational services, cashless economy and digital transactions, transparency in bureaucracy, fair and quick distribution of welfare schemes all seem achievable with the digital India initiative of the present Government.
  • A look at Government initiatives in various sectors in past three years show how digital revolution in India is not only changing the way society functions but also bridging the gap between the haves and the have-nots of the country.

16 balsam species found in 5 years in Arunachal: (The Hindu)

Context

  • 16 new species of plants under the genus Impatiens, commonly referred to as balsam, have been discovered from Arunachal Pradesh since 2013.
  • Botanists have found 55 species of balsam from the northeastern State, 16 of which are new discoveries to science.

‘Balsam’

  • Common names include impatiens, jewelweed, touch-me-not, snapweed, patience, and, for I. walleriana in Great Britain, “busy lizzie”, as well as, ambiguously, balsam.

Uses:

Impatiens balsamina or Rose Balsam

  • The plant is cathartic, diuretic and emetic.
  • It is used in the treatment of pains in the joints. The leaf juice is used as a treatment against warts.
  • The flowers are cooling, mucilaginous and tonic. They are useful when applied to burns and scalds.
  • The juice of the flowers is used to treat snakebites.
  • The flowers, and their alcoholic extract, possess marked antibiotic activity against some pathogenic fungi and bacteria.
  • The seed is expectorant and has been used in the treatment of cancer.
  • The powdered seeds are given to women during labour in order to provide strength.
  • North American impatiens have been used as herbal remedies for the treatment of bee stings, insect bites, and stinging nettle (Urtica dioica) rashes. They are also used after poison ivy (Toxicodendron radicans) contact to prevent a rash from developing

Study on Balsam

  • The study on the balsams emphasizes that the balsams have immense horticulture importance.
  • Studies on hybrids of the plants have been undertaken to produce flowers that can sustain in different environmental conditions.
  • The exact number of balsam species is an important information as different hybrids can be created from wild balsam species.

Impatiens species

Impatiens walongensis

  • In August 2017, a research paper has described Impatiens walongensis, a new species of balsam, published in the scientific journal Phytotaxa.
  • The species was discovered from Arunachal Pradesh’s Anjaw district.
  • Impatiens walongensis is a meter tall with ovate elliptical leaves and light pink flowers.
  • The plant is named after Walong, the locality where it was found.
  • Impatiens walongensisis the latest but not the only new discovery of balsam in Arunachal Pradesh.

Impatiens arunachalensis

  • They bear purple flowers with a pink throat. It was discovered from the Upper Siang district.
  • Since only 50 plants of the species were found at a particular location, scientists described the conservation status of the plant as critically endangered.

Impatiens zironiana

  • These are the lanceolate pale yellow floral buds flowering and fruiting in the rainy season from July to September, discovered from the Lower Subansiri district.

Others

  • Two more species of balsam, Impatiens rugosipetala from the State’s Lower Dibang valley, and Impatiens tatoensis from the West Siang district, were also discovered and described earlier this year.

What are the soil requirements for Balsam species?

  • The Balsams are known for their starkly differing flower shapes, which are produced along the stem with vivid colours like pink, red, white, purple and yellow. These balsams mostly grow in rich moist soil.
  • Across the world, about 1,000 species of these angiosperms or closed seeded plants are known to occur.
  • In India, about 210 balsam species were known till these new discoveries from Arunachal Pradesh emerged. Now, the number of balsam species has increased to 230.
  • The Impatiens is known for the high endemism among these plants.
  • These plants have a very small habitat hence they face a threat from the fast-changing landscape of the region.

Why it took time to get discovered?

  • The inaccessibility and the difficult terrain of the region were among the reasons why it took so long for the new species to be discovered.
  • The researchers also had to dissect and study their morphology in the field.

New vaccine on way could be a gamechanger for flu – here’s how: (Indian Express. Explained)

Context:

  • By employing a new way to attack the virus, a new vaccine is on its way to be tested.
  • If passed, it would bring positive results to the world and significantly to India.

What are Influenza viruses and its types?

  • Influenza, commonly known as “the flu”, is an infectious disease caused by an influenza virus.
  • Influenza viruses are classified into A, B, C and D types.
  • A and B are known to cause seasonal epidemics.
  • C causes mild respiratory illness, but not an epidemic.
  • Influenza D affects cattle.

What kinds of influenza will the new vaccine target and what is its significance?

  1.  According to Oxford University, the new vaccine will target influenza viruses A, B and C.
  2. The researchers believe that the different mechanism of the new vaccine will provide stronger protection against the flu, and could reduce its severity and duration.
  3. The new influenza is hoped to reduce the burden of influenza disease which would result in fewer clinic visits, hospitalisations and deaths.
  4. This new vaccine is expected to use throughout all areas in which influenza vaccination is not widely available, due to the lack of present perceived benefit.
  • The effect of the standard vaccine only lasts 4-6 months whereas the new vaccine could remain efficacious for a few years.

How is the new vaccine supposed to work?

  • The new vaccine will stimulate the immune system to boost influenza-specific T-cells (the body’s own immunity-building cells), instead of antibodies, that kill the virus as it tries to spread through the body.
  • Everyone has some influenza-specific T cells already, but their numbers are often too low to be protective.
  • Previous research found that these T-cells can help fight more than one type of flu virus and this, according to the researchers, means more people could be protected and the severity and duration of flu may be reduced.

How is the new vaccine expected to help in India?

  • The flu burden in India is significant.
  • The total number of cases until October 1, 2017 had crossed 36,000 countrywide, and the number of deaths was close to 2,000.
  • If the vaccine passes all tests of safety and immunogenicity, it will be a breakthrough, and will further help all countries struggling to tackle the worldwide problem of influenza.
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