International groupings and agreements
Diplomacy must to solve conflicts: (The Hindu)
- Prime Minister Modi and President Xi are expected to hold a one-on-one meeting during the ninth BRICS summit at Xiamen
- With military tensions between India and China finally coming to an end, the meet might focus
- The agenda for the meet shall be aimed at “peace and development” of the five emerging countries.
- Mr. Modi is scheduled to hold a meeting with nine other countries, including BRICS partners, during an Emerging Markets and Developing Countries Dialogue
- The New Development Bank (NDB) of the world’s five emerging economies has begun construction of a state-of-the-art headquarters in Shanghai, symbolising the rise of the grouping in revamping the world’s financial architecture.
- Prior to the meeting, Beijing focused on highlighting the maturing of the BRICS institutional architecture.
- India’s disagreement to any formal docking of China’s Belt and Road Initiative with the BRICS as part of an end-of summit document in Xiamen.
- China’s proposal for establishing a BRICS arrangement where the host country of the summit is free to invite non-members is likely to be endorsed at Xiamen.
Behind SC verdict on places of worship, Article on taxpayers’ money and religion: (Indian Express, Explained)
- During the Gujarat riots of 2002, 567 places of worship, including 545 of Muslims, were damaged.
- In a legal battle on the compensation to be paid, the Supreme Court last week upheld a state government compensation scheme while setting aside a Gujarat High Court order, which too had held the state liable to pay compensation.
- The state government scheme sets a limit of Rs 50,000 for each damaged structure, and certain conditions for eligibility.
- The high court verdict, said, it was the government’s duty to restore all the damaged places of worship to their original position, and asked it to collect the amount from those found guilty of the destruction.
- While the high court order did not set a limit for the compensation, it tasked principal district judges with fixing the amount.
Supreme Court verdict:
- The Supreme Court ruled that a “substantial part of taxpayers’ money cannot be granted for repairing religious structures” under Article 27, which prohibits promotion or maintenance of any particular religion or religious denomination.
- The legal battle began in 2003 with a petition in the high court by an organisation called Islamic Relief Committee, Gujarat (IRCG).
- Following reports of the National Human Rights Commission on the state government’s alleged failure to protect life and properties; IRCG filed its petition seeking compensation for “restoration of the damaged, desecrated and destroyed places of worship”.
- IRCG stressed the principle of res ipsa loquitor, which infers negligence on the ground that the incident concerned would not have happened without negligence.
- It contended that if this principle were applied, the government was liable to pay compensation for the loss in view of “principles of public wrong”.
High court ruling:
- In 2012, the high court ruled that it was the government’s duty to restore the damaged places of worship, irrespective of the religion, to its original position as it existed at the time of destruction,”
- The court directed the government to collect the money spent on restoration from the persons found guilty of the destruction.
- The high court appointed the state’s principal district judges as special officers for deciding the amount of compensation for restoration of the religious places in the respective districts.
- The state government accepted the recommendations of a committee it had set up.
- It passed a resolution in 2013 to pay ex gratia assistance up to Rs 50,000 to all religious places damaged or destroyed during the riots — at par with assistance provided for damaged/destroyed houses — subject to certain conditions, including that the place should not be unauthorised or located in the middle of road, and that an FIR should have been lodged at the time of the incident.
- In October 2013, the government filed an affidavit in the Supreme Court and informed it that it had issued a notification on compensation, and that it was not implemented since the matter was pending.
- ICRG, for its part, filed an affidavit stating that the principal judges, as directed by the high court, had arrived at the conclusion that the “quantum of compensation, payment up to Rs 50,000 only as against the quantified quantum, would be travesty of justice”.
- In its petition, the state challenged the inference that the properties were damaged due to “failure or inability or negligence on the part of the state”.
- “The state has not failed in fulfilling its constitutional obligation of protecting the liberty and dignity of its entire people.
- The state did its best with available resources to protect the lives of its people,”
- Another point the government raised, citing Article 27, was “whether public money, collected from taxpayers, can be spent on repairing religious structures”.
- Article 27 says, “No person shall be compelled to pay any taxes, the proceeds of which are specifically appropriated in payment of expenses for the promotion or maintenance of any particular religion or religious denomination.”
- The Supreme Court cited the verdicts in Prafull Goradia v Union of India (2012) and Archbishop Raphael Cheenath S V D vs State of Orissa (2009).
- In the first case, the two-judge bench has opined that object of Article 27 is to maintain secularism.
- The article would be violated if the substantial part of any tax collected in India, were to be utilized for promotion or maintenance of any particular religious denomination.
Indian Economy. Planning, Growth and Employment
Moving to the faster lane: (The Hindu)
- The introduction of GST tax reforms will have the most far-reaching ramifications in the growth of the logistics sector in India.
- GST reform is certain to catalyse conformity in every part of the business chain and to expand the tax base in a transparent and efficient manner
Supply chain evolution
- From a macroeconomic perspective, a commonly used metric to assess global economies in terms of supply chain efficiency is the ‘logistics costs as a percentage of national GDP.’
- This percentage for India is as high as 14% compared with 8% in developed nations.
- Compared with global economies, India has some of the cheapest transportation and warehousing costs.
- India’s inventory carrying costs and losses(from food wastage), is the highest in the world.
- The high inventory carrying costs are due to modest physical infrastructure, inadequacy of technology adoption and complicated tax structure.
Impact of GST :
There are facets of our industry where the GST is undeniably expected to impact.
- Interstate movement of goods has become easier with reduced procedures and restrictions at state borders.
- Dismantling of check posts at state borders on July 1 has remarkably reduced transit times by about 18% for organised players as average truck speeds have increased.
- In the long term, GST offers a unique opportunity for customer organisations to eliminate inherent inefficiencies in the location, movement and inventory holding of goods.
The logistics industry supports goods movement for numerous end-user verticals.
- The state governments have begun issuing interim transit rules, requiring logistics players to quickly adapt for efficient movement of goods.
- The initial draft e-Way bill Rules needed to recognise the process involved in time-sensitive multi-modal transportation.
Complemented by this encouraging environment, GST is expected to help unlock much-needed efficiencies I n the way domestic businesses operate today Shifting gears and moving on to a faster lane is a matter of time for the logistics industry.
Economy outlook still cloudy: (The Hindu, Editorial)
The government move to published economic data for the April to June quarter of this year needs a look
- The real growth of GDP, after removing the impact of inflation, was only 5.7%, much lower than expected.
- For the past six consecutive quarters, the growth rate has gone down steadily, from 9.2% at the end of the quarter ending March 2016, to 7.9%, 7.5%, 7.0%,, 6.1% and now 5.7% at the end of the June quarter.
- Inflation has been moderate, and touched a low of 1.5% recently.
- Both trade and fiscal deficit are moderate and manageable.
- Oil prices, the ban of the Indian economy, have been stable and comfortably low.
According to the Economic Survey, if the growth rate will be below 7% this fiscal year. That would be a potential loss of 1% growth. It also signifies millions of jobs not created.
Low manufacturing sector:
- The manufacturing growth stood at 1.2% is the lowest in the past five years.
- The decline was caused supposedly by the suspension of manufacturing activity prior to the rollout of the Goods and Services Tax(GST) in July, and consequent de-stocking of inventory.
- A State Bank of India report said that credit growth for the year ending last March was the lowest in 63 years.
The GDP is measured in two different ways:
1-By looking at the production side
2-By looking at the spending side.
- The capital formation is steadily declining for several years.
- Private sector investment has practically come to a standstill.
- Despite the push for ‘Make-in-India’, reforms for improving ‘Ease of Doing Business’ , increased access to electricity, improvement in infrastructure and private investment are not picking up
- The corporate sector and banks have been affected by the twin balance sheet squeeze wherein corporates are over-leveraged, and banks have mounting bad loans.
- The most significant challenge to the domestic industry is the ever-strengthening rupee.
- Since January the rupee is 7% stronger compared to the American dollar.
- The rupee is stronger than its Asian peer currencies too, including China, the Phillippines, Indonesia and Thailand.
- Our exports are barely up 12% since January, whereas imports are up more than 30%.
- The GST regime has given an extra advantage to importer traders since the countervailing duty that they now pay as GST can be offset against other taxes, a concession which was not available earlier.
- India is a net importing country; our exchange rate should be stronger.
- If gold imports is removed, a large part of which is not for consumption but as store of value, then our trade deficit will be much smaller.
- The rupee needs to be weakened or else it will hurt domestic manufacturing even more.
Impacts of Demonetisation:
- Half of the last fiscal year, that is prior to demonetization, recorded a real growth of 7.7%.
- The current April to June quarter’s growth is 5.7% certainly includes the negative impact on the informal and rural economy.
- Investment and consumption spending were postponed due to cash shortage.
- The Economic Survey warns about the deflationary impact of low agricultural prices.
- The agriculture sector GDP shows nominal GDP growth to be lower than real DGP
- The growth in GDP can be traced to the growth and vigour of each of these components.
- Investment, which is between 30 and 35% of total pie, needs to grow at least in double digits.
- Investment in future capacity creates GDP growth of the future. It needs to be led by the private sector.
- Presently, that component is barely growing at 1.5%.
- Initiatives such as Housing For All, Smart Cities and Digital India give room for huge opportunities for private entrepreneurs.
- The big structural reforms of GST, the new insolvency code, the new monetary framework and Aadhaar linkage are measures which will show desired results in long run.
Voting for man-made disasters: (Live Mint, Editorial)
The root cause of man-made disasters in August is the conscious errors of omission and commission by the state
Tragic month of this year
- The month of August was a disaster-filled month for India.
- Dozens of infant deaths in a government-run hospital in Gorakhpur, Uttar Pradesh,
- frenzied rioting after a godman was convicted in the rape of two followers,
- Untold deaths and millions displaced in massive floods in Bihar,
- A night of horrendous commutes in Mumbai following torrential rains,
- The aftermath of significant flooding in the North-East— these marked only the most notable disasters during the month.
Water, waterlogging, and waterborne disease
- What is common to the disasters above is that they are all about water, related disease.
- And that they are man-made with a collapse in administration and a sharp political failure
The Gorakhpur deaths
- The Gorakhpur deaths that took place early in August were allegedly due to the lack of oxygen supply in the hospital.
- The tragedy exposed the weakness of the entire public health system
- The incident exposed a severe shortage of trained nurses, doctors and an absolutely failed political and administrative system with dysfunctional incentives and accountability.
- Japanese encephalitis overwhelms the region due to rampant mosquito breeding consequent to annual floods in the low-lying region.
- The impact, particularly on the rural poor, continues year after year.
- The Kosi flooded again this year and 500 people are dead and nearly 17million have been rendered homeless in Mithila.
- State complicity in illegal construction is the primary reason for the repeated collapse.
- The sycophancy of the political establishment simply to align with vote banks is reaching a new high.
- Rioting by lawless goons was an issue because the political and administrative machinery has been totally captured by such godmen
Prelims Related News
- According to experts, air pollution is diminishing India’s capacity to harness power from the sun, undermining billions being invested in renewables as the energy-hungry giant emerges as a solar superpower.
- New research has found the smog and dust that sickens millions across India every year is also sapping solar power generation by more than 25 percent, far beyond levels previously thought.
- In the first study of its kind, U.S. and Indian scientists measured how man-made particles floating in the air and deposited as grime on solar panels combined to seriously impair sunlight from converting to energy.
- Presently in India, it could amount to roughly 3,900 MW of lost energy — six times the capacity of its largest solar farm, a gigantic field of 2.5 million panels.
- Experts highlighted that these huge losses will only compound as India realises its grand solar ambitions.
- According to scientists, the Earth-sized planets orbiting the ultracool TRAPPIST-1 dwarf star 40 light-years away may have substantial amounts of water and could be habitable.
- An international team of astronomers used the NASA/ESA Hubble Space Telescope to estimate whether there might be water on the seven planets orbiting in the nearby TRAPPIST-1 planetary.
- The results suggest that the outer planets of the system might still harbour substantial amounts of water.
- This includes the three planets within the habitable zone of the star, lending further weight to the possibility that they may indeed be habitable.
- In February this year, astronomers had announced the discovery of seven Earth-sized planets orbiting the ultracool dwarf star TRAPPIST-1, 40 light-years away.
- Scientists used the Space Telescope Imaging Spectrograph (STIS) on the Hubble telescope to study the amount of ultraviolet radiation received by the individual planets of the system.