Download the compilation of all summaries of all the new article here


GS-1


Social Issues

Call to wipe out modern slavery:  

Context

There is an urgent need for more aggressive and effective implementations of labor law protections to eliminate modern slavery and forced labour in line with the Sustainable Development Goals (SDGs).

What is the current incidence?

The day International Labor Organization (ILO) released new global estimates of modern slavery, a group of over 40 activists and academics from different parts of the world have released a 25-point signed statement urging India to ensure a more effective implementation of labour law protections to eliminate modern slavery and forced labour in line with the Sustainable Development Goals (SDGs).

What was the content of the statement released?

  • Dominant international discourses on modern slavery do not adequately reflect the extreme exploitation and precarious nature of employment in India today
  • An undue emphasis on sensationalist accounts of modern slavery deny the widespread prevalence of economic exploitation, even now based on social customs, cultural traditions and hereditary obligations, and obfuscate the continuum between extreme and ‘everyday’ forms of such exploitation.
  • A multi-pronged strategy that responds to the needs of all affected constituencies, including bonded labourers, contract workers, domestic workers, intra- and inter-state as well as international migrant workers, and sex workers is necessary in order to achieve SDG 8.7

What is the objective of SDG 8.7?

The SDG 8.7 calls for immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking, and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms.S

What is the way forward?

  • The most effective and durable way to prevent all forms of extreme exploitation lies in the self-organisation of workers and in their efforts at collective bargaining, especially through trade unions and workers’ collectives
  • The problem of trafficking can be addressed through a multi-faceted legal and economic strategy that strengthens the implementation of labour protections such as those guaranteed by the Constitution

Who knew healthcare was so complex: (Live Mint, Editorial)

Context

The NITI Aayog has proposed a solution to the issues plaguing India’s health sector. The solution is to incentivize the private sector via public private partnerships (PPPs), wherein the government provides land, infrastructure, capital for viability gap funding, and patients via referrals from public screening programmes. In return, the government fixes the price of basic services to ensure a reasonable rate of return. The delivery, quality and governance of the PPPs is monitored by the project steering committee, contracts management cell and project coordination committee, etc.

Problems of the healthcare sector in India

  • Corruption in MCI
  • Shortage of medical doctors due to the emigration of physicians and the fact that the current MCI rules and guidelines prohibit qualified MBBS doctors without a PG degree from performing procedures such as ultrasound and interpreting chest X-rays
  • The challenges in Availability and maintenance of equipment and supply of drugs in the  local public health infrastructure
  • The capacity of district level public health institutions
  • A weak primary health care sector with a Lack of intensive care units and issues like sanitation and drainage.

Unequally distributed skilled human resources

  • There aren’t enough skilled healthcare professionals in India despite recent increases in MBBS programmes and nursing courses
  • Shortage is compounded by inequitable distribution of these resources.
  • India does not have an overarching national policy for human resources for health.

Large unregulated  private sector

  • The National Sample Survey Office (NSSO) numbers show a decrease in the use of public hospitals over the past two decades
  • significant portion of these private practitioners may not be qualified or are under-qualified
  • many new institutions set up in the past decade encouraged by commercial incentives, have often fuelled corrupt practices and failed to offer quality education

Low public spending on health

  •    Economically weaker states are particularly susceptible to low public health investments.
  • Many state governments also fail to use allocated funds

Fragmented health information systems

  • getting quality, clean, up-to-date data is difficult in the health sector
  • Data is incomplete (in many cases it excludes the private sector) and many a time, it’s duplicated

Irrational use and spiralling cost of drugs

  • Costs of medical treatment have increased so much that they are one of the primary reasons driving people into poverty
  • Jan Aushadhi campaign to provide generic drugs at affordable prices, but their implementation has been patchy and varied in different states
  • Corruption also increases irrational use of drugs and technology.
  • kickbacks from referrals to other doctors or from pharmaceutical companies lead to unnecessary procedures such as CT scans, stent insertions and caesarean sections

Weak governance and accountability

  • many of the new laws have not been widely implemented
  • missing trust and engagement between various healthcare sectors
  • poor coordination between state and central governments as the main constraints why universal healthcare is not assured in India
  • unwillingness on the part of the state to prioritize health as a fundamental public good, central to India’s developmental aspirations, on par with education
  • India continues to lag several health indicators such as mortality rates and malnutrition

Niti Aayog’s Proposed  Model contract

  • Niti Aayog and the Union ministry for health and family welfare have proposed a model contract to increase the role of private hospitals in treating non-communicable diseases in urban India.
  • The agreement, which has been been shared with states for their comments, allows private hospitals to bid for 30-year leases over parts of district hospital buildings and land to set up 50- or 100-bed hospitals in towns other than India’s eight largest metropolises.
  • According to the model contact, the district hospitals will need to share their back-end services such as blood banks and ambulance services with the private players. The state government could also provide part of the funds needed by these private players to set up the new hospitals. The district health administration will ensure referrals for treatment from primary health centres, community health centres, disease screening centres and other government health programmes and ventures are made to these private hospitals
  • Under the model contract, these private hospitals will provide secondary and tertiary medical treatment for cancer, heart diseases and respiratory tract ailments at prices that are not higher than those prescribed under government health insurance schemes. For non-communicable diseases needing these three kinds of specialised treatments, the hospitals will need to have out-patient departments, in-patient beds, beds for intensive care, operation theatres, centre for angioplasty and angiography, laboratories and radiology services.
  • The district government hospital will be expected to share its ambulance services, blood blank, physiotherapy services, bio-medical waste disposal system, mortuary services, parking facilities, electricity load, in-patient payment counters and hospital security with the private enterprise running out of its campus, the contract says.
  • Beneficiaries of the government insurance schemes will be able to get treatment at these hospitals but there will be no reserved beds or quota of beds for free services. General patients will also be allowed to seek treatment. Patients not covered by the state insurance and health schemes would be required to pay the full cost.
  • The private hospitals operating from these public hospital campuses will be able to refer complicated cases either to other government hospitals or other empanelled private hospitals. However, sending patients further to other private hospitals would require the permission of the medical superintendent of the district hospital..

What is NMC?

Experts at NITI Aayog have proposed replacing the compromised MCI with a new National Medical Commission (NMC), outlined in a draft Bill known as the National Medical Commission Bill of 2016. Structural differences between the proposed NMC and MCI are enormous. The NMC would split the selection, advising, and actual accreditation process into three separate boards. By dividing power, the hope is to create a system of checks and balances.


GS-2


Government policies

A time of strategic partnerships: (The Hindu, Editorial)

Context

The article discuss about the importance of strategic partnership in the context of India-Japan relationship.

What is the importance of strategic partnership with Japan for India?

  • The India-Japan “Special Strategic and Global Partnership” (a designation and status New Delhi accords to no other partner) has reached new heights.
  • Reasons: The rise of China and questions about America’s commitment in Asia have drawn India and Japan into a deepening security-cum-economic relationship.

What are the basic elements of synergy between India and Japan?

The India-Japan synergy has following key elements:

  • Japan is investing heavily in strengthening its critical infrastructure to enhance its economic and potential defence capabilities.
  • Simultaneously, the two countries have begun working on a joint infrastructure development and connectivity drive traversing the Indian Ocean, from Myanmar to Sri Lanka to Iran and encompassing the Asia-Africa Growth Corridor.
  • On defence matters, Japan and India have agreed to establish regular consultations in the “2+2” format of their defence and foreign ministries.
  • Japanese investment in the strategically placed Andaman and Nicobar Islands is likely to help New Delhi establish a major security sentinel in the eastern Indian Ocean.

What are strategic partnerships? What is its relevance in today’s world?

  • We live in a world today driven by “strategic partnerships”. States find themselves in an interdependent system where the traditional power politics doesn’t fit.
  • For example, every major relationship is characterized by strategic tension such as U.S.-China, Japan-China, India-China is simultaneously one of economic gain. The U.S. and China are each other’s chief trading partners, while China ranks at the top for Japan and India. Besides, India might confront China at Doklam but it also wants Chinese investment.
  • Strategic partnerships carry certain characteristic features falling short of alliances. Unlike alliances, they do not demand commitments to a partner’s disputes with other countries.
  • Strategic partnership means that both retain the flexibility to continue political engagement and economic cooperation with their common adversary. Second, they avoid “entrapment”, or being dragged into a partner’s disputes and potentially into conflict, which happened in the First World War. Third, regular high-level political and military interactions facilitate a collaborative approach to strategic policies over a range of economic and military activities.
  • The aim of major strategic partnerships is to strengthen defences against marginal conflict, convey a determination to stand up to a strategic adversary and, overall, generate a persuasive environment that discourages potential intimidation.
  • Occasionally, as between India and China, a “strategic partnership” is a way of opening a channel of communication and minimal cooperation intended to stabilise and develop the potential for a détente and conceivably something warmer.

Way forward

  • India’s two main strategic partnerships, with the U.S. and Japan, are dovetailing nicely.
  • For New Delhi, U.S. will remain its chief backer both to enhance India’s conventional defence capabilities and to draw political support in global political institutions, for example in components of the nuclear non-proliferation regime.
  • Japan, in the meantime, is becoming its primary collaborator in developing its economic sinews and for building a geostrategic network that offers Indian Ocean states an alternative to dependence on China.
  • Together, the emerging structure of triangular cooperation should give Beijing time to think.

GS-3


Pollution and conservation

Bound by Paris deal, says India:

Background

  • President Donald Trump in June announced that America was withdrawing from the Paris deal, arguing that it gave undue advantage to countries like India and China.
  • Amid this uncertainty, India reaffirmed its commitment to the Paris climate change agreement.

What happened?

  • External Affairs Minister Sushma Swaraj attended UN’s Leadership Summit on Environment Pact.
  • It was reiterated by the Indian side that India had been at the forefront of the debate on environment and development.
  • It was willing to “work above and beyond” the pact to reduce greenhouse gas emissions.
  • It was also mentioned that India and France are working together on the International Solar Alliance.

Paris Climate Change Agreement

  • India, which is the world’s third largest carbon polluter, reached a pact, along with more than 190 nations, in December 2015 with an aim to prevent an increase in the global average temperature and keep it well below 2 degrees Celsius.
  • The deal, which replaced the 1997 Kyoto Protocol, was ratified last October.
  • It is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC) dealing with greenhouse gas emissions mitigation, adaptation and finance starting in the year 2020.
  • As of September 2017, 195 UNFCCC members have signed the agreement, 164 of which have ratified it.

International Solar Alliance

  • The International Solar Alliance (ISA) is an alliance of more than 121 countries, most of them being sunshine countries, which come either completely or partly between the Tropic of Cancer and the Tropic of Capricorn.
  • The alliance’s primary objective is work for efficient exploitation of solar energy to reduce dependence on fossil fuels.
  • This initiative was first proposed by Indian Prime Minister Narendra Modi.
  • The alliance is a treaty-based inter-governmental organization.
  • Countries that do not fall within the Tropics can join the ISA and enjoy all benefits as other members, except for voting rights.
  • The launching of such an alliance in Paris also sends a strong signal to the global communities about the sincerity of the developing nations towards their concern about climate change.

Indian Economy. Planning, Growth and Employment

Take reform to fuel: (Indian Express, Editorial)

Context

  • Prices of petrol and diesel will come down if states agree on a mechanism to levy GST for oil products

Why is the sale price of oil as high as it was when the crude price was twice as high?

  • The government has subsidized the consumers while OMCs and upstream public sector oil companies have been bearing the losses.
  • The level of under-recoveries over 2002-2003 to 2012-2013 was Rs 25,000 crore for petrol users and Rs 3, 38,000 crore for diesel users.
  • Excise rate on diesel is Rs 17.33 per litre and on petrol it is Rs 21.48 per litre.

Is the Centre to blame?

  • The center has subsidized consumers too long and there is no justification for doing so now.

How can the prices be moderated?

  • Adjusting the excise duty rates and making them equal for both diesel and petrol would not change the excise duty revenue of the central government.
  • It will increase the price of diesel by two per cent and reduce the price of petrol by six per cent.

The benefits of doing this will be

  • Reduction in distortion
  • Reduced demand for diesel
  • A fall in demand for diesel-driven vehicles
  • Reduced air pollution
  • A fall in carcinogenic emissions
  • A decline in diesel imports.

What will be the effects of increasing the prices of diesel?

  • A recent study carried out at IRADe has shown the impacts to be miniscule and manageable.
  • The introduction of GST has reduced trucking costs substantially by eliminating the wait at check posts for levies such as octroi.
  • A two per cent increase in diesel prices can be easily absorbed and no increase in goods distribution cost may be expected.

Are the states to be blamed?

  • Apart from the central excise duty, the sale prices of diesel and petrol have increased because of the very high VAT rates imposed by the states.
  • Madhya Pradesh imposes a VAT rate of 40 per cent on petrol and 32 per cent on diesel.
  • The lowest rates are in Mizoram: 20 per cent on petrol and 12 per cent on diesel.
  • The states insist on keeping diesel and petrol out of GST as the tax on diesel and petrol constitutes the bulk of the revenues of many states.
  • The VAT rates are in percentage terms, whenever the cost of diesel or petrol increases, revenues of states goes up.

What can be the solution?

  • The states have a scope to reduce their VAT rates so that sale price of petrol and diesel can be moderated.
  • All states should have a uniform GST rate for diesel and petrol.
  • A mechanism needs to be developed to get the states to agree on the GST for petroleum products. Only then the prices of diesel and petrol will come down dramatically.

Is FDI the new engine of growth?: (Live Mint, Editorial)

Context

FDI from private equity funds have mainly financed e-commerce firms. These have drove import-led consumption boom.

Discussion paper on Industrial Policy – 2017

  • The official discussion paper (DP), Industrial Policy 2017 sets down a list of known constraints, but it ignores serious analyses of poor industrial performance.
  • Discussing competitiveness, the policy paper makes very little reference to trends in global trade, or inadequate domestic industrial demand, falling capacity utilization or negative credit growth.
  • Exception: Flagging the boom in foreign direct investment (FDI) inflows, the paper claims it as a badge of success for official policy. India is now ranked amongst top 3 FDI destinations (World Investment Report 2016) and ninth in the FDI Confidence Index in 2016.
  • The official paper also pins hope on outward FDI to strengthen domestic industrial and services capabilities.

What does FDI inflow do for the economy?

  • FDI (as against foreign portfolio investment, which flows into the secondary capital market) brings in long-term fixed investments, technology and managerial expertise, together with foreign firms’ managerial control.
  • FDI in green field investment is for fresh capital formation, and in brown field investment for acquiring existing enterprises with the expectation of improving the firm’s productivity and profits.
  • Despite rising FDI inflows, domestic capital formation rate, or industrial capacity utilization, have declined.
  • Drawback: FDI does not come from leading global producers of goods and services, but from shadow banking entities such as private equity (PE) funds.

About Private Equity (PE) funds

  • These funds are used to finance retail trade of mostly imported consumer goods to expand their market shares, in order to boost the firm’s market valuations.
  • Since PE investments are highly leveraged (high debt-equity ratios), rising markets valuations help them reap disproportionate gains when they make their exit.
  • PE firms do not commit to fresh capital formation or invest in technology, as expected of FDI.

Where is the outflow going?

  • India is being used as a conduit for routing international capital for tax arbitrage.
  • Inward and outward FDI flows across emerging market economies are highly correlated, responding to the US policy rate.
  • Inward and outward FDI flows apparently represent channeling of global capital via India to take advantage of tax concessions.
  • Hence, such short-term foreign capital movements in and out of the country may contribute little to augment domestic capability.

Contribution of FDI in question

  • If the foregoing arguments and evidence are valid, then recent FDI flows have contributed little by augmenting domestic capabilities, output and employment growth.
  • Inward FDI, increasingly from PE funds, has largely financed e-commerce firms, driving import-led consumption boom.
  • Outward FDI, instead of enabling domestic enterprises to access external markets and technology, has instead helped international capital to take advantage of India’s tax treaties to optimize tax burden of global firms.

Conclusion

The proposed industrial policy needs to look elsewhere, other than FDI to realize the vision of Make In India.

A big broom: (The Hindu, Editorial)

Context:

The government’s decision to publicize the identities of entities involved in malpractices through shell companies.

What are the reasons behind the government’s crackdown on shell companies?

  • Fight against black money
  • Create an atmosphere of confidence
  • Improving the climate for ease of doing business

What is the government’s latest decision on shell companies?

  • The government will publish the details of individuals associated with shell companies and doing malpractices.

Why should the government be cautious?

  • A Hasty decision may fulfill the cause of the move; an Innocent entity may be penalized. Example: the Securities Appellate Tribunal recently gave relief to some entities over trading curbs hastily imposed on them by SEBI.

What are the areas of opportunity?

  • Each shell company must be duly investigated
  • Both the Union government and the regulatory arms should analyze the loop-holes which allowed so many companies to do malpractices
  • They should target the deep-rooted maladies instead of symptoms
  • It should make earlier to delist a company

Taxpayer rights and obligations: (The Hindu, Editorial)

Context

The tax structure of the country is making a paradigm shift both in terms of direct and indirect tax, but it still requires more clarity and fairness in the assessment and collection of the taxes,  so as to bring in more trust among the taxpayers.

What is missing?

  • Taxpayers are looking for certainty in the tax structure of the country which is witnessing a transition.
  • Though the purpose is to make the tax collection system more efficient and productive, at the same time the tax levied and the way it is collected should deem fit to the suitability of the tax payers.
  • This is where an internationally recognised concept such as taxpayer rights holds well even in the Indian context.

How is Government lending its support ?

  • The Central government has development strategies in the form of campaigns like ‘Make in India’ and ‘Startup India’.
  • The recent introduction of the Goods and Services Tax (GST), which is the most significant overhaul of the taxation system in India ever, also aims to achieve a unified market across the nation for the first time.

What is the need for identifying the concept of taxpayer rights?

  • By introducing this new tax regime of GST, the government has made it clear that it wants to transform India into a manufacturing, investment and research and development hub and consequentially, there would also be an increase in revenue generation
  • In the light of such economic aspirations, a fair balance between taxpayer rights and obligations will only ensure a higher degree of trust between the tax collector and taxpayer, thus leading to a higher tax yield

Where is the loophole?

  • India has seen key tax disputes ever since a similar growth-oriented road map was adopted by the government in the early 1990s
  • For instance, in order to attract investments, the government signed Double Taxation Avoidance Agreements (DTAAs) with states like Singapore and Cyprus on similar treaty terms as the India-Mauritius DTAA signed in 1983
  • In the long run, they proved to be detrimental for India
  • Multiple disputes relating to capital gains surfaced due to exploitation of legal loopholes in these DTAAs.
  • Another example is of ‘transfer pricing’ mechanism (the rules and methods for pricing transactions between enterprises under common ownership or control), where there was little clarity with respect to international transactions between associated enterprises before April 2001.
  • Even after the introduction of a dedicated transfer pricing segment in the Income Tax Act, the chaos could not be curtailed as the determination of arm’s length price (the price of such international transactions in open market conditions) would almost always be a contentious exercise.
  • India ended up being party to more than half of the global transfer pricing disputes by 2014.

What corrective measures did government take to handle transfer pricing disputes?

  • After it lost to Vodafone over a capital gains dispute, the government came up with aggressive measures not only to to augment its revenue generation capabilities but also to counter any such abusive avoidance strategies by taxpayers henceforth
  • Retrospective amendments were made to the Income Tax Act to supersede the adverse judgment of the Supreme Court in 2012, which were not limited in effect to only Vodafone but several such disputes relating to taxation of capital gains and deemed income of numerous MNCs having their interest or investments in India, directly or indirectly.
  • A step further was the implementation of General Anti-Avoidance Rules (GAAR) in India

How does taxpayer rights remain unattended?

  • The GAAR provisions have been made effective in India from April 1, 2017, and they can be considered as the latest chapter on the mismatch between taxpayer rights and obligations.
  • Some major concerns with respect to taxpayer rights are left grossly unaddressed.
  • A major example is the revocation of ‘presumption of innocence’ of the taxpayers.
  • It is now a burden on these business entities, right from the initiation period to prove that their tax mitigation techniques do not qualify as ‘impermissible avoidance arrangements’.
  • This goes against the fundamental principle of ‘innocent unless proven guilty’.
  • As for the GST, while the government has apparently achieved a balanced model of fiscal federalism through a dual GST system, the path ahead is simple neither for the taxpayer nor the tax collector.
  • For example, the GST Network will process billions of invoices every month, with its concomitant economic and fiscal impacts of technical glitches and other such situations.
  • These snags will impact traders with genuine transactions, as the processing of their tax collections, input tax credit claims and tax refunds might get affected.

What are the positive aspects?

  • What is positive to note though is the constructive approach of the government, aiming to improve tax administration and as a result ensuring better tax compliance.
  • The recommendations of the Tax Administration Reform Committee, submitted to the Finance Ministry in 2014, tried to reintroduce a fair balance between the rights and obligations of taxpayers
  • Several of these recommendations, such as improvement in taxpayers’ service, enhanced use of information and communication technology, exchange of information with other agencies, expansion of tax base, compliance management, etc. have either been accepted or implemented to ensure a better relation between the taxpayer and the tax collector.

India joins quantum computing race:

Context

  • The Department of Science and Technology (DST) is planning to fund a project to develop quantum computers.

What are quantum computers?

  • A quantum computer employs the principles of quantum mechanics to store information in ‘qubits’ instead of the typical ‘bits’ of 1 and 0.
  • Qubits work faster because of the way such circuits are designed, and their assurance is that they can do intensive number-crunching tasks much more efficiently than the fastest comparable computers.
  • The Physics departments at the Indian Institute of Science, Bangalore, and the Harish Chandra Research Institute, Allahabad, have only forayed into the theoretical aspects of quantum computing.
  • Experts from across the country are estimated to gather this month in Allahabad for a workshop to develop such a computer, and to discuss the costs and the time it would take to build one.
  • The project was part of a forthcoming mission in the DST to fund research areas that would create the next generation of technology jobs in India.

A ‘Boat Lab’ to study Brahmaputra:

Context

  • The Department of Biotechnology will commission a two-tiered barge that will roughly be the size of two large conference rooms and host scientists and a full-fledged lab that will allow those on board to collect samples from various stretches of the river, perform tests on water quality and biodiversity of the wider ecosystem.

The Brahmaputra Biodiversity Biology Boat (B4)

  • The proposed vessel, now only known as the Brahmaputra Biodiversity Biology Boat (B4), will be linked to smaller boats and research labs.
  • The first experiments will likely begin this December and will have the boat a re-purposed one trawl Pasighat, Dibrigarh, Neemati, Tejpur and Guwahati in Assam and managed by the Indian Institute of Technology, Guwahati.
  • The “B4” will also have a teaching laboratory for school and college children.
  • There would also be ‘mobile labs’ that would run along the tributaries of the Brahmaputra to feed in data to the B4.
  • A boat of this nature would be one of its kind in the world though there were a few precedents in China and mobile laboratories that studied the Amazon river.
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.