All help, but no troops to Afghanistan: (The Hindu)
- India on 26th September has ruled out the decision of deploying troops in Afghanistan to expand development and medical assistance for the strife-torn nation.
What are India’s contributions to Afghanistan?
- Indian contribution to Afghanistan has been for a very long time and been consistently on developmental issues.
- Medical assistance is also provided by India.
- India has already extended $3 billion aid to Afghanistan, provides security assistance in the form of training and has also supplied some utility and attack helicopters.
- Kabul has repeatedly sought lethal weapons and ammunition from India.
U.S. nudges India-Afghanistan trade: (The Hindu)
- Afghanistan’s Chief Executive, Dr. Abdullah’s arrival will result into intensifying trade links.
What is the purpose of the visit?
- Dr. Abdullah, accompanied by several other ministers, is here to inaugurate an India-Afghanistan trade fair, sponsored by the United States Agency for International Development.
- India has been partnering with the Government and people of Afghanistan in their efforts to build a stable, peaceful, prosperous united and pluralistic country.
Who all will be inaugurating the event?
- The four-day “India-Afghanistan Trade and Investment Show” will be co-inaugurated by Finance Minister Arun Jaitley, Civil Aviation minister Ashok Gajapathi Raju as well U.S. envoys in Delhi — MaryKay Carlson, and Kabul — Hugo Llorens.
What are the expectations?
- The air cargo agreement for bilateral trade is expected to be signed by India and Afghanistan as well.
What impact does this meet serves?
- The hope is that apart from growing trade figures, the social sector, especially projects in health and education will receive support from Indian companies.
- According to the U.S. official, about 240 Afghan private and social sector businesses and about 800 Indian businesses have registered to participate in the fair.
- At about $684 million (2014-15), India-Afghan trade is far lower than its potential for a number of reasons, the chief being the security situation in Afghanistan with civilian deaths peaking in 2016.
What are the changes in the security situation?
- Afghan officials hopes that Indian investors and traders will be reassured by the announcement of U.S.
- U.S President Donald Trump’s new policy for Afghanistan which has committed to keeping troops there without a deadline.
- The new U.S. policy is already effecting a change in the security situation. Because there is a clear message of a long-term commitment based on the condition on the ground, not on timelines.
What are the other obstacle?
- The other obstacles to trade include Pakistan’s refusal to allow Indian exports to Afghanistan through the road route at Wagah, and delays for goods routed through Karachi port.
BSF pushes back Rohingya from Tripura: (The Hindu)
- The Boarder Security Force recently pushed back four Rohingya Muslims who were trying to cross over an unfenced stretch on the Bangladesh border in Tripura.
- This is the first instance of Rohingya being pushed back since the Home Ministry circular on August 19 to identify and deport them.
- The BSF had identified 75 vulnerable locations on a 21 km stretch in Tripura.
- NHRC opposition
- The National Human Rights Commission has opposed the government’s move to deport and push back the Rohingya and sought a report from the Ministry.
- In its affidavit filed in the Supreme Court on September 18, the union government said Rohingya were a threat to national security and “some of the unauthorised Rohingya immigrants had linkages with Pakistan-based terror organisations.”
- It said there was an organised influx of “illegal” immigrants from Mynamar through agents and touts facilitating illegal immigration of Rohingya into India via Benapole-Haridaspur (West Bengal), Hili (West Bengal), Sonamora (Tripura), Kolkata and Guwahati.
- The first four points are authorised immigration checkpoints and manned by customs, immigration and BSF officials.
- In June, the Home Ministry constituted yet another committee to examine various methods to curb the misuse of free movement along the Myanmar border, a friendly country, with which it shares unfenced borders and unhindered movement of people across the border.
- The committee, headed by Rina Mitra, Special Secretary, Internal Security, visited the border areas last week.
‘Panel to review industrial policy hurdles’: (The Hindu)
- The Union Government’s proposal to constitute a new mechanism to fast-track investment proposals
What is the news all about?
- The Union government will set up a committee to review policy-related roadblocks and other factors that obstruct industrial growth and private investments.
- The government is considering a new mechanism to monitor domestic and foreign investment proposals.
- The government is looking to increase average utilization of industrial capacity
- It will hold consultations with all the stakeholders impacted by the Goods and Services Act.
How will the new mechanism work?
- The regulatory review committee will address policy-related roadblocks
- It will examine the factors responsible for the slowdown in the industrial growth and private investments.
- It will help in decision-making
- The Union government’s plan to roll-out of 5th generation telecom services by 2020
What is the news all about?
- The government has formed a high-level panel to evaluate and approve road-maps and action plan to achieve the target of rolling out the 5G technology in India by 2020
- The Centre has created a support fund of about Rs. 500 crore to facilitate research and development for 5G
Why does India wish to actively participate in the process of defining global standards for 5G technology?
- Indian government delegations did not participate in the process of defining global standards for the wireless technology like 3G and 4G
- The participation will benefit local industries to come up with infrastructures and technology resulting creation of new jobs
Of paramount interest?: (The Hindu, Editorial)
- The UN General Assembly has confirmed the growing ineffectiveness of the world body.
- In June 1945, India’s princely states sent a single representative to sign the Charter of the United Nations at the San Francisco conference.
A word war
- Religion became cause to divide rather than build a common understanding, and the dignity of the United Nations, disappeared as each side used its multiple rights of reply for name-calling and rhetoric hurled at the other.
- The India-Pakistan word war was outdone by the U.S. and North Korea who sparred over Pyongyang’s latest provocations.
Secretary General’s list:
- The Secretary General António Guterres in his UN’s 72nd General Assembly listed the world’s seven biggest threats: nuclear peril, terrorism, unresolved conflict and violations of international humanitarian law, climate change, growing inequality, cyber warfare and misuse of artificial intelligence, and human mobility, or refugees.
- The UN’s actions in response to North Korea’s missiles and nuclear tests amounted to another round of sanctions against the Kim Jong-un regime.
- Since 1966, the UN Security Council has established 26 sanctions regimes, of which about half are still active. In some cases, the sanctions only squeezed the country’s poor, as in Zimbabwe (Southern Rhodesia ) and DPRK itself, while not changing its belligerent positions.
- In most cases, the misery was heightened by international military interventions, from Yugoslavia to Libya and Yemen.
- Even the Taliban regime in Afghanistan, against which the U.S. and Russia united to pass a slew of economic, political and travel sanctions in the 1990s, didn’t change course on its support to al-Qaeda or its brutal treatment of women and minorities.
- The UN has done itself no favours by failing to censure NATO on violating its mandate only to the responsibility to protect (R2P) and not for regime change in Libya in 2011.
- To other countries that may enter talks, as Iran did, the imminent threat from the U.S. of walking out of the Joint Comprehensive Plan of Action (P5+1 agreement) would make them question the efficacy of the UN in guaranteeing any deal struck.
- Other decisions of the Trump administration in the U.S., to walk out of the climate change agreement as well as threaten to cancel its funding contributions to the UN, have also seen little comment from the world body, which further reduces the respect it is viewed with.
- India’s struggles to convince China to allow the Security Council to sanction Masood Azhar, whose release in exchange for hostages in 1999 should have been proof enough of his perfidy.
- Both Russia and the U.S. have been known to use cyber warfare, but equally the use of new-age warfare-drones, robotic soldiers and remote killings must see more regulations from the international community.
Each one ‘first’
- Solving the world’s inequalities, the last point on his list, where Mr. Guterres pointed out that “eight men represent as much of the world’s wealth as half of all humanity”, will be a harder and harder task for the UN, where member countries speak only of putting themselves “first”.
The Rohingya Threat: (Indian Express, Editorial)
- Myanmar’s army claimed that it had discovered a mass grave containing the bodies of 28 Hindus, including women and children, in violence-affected Rakhine state, blaming the killings on Muslim Rohingya militants.
What is in the news?
- Times Now revealed that about 300 Rohingya abducted 100 Hindus on August 25, eliminated 92 of them and forcibly converted the eight surviving women to Islam.
- Around 30,000 Hindus and Buddhists have been displaced by the violence.
What has posing threat to India’s national security?
- The two back-to-back disclosures confirmed India’s worst fears that Pakistan-based terror groups have infiltrated the Rohingya and pose a grave threat to national security.
- Inputs from security agencies indicate the involvement of some Rohingya in illegal activities including fund mobilisation through hawala channels, human trafficking and procurement of fake Indian identity documents.
- Rohingya with militant backgrounds have been found to be active as far as Jammu, Delhi, Mewat and Hyderabad.
- Intelligence inputs also indicate that the nefarious designs of the ISI and ISIS include not only using the Rohingya to stir communal violence and destabilise the Northeast but also a serious potential of violence by radicalised Rohingya against the country’s Buddhist citizens.
What can be its consequences?
- From a purely economic point of view, with its challenges of population and meeting their basic requirements, the country would be hard-pressed to handle such a major influx of illegal immigrants.
- Pumping in more resources to cater to the illegal immigrants would only serve to deprive legitimate Indian citizens, which could result in social tensions.
Power problem: (The Hindu, Editorial)
The article discusses about the issues faced while providing universal access to electricity. It also examines the various steps undertaken by the government to address the issue.
How to ensure universal access to electricity?
Universal access to electricity has been a familiar and long-standing promise of governments at the Centre. This will require more than just budgetary fund allocation. It will depend largely on addressing structural issues that plague the broken power sector.
About Saubhagya scheme
- The Pradhan Mantri Sahaj Bijli Har Ghar Yojana, or the Saubhagya’ scheme aims to make electricity accessible to every household by the end of 2018.
- Under the scheme, expected to cost a little over Rs.16,000 crore, poor households that have no access to electricity will be provided electricity connections free of cost.
Critical analysis: Saubhagya scheme
- It hopes to improve electricity access within villages that are already classified as “electrified”, according to the criterion that 10% of households enjoy access to electricity.
- However, the Saubhagya scheme does very little to address the real problem of affordability.
- By failing to account for illegal connections taken by households which find it difficult to afford legal access to power, government data on electricity accessibility understate penetration.
Steps undertaken by government to increase accessibility of electricity earlier and its outcome
- Deen Dayal Upadhyaya Gram Jyoti Yojana launched in 2015, and the Rajiv Gandhi Grameen Vidyutikaran Yojana, both had aimed to provide free electricity connections to the poor.
- The Ujwal DISCOM Assurance Yojana (UDAY), introduced two years ago to restructure the debt of State distribution agencies, has failed to make enough of a difference to this state of affairs.
- The outcome is not surprising, given that UDAY has failed to address the root problem of populism in the pricing of electricity.
Major issues faced while ensuring increased accessibility of electricity
- A free electricity connection can ease the financial burden on the poor to some degree, but it will not address the recurring burden of power bills.
- The aim of improving affordability would require that supply be increased drastically to lower the price paid by retail consumers.
- The power generation utilities remain vastly under-utilized.
- Problem of populism in the pricing of electricity is also there.
- The plant load factor (PLF) of coal and lignite-based plants, an indicator of capacity utilization of power generation units, has dropped consistently over the decade from 77% in 2009-10 to 60% in 2016-17. This is due to demand for electricity from State distribution companies dropping in tandem with their deteriorating financial status.
In the absence of the freedom to sell at a profitable price, distribution agencies have had very little incentive to demand more electricity from power generators, as evident in the constantly falling PLF. This in turn holds back investment in power generation units. Saubhagya, unfortunately, does very little to address the fundamentals of India’s crippling power problem.
From waste to health: (Indian Express, Editorial)
- Compost from biodegradable municipal solid waste will simultaneously clean up our cities and improve agricultural productivity and soil quality of our farms.
The challenge of municipal solid waste management
- processing and treating the different streams of solid waste,
- safe disposal of the residuals in scientific landfills
- instead of focusing on waste management for health, we have got sidetracked into “waste for energy”.
Benefits of compost and city compost
- City compost from biodegradable waste provides an alternative to farmyard manure (like cowdung)
- its rich microbial content that helps plants to take up soil nutrients.
- It provides an opportunity to simultaneously clean up our cities and help improve agricultural productivity and quality of the soil.
- The water holding capacity of the soil which uses compost helps with drought-proofing, and the requirement of less water per crop.
- Because of good water retention, farmers do not need second or third sowing if rains fail.
- By making soil porous, use of compost also makes roots stronger and resistant to pests and decay.
- Farmers using compost therefore need less quantity of pesticides.
- City compost had advantage of being weed-free unlike farmyard manure
- City compost is also rich in organic carbon, and our soils are short in this.
- City compost can also be blended with rock phosphate to produce phosphate-rich organic manure
- The addition of compost or organic manure reduces nitrogen wastage, as its humus absorbs the nitrogen and acts like a slow release sponge.
- Fortification of soil with organic carbon is an essential element of integrated plant nutrient management as it increases the productivity of other fertilisers.
Efforts from the side of administration for promoting organic manure
- the Supreme Court had directed fertiliser companies in 2006 to co-market compost with chemical fertilisers.
- The Solid Waste Management Rules 2016 make the co-marketing of compost mandatory.
- To provide incentive for co-marketing to the fertiliser companies, in February 2016, the Government of India’s Department of Fertilisers notified a policy to promote the use of city compost by offering Market Development Assistance (MDA) of Rs 1,500 per tonne on the purchase and distribution of city compost through the rural outlets of these companies.
- In 2017, the MDA scheme was extended to compost manufacturers on bagged compost.
- The MDA scheme has not worked well because of its administrative complexity.
- The high volume but low value nature of compost also makes it not so attractive for fertiliser marketing companies to promote its use.
- While compost manufacturers must meet the quality specifications laid down by the Fertiliser Control Order (FCO), it is equally important for fertiliser companies to make vigorous efforts to market city compost.
Urban India generates approximately 70 million tonnes of municipal solid waste in a year, and assuming 15 per cent yield of compost, this would provide 10 million tonnes of city compost annually. Quite apart from cleaning up the cities of biodegradable waste, this would be a major and sustainable contribution to improving the health of our soil without further damage by excessive chemical inputs.
PM’s economic advisory body returns – at a time of both continuity and change: (Indian Express, Explained)
- The article talks about the history and evolution of Prime Minister’s Economic Advisory Council (PMEAC)
The first PMEAC under Indira Gandhi
- After returning to power in 1980, Indira Gandhi faced formidable economic challenges.
- The impact of the global oil shock and drought was reflected in a decline in national income and soaring prices.
- To arrest the slide and set the economy on the path to stability and growth, Indira brought in Sukhamoy Chakravarty, who had, in the mid-70s, headed the Planning Commission’s Policy Perspective Division
- In its early days, the Council had the famed economist K N Raj, besides C Rangarajan and Vijay Kelkar.
The PMEAC after PM Indira Gandhi and through the 1990s
- Sukhamoy Chakravarty continued in the post even after Rajiv Gandhi succeeded Indira in 1984.
- Rajiv Gandhi government acknowledged the input of the council which had flagged the emerging faultlines and warned of a fiscal imbalance.
- Manmohan Singh headed the Council briefly when Chandra Shekhar was Prime Minister.
- After Singh, Bimal Jalan headed the Council.
- Under the P V Narasimha Rao government, of which Manmohan Singh was Finance Minister, the Council held only a few meetings.
PMEAC under PM Atal Bihari Vajpayee
- The economy was again in trouble after the Asian crisis.
- PM Vajpayee decided to chair the council himself in 1998.
- A 12-member Council for Trade and Industry was also appointed.
- His EAC had a galaxy of economists including the former RBI Governor I.G. Patel and P.N. Dhar
- Through this period, the Finance Ministry remained dominant in economic policymaking.
PMEAC under PM Manmohan Singh
- In 2004, Manmohan Singh got his former RBI colleague Rangarajan to head the PMEAC, which was now more compact, with fewer than half dozen members.
- Rangarajan had the status of cabinet minister — and with a powerful Finance Ministry under P Chidambaram and later Pranab Mukherjee, and a Planning Commission headed by Montek Singh Ahluwalia, the Council was seen as the advisory group best equipped to provide independent advice to the PM.
- During 2004-14, the Council often brought out its own review of the economy, besides reports on a range of issues.
- Manmohan Singh’s Council was the most influential in the over three-decade history of the institution.
- It drew its strength from the confidence and trust that the economist PM had in the Council head.
PMEAC reconstituted under PM Modi
- 40 months into the government’s term, a new PMEAC has been announced, headed by NITI Aayog member Bibek Debroy, to advise the Prime Minister at a time of increasing concern over the economic slowdown
- The revived Council — with Surjit Bhalla, Rathin Roy and Ashima Goyal as members and former finance secretary Ratan Watal as Secretary — will analyse economic and other issues that the Prime Minister refers to it.
- Like in the past, the Council has been revived at a time when the economy faces headwinds.
- The pressure for quick fixes will be high as 2019 isn’t far.
India’s imminent economic crisis: (Live Mint, Editorial)
- There is a need to undertake meaningful structural reforms and loosen monetary and exchange rate policy. We need not have a tighter fiscal and monetary policy.
Need for macroeconomic management
- Poor macroeconomic management, both by the central bank and political regimes over the past several years, is leading India toward an imminent vicious cycle of low growth and high inflation, making it exceedingly vulnerable to emerging domestic and geopolitical risks.
- The low growth-high inflation scenario will lead to higher fiscal and current account deficits, consequent capital outflows, a weaker currency and a lack of confidence in the economy among investors.
- The authorities need to undertake meaningful structural reforms and loosen monetary and exchange rate policy at the earliest to arrest the decline before it culminates in an external and financial crisis.
- A loose fiscal policy (increased government expenditure) at this juncture with a likely low fiscal multiplier would be counterproductive and accelerate the pace of economic decline.
Economic growth in India: Statistics
- Economic growth in India has likely been lower than the 7% rate that has been estimated by the Central Statistical Authority for the past two-three years.
- A sustained 7% gross domestic product (GDP) growth has been inconsistent with other major indicators, including credit, investment, index of industrial production, and exports growth slowing for at least the past four years.
- A slower 5.7% official GDP growth in 2QFY18 is therefore not surprising.
- Amongst other flaws, value added in manufacturing, which has been consistently significantly higher than other indicators would suggest, is arrived at from a corporate financial database maintained by the ministry of corporate affairs.
Real measure of Economic growth
- Economic output and growth depend mainly on productivity growth and on increases in labor and capital; most commentators mistakenly tend to focus instead on the uses of this output – consumption, investment and exports.
- Productivity growth, the main driver of growth, depends on structural reforms that would require better institutions and improving human skills.
Need for structural reforms
- Structural reforms are reforms aimed at changing the structure of the economy to make it more market-oriented, and consequently efficient and productive.
- India needs to focus on reforms in several areas – liberalizing markets, legal, civil service, tax structure, financial sector, education, and labour, amongst others.
- In competitive markets, any price different from the market-determined one (e.g. controls such as minimum or maximum prices) leads to a decline in output, ensuring reduced GDP.
How to foster higher economic growth and job creation?
- To foster higher economic growth and job creation, the authorities need to focus on productivity enhancing structural reforms that would encourage the private sector—domestic and foreign—to invest in India.
- The innumerable controls on markets and administered prices need to be freed up, including food and agricultural prices, water, electricity, pharmaceuticals, fertilizers, seeds and railways, amongst others that reduce output and lead to a misallocation of resources.
- The direct tax structure needs to be simple and transparent with retrospective taxes eliminated.
- Public sector banks need to be recapitalized and privatized.
- The education system needs to be opened up to investors—domestic and foreign—as a profit-making sector, both at the school and higher education levels. These are minimal measures to attract investments.
Role of RBI
- The tight monetary policy of high interest rates and overvalued exchange rate have been damaging to the economy.
- The insistence of the Reserve Bank of India (RBI) to engage in foreign exchange market intervention to maintain an overvalued currency has encouraged further volatile debt inflows.
- This has increased India’s external vulnerability and inhibited financial markets development.
- RBI’s high interest rate and overvalued exchange rate policy has hurt credit growth, especially to industry, hurt firm-level debt sustainability and in turn bank balance sheets, and damaged exports and domestic industry further via cheaper imports.
Misguided fiscal policy
- Fiscal policy has been unimaginative and a tighter fiscal policy with tight monetary policy has meant no policy support for growth over the past several years.
- Tax policy has mainly been one of raising tax rates – excise duties on petrol and diesel mainly and service tax rates that have increased from 12% to 18% over the last three years.
- Little effort has been made to simplify tax rules; indeed, the new goods and services tax structure with multiple rates is the most complicated globally. This structure with a smattering of controls has kept money out of India.
- Statistics: The fiscal multiplier is low; around 0.3 for emerging economies, according to some estimates. This means an increased fiscal expenditure of Rs40,000 crore (0.3% of GDP) being mentioned in the press would yield a negligible additional growth of 0.1% to GDP, raising growth from 5.7% to 5.8%.
- The costs of this misguided fiscal expansion (government expenditure) could be significantly high.
- It would not lead to sustainable growth or increased investments from the private sector.
- The larger fiscal deficit, along with slowing growth reducing tax revenue, and a consequent worsening fiscal situation would lead to more borrowing from the RBI.
- The deteriorating economic situation would lead to capital outflows, slowing the economy further, and draining liquidity from the system and raising interest rates, further dampening economic growth.
- The government needs to undertake structural reforms on a war-footing to encourage investments to grow the economy and increase revenue growth.
- Interest rates need to be reduced by the RBI.
- Misadventures such as expansionary fiscal policy will not be sustainable and will lead to low growth, higher fiscal deficit, high inflation, less competitiveness which would trigger capital outflows and lead to an external and also a financial crisis if financial sector weaknesses are not addressed.
India’s GST is all tangled up: (Live Mint, Editorial)
- There is a need to focus on making paying taxes easier and reduce costs, which was the main objective behind the goods and services tax (GST).
Complexity of the situation
India’s new indirect tax system – GST, which for the first time tries to standardize most taxes across this vast country’s many states, is proving to be even more difficult and disruptive to implement than first feared. That speaks to the unnecessary complexity the governments introduced into what should have been the simplest of laws.
What was the GST supposed to do?
- Here’s what the goods and services tax, or GST, was supposed to be: a simple and low, India-wide tax rate that allowed businesses to claim credits for the taxes that they paid on their inputs.
- First, the GST would bump up government revenue significantly as new products, services and producers entered the tax net.
- Second, it would reduce costs and increase efficiency, vastly increasing the competitiveness of Indian firms and making everything they produced cheaper.
- Third, it would make paying taxes so much easier that smaller companies would themselves seek to join the tax net, thereby increasing the size of India’s “formal” economy and boosting small firms’ chances for growth.
- Fourth, it would knit India’s many states into a genuine single market.
Will GST permanently increase revenue?
- The claim for credits might just be a one-off, a consequence of the transition between one rate and another.
- But it might also be to some extent a problem inherent in the system, if people are claiming input credit for tax at a higher rate than they pay on the eventual product.
- The government can’t be at all confident that the GST will permanently increase its revenue.
- Impact of GST on efficiency
- A well-designed indirect tax system would reduce compliance costs for companies.
- The GST is so complicated that even medium-sized companies are struggling to keep up with the rules, diverting resources that could have been devoted to productive activity.
- As for smaller companies, those who can’t afford to hire a tax planner or get online daily may simply shut up shop.
- The government insists that its online payment system is easy to use.
- Few who have actually had to use it seem to agree, and it’s their opinion that matters, not that of New Delhi bureaucrats.
Government need to reverse course and focus on returning to first principles. It needs to slash the number and level of tax rates. It needs to ensure people don’t have to wait for refunds. It can only do that if it remembers the original motivation for the GST, that is to make paying taxes easier and reduce costs. In the multitude of last-minute, politically inspired changes to the GST, that basic economic logic has sadly been forgotten.
- French researchers have restored a significant measure of consciousness to a brain-damaged 35-year-old car accident victim who had spent 15 years in a vegetative state.
- Currently, it is generally believed that if someone is in a vegetative state for more than a year, it’s irreversible.
vagal nerve stimulation [VNS] used by researcher
- Vagal nerve is a key pathway in brain-body circuitry. It plays a central role in a number of essential functions, including waking and alertness.
- vagus nerve stimulation has long been used as a treatment for both epilepsy and depression,
- After one month of vagal nerve stimulation [VNS], the patient’s attention, movements and brain activity significantly improved,
- brain scans revealed that VNS sparked a notable increase in a particular type of brain rhythm activity (called the “theta EEG signal”) in those regions of the brain long-linked to the control of movement, body sensation and awareness.
Some other related facts
- both coma and vegetative state patients exist in a state of continuous unawareness with respect to both themselves and their surrounding environment.
- By contrast, patients in a minimally conscious state exhibit partial or intermittent awareness of themselves and their surrounding environment, and display an ability to respond to simple instruction
- some patients with disorders of consciousness might benefit from vagus nerve stimulation