Mar 6, 2016 Motivational Articles

Creative Guidance – Know Your Self – Inspirational & Educative Articles

Know Your SelfHave you ever wondered why is it that in spite of all the things you possess and all the things you have accomplished, there comes a time in your life when nothing seems to matter except the sense of certainty you have acquired through painfully understanding yourself.How often does your bank balance or your name, fame and accolades come to your rescue when you are torn by the bitterness of lost relationships, your ailing body or your tormenting mind?Nothing whatsoever you have accomplished will help you in moments when you need them the most. Not to say that you should not pursue a better, richer and significant life. But to forget the most important needs of your mind, body and spirit in pursuit of such a life is the grandest of mistakes you can make.There is no substitute for knowing yourself; and there is an ocean of difference between knowing about yourself and knowing yourself. Almost everything you know about yourself comes from the people and the society around you. Knowing yourself is a completely different ball game all together.So, what do you know about yourself. I am tall, I am short, I am dark, I am rich, I am poor, I am intelligent, I am dumb, I am famous, I am worthless. Everything you know about yourself this way is simply a comparative analysis; it has nothing to do with the real you.You spend a lifetime fighting these phantoms of adjectives, constantly trying to understand in which category you belong. Battle with the false has become your life and your purpose; even if you manage to win the battle, you will eventually stand to lose the most important thing that matters – You.Everything you are trying to accomplish is just a tiny part of your hungry mind. The most important necessity of life is the understanding of the phenomenon called you. There is no rest and respite till you solve the mystery called you.Saying that wealth and recognition can guarantee a good life, is like saying that a change of hair style and makeup is a guarantee of good health. Everything you are trying to accomplish is meant for the people around you; as for yourself, none of these matter.Creativity, love, service, meditation and silence are some of the paths that lead to the destination called you. Knowing yourself has to be pursued with the same aggressive intent with which you are trying to accomplish all other things.The greatest gift you can give yourself is the gift of self-knowledge. While everything fades away with time, only the knowledge of understanding yourself lasts. In times of pain, fear and uncertainty, what you possess and what you have accomplished is of very little significance compared to how much you know yourself.“The articles are a copyright of The Ahamo Movement and IASBABA.”Read more such articles– Click Here

Mar 5, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 5th March, 2016

Archives   IASbaba’s Daily Current Affairs – 5th March, 2016   NATIONAL   TOPIC:  General studies 3 Infrastructure: Energy, Ports, Roads, Airports, Railways etc. Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.   Public transport: Overwhelming Needs but Limited Resources Background In 2014-15, India added nearly 20 million vehicles, mainly two-wheelers, but also two million cars, vans and so on to the existing 172 million registered motor vehicles. Several million more have been added since, as public transport remains inadequate. Personal transport has now reached saturation limit in the cities, resulting in gridlock, rising air pollution, lost productivity and ill-health The Union Budget for 2016-17 has made a timely intervention at such an inflection point, with the move to expand the public transport system. The Motor Vehicles Act is to be amended to open up the passenger segment, and more entrepreneurs will be able to operate bus services.  Budget talks of greater investment, employment and multiplier effects for the economy stemming from such a move. What is the role of public transport in Indian economy? Public transport is an important part of India's economy. Since the economic liberalization of the 1990s, infrastructure development has progressed rapidly; today there are a variety of modes of transport by land, water and air. However, India's relatively low GDP per capita has meant that access to transport has not been uniform. Public transport remains the primary mode of transport for most of the population, and India's public transport systems are among the most heavily used in the world. The demand for transport infrastructure and services has been rising by around 10% a year with the current infrastructure being unable to meet these growing demands. In general, the larger the city size, the higher the percentage of urban trips served by public transport in India: 30 percent in cities with population between 1 and 2 million, 42 percent for cities with populations between 2 and 5 million, and 63 percent for cities with populations over 5 million . Thus, the especially rapid growth of large cities suggests a further rise in future demands for public transport in India.   The Crisis of Public Transport in India: The rapid growth of India’s urban population has put enormous strains on all transport systems. Travel demand far exceeds the limited supply of transport infrastructure and services. Public ownership and operation of most public transport services has greatly reduced productivity and inflated costs. India’s cities desperately need improved and expanded public transport service. Unfortunately, meager government financial assistance and the complete lack of any supportive policies, such as traffic priority for buses, place public transport in an almost impossible situation. Perhaps most important, the lack of financial resources prevents necessary investments in maintaining and upgrading existing bus and rail systems and building new ones. Likewise, many advanced technologies long available in Western Europe are simply not affordable in most developing countries. Public transport systems in the Third World are plagued by chronic corruption and inefficiency, overcrowded and undependable service, congested roadways that slow down buses, and an operating environment that is often chaotic and completely uncoordinated. Those problems of public transport occur within the broader context of daunting urban transport problems in general.   Trends in Population and Land Use The rapid growth of India’s urban population—as in other developing countries—has generated an enormous need for efficient public transport services to carry high volumes of passengers through dense, congested urban areas. Since large cities are far more dependent on public transport than small cities, the need for public transport services has increased faster than overall population growth. Lack of effective planning and land-use controls has resulted in rampant sprawled development extending rapidly in all directions, far beyond old city boundaries into the distant countryside. That also has greatly increased the number and length of trips for most Indians, including those by public transport. Moreover, local governments have permitted scattered commercial and residential development in outlying areas without the necessary infrastructure such as roads, utilities, hospitals, shopping, and schools. That generates long trips between residences and almost all other trip destinations. Just as in North America, most new commercial development is in the distant suburbs. For example, Tidal Park is a software center on the outskirts of Chennai; Gurgaon is a large new industrial area outside Delhi. Similarly, Bangalore is planning several technology parks on its fringe as well as several circumferential highways in the suburbs, both of which will induce further decentralization.   What are the challenges and problems? Air pollution, noise, congestion, and traffic fatality levels are often much more severe than those of developed countries. In fact, many city residents are so poor that they cannot afford even low fares, and routes are not designed to serve the poor at any rate. Thus, the poor in developing countries suffer even more than those in the Western World from low levels of mobility and accessibility, especially to jobs. With 23 percent of its urban population living in poverty, India has been forced to keep its public transport fares extremely low. That has sharply restricted the operating revenues of all public transport systems, making it difficult to afford even routine maintenance and vehicle replacement, let alone system modernization and expansion. The financial problems stemming from India’s low per-capita income are probably the most important challenges facing Indian public transport, but there are many others as well: inefficiency, roadway congestion, traffic accidents, lack of planning, overcrowding, noise, and total lack of coordination of any kind. Another crucial problem of Indian transport is inefficiency, lack of productivity, overstaffing, excessively high operating costs, and large subsidy needs. Clearly, much could be done to improve the efficiency of both bus and rail operations, most of which are publicly owned, operated, and regulated. There are many institutional obstacles to any fundamental changes, including powerful labor unions representing employees, which have blocked changes that would disadvantage them. The heavy, high floor buses currently in service in most cities are noisy, polluting, fuel-inefficient, and unsafe. They are built on truck chassis with such high floors that boarding is slow and difficult. Moreover, they have slow acceleration as well as poor fuel economy due to their weight, and are inappropriate to urban use.   Regulation: Regulation is often seen as the obstacle that has affected the growth of bus transport. Yet, a scheme of the kind that the Budget proposes cannot run without a sound regulatory framework, if the goal is to remove erstwhile monopolies and introduce greater competition even in those States where private provision in urban and inter-city services already exists Optimally, a system should lay down standards, identify areas of operation, fix prices and enable participation by entrepreneurs. Funding: The main problem in Indian cities, however, is financial. To some extent, operating revenues of public transport firms could be greatly enhanced by targeting fare subsidies to low-income passengers and raising considerably the fares for the middle and upper classes. Fares on most systems are extremely low and passenger volumes are extremely high so that even modest increases might yield substantial revenues for system maintenance, modernization, and expansion. Fares cannot be raised too high, however, even among middle-class riders, since they might then be diverted to private transport modes, which cause the most urban transport problems. Thus, larger subsidies from the public sector will be essential. Since passenger revenues do not cover the full costs of operation and capital investment of public transport, government financial assistance is obviously crucial. As owner of Indian Railways, the Central Government must bear whatever operating deficit remains after the substantial cross-subsidies from profitable freight services. The World Bank, the Japanese Bank for International Cooperation (JBIC), and other international lending agencies have also provided loans for large infrastructure projects. For example, a JBIC loan is funding two-thirds of the capital cost of building the Delhi Metro (Delhi Metro Rail 2003). Most bus services are still publicly owned and operated by STUs (State Transport Undertakings), whose operating and capital investment costs are covered by a combination of state and local government subsidies, grants, and loans that vary from state to state. Significantly, no government level has any dedicated taxes whose proceeds would be automatically earmarked for public transport. Thus, financial support for public transport is tenuous, depending on annual budgetary appropriations.   Safety of passengers: Tens of thousands of public transport passengers are killed or injured every year in accidents. Many buses and trams do not even have doors and windows that can be closed, and that only encourages passengers to ride by protruding from inside the vehicle or by hanging on from outside. Clearly, riding on the roofs or sides of buses and trains is inherently unsafe and results directly from the severe under capacity of public transport systems in India.   What needs to be done to make public transport more effective and efficient? The law enabling State road transport undertakings dates back to 1950, and many States have failed to progressively augment their operations after opting for full or partial nationalization, especially in the cities. Private operators, on the other hand, have rapidly increased their share of the total number of buses. The Budget proposal to open up the sector has the potential to reverse the effects of the neglect and obsolescence. Equally important, state and local governments must give traffic priority to buses, both through special bus lanes and signal priority over private transport. With more than 90 percent of public transport passengers in Indian cities relying on buses, it is especially important to upgrade bus services through modern, safe vehicles and priority on the congested roadways. Buses are also unpopular because they are not ergonomically designed as per the national bus code. A renaissance in bus services is possible, but not without modern design standards and service-level benchmarking that are ensured through strict enforcement.  Encouraging private sector: On the question of encouraging private sector participation in bus services, the experience of London is worth studying: routes are tendered as per schedules, fares are fixed by the city government, and buses are run by franchisee operators who are paid according to mileage. What stands out in this model is the use of intelligent transport systems — of the kind the new taxi companies in India use — to determine whether the contractor is adhering to schedules, and to analyze demand-supply patterns. For passengers, they provide efficient real-time service information.   Way ahead: Selective privatization of India’s public transport sector: This could be done either through opening up the market to private firms (who would own, manage, operate and finance their own systems) or by having public agencies contract with private firms to operate services on a system wide basis, for selective routes, or for selected functions (like maintenance). Rail systems have only rarely been privatized anywhere in the world (except for certain narrow functions), while there is considerable experience with bus privatization. Thus, privatization seems an option only for bus services, but they account for more than 90 percent of India’s public transport. Privatization of public transport in India was strongly encouraged by the World Bank (2002), which accused publicly owned and operated systems of being inefficient and highly unprofitable, providing insufficient and low-quality services, and failing to respond to market demands. Privatization in Bangalore and Hyderabad has so far been limited to the contracting out of certain routes to private operators, but still with the overall coordination of a public agency. It appears that privatization does indeed have much potential to improve efficiency, but that it must be accompanied by strict regulations, performance standards, and overall coordination to ensure an integrated network of services. In light of the transport funding crisis in Indian cities, they may have little choice but to seek the cost savings possible with privatization and increased competition. Many buses do not even have closable windows and doors to protect passengers from the weather and from falling out of the vehicle. It is essential to replace these outdated buses with modern, safe, clean, and fuel-efficient vehicles. Improving and expanding rail systems is also crucial, since they are insulated from the congestion delays caused by roadway traffic.   Connecting the dot: Modernization and selective privatization of public transport play vital role in making public transport efficient. Comment?   Related Articles: India’s draft road transport and safety bill NATIONAL   TOPIC:  General Studies 2 Government policies and interventions for development in various sectors and issues arising out of their design and implementation. General studies 3 Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Government Budgeting, Taxation & its impact   Political pursuit of a Pensioned Society Stuck with informal jobs: 82 per cent of the workforce Budget portrays a proper roadmap? This shifting stance over taxing provident fund savings illustrates the lack of a clear road map Illustrations of three different versions on how the tax would be implemented were put forth   Lacunae’s of the Past Budgets— Welfare of Senior Citizens: 2014-15 Limited revival of the Varishtha Pension BimaYojana (VPBY) ‘Large amount of money’ lying as unclaimed amounts in Public Provident Fund, Post Office Saving Schemes and other such accounts- To set up a committee to examine how this amount can be used to protect and further financial interests of the senior citizens (Deadline: 6 months; Meeting: Twice) Social security and welfare of employees serving in the organised sector: Extended a minimum pension of Rs.1,000 for all members of the employees’ pension scheme run by the Employees’ Provident Fund Organisation (EPFO) Raised the wage ceiling for mandatory Employees’ Pension Scheme (EPS) membership from Rs.6,500 per month to Rs.15,000 per month EPF— Mandatory for all employees earning up to Rs.15,000 per month in firms employing over 20 workers 24 per cent of an employee’s salary (12 per cent as employee’s share and 12 per cent as employer’s share) is contributed to EPFO as a social security net for old age — a little over a third of that (8.33 per cent) is diverted to the EPS, with the government chipping in with a 1.16 per cent subsidy 2014-15: Put in an additional Rs.250 crore that year Present: EPF savings will remain tax-free if three-fifths of the corpus is used to buy an annuity and get a monthly pension Jan-Dhan to Jan Suraksha: 2015-16 Three new schemes as part of the government’s commitment so that no Indian citizen will have to worry about illness, accidents, or penury in old age Creating a universal social security system for all Indians— Pradhan Mantri Suraksha BimaYojana- Accidental death cover of Rs.2 lakhs at Rs.12 premium a year) Atal Pension Yojana- Would give a fixed pension, with a limited co-contribution up to Rs.1,000 from the government Pradhan Mantri Jeevan JyotiBimaYojana: Natural and accidental death risk cover of Rs.2 lakh at Rs.330 premium a year) A scheme for providing physical aids and assisted living devices for senior citizens living below the poverty line   Senior Citizen Welfare Fund About Rs.9,000 crore lying unclaimed in PPF and EPF accounts would be ‘appropriated’ to a new Senior Citizen Welfare Fund (violate the trust vested by investors in the trustees of these funds- illegal) EPF and Employees’ State Insurance Corporation (ESIC)- Provides medical care to organised sector workers) Caters to hostages, rather than clients Workers with low incomes suffer on account of high statutory deductions to such schemes Provide employees the option to leave the EPF and opt for the New Pension Scheme (NPS) launched by the Pension Fund Regulatory and Development Authority (PFRDA) Employees below a certain level of monthly income could decide if they wanted to stop their own contributions (12 per cent of salary) to the EPF Offered an option for workers to opt for a health insurance product instead of ESI Report Card of NPS: An additional tax sop of Rs.50,000 was given for investments beyond Rs.1.5 lakh that are tax deductible under Section 80C of the Income Tax Act 8 million new members joined the scheme and the corpus now stands at Rs.1.10 lakh crore from 11.5 million accounts Issue: Law Ministry is still vetting the legislation to amend the EPF Act of 1952, while a draft Cabinet note is doing the rounds on amending the ESI Act of 1948 What about the above mentioned announcements—Still remain a non-starter Towards a Pensioned Society- A Big Picture Pensioned society- One of the nine new pillars for growth (with its failure to meet the desired goal of the previous budgets lurking in the backdrop) The Way Ahead exists? EPF savings, PPF and government employees PF should be taxed for true parity in tax treatment The government can also work on bringing the EPFO under the Finance Ministry as well and put a fresh perspective in place to formulate a framework for payment of pensions to those who have no formal employment contracts and access to either of the two schemes Connecting the Dots: Will rationalising the statutory deductions from salaries (like EPF) work better than opting for a breakthrough social security system at once? Critically examine. Do Read: Employees’ Provident Fund (EPF) Tax- Is it a Healthy proposal? MUST READ A sinister pattern underway - Hatred in the hinterland Hindu   India takes US to WTO over IT visa fee rise Business Standard   Fiddling while Rome is built- Aadhaar bill is one of the most transformative economic reforms ever. But does anyone care? Indian Express   Domestic hurdles to economic growth- Economic growth will depend on policy support and movement on reforms Live Mint

Mar 4, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 4th March, 2016

Archives   IASbaba’s Daily Current Affairs – 4th March, 2016   ECONOMICS   TOPIC:  General Studies 3: Government Budgeting. Inclusive growth & related issues Conservation, environmental pollution and degradation, environmental impact assessment   Green Budget for sustainable development BACKGROUND: The funds for the ministry of new and renewable energy have also been reduced even as an increase in the generation target for renewable energy has been announced, to 175,000 megawatts by 2022. Making a country’s budget green is not about how much money is allotted to tiger or forest protection. It is about integrating it into every aspect of the economy and ensuring there is no wasteful use of natural resources. What does green budget or green accounting mean? Green accounting is a type of accounting that attempts to factor environmental costs into the financial results of operations. It has been argued that gross domestic product ignores the environment and therefore policymakers need a revised model that incorporates green accounting. The major purpose of green accounting is to help understand the advantages of achieving traditional economics goals in parallel with environmental goals. It also increases the important information available for analyzing policy issues, especially when those vital pieces of information are often overlooked. Green accounting helps promote a sustainable future for businesses as it brings green public procurement and green research and development into the big picture. Penalties for polluters and incentives (such as tax breaks, polluting permits, etc.) are also a crucial part of this type of accounting.   What are the steps taken to make our budget green? There has been some attempt to discourage “dirty coal” through an increase in the clean energy cess from Rs.100 to Rs.200 per tonne of coal to finance clean environment initiatives. However, there is no clarity on how this money will be used for clean environment initiatives and by which department of the government, given that previous funds too are lying unused. Budget has allocated around Rs.150 crore for the National Afforestation Programme A separate programme for sustainable groundwater management and the setting up of a Rs.400 crore fund to encourage organic farming. However, for all the grand commitments that India made at the Paris climate summit what is missing in this budget is a conscious transition to a low-carbon economy. There are some initial shoots of change that can be seen through the infrastructure cess on private cars, but these are far from radical.   What was missing in the budget to term it as green budget? There was any mention of allocation of funds for the protection of India’s large swathes of existing forests, lakes, wetlands and water resources or the biodiversity found in them as these are the drivers of the nation’s economic growth and health From minerals extracted from the forests to several thousand tonnes of sand removed from our river beds, natural resources fuel the economy in all forms by providing raw material for high-rise buildings, water for thermal power plants. What are we doing to restore and protect these natural resources so they continue to power our economy? Apart from a mention of a fund for protecting groundwater, the budget assumes that growth can happen without these natural resources. What does Green Economy Report released by United Nations Environment Programme (UNEP) advocate? A strategy of reallocating investments towards the green economy may lead to slower potential economic growth for a few years, as renewable natural resources are replenished (an effect that can be strong in some sectors, such as fisheries), but will result in the long run in faster economic growth The report also underlines other benefits to the economy as it reduces the risks of adverse events associated with climate change, energy shocks and water scarcity while creating increased employment.   What are the advantages in investing on Natural resources? The advantages of investing in our natural resources are many. For instance, the Center for International Forestry Research estimates that families living in and around forests derive an average of one-fifth to one-fourth of their income from forest-based resources. In many countries, including India, non-timber forest products contribute prominently to local economies and livelihoods, though their role is understated. The Food and Agriculture Organization estimated in 2005 that the value of non-timber forest products extracted from forests worldwide amounted to $18.5 billion.   Way ahead: Creation of a green protection fund: This fund could be used to protect existing forest belts, let our rivers flow free of garbage and sludge, provide front-line forest protection staff with better equipment, and better protect our rich biodiversity. Connecting the dots: What does green budget mean? What are the advantages of having green budget? Can green budget help in addressing climate change?   INTERNATIONAL TOPIC:  General Studies 2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora. Important International institutions, agencies and their structure, mandate.   India’s trade pacts in a changing world The Economic Survey2015-16’s analysis of the impact of India’s free trade agreements (FTAs) on the economy is a valuable attempt to address a gap in the policymaking ecosystem. Its conclusion—Controlling for potential non-FTA trade growth, India’s FTAs have on the whole had significant impact, boosting trade without introducing inefficiency due to trade diversion. What are FTAs? A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers – import quotas and tariffs – and to increase trade of goods and services with each other. If people are also free to move between the countries, in addition to FTA, it would also be considered an open border. It can be considered the second stage of economic integration.   WTO: World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization which regulates international trade. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The WTO deals with regulation of trade between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments   What are the factors guiding India’s preference for multilateralism under the aegis of WTO? India’s preference for multilateralism under the aegis of the World Trade Organization (WTO) is based on two factors. The first is the “spaghetti bowl” problem that bilateral and regional pacts present, creating a tangle of trade commitments that can both overlap and work at cross-purposes. The second is the potential for collective bargaining at the WTO, where developing economies can push for flexibility in the rate, quantum and scope of tariff reduction What is current status of India? India’s attempts to exploit that potential, however, haven’t been particularly successful. Its ratification of the WTO’s trade proposal agreement was a signifier of its failure to hold the line on the organization’s agricultural subsidy issues, crucial for domestic food security. That followed increasing isolation on the issue and the concurrent diplomatic risk of being perceived as the villain of the piece. As a consequence, the Doha agenda with its focus on development issues is now a relic. The WTO’s Non-Agricultural Market Access (NAMA) negotiations—crucial, given that the vast majority of the world’s merchandise exports fall under this rubric—haven’t been making significant headway either. India’s push for greater flexibility in NAMA-mandated tariff reductions—the so-called Less than Full Reciprocity principle—is thus in limbo for the time being. WTO’s World Tariff Profiles 2015 report shows that the difference between India’s bound tariff rate (the maximum customs rate under a country’s WTO obligations) and its applied rate is substantial. This is typical of developing countries; developed economies tend to have a far smaller binding overhang. But this also means trade with a developing country is more unpredictable given the greater potential for tariff creep—another liability.                                                                                                                                            Isn’t it particularly surprising that an emphasis on bilateral and regional pacts is growing globally? The Trans-Pacific Partnership agreement is, of course, the poster child. Taken together with the Transatlantic Trade and Investment Partnership currently under negotiation, it will cover a substantial majority of global trade. India’s focus on multilateralism is both understandable and necessary. But a parallel push for bilateralism and regional’s is now a necessity to preserve export competitiveness. That means confronting a number of domestic and policy challenges. Bottom-up approaches with supply chains created across borders are more effective in fostering regional integration that top-down diplomatic approaches.   Bottle necks: The disappointing results of India’s trade under Bimstec—the Bay of Bengal free trade agreement—due in substantial part to poor connectivity and supply infrastructure, show the damage the lack of such linkages causes. Restrictive foreign direct investment (FDI) norms serve as barriers to the trade plus investment arrangements that typically result in greater success. Consider the India-European Union FTA with its many setbacks: Inability to make concessions on FDI in multi-brand retail, accountancy and legal services comes in the way of its securing market access for services. There are hosts of other domestic inefficiencies—from a heavily distorted agricultural sector to poor infrastructure undercutting exporters and the poor regulatory regime in the drug sector that has given the EU and the US a handy weapon against Indian generics—waiting in the wings.   Way ahead:- India must do a balancing act: Between trying to regain lost ground at the WTO and protecting its flanks via bilateral’s; Between securing trade pacts and checking the trade imbalance that has seen its existing FTAs result in a sharper rise in imports than exports; Between protecting domestic industries and making the concessions that will allow it to extract its own concessions for leveraging its strong services sector.   Connecting the dots: Should India place greater emphasis on FTAs or Multilateral Trade Agreements? Evaluate. MUST READ Reviving the politics of remission - release the seven life convicts in the 1991 Rajiv Gandhi assassination case Hindu   New, strong and clear outreach - Does the leadership of Prime Minister Narendra Modi mark a significant watershed in India’s foreign policy?  Hindu   Trump in Delhi- US is changing, it can’t be taken for granted. Why India must prepare for a larger global role. Hindu   North Korea’s Kim Jong-Un puts nuclear arsenal on standby Hindu   Jaitley introduces Aadhaar Bill in Lok Sabha- Opposition questions govt's intent to make it a 'money bill' Business Standard 1 Business Standard 2   A pitch for academia-industry interface- Way back in the 1970s, a collaboration between academia and industry led to the patenting of a water purifier. The takeaway: Private companies can build upon publicly-funded research for national growth Business Standard   National identity and growth- Will India take an exclusionary view of the religion of majority? Or a broad view to strengthen institutions? Live Mint   Renegotiation of PPP contracts becomes a reality- Norms for renegotiation of PPP pacts will be issued, keeping in view the long-term nature of such contracts and potential uncertainties of the real economy Live Mint

Mar 3, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 3rd March, 2016

Archives   IASbaba’s Daily Current Affairs – 3rd March, 2016   INTERNATIONAL   TOPIC:  General Studies 2: Bilateral, regional and global groupings Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora. Important International institutions, agencies and fora- their structure, mandate General Studies 3: Inclusive growth and issues arising from it; Effects of liberalization on the economy Infrastructure: Energy (Renewable), Conservation, environmental pollution and degradation, environmental impact assessment.   WTO: The much talked about Solar panel Dispute Issue: The domestic content requirement imposed under India’s national solar programme is inconsistent with its treaty obligations under the global trading regime; leading it to be described as archaic trade rules trumping important climate imperatives India’s National Solar Programme Launched in 2010 Aim: To “establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible” To incentivise the production of solar energy within the country: The government enters into long-term power purchase agreements with solar power producers, effectively “guaranteeing” the sale of the energy produced and the price that such a solar power producer could obtain Then it would sell such energy through distribution utilities to the ultimate consumer Eligibility of a solar power producer to participate under the programme: Required compulsorily to use certain domestically sourced inputs(solar cells and modules) for certain types of solar projects (if requirement not satisfied- the government will not ‘guarantee’ the purchase of the energy produced) Violation of the Global Trading Rules 2013: U.S. brought a complaint before the WTO arguing that the domestic content requirement imposed under India’s national solar programme is in violation of the global trading rules (unfavourable discriminating against imported solar cells and modules) Origin: Discrimination was done between solar cells and modules on the basis of the national ‘origin’ of the cells and modules (a clear violation of its trade commitment) Domestic content requirement (DCR) measures violated core norms of- Trade-related investment provisions, National treatment provisions for treating imported products on a par with domestically manufactured products Financial subsidy rules   India’s Stand: Was principally relying on the ‘government procurement’ justification, which permitted countries to derogate from their national treatment obligation provided that the measure was related to “the procurement by governmental agencies of products purchased for governmental purposes and not with a view to commercial resale or use in production of goods for commercial sale” The measure is justified under the general exceptions since it was necessary to secure compliance with its domestic and international law obligations relating to ecologically sustainable development and climate change.   The panel speaks up: Violation: India had violated its national treatment obligation (mandatory domestic content requirement) Inconsistency with the product: The product being subject to the domestic content requirement was solar cells and modules, but the product that was ultimately procured or purchased by the government was electricity (not an instance of “government procurement”) No specific issue: India failed to point out any specific obligation having “direct effect in India” or “forming part of its domestic legal system”, which “obligated” India to impose the particular domestic content requirement (bereft of the general exception) Clean Energy Syndrome? Ruling of the WTO-panel: Has come under intense criticism for undermining India’s efforts towards promoting the use of clean energy If Objective: To produce more clean energy, then Free to choose: Solar power producers should be free to choose energy-generation equipment on the basis of price and quality Burdening the consumer: By making it mandatory for the producers to buy locally, the government is imposing an additional cost, usually passed on to the ultimate consumer, for the production of clean energy Is it possible to give preferential treatment to clean energies? Yes, in the form of tax rebates for solar power producers Wrong move by India: During its submissions before the WTO, India did not invoke the general exceptions under article XX(b) or (g) of the General Agreement on Tariffs and Trade (utilized by parties seeking to protect their domestic regulations on ‘environmental’ or ‘health’ grounds) Thus, India had no proven perspective in place regarding the local content requirement under the programme (imposed for the ‘conservation’ of ‘clean air’ or green energy)   Resist the temptation of adopting protectionist measures: Domestic content measures, despite their immediate political gains, have a tendency to skew competition and therefore, manufacturers must remain free to select inputs based solely on quality and price, irrespective of the origin Need to work towards building a business and regulatory environment which is conducive to manufacturing which will require systemic changes in the form of simpler, transparent and consistent laws and effective dispute resolution mechanisms The road ahead— India might propose to opt for the usage of the domestic content requirement measures for buying solar panels for its own consumption such as by the railways and defence and would decide not to sell the power generated from such subsidized panels for commercial use. It has the capacity to hinder India’s solar power programme and will hold consequences for other countries planning to embark on renewable energy programmes. The initiative has driven dramatic growth of India’s solar capacity that has the capacity to reduce its reliance on dirty coal and spur the development of new clear energy jobs US-India ties at risk? US has consistently offered India to utilize its technologies to achieve its clean energy goals faster and more cost-effectively. But keeping the in mind the launch of the ambitious International Solar Alliance, with the aim of switching “sunshine nations” in tropical areas to solar energy, India might not let US take the entire credit. Moreover, US should be applauding and encouraging India to scale up solar energy and not striking it down with WTO. Both the countries need to remember that an important part of any maturing trade relationship is effectively addressing the range of issues on our trade and investment agenda, including in areas where we might disagree and therefore, exercising restraint and employing diplomacy while keeping the perspective of ‘climate change’ in mind will help effectively solve the issue.   NATIONAL   TOPIC:  General Studies 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Government Budgeting, Taxation & its impact General Studies 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.    Employees’ Provident Fund (EPF) Tax- Is it a Healthy proposal? A retirement benefit scheme Structured to: Provide financial security to employees of factories and other establishments post-retirement Administered by: The Employees’ Provident Fund Organisation (EPFO) whose highest body is the Central Board of Trustees, with representation from the government, employers and employees Process: Employees (earning up to Rs 15,000 per month) contribute 12% of the basic salary and dearness allowance Employer needs to contribute (12%) mandatorily in case of all employees Employer’s component is split into— EPF (3.67%) Employees’ Pension Scheme (8.33%) Deciding Factor: Decided by the government every year Investment in the EPF: Tax-free at all the three stages of (EEE:Exempt-Exempt-Exempt)— Investing Interest accumulation Withdrawal   Budget’s Proposal: Taxing the fully tax-exempt EPF corpus at retirement; putting the tax on 60% of the corpus, leaving 40% tax-free (both under recognised Provident Fund and NPS) EPFO raised the age for withdrawal from 55 to 58 years Contributions made until March 31, 2016 will attract no tax at the time of withdrawal Applicable- On contributions made on or after April 1, 2016   6 million “highly-paid” private sector employees in EPF who earn more than Rs.15,000 a month and have accepted EPF voluntarily— At retirement, 40% of the corpus will be tax-free If the rest, that is 60%, is used to buy an annuity, there is no tax Income from the annuity will be taxed each year at slab level (no change in this) But if the rich EPF subscriber wants his 60% as a lump sum, there will be a tax on it the entire corpus will be tax free, if invested in annuity An ambiguous act— If the entire 60% corpus is taxed at a top slab rate of 30.9%, the average tax on the entire corpus comes to 18.54% If just the interest on 60% of the contribution gets taxed, then the tax will be small Mostly: It will be just the interest that will be taxed and not the full 60% corpus How would the tax look like? Suppose a person joins in the next fiscal and sees a salary growth of 10% a year for the next 40 years Assume that EPF interest remains a steady 8% over this 40-year period (an assumption) A tax on the interest corpus at 30.9% works out to an average tax rate of 12% on the entire corpus.   In favour— Disproportionate gainers: Since Independence, the richest Indians have been disproportionate gainers of government subsidies and tax breaks (on cooking, automobile fuel, higher education and housing, opportunities of economic liberalisation) Urgent competing demands on the Budget-There is an urgent need for the government to control expenditure Balancing Act: To bring greater parity in the tax treatment of different types of pension plans E.g.: EPFO on a par with the National Pension System (NPS), as NPS has been languishing because of the differential tax treatment To encourage more number of private sector employees to go for pension security after retirement instead of withdrawing the entire money from the Provident Fund Account Allow investors to choose a product based on the returns they generate and the risk exposure they carry, and not on the basis of the tax benefit they offer Allows investments to be routed to equity markets that have the potential to generate higher returns. Since the money can be routed to equity markets, it will free up the capital, and can be used in the growth of the economy Youthful India enjoying a demographic dividend: India’s dependency ratio: Improved from 71.5 per cent in 1990 to 53.1 per cent in 2014 The incidence of additional taxation is relatively small; being an opportune time to get wage-earners used to the minor rigours of taxation in stages Against the Proposal: Religious Sentiments attached— Making the EPFO partially taxable is unjust—As India lacks a social safety net and most employees do not get pensions With fathers getting their daughters married by breaking their PF before retirement or the sons relying on their dads’ PF accounts to start businesses; or right from running the house to having a little bit of hope in old-age—this forced compulsory saving was transformed into a true partner in times of crisis Paying Twice-the-Tax (TtT)— An imposition of tax at the time of withdrawal will rob them of a sizeable portion of their long-term savings Since the contribution to EPF goes from tax-paid income, if the government imposes tax at the time of withdrawal, it will be like taxing them twice on the same income   Way Ahead: The entire retirement landscape needs to be viewed at a conceptual level, taking care of the observations by the behavioural economists to make it an opt-out product, with a default opt-in (you are automatically put into a pension plan unless you opt out); making the opt-out effective and on-going. Formulating the portability options and ways between the National Pension System (NPS) and EPF (safe and effective transitions) Need to develop the annuity market for a viable choice as it is still undeveloped with a poor choice set Connecting the Dots: What is the EPF, and why does the salaried class consider it a reliable social security net? Why does the government want to take it out of the Exempt-Exempt-Exempt (EEE) category and make it Exempt-Exempt-Tax (EET)? What is the government’s rationale for making the change?   MUST READ The loss of hope : Recent suicides - The vulnerability of youth Hindu   Wait for the good days got longer - A government in the middle of its term could have taken bold decisions. The Budget leaves room for neither private borrowing nor public investment Hindu Related Articles: Union Budget 2016-17   ‘Dalit movement has to see itself as part of a class-wide movement’ Hindu Related Articles: Death of a Dalit scholar: Ancient Prejudice, Modern Inequality The promise of Dalit capitalism All India Radio   Blow for reformists in Iran Hindu   Getting our goats- We need to make goat farming organised, tie it to agriculture and animal husbandry. Indian Express Related Articles: Animal husbandry and Indian Economy The economics of Cow Slaughter   IISc start-up builds world's first food grade DNA/RNA stain-Azooka Life Sciences claims the patent pending nucleic acid gel stain developed from an undisclosed plant source is the safest in the world market Business Standard   Union budget 2016: Implications for ease of doing business Government’s focus in terms of ease of doing business has been not just for corporate entities but also for ordinary people   A new paradigm for agriculture?-A growth-first approach may work in the short-term, but India needs to prioritize sustainability simultaneously Live Mint   Union budget 2016: Implications for ease of doing business- Government’s focus in terms of ease of doing business has been not just for corporate entities but also for ordinary people Live Mint MIND MAPS   1. Railway Budget 2016-2017

Mar 2, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 2nd March, 2016

Archives   IASbaba’s Daily Current Affairs – 2nd March, 2016   INTERNATIONAL   TOPIC:  General Studies 2 Bilateral, regional and global groupings Effect of policies and politics of developed and developing countries on India’s interests, Indian Diaspora. Important International institutions, agencies their structure, mandate.   EU referendum: the big questions for Britain Background: The roots of the EU lie in the aftermath of the Second World War with the search for ties across European boundaries to prevent the two great continental powers, France and Germany, from ever again taking up arms against each other. Britain was not initially on board, but became the seventh member country in the early 1970s. At that stage, the EU was generally known as the Common Market, a free-trade zone much more than a political alliance. The EU expanded to almost every corner of Europe, particularly after the implosion of the Moscow-led Communist bloc in eastern Europe. Half a billion people now live in EU member states, powerful nations including Serbia and Turkey are queuing up to join, and no member state has ever left the EU — at least, not yet. Britain has always been an uneasy member of the EU. In the 1980s, British Prime Minister Margaret Thatcher railed against European interference in member states’ monetary and fiscal policy. What is European Union or EU? The European Union (EU) is a politico-economic union of 28 member states that are located primarily in Europe. It covers an area of 4,324,782 km2, with an estimated population of over 508 million. The EU operates through a system of supranational institutions and intergovernmental-negotiated decisions by the member states. The institutions are: the European Parliament, the European Council, the Council of the European Union, the European Commission, the Court of Justice of the European Union, the European Central Bank, and the Court of Auditors. The European Parliament is elected every five years by EU citizens. The EU has developed an internal single market through a standardized system of laws that apply in all member states. EU policies aim to ensure the free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries, and regional development. The monetary union was established in 1999 and came into full force in 2002. It is currently composed of 19 member states that use the euro as their legal tender.   When was the EU formed? The EU can trace its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed in 1951 and 1958 respectively by the Inner Six countries of Belgium, France, West Germany, Italy, Luxembourg and the Netherlands. French foreign minister Robert Schuman led the formation of the ECSC with the Schuman Declaration in May 1950. The organization was a forerunner of several other European Communities and what is now the European Union. The European Union was established under its current name in 1993 following the Maastricht Treaty. Why was the EU created? After the Second World War there was a new movement to create unity between Germany and France, which would ultimately lay the foundations for the European Union four decades later. Which countries are in the EU? The European Union is an economic and political union of 28 countries. Each of the countries within the Union is independent but they agree to trade under the agreements made between the nations. Twenty two of the member states also belong to the Schengen Area, which is comprised of 26 European countries that have abolished passport and border controls at their common borders. Of the countries that are not part of it, Bulgaria, Croatia, Cyprus and Romania all intend to join, while the United Kingdom and Ireland have opted out. The European Economic Area (EEA) includes EU countries and also Iceland, Liechtenstein and Norway. It allows them to be part of the EU’s single market. Switzerland is neither an EU nor EEA member but is part of the single market - this means Swiss nationals have the same rights to live and work in the UK as other EEA nationals.   What is the purpose of the EU? The European Union operates a single market which allows free movement of goods, capital, services and people between member states. When will the EU referendum be held? The date has been set for 23 June 2016. What will the referendum ask? Should the UK remain a member of the EU or leave the EU?   Who can vote in the EU referendum? Eligibility will be based on the criteria for voting in a general election, which means citizens of most EU countries (who can vote in local and European elections in Britain) will not be allowed to take part. Anyone over the age of 18 who falls into one of the following groups can cast a vote: British citizens resident in the UK British citizens resident overseas for less than 15 years Citizens of Ireland, Malta and Cyprus resident in the UK Commonwealth citizens resident in the UK Commonwealth citizens resident in Gibraltar The pros and cons of leaving the EU Perhaps the greatest uncertainty associated with leaving the EU is that no country has ever done it before, so no one can predict the exact result. Nevertheless, many have tried. Trade:  One of the biggest advantages of the EU is free trade between member nations, making it easier and cheaper for British companies to export their goods to Europe. Some business leaders think the boost to income outweighs the billions of pounds in membership fees Britain would save if it left the EU. The UK also risks losing some of its negotiation power internationally by leaving the trading bloc, but it would be free to establish trade agreements with non-EU countries. Ukip leader Nigel Farage believes Britain could follow the lead of Norway, which has access to the single market but is not bound by EU laws on areas such as agriculture, justice and home affairs. But others argue that an "amicable divorce" would not be possible. Britain would still be subject to the politics and economics of Europe, but would no longer have a seat at the table to try to influence matters. "Brexit(Britian’s exit)" scenario is that the UK economy loses 2.2 per cent of its total GDP by 2030. However, it says that GDP could rise by 1.6 per cent if the UK could negotiate a free trade deal with Europe in long run   Investment: The general view is that inward investment could slow in the lead up to the vote due to the uncertainty of the outcome and its consequences, following the precedent set ahead of the Scottish independence referendum in 2014. Longer term, there are diverging views: pro-Europeans reckon the UK's status as one of the world's biggest financial centres will come under threat if it is no longer seen as a gateway to the EU for the likes of US banks, while Brexit campaigners argue London's unique appeal will not be diminished. This will be seen as positive by those advocating a vote to leave. It reckons the departure of one of the union's most powerful economies would hit its finances and also boost populist anti-EU movements in other countries. This would open a "Pandora's box" that could lead to the "collapse of the European project". Jobs: Free movement of people across the EU opens up job opportunities for UK workers willing to travel and makes it relatively easy for UK companies to employ workers from other EU countries. Exit prevents the UK "managing its own borders". Limiting this freedom would deter the "brightest and the best" of the continent from coming to Britain, create complex new immigration controls and reduce the pool of candidates employers can choose from. Regulations:  Euro skeptics argue that the vast majority of small and medium sized firms do not trade with the EU but are restricted by a huge regulatory burden imposed from abroad. However, on the other hand warn that millions of jobs could be lost if global manufacturers, such as car makers, move to lower-cost EU countries, while British farmers would lose billions in EU subsidies. Influence: Britain may lose some of its military influence – many believe that America would consider Britain to be a less useful ally if it was detached from Europe. On the plus side, Britain would also be able to claim back its territorial fishing waters, scrap caps on limits to the number of hours people can work per week, free itself from the EU's renewable energy drive and create a freer economic market. This would turn London into a "freewheeling hub for emerging-market finance – a sort of Singapore on steroids". The most likely outcome is that Britain would find itself "as a scratchy outsider with somewhat limited access to the single market, almost no influence and few friends. And one certainty: that having once departed, it would be all but impossible to get back in again." Security:   In favor of Brexit : There is a strong belief amongst Pro exit that they are leaving the "door open" to terrorist attacks by remaining in the European Union. "This open border does not allow us to check and control people". Failure to do so, significantly increase the terrorist threat and endangers people and is a betrayal of this country. Pro Union: Argue that the EU is an "increasingly important pillar of our security", especially at a time of instability in the Middle East and in the face of "resurgent Russian nationalism and aggression". UK benefits from being part Europe, as well as NATO and the United Nations. It is through the EU that you exchange criminal records and passenger records and work together on counter-terrorism. We need the collective weight of the EU when you are dealing with Russian aggression or terrorism. Would taxes change? Better off out: The EU has limited power over tax, which is largely a matter for national governments. The exception is VAT which has bands agreed at the EU level. Outside the EU, the UK would potentially have more flexibility. Better off in : Tax avoidance and evasion will reach crippling levels as our economy becomes increasingly wholly owned by foreign multinationals that make tax avoidance in Britain central to their business strategy. Would Britain's legal system, democratic institutions and law-making process change? Better off out: It would be a major shot in the arm for British democracy as the Westminster parliament regained its sovereignty and re-connected with voters. The country would be free from the European Arrest Warrant and other law and order measures, but would still have to deal with the European Court of Human Rights, which is separate from the EU.   Better off in: Britons benefit from EU employment laws and social protections, which would be stripped away. Withdrawal from the European Arrest Warrant could mean delays for the UK in extraditing suspects from other European countries; and the UK already has some opt-outs from EU labor law, including the Working Time Directive. Connecting the dots: Should the UK remain a member of the EU or leave the EU? Examine   MUST READ ‘Nationalism does not allow the Hindu in India to claim primacy’- Historian Romila Thapar on academic freedom, nationalism, sedition, and free speech Hindu Related Articles: Patriotism without nationalism   Looking beyond economic quick-fixes Hindu   The health net should cover all Hindu   Supreme Court to determine legality of Punjab act terminating sharing agreements- The water-sharing row between Punjab and Haryana is set to take centre stage again. On Monday, a five-member Constitution Bench of the Supreme Court began hearings on the presidential reference pertaining to Punjab Termination of Agreements Act, 2004. Hindu   Simply Put: Where the tax on Provident Fund pinches, and how- What is the EPF, and why does the salaried class consider it a reliable social security net? Why does the government want to take it out of the EEE category and make it EET? What is the government’s rationale for making the change? Indian Express   FDI in food processing could let govt come out of multi-brand logjam FDI in food processing to push local sourcing Business Standard 1 Business Standard 2   The challenge of bank recapitalisation- Need to allow government shareholding in public sector banks to come down below 51 per cent Business Standard Related Articles: Fashioning a Banking Turn- Public Sector Banks Capacity building in Banks and Non-Bank Institutions BASEL III norms and INDIA The problem of debt concentration ‘A solution, with its own problems’- Strategic Debt Restructuring Scheme MIND MAPS   1. National Court of Appeal  

Mar 1, 2016 IASbaba's Daily Current Affairs

Union Budget 2016-17 : IASbaba's Daily Current Affairs -1st March 2016

Archives ECONOMIC SURVEY 2015-16 <- Click Here RAILWAY BUDGET 2016 <- Click Here   UNION BUDGET 2016-17 IASbaba’s Daily Current Affairs – 1st March, 2016     ECONOMICS   TOPIC:  General Studies 3 Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Government Budgeting.   NOTE: This article is compilation of information from 5 different National Newspapers’   All you need to know about – ‘Budget 2016-2017’ Background: The Union Budget 2016 has been crafted under the most extraordinarily challenging economic environments India has seen. The external environment is both uncertain and volatile, the inherited logjam caused by stressed banks and the stressed private sector has yet to be broken, poor monsoons have caused immense rural distress, and demand, a central pillar of growth, has been tepid. Many of the measures needed to face up to this challenge are not, strictly speaking, budgetary. It has a much greater sense of purpose and direction. It signals macroeconomic credibility by adhering to fiscal deficit targets. The ambitious provision of LPG connections to all is quite revolutionary, for its health, gender justice and aspirational effects, though its political-economy effects on the subsidy bill will become clear over the next few years. It goes to great lengths to reverse the government’s pro-corporate image   Budget Basics: What is a Budget ? Budget is Estimate of inflows and outflows of the Government during a year. Budget is presented for the ensuing Financial year.   What does Budget consist of? Every budget consist of Actual figures for preceding years, Budget and revised figures for the current year, Budget estimates for the following years So the Budget presented in March 2001 will be estimate of Inflows and outflows of the Funds for the period beginning from 1st April 2001 to 31st March 2002.   When is Budget presented? Budget is to be presented in Lok Sabha on a day as the President directs. By convention, the Budget is presented in Parliament on the last working day of February.   Who draws the timetable for Budget? Timetable is drawn by the Business Advisory Committee (BAC) of Parliament. In the schedule drawn up by the BAC, there is a fixed period of discussion for each ministry.   Who has the responsibility for Budget? Budget Division in the Finance Ministry has the overall responsibility. It prepares the budget on basis of proposal received from various departments and ministries and the availability of funds. However, final approval is from the Prime Minister.   What if Budget is not approved by 1st April? The Constitution empowers Lok Sabha to grant a Vote-on-Account (Article 116) so that the government can continue with the necessary expenditure into the new fiscal, before the Budget proposals actually get passed after necessary discussions. The vote-on-account normally covers the expenditure requirement of the government for two months.   Is it compulsory to have budget for every year? Yes. Under Article 112 of the Constitution, a Statement of estimated receipts and expenditure of the Union Government has to be laid before the Parliament in respect of every financial year running from 1st April to 31st March. The Receipt and Payments of the Government is categorised in three parts: Consolidated Fund. : All the inflows like Tax and other Revenues as well as Loans raised by it form part of this category. All outflow including expenses etc also form part of this Account. For withdrawal from this fund parliament authorisation is required. Contingency Fund: It is the money kept at the disposal of the President to meet out any unforeseen expenses. The corpus of the fund is merely Rs.500 Crores. Public Account: This category comprises of money raised from various Schemes of the Government like Provident Fund. But this was the technical framework. To put simply it is Annual financial discipline like other corporates prepare Profit and Loss Account and Balance Sheet. However to what disclosure norms the government accounts are subjected to is mystery. We have seldom come across the laid down norms like other balance sheets to disclose the information in a manner prescribed.   What is the process of Budget approval? The Finance Minister introduces the budget in the Lower House of the Parliament or the Lok Sabha & makes a short speech, giving a overall view of the budget. After the presentation of the Budget, Parliament allots some time for a general discussion on the Budget. The finance minister replies at the end of the general discussion. The reply is also of a general nature and no specifics of the Budget are discussed. However, no motion is moved nor voting required at this stage. After the finance minister's reply, Lok Sabha takes up for discussion each ministry's expenditure proposals, and is known as demand for grants. The demands for grants presented by each ministry are taken up by the House. After, the prescribed period for the discussion on demands for grants is over, the Speaker applies the `guillotine', and all the outstanding demands for grants, whether discussed or not, are put to vote at once. Only the Lower House is entitled to vote. Appropriation Bill is introduced in the Lok Sabha after it has passed all demands for grants relating to all ministries. This is to authorise the government to draw funds from the Consolidated Fund of India. Once this Bill is passed, it becomes the Appropriation Act and is certified as a Money Bill. After passing of Appropriation Bill, the Finance Bill is introduced and it incorporates all taxation proposals. At this stage, amendments for tax proposal can be moved. After the passing of this Bill, it enters the statute as the Finance Act. Thus the final Budget gets approved. Budget 2016-2017: Snapshot Taxation: The principal tax rates have reached stability. The rates of direct taxes are comparable to international rates (except for personal tax brackets, which vary across countries on account of differing price levels); and indirect taxes are in a long process of replacement by the Goods and Services Tax, which is stuck in disagreements between States. For 2016-17, the Finance Minister has promised to bring this ratio down to 3.5 per cent primarily through a 20 per cent increase in indirect taxes and as much as 39 per cent in excise duties , even as the corporate taxes go down. A rise in indirect taxes as opposed to direct taxes is a clear case of regressive taxation because both the poor and the rich pay the same tax per unit of purchase of an item. That this has been the pattern of revenue mobilization of this and the previous government goes to show their concern for the ‘aam aadmi’. There is another problem an increase in indirect taxes brings to the table: inflation. The fact that the economy is not witnessing high inflation today is not because of any prudent monetary policy but because the oil prices are at a real low — that might not be the permanent state of affairs in the coming year. If the oil prices go up, with these hiked indirect tax rates, inflation might hit through the roof. The odd changes in taxation provisions for future provident fund withdrawals make it a budget hostile to the middle class. The salaried class is likely to feel hard done by a move to tax 60 per cent of the corpus created from contributions to the Employees’ Provident Fund starting April 1 as part of a move to create a ‘pensioned society’. Addressing the slowdown A Budget in such difficult times should address the problem of a slowdown squarely. It can do it in two ways: Directly by injecting demand into the economy Indirectly by creating opportunities for other sources of demand to pick up. Big business and the media want the government to do the latter and not the former, whereas a pro-people government will push for the first. The strange thing about this Budget is that it does neither. An economy grows based on demand for its goods and services. There are broadly five sources of demand in an economy: Consumption by the poor, Consumption by the rich, Private investment, Fiscal deficit and Trade surplus. Contrary to popular belief, the indirect effects of a Budget are positively related to the direct effects of it. So, while a rise in the fiscal deficit directly increases the profits as well as wages in the economy, thereby pushing demand up, it indirectly increases private investment if ‘business sentiments’ are low otherwise.   Fiscal consolidation quick-fixes: The Finance Minister has maintained that he will adhere to the ‘fiscal consolidation’ map, which means bringing down further the fiscal deficit as a proportion of GDP. Fiscal deficit is essentially government expenditure minus its tax revenue. So, bringing it down means a fall in government expenditure and/or a rise in tax revenue as a proportion of GDP. Budget for 2016-17 sticks to the commitment made under the Fiscal Responsibility and Budget Management Act by keeping the fiscal deficit target at 3.5% of GDP. This problem becomes doubly difficult if the estimate of the GDP itself is inflated, which is what has happened this year. The revised estimate of the GDP for 2015-16 is less than the Budget estimate by about Rs. 5,41,753 crore. If the denominator itself is falling in a ratio, the numerator has to fall further for the ratio to decrease. The way they have managed to keep the ratio to 3.9 per cent despite such a fall in the estimated GDP is through increased collection in the indirect taxes and excise duties even as the non-plan expenditure has declined. Such a strict belt-tightening shows that the long wait for the ‘achche din’ is not over. It requires the poor to pay through their nose through increased indirect taxes while the cushion of the social sector is consistently taken away from them, and all of this is being done in the name of creating ‘business sentiments’, which themselves are ever elusive. Good to see that unlike between 2012-13 and 2014-15, fiscal consolidation in 2015-16 is not being achieved by paring capital spending but through subsidy reduction afforded by sharply lower crude prices. This has improved the spending mix of the government with a tilt towards infrastructure. What are the structural factors aiding the fiscal math? Improved coverage and higher tax on services. In the current fiscal, service tax collections were marginally higher than budgeted despite slowing growth in the services sector.   Pros of the Budget: The budget ticks the boxes on fiscal, revenue and primary deficit parameters. It has done better on the revenue deficit target (2.5% vs 2.8%) and effective revenue deficit target (1.5% vs 2%). Not only that, it projects an accelerated decline in the effective revenue deficit, reaching 0% by 2018-19. True, there has been some deviation from the goals envisaged under the Fiscal Responsibility and Budget Management Act to support investment activity. But the overall direction has been the correct one of consolidation: fiscal deficit as a percentage of gross domestic product (GDP) narrowed to 3.9% in 2015-16 from 4.9% in 2012-13, and revenue deficit as a percentage of GDP has come down to 2.5% from 3.6%. The increased outlay on infrastructure, particularly the Pradhan Mantri Gram Sadak Yojana. Rural connectivity is great for growth; and power and logistics are key to India’s competitiveness. Symbolically, this budget speaks to the government’s potential strengths: Power, infrastructure, railways, and petroleum and gas. To be sure, these have helped offset the shortfall in direct tax collections because of weak manufacturing activity, poor corporate performance, increased food subsidy, and lower-than-anticipated nominal growth. Nominal GDP growth was 8.6% in fiscal 2016 against 11.5% assumed in the budget. But the most pleasant surprise is the direction in which we want to go on the environment. An additional cess on coal and taxes on cars are signals of a long-overdue resolve that the environment is no longer a luxury. There are small administrative victories like the abolition of the distinction between plan and non-plan expenditure. Farm sector: Nearly 65 per cent of small farmers in this country depend on rain-fed irrigation. More than 75 per cent of Indian farmers are not covered by crop insurance. Since shocks, such as bad weather or bad health, affect the poor significantly more than the average citizen in the country, allocations provided for irrigation, crop insurance and health insurance will significantly impact the rural population’s ability to withstand negative economic shocks. In particular, farm insurance, health insurance and cooking gas connections for BPL (below poverty line) families are superb initiatives that will focus government spending on those sections of the population that need the government’s attention the most — the poor and the downtrodden. Fertilizer and electricity subsidies together amount to 1.6 per cent of the GDP, much of which leaks abroad or to non-agricultural uses, or goes to inefficient producers, or to firms given the exclusive privilege to import. Rs 40,000 crore of subsidies are provided in the electricity sector. But precisely for these reasons it has proved politically impossible to close the inefficient firms or eliminate the canalization of imports. By providing a legal framework for the Aadhaar platform, the “JAM trinity” of Jan Dhan, Aadhaar and mobile would be strengthened considerably. This will help to rationalize the regime of subsidies and lead to better targeting. Again, better targeting of subsidies to deserving beneficiaries would help to foster domestic demand, particularly in the rural sector. Another key measure in the budget relates to providing a legal framework for the Aadhaar platform, which will help to ensure that subsidies are directed to the needy. More than Rs 40,000 crore of subsidies provided for fertilizers. As for crude prices, they are expected to average $10 per barrel lower next fiscal compared with $45 in the current one. This means the transitory benefit of lower oil prices will continue and afford an offset to the extra spending being made based on the One Rank One Pension and Seventh Pay Commission recommendations. Increased excise duty on oil will benefit the next fiscal year more, because these came into effect only from November 2015. On the financial sector front, some of the measures are welcome, though most of them are along expected lines — such as the recapitalization of banks (where the allocation of Rs 25,000 crore may be inadequate), the strengthening of asset reconstruction companies, a dispute resolution regime for financial firms and enabling the setting up of a Monetary Policy Committee to set interest rates. Education fares even worse. While there has been a slight increase in the allocation in absolute terms, the budgetary allocation for education has declined, both as a percentage of GDP and as a percentage of the total Budget. It was 0.5 per cent of GDP and 3.8 per cent of the revenue expenditure for 2015-16, and it is down to 0.48 per cent of GDP and 3.7 per cent of the Budget estimates this year Outlay of Rs.19,000 crore that the Central government will spend this year on rural roads as part of its goal to ensure that all habitations are connected by 2019, Push to achieve universal village electrification in the next two years. Between improved road connectivity and the availability of electricity, the potential is significant for a multiplier effect on the rural economy and improvements to the quality of life for residents of the hinterland. Social sector: Sarva Shiksha Abhiyan budget increased by 2% from 2015-16 (revised estimates) while the Mid-Day Meal scheme budget increased by 5%. The Budget proposes the introduction of a health insurance scheme that would provide up to Rs.1 lakh as coverage against hospitalization costs for economically weak households, with senior citizens above the age of 60 eligible for another Rs.30,000 in top-up cover. The National Health Mission budget increased by 2%, while the Mahatma Gandhi National Rural Employment Guarantee Scheme, which according to the finance minister had received its highest allocation yet in this budget, increased by 4% from the previous years. Swachh Bharat Mission (SBM), the flagship programme on rural sanitation, saw one of the biggest jumps at 38%. However, this jump is in part due to lower revised estimates. Health : the big jumps in allocation are in health insurance—the old Rashtriya Swasthya Bima Yojana has been renamed and has received a 152% hike (Rs.900 crore The allocation for the National Social Assistance Programme (for the aged, disabled, widows, the Annapurna Scheme) has gone up only marginally, from Rs.9,000 crore last year to Rs.9,500 crore. The other, equally laudable, initiative is to provide all families below the poverty line with cooking gas. This can afford those in underprivileged homes the dignity of a quicker and less harmful way to keep their kitchen fires running.   Cons of the Budget: As for the farm sector, whose welfare is purportedly the primary focus of this Budget, the allocation of Rs.35,000 crore is woefully inadequate given the drought-related distress that farmers have faced for consecutive years. It covers only 20 per cent of farmers, and there has been no effort to bring a greater number of farmers into the net. It’s a good sign that small and marginal farmers find a mention, but there was no mention of the landless farmer Weak growth in advanced and emerging countries has taken its toll on India’s exports. As imports have also declined, principally on account of reduced prices of crude oil for which the country is heavily dependent on imports, trade and current account deficits continue to be moderate. Growth in agriculture has slackened due to two successive years of less-than-normal monsoon rains. Saving and investment rates are showing hardly any signs of revival. The rupee has depreciated vis-a-vis the US dollar, like most other currencies in the world, although less so in magnitude… Given the prevalent overall macroeconomic scenario, and assuming a normal level of rains in 2016-17, it would not be unreasonable to conclude that the Indian economy is all set to register growth in excess of 7 per cent for the third year in succession Another disappointment is that the government has made a very tentative beginning in removing corporate tax exemptions and lowering the tax rate. The measures announced reflect revenue-consciousness rather than growth consciousness Even the two interesting initiatives announced by the Finance Minister – health cover of Rs.1 lakh per family and a National Dialysis Service Programme — betray an anxiety to help the private sector (through the PPP framework) rather than the Indian patient. At the same time, two long-standing demands have been ignored: universalizing social pension for those over 55 years old, and increasing the minimum pension amount from the abysmal Rs.300 per month to Rs.500 per month While the health budget has seen a marginal increase of 9-10 per cent, it is way below the 30-40 per cent increase needed to keep India on course for a health allocation of 2 per cent of GDP in the medium term. The ‘Vikas Ka Budget’ flyer on the new dynamic social sector included schemes like the LPG connection, the health insurance program, the Stand Up India scheme, the Jan Annusuddhi Yojana, but none of this can be pieced together into a coherent narrative for what the government envisaged for social policy in India. Many commentators have picked up on the important decision in the budget to end the distinction between Plan and non-Plan expenditure. But an equally critical and far-reaching change is in the decision to adopt the NITI Aayog recommendation to streamline centrally sponsored schemes to 30, introduce a sunset clause and, above all, undertake an outcome review. The Direct Taxes Code seems to have been buried permanently. There was only a lukewarm reference to the GST bills, but there was no promise of accommodating the legitimate criticism of the Opposition. There is nothing in the budget for the urban middle classes, even in the form of a symbolic raising of income tax exemption slabs that has been a feature of every single budget in recent years. The worrying aspect in the current budget is about the banking sector. The Rs 25,000 crore provided for the capitalization of public-sector banks in this financial year is woefully inadequate. In the next five years, Public sector banks (PSBs) will require several multiples of this amount to be able to meet the capital requirements of Basel III. Another key announcement that is worrisome in this context relates to the consolidation of PSBs. As we have witnessed with the merger of Indian Airlines and Air India, bunching up two large and struggling PSUs only serves to exacerbate problems for the merged entity. Consolidating PSBs without first empowering the boards of these banks would create more costs for the financial system than benefits.   Iconic barometer Coming finally to that iconic barometer of a government’s welfare intentions, the MGNREGA, the budgetary allocation of Rs.38,500 crore, while marginally higher than last year, is way below the amount needed (estimated to be at least Rs.50,000 crore) to keep this scheme going in any meaningful fashion. So be it education, health, pensions for the socially vulnerable, distressed farmers, or MGNREGA, the 2016 Union Budget has nothing radical to offer.   Way ahead : Global economy is in a serious crisis and does not seem to be coming out of it any time soon. With international scope limited for exports, therefore, what was required of this Budget was a direction to the economy in terms of generating demand domestically, which in turn would generate employment for the fast-growing unemployed youth population of this country. This Budget does little or nothing on that count. Government spending will have a critical role in improving both social and physical infrastructure, and provision of subsidies to the needy. There is certainly scope for the restructuring of government expenditure towards investment and better targeting subsidies using the Aadhaar platform. Good to see the announcements on the name change from disinvestment to Investment and Public Asset Management and the abolition of the distinction between Plan and Non-plan expenditure. Also welcome is the emphasis on sunset date and outcome review on new schemes. Given the fact that the global economy is tottering, there is a definite need to foster domestic demand to accelerate economic growth. At the same time, it is politically and economically imperative that jobs are created in the formal sector to avoid the demographic dividend becoming a demographic liability. Given these twin objectives for the country, this year’s budget to be an admirable exercise. While there are concerns regarding the budget’s ill effects on the banking sector, it is an excellent budget because it helps to foster rural demand and attempts to fix risks in the rural economy. In the final analysis, it is a thoughtful, prudent and careful budget. But it is hard to avoid the impression that it has been more careful than it needed to be, especially in the critical areas of bank recapitalization and corporate tax reforms.   Connecting the dots: Could this budget be the first step towards developing an outcome-based financing model for social policy in India? Comment.

Feb 29, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 29th February, 2016

ArchivesIASbaba’s Daily Current Affairs – 29th February, 2016 ECONOMICS TOPIC:  General Studies 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Inclusive Growth Agriculture & Related Issues- Major crops cropping patterns in various parts of the country, different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmersGeneral Studies 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Need to Revive Agriculture The story of agriculture (backbone of the country in terms of livelihoods) has not been sounding right since the past two years and the crash in global commodity prices and deficit rainfall for two years in a row have affected farmers’ incomes drastically. Agriculture GDP (gross domestic product) grew at (-)0.2% in 2014-15 and 1.1% in 2015-16; with 10 states have declared drought this year. Coupled with the forward and backward linkages, the manufacturing and services sectors have been getting affects inevitably.Let’s talk strategically:Two-pronged strategy: Raise: Productivity and Incomes of farmersCope: Risks due to climate change and Crash in commodity pricesTherefore, the following steps need to be taken—Productivity: Emphasis should be given more on investment in infrastructure such as irrigation, rural roads and electricity as well as public investment in rural infrastructure can act as a major game-changer her. The Pradhan Mantri Krishi Sinchai Yojana (PMKSY) and the Rashtriya Krishi Vikas Yojana (RKVY) can serve as a good way forward but proper implementation and more funding is required. ‘More crops per drop of water’: Water-use efficiency (water productivity) has to be increased with better policies on watershed development, groundwater and involvement of farmers in the management of irrigation systems. Need to encourage drip irrigation (covers 10 times the area covered by usual flood irrigation)Climate-resilient Agriculture (CRA):Diversified cropping systems- In the international year of pulses, India can do well by cultivating pulses as its deficient in its production. Why Pulses: Pulses are legumes which improve soil fertility and can contribute in reducing food inflation Win-win situation: In terms of attaining self-sufficiency and raising soil fertilityCrop insurance for Risk Mitigation: Higher allocation of funds under PMFBY Lessons need to be learnt and applied from the failure related to crop insurance schemes MNRGA should be given an ultimate push as it is much useful in asset creation and drought proofing; studies also showing reductions in vulnerability due to the implementation of MGNREGA works and resultant environmental benefitsFocus on the role of research and extension systems: India needs to invest in research and extension-activities of agriculture as research can lead to the development of climate-resilient technologies and the extension system will promote these technologies among farmers Research on adaptation and mitigation should cover crops, livestock, fisheries and natural resources management and focus on technology improvement is crucial for increasing productivity and conserving natural resources (High returns assured)Fertilizer Subsidies: Fertilizer subsidies should directly be reaching farmers- cutting down the costs wasted in the process by involving middle men. Saved funds: Can be alternatively used provided for investment in infrastructure (irrigation)Legalizing Land Tenancy: A proper policy needs to be formulated and advanced, taking into consideration the important issues along with solutions forwarded. Will lead to access to land for the rural population Will increase private investment in agricultureRemunerative prices and development of markets: The talks about National Agricultural market (an online platform for selling agricultural produce) have borne lot of hope in the minds of the farmers, across the length and breadth of the country. This will not only help farmer raise his income but will also assure him of accurate earnings (or maybe better prices) For the plan to work on the desied level, much effort needs to be put in the marketing front using a tailored value chain approach to connect farmers to input and output markets Farmer Producer Organizations (FPOs): It needs to be strengthened and good practices from successful milk cooperatives can be studied-selected-suit to meet the needs of the farmers and be implemented Incentives can be given to commodity-specific FPOs to develop value chains (e.g: FPOs for pulses can be developed on a large scale)Agricultural Credit: A proper surveillance of the past allocated agricultural credit needs to be done and thus, this year’s credit disbursement be based upon it Measures also, have to be taken to increase the formal credit to small and marginal farmers as a Reserve Bank committee found that their access to it was limited Utilization of JAM-Trinity needs to be enhancedConnecting the Dots: What are the objectives of an efficient marketing system for the agricultural produce? Enlist the facilities needed by a farmer to market his produce. An efficient transport system is critically important to efficient agricultural marketing. Discuss. NATIONAL TOPIC:  General Studies 2 Dispute redressal mechanisms Statutory, regulatory and various quasi-judicial bodies. News Ombudsman: Holding the newspaper to accountBackground: Newspapers continue to play an important role in society and politics. In some respects they play an enhanced and widening role in this digital age, even as they have come under disruptive pressure of varying degrees. There is a new challenge newspapers face in many countries, including India, and this is the increasingly heard political demand for regulation of the ways of an allegedly irresponsible, wayward, and venal press. It is in this stressful context that the institution of a news ombudsman becomes not just a virtuous option but an existential necessity and even a priority for Indian newspapers. The Hindu is the first newspaper in the history of Indian journalism to appoint a news ombudsman — an independent, full-time, empowered professional, known as the Readers’ Editor (RE), with a clearly defined daily role in the newspaper and transparent terms of reference. The inspiration had come from the exemplary practice and experience of The Guardian , whose pioneering RE, Ian Mayes, had set the bar high.Why there is demand for regulation?      The rise of social media — its positive, corrective, and value-adding side as well as its trolling, noisy, and truth-distorting side — has increased in no small measure the daily pressure the mainstream press and professional journalists face in the increasingly contested space. In this situation, protecting and revitalizing the core functions, standards, and values of professional journalism has become absolutely vital to democracy, to the public interest, and, of course, to the newspaper industry’s own health.What are the key roles for a news ombudsman? Two central functions of serious, independent journalism have remained constant — the credible-informational and the critical-investigative-adversarial. To improve the quality of news reporting by monitoring accuracy, fairness and balance. To help the news provider become more accessible and accountable to readers and, thus, become more credible. To increase the awareness of news professionals about the public’s concerns. To save time for publishers and senior editors, or broadcasters and news directors, by channeling complaints and other inquiries to one responsible individual. To resolve some complaints that might otherwise be sent to attorneys and become costly lawsuitsWhy do we need news ombudsman or Reader’s Editor (RE)? An institutionalized review mechanism in the form of a Readers’ Editor has a strong bearing on the process. It carries moral force, and the participants in the chain of editorial work do incorporate stronger checks to eliminate errors.What is the essence of news ombudsman or Reader’s Editor(RE) job? News ombudsman represents a form of self-regulation, the only kind of self-regulation that has the effect of building trust between a specific news organization and its readership or audience, through the systematic, impartial and public handling of complaints, and through the open discussion of issues raised by readers concerning the journalism. RE oversees the process of publishing corrections and clarifications on a daily basis; attends sympathetically to readers’ complaints and concerns that his or her office receives. RE also oversees various aspects of professional journalism and best practices, the newspaper industry, the media and society, and ethical issues; and inquires into, and recommends appropriate action on, specific cases of plagiarism, other ethical transgressions, and inappropriate or unprofessional journalism that are referred to him or her by the Editor. The RE’s is a post-publication job; he or she rarely comes in pre-publication and even then only when the matter is referred to him or her.What are the Benefits of self-regulation through the work of RE’s job? It constantly attempts to hold various institutions, actors, and ideologies to account, regards itself as responsible and accountable to readers when it comes to living up to the highest professional standards and to the editorial values it proclaims. Here is a real institutional mechanism to correct serious mistakes and remedy inappropriate journalistic practices whenever they arise. This empowered office protects them from motivated attacks, especially from the trolls in the social media. This form of unilateral and quick-acting self-regulation — which is not mandated by law — brings down both the incidence and the risk of litigation against the newspaper by those who feel aggrieved or offended by something it has published.Way ahead: The Hindu as an institution committed to the highest standards and values of journalism remains firmly committed to continuing and strengthening the office of its Readers’ Editor. It takes pride in being the first Indian newspaper to have this office and make it responsive to the needs of the time. However, it has mixed feelings about being the only Indian newspaper to have an independent and regularly functioning news ombudsman — for the simple reason that this does not seem to reflect well on the priorities of the Indian newspaper industry. Connecting the dots: Newsgathering and news dissemination may appear to be mysterious and some readers may suspect the process itself. Comment. Throw light on the necessity of news ombudsman as an institution to maintain professional journalism across the Indian newspaper industry?  MUST READIs India at an inflection point?HinduReworking the Supreme Court’s roleHinduFor a green economy that is also justHinduGet down to business- If India is to improve its ease of doing business rank, the Centre needs to partner with statesIndian ExpressRelated Articles:http://iasbaba.com/2015/12/iasbabas-daily-current-affairs-18th-december-2015/http://iasbaba.com/2016/01/iasbabas-daily-current-affairs-11th-january-2016/Saving Siachen’s Soldiers- India and Pakistan should seriously rethink deployment in winterIndian Express It's time for civil aviation reform to take off- The changes suggested in the proposed civil aviation policy encourage competition and offer more choice to consumersBusiness StandardRelated Articles:Draft National Civil Aviation Policy (NCAP) 2015The bright spot- But India must overcome barriers in the smartphones marketBusiness StandardLaws that make the Budget- A look at some key legal and Constitutional aspects that form the basis of the Budget-making processBusiness Standard A tale of an election and a selection- Unless the P5 recognize that a weak and inept leader challenges their own legitimacy, the UN will be encumbered by a powerless leaderLive MintLoose ends in our tax administration - Direct and indirect tax data should be integrated, Property transactions and small businesses escape the tax netBusiness Line

Feb 29, 2016 PIB

IASbaba Press Information Bureau (PIB)- 22nd Feb to 28th Feb, 2016

ARCHIVES   GS-2 Swachh Paryatan Mobile App Launched  (Topic: Important aspects of governance, transparency and accountability, e-governance-applications, models, successes, limitations and potential) Launched by - Minister of State (I/C) for Tourism & Culture and Minister of State for Civil Aviation Project implemented by- Ministry of Tourism, Government of India through DeGS and NIC Facilitate- Public to communicate their complaints about any unclean area, garbage piles and around tourist destinations. About App- 25 Adarsh Smarak Monuments protected byArchaeological Survey of India (ASI) have been identified for inclusion in the app Enables a citizen to take photograph of garbage at the monument and upload the same along with his/her remarks Application then sends an SMS to the ASI Nodal Officer concerned with the monument upon receipt of which the Nodal Officer gets the garbage cleared/removed Nodal Officer thereafter sends confirmation about the redressal of the complaint through an SMS to the complainant   Extension of e-Tourist Visa scheme to 37 more countries- (Topic: Important aspects of governance, transparency and accountability, e-governance-applications, models, successes, limitations and potential)    About- e-Tourist Visa (e-TV) facility will be extended to 37 more countries from tomorrow Connect- Total count of countries under the scheme will become 150 e-Tourist Scheme- GoI had launched the e-TV facility on November 27, 2014 Till now the scheme has been extended to 113 countries at sixteen Indian airports designated for providing e-Tourist visa service Since the launch of the scheme more than 7.50 lakh Visas have been issued under the scheme At present on an average 3,500 e-Tourist Visas are being granted daily to foreign nationals   Health Minister urges Himachal Govt. to take necessary steps to check Jaundice (Topic: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resource) About - Concern over the situation arising out of outbreak of jaundice in Shimla, Himachal Pradesh It is to - Urge the state government to take all necessary steps to handle the situation while assuring full support from the Centre in this regard Amount - Rs 70 lakh has been sanctioned by the Health Ministry for Indian Council of Medical Research (ICMR) Objective- To conduct a study so that reoccurrence of this situation can be avoided Steps taken-  Team of National Centre for Disease Control under the Union Health Ministry had already visited the affected areas in the first week of January 2016 To- Assess the situation and give expert advice to the state government to handle the situation Team advised- Sanitation and cleanliness in affected areas need to be improved and contamination of water needed to be checked   Establishment of Atal Innovation Mission and Self Employment and Talent Utilisation in NITI Aayog (Topic: Government policies and Interventions for development in various sectors and issues arising out of their design and implementation) About- Union Cabinet has given its approval for establishment of Atal Innovation Mission (AIM) and Self Employment and Talent Utilisation (SETU) in NITI Aayog with appropriate manpower Establishment of AIM and AIM Directorate would result in- Implementation of Mission activities in a focussed manner + would be a focal point for innovation and entrepreneurship in the country   Agreement between India and Maldives for avoidance of double taxation of income from International air transport  (Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s Interests) Context- Union Cabinet has given its approval for signing of an Agreement between India and Maldives for the avoidance of double taxation of income from international air transport. About Agreement- Provides relief from double taxation for airline enterprises of India and Maldives by way of exemption of income derived by the enterprise of India from the operation of aircraft in international traffic, from Maldivian tax and vice-versa Under the agreement, profits from the operation of aircraft in international traffic will be taxed in one country alone Accordingly the taxing right is conferred upon the country to which the enterprise belongs Provide tax certainty for airline enterprises of India and Maldives. Provides for Mutual Agreement Procedure for resolving any difficulties or doubts arising as to the interpretation or application of the Agreement.   Arrangement for the establishment of an Indo-French Joint Committee on Science & Technology Cooperation (Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s Interests) About- Establishment of an Indo-French Joint Committee on Science & Technology Cooperation Joint Committee work- Identify + Synergise + Define priorities forà Indo-French cooperation in science, technology and innovation   Aim- To achieve economic and social development through research, development and innovation Agreement comes in- Backdrop of enhanced scientific and technological cooperation between the two countries, and the role played by multiple national science and technology agencies of both countries in promoting this partnership.   India and UK Institutions Sign Agreements for Collaboration in Crop Sciences  (Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s Interests) MoU signed between- Department of Biotechnology + Ministry of Science and Technology + Consortium of top UK research institutions   It is for- Establishment of a joint India-UK collaboration programme in crop science Aim- To enhance Collaborative research Promote knowledge exchange Support capacity building to develop resilience in food security   Importance- Collaboration will create opportunities for leading experts in the UK and India to come together to tackle global challenges in the areas ofà Food security + Crop science + Biotechnology Agreement foresees joint projects focusing on- Fundamental science underpinning yield enhancement Disease resistance and drought resistance Research into crop re-breeding Translation of fundamental research into sustainable agriculture practice Contemplates the establishment of a joint Indo-UK Plant Science Centre in India   GS-3 3rd Asia Ministerial Conference on Tiger Conservation (Topic: Conservation of Wild life) About – Three-day Asia Ministerial Conference on Tiger Conservation (April 2016);Third such conference on tiger conservation Participants- Attended by the representatives of four Tiger Range countries (TRCs) – Bhutan, Indonesia, Malaysia and Russia There are only 13 countries that have the pride of having tigers in the wild and tiger-bearing areas in the world Highlights- All TRCs share their good practices and success stories, thereby contributing towards the cause of conservation of the magnificent species and the national animal of India – Tiger Highlighted that the biggest threat to tiger conservation is poaching, due to the existing market and demand for tiger body parts and derivatives in other countries.   Solution- Need for a sustained effort from all Tiger Range Countries and other partners outside the government system Outcome- Conference will bring the desired will and momentum for tiger conservation at global level and have long-term ramifications in the future    Seismic Microzonation reports for Delhi and Kolkata (Topic: Disaster and Disaster Management) About- Union Minister for Science & Technology and Earth Sciences released Seismic microzonation reports for Delhi and Kolkata in New Delhi Help- To minimize the impact of earthquakes by – Proper assessment of Seismic Hazard Implementation of safe building construction codes, Adopting appropriate land-use planning Microzonation- Seismic microzonation is a process of identifying- Geological, Seismological, Hydrological and geotechnical site characteristics in a specific region Emphasis on- Impact of earthquake on the habitat Help- Design of safe structures to reduce loss of human life Why to use? - As prediction of most of the natural events, particularly the earthquakes, is not possible, but the resulting damage due to them can be minimized by taking proper measures with the help of Microzonation   Microzonation Process- Ambient noise survey, Multi-Channel Analysis of Surface Waves (MASW) survey, In-situ geotechnical testing, In-situ seismic measurements etc. were carried out After analysis of data sets different maps viz.- Peak Ground Acceleration (PGA), Spectral accelerations for different periods, Liquefaction potential, Predominant frequency, Amplification factor, Average shear wave velocity at 30 meters depth, Geology & geomorphology and projected Hazard Scenarios at GIS platform etc. have been prepared.   Study- It was seen that due to an earthquake in 1985 there was severe damage in Mexico city, though the earthquake source was located about 350 km away from the city. Normally it was believed that the impact of earthquake decreases as we move away from the earthquake epicenter, but that was not always found to be true. It was realized that putting a large region into a single seismic hazard zone is not a good idea, this and several other examples led to a new concept, called Microzonation.   Beneficiaries include- Disaster Mitigation & Management Authorities Urban Development Authorities Planning, Design & Construction Agencies Risk Assessment to existing life & Property Defense Installations Heavy Industry Public Utilities & Services   Classifiacation of Seismic Zones in India- Bureau of Indian Standards(BIS) classified India into 4 major groups- Zone 2 – Least active seismic zone Zone 3 – Moderate seismic zone Zone 4- High seismic zone Zone 5- Highest seismic zone In India no area is classified as Zone 1. National Capital Territory (NCT) Delhi is located in Seismic Zone 4 and Kolkata is placed at the border of Seismic Zone 3 and 4                                                                      Market Conference on Hybrid-Annuity Based PPP Model for Creation of Sewage Treatment Infrastructure (Topic: Conservation, environmental pollution and degradation, environmental impact assessment) Context- National Mission for Clean Ganga (NMCG) is organizing Market Conference on Hybrid-Annuity based Public Private Partnership (PPP) Model It is for- Creation of Sewage Treatment Infrastructure under Namami Gange Programme on 24th February, 2016 at New Delhi Aim- To sensitize the market of the upcoming hybrid-annuity based PPP model for sewage treatment and institutionalization of the Special Purpose Vehicle (SPV) for project execution through Transaction Advisors (TA). Highlights- Deliberations will take place on GoI initiatives on setting up of- Institutional + Financial model for municipal waste water treatment under Namami Gange program, Business models in sewerage sector Maintenance and monitoring of assets MLD gap Institutional framework and roadmap for NGRBA-SPV-TAs-Concessionaire Treated water recycling development and opportunities and international success stories on annuity/ hybrid annuity model in STP development and operation. NMCG- National Mission for Clean Ganga (NMCG) is the implementation wing of National Ganga River Basin Authority (NGRBA) Presently implementing various pollution abatement, aquatic resource conservation and institutional development projects under NGRBA in the five basin States on the main stem of the Ganga adopting basin-based holistic approach.   Finance Minister Presents Economic Survey 2015-16 (Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment) About- Economic Survey 2015-16 presented in the Parliament states that the benign price situation and comfortable level of external current account in the country makes it possible now for growth rates of 8 % or higher in the next couple of years. Highlights- Report portends growth rate in the range of 7 to 7.5 % in 2016-17. After 7.2% in 2014-15 and 7.6 per cent in 2015-16, such growth rate of over 7 per cent makes India the fastest growing major economy in the world. India’s contribution in the global economy has become much more valuable today as China is rebalancing. Survey further mentions that the recent growth revival in India is predominantly consumption driven. Survey, however, expresses a caution of weak global demand GDP Growth- In spite of challenges and lowers than projected GDP growth during 2015-16, the fiscal deficit target of 3.9 per cent of GDP seems achievable. This became possible as the Gross Tax Revenue (GTR) targets were achieved, due to improved tax buoyancy and prudent expenditure management, assisted by declining oil prices. Post Fourteenth Finance Commission (FFC) recommendations, equilibrium is sought to be achieved between higher capital expenditure, higher net resource transfers to States and higher gross tax revenues Notable highlights of the benign fiscal outcome in the current year till December 2015 included- Robust growth in indirect taxes Increased tax devolution to the states in line with the recommendations of the FFC Highest increase in capital expenditure in the last six years and decline in major subsidies.   Inflation- Wholesale price inflation had been in the negative territory for more than a year and the consumer price inflation has also declined to about half of what it used to be in earlier years. Astute policies and management of inflation by the government through buffer stocking, timely release of cereals and import of pulses had helped in keeping prices of essential commodities under check during 2015-16. Easing of inflation measures, the RBI had brought down the repo rate by 125 basic points (bps) from the beginning of 2015 to 6.75 per cent by the end of September 2015. Rationalize agricultural policies- Need to rationalize agricultural polices including subsidies by making them ‘input-crop and region-neutral’to improve productivity in agriculture Adoption of Quality/GM/Pest resistant seeds will be another pathway to improve the productivity in agriculture. Direct Benefit Transfer (DBT)mode for inputs like seeds and fertilizer can prevent leakage and diversions in the system and reach the targeted beneficiaries. Good performance on the front of Government’s initiatives towards achieving the overall goal of Financial Inclusion through- Pradhan Mantri Jandhan Yojana(PMJDY), Pradhan Mantri Suraksha  Bima Yojana(PMSBY), Pradhan Mantri  Jeevan Jyoti Bima Yojana(PMJJBY), Atal Pension Yojana(APY) Micro Units Development Refinance Agency (MUDRA) in the banking and insurance sectors Measures were taken to mobilize gold for productive purposes, through the Sovereign Gold Bond Scheme and the Gold Monetization Scheme. Industrial Growth- Good performance by the Industrial, Corporate and Infrastructure Sectors in the wake of various recent reform measures undertaken by the Government Growth in the freight carriage by Indian Railways, at Ports, the growth in the Civil Aviation Sector, Telecommunication Sector and National Highways Construction. Some reform measures which contributed to such growth include: Auctions successfully undertaken for allocation of coal and mines blocks. Improvements in Policy  for production sharing contracts under NELP and testing requirements along with  a Uniform Licensing and Open Acreage Policy etc., in the petroleum sector has been taken up. Tax-free infrastructure bonds have been allowed for rail, roads and irrigation programmes National Investment and Infrastructure Fund (NIIF) to extend equity support to infrastructure Non-Bank Financial Companies (NBFC). More open FDI policy has been adopted with FDI allowed for Defence sector up to 49%; Railways 100%; Insurance and Pension 49% etc. Apart from this, a number of sectors like construction, broadcasting, civil aviation, plantation, trading, private sector banking, satellite establishment and operation and credit information companies etc. have been liberalized.   Service Sector- Continues to be the key driver of India’s economic growth and it accelerated to 10.3% in 2014-15 from 7.8 % in the previous year and it is expected to be 9.2 % (constant prices) in 2015-16 as per the advanced estimates. This is due to lower growth in Public Administration, Defence and other Services. Rising trend in FDI equity inflows to the services sector in the first seven months of 2015-16 with FDI inflows growing by 74.7%. Survey points-out that at the end-September 2015, India’s external debt has remained in safe limits as shown by long term debt accounted for 82.2% of India’s total external debt, vis-à-vis 82.0% at end-March 2015. Proportion of short term debt to total external debt decreased from 18.0 % at end-March 2015 to 17.8 % at end-September 2015. External debt to GDP ratio of 23.7% and debt service ratio of 7.5% in 2014-15 are at comfortable levels. Social Infrastructure, Employment and Human Development- Government is committed to invest in bridging the skill gap. It also talks of technology for Efficient Delivery of Services. Report points out those more than 122 lakh toilets have been constructed in rural areas since the beginning of Swachh Bharat Mission (Gramin) for improving sanitation situation in rural India.   Quality of education- Need of quality education both the public and private sectors. Need for professionally qualified and trained teachers to improve educational outcomes. To strengthen the delivery of public health services and infrastructure facilities, both public investments and leveraging of private investments are necessary. To improve the efficiency in the delivery of services and to overcome the shortages in the skilled personnel in health sector policy interventions are felt needed. Climate Change and Sustainable Development- India had been an active participant and a signatory to the United Nations Framework Convention on Climate Change (UNFCCC) Agreement signed in December 2015 and to the Sustainable Development Goals (SDGs) agreement signed in September 2015. India stated its Intended Nationally Determined Contribution (INDC) goals for the renewable energy sector, mainly from solar and wind energy. Aim is to achieve a target of 60 GW of wind power as well as 100 GWs of solar power to be in the country installed by 2022.   India Ranks First in Milk Production, Accounting for 18.5 Per Cent of World Production  (Topic: Food processing and related industries in India- scope and significance, location, upstream and downstream requirements, supply chain management) Context- India ranks first in milk production, accounting for 18.5 per cent of world production Growth Scenario- An annual output of 146.3 million tones during 2014-15 as compared to 137.69 million toness during 2013-14 recording a growth of 6.26 per cent Food and Agriculture Organization (FAO) has reported a 3.1 per cent increase in world milk production from 765 million tonnes in 2013 to 789 million tonnes in 2014. Per capita availability of milk in India has increased from 176 grams per day in 1990-91 to 322 grams per day by 2014-15. It is more than the world average of 294 grams per day during 2013. Represents a sustained growth in availability of milk and milk products for the growing population. Dairying has become an important secondary source of income for millions of rural households engaged in agriculture. Success resulted from- Integrated  co-operative system of- Milk collection Transportation Processing and distribution Conversion of the same to milk powder and products, Minimize seasonal impact on suppliers and buyers Retail  distribution  of milk and milk products, Sharing of profits with the farmer, which are ploughed back to enhance productivity  and needs to be emulated by other farm produce/producers   Poultry segment- Government’s focus, besides framing suitable policies for enhancing commercial poultry production, is for strengthening the family poultry system, which addresses livelihood issues. Both egg and fish production has also registered an increasing trend over the years. Egg production was around 78.48 billion eggs in 2014-15, while poultry meat production was estimated at 3.04 MT. Fisheries constitute about 1 per cent of the GDP of the country and 5.08 per cent of agriculture GDP.   Railways Special Railways to Partner with State Governments for Operation of Tourist Circuit Trains  (Topic: Infrastructure- Energy, Ports, Roads, Airports, Railways etc) About- Indian Railways will be partnering with the State Governments for operating tourist circuit trains and exploring the possibility of a revenue sharing model   Highlights- Indian Railways have recently upgraded our National Rail Museum. Promotion of tourism through Railway museums and UNESCO world heritage Railways will be special focus. Highlighted that India’s rich biodiversity and wildlife is one of the mainstays of Incredible India campaign. Indian Railways initiated a project to target reduction in elephant collisions, especially in North Eastern states. To spread awareness about our National Animal, the Tiger, Indian Railways will offer complete packages including train journey, safaris and accommodation to cover the wildlife circuit comprising Kanha, Pench and Bandhavgarh.   Railway Proposes to Set Up ‘SRESTHA’- A R&D Organization (Topic: Infrastructure- Energy, Ports, Roads, Airports, Railways etc) About- Minister of Railways, while presenting the Railway Budget 2016-17 in Parliament announced to set up a R&D organization, a Special Railway Establishment for Strategic Technology & Holistic Advancement, ‘SRESTHA.’   RDSO – Focus only on day to day issues RDSO functioning will be made totally transparent with time bound results. SRESTHA – Drive long term research. Headed by an eminent scientist reporting directly to Chairman, Railway Board and would be staffed with scientists and a limited number of Railway experts. Highlights- Aekikaran – Consolidation of Holding Companies of Railways. Propose to examine the feasibility of bringing most of these companies under an umbrella of a holding company which would provide the necessary strength for leveraging the combined resources as also in providing the much needed flexibility in utilizing the strength of each of the subsidiaries Ensuring delivery of quality services to its customers, IR needs to be equipped with modern and cutting edge technology. Priority areas of IR, like- High Speed Rail, Heavy haul, Rolling stock Signalling To institutionalise and take forward such cooperation in key technology areas, the Government is working on a Foreign Rail Technology Cooperation Scheme (FRTCS).   Introduction of 30,000 Bio-Toilets in Trains (Topic: Infrastructure- Energy, Ports, Roads, Airports, Railways etc) Aim- To improve the cleanliness on stations and trains Highlights- Clean my Coach Service on Pan India basis is introduced, where a passenger can request cleaning of his/her coach/toilets on demand through SMS A1 and A classes of stations are ranked based on periodic third party audit and passenger feedback Setting up of waste segregation and recycling centres at A1 stations in a phased manner Portable bio toilets will be provided at all platforms of select stations to cater to the demand of senior citizens, persons with disabilities and women passengers Awareness campaigns- To improve cleanliness at select stations, station approach roads and adjacent colonies. Innovative means of providing and maintaining toilets through advertisement rights, CSR sponsorship, etc.   Transformation of Indian Railways through Avataran (Topic: Transformation in Indian Railways) About- To transform Indian Railways through seven Mission activities – Avataran. Mission 25 Tonne – Aim- To increase revenue by augmenting carrying capacity. To achieve this 10-20% freight loading will be done through 25-tonne axle-load wagons in 2016-17 and target movement of 70% of freight traffic on high axle load wagons by FY19-20 Mission Zero Accident- Comprises of two sub missions- Elimination of unmanned level crossings: Goal is eliminate all unmanned level crossings on Broad Gauge in the next 3-4 years through innovative financing mechanisms. Reduce deaths due to accidents and improve throughput of the network TCAS (Train Collision Avoidance System): An indigenous technology has been developed to equip 100% of the High Density Network with TCAS in the next 3 years. Prevent head on collisions and improve throughput by increasing average sectional speeds. Mission PACE (Procurement and Consumption Efficiency)- Aim- To improve our procurement and consumption practices to improve the quality of goods and services. Introduce a culture of optimum usage by adopting practices such as Vendor Managed Inventory, direct procurement of HSD, new procedures for identification and disposal of scrap. Comprehensive review of procurement and consumption of HSD will lead to saving more than Rs 1,500 crore in 2016-17. Mission Raftaar: Aim- Doubling of average speeds of freights trains and increasing the average speed of superfast mail/express trains by 25 kmph in the next 5 years. Loco hauled passenger trains will be replaced by DEMU/MEMU over the next five years. It will complement Mission 25 Tonneto increase throughput of the railway system.   Mission Hundred- Mission will commission at least a hundred sidings in the next 2 years. The current siding/ PFT policy would be revised to elicit greater private participation. An online portal will be operated for accepting and processing all new applications, along with decentralization of powers. Mission beyond book-keeping: Establish an accounting system where outcomes can be tracked to inputs. Transform IR as right accounting would determine right costing and hence right pricing and right outcomes.   Mission Capacity Utilisation: Proposes to prepare a blueprint for making full use of the huge new capacity that will be created through two Dedicated Freight Corridors between Delhi-Mumbai and Delhi-Kolkata scheduled to be commissioned by 2019   Sarathi Seva- To help old and Disabled Passengers   (Topic: Railways welfare schemes for vulnerable sections of the society, performance of schemes, protection and betterment of vulnerable sections) About- Sarathi Seva was introduced in Konkan Railway to help the old and disabled passengers requiring assistance at stations, service will be expanded at many more stations. Sarathi Seva- Existing services for enabling passengers to book battery operated cars, porter services, etc. on a paid basis in addition to the existing pick up and drop, and wheel chair services will be strengthened. Provide porters with new uniforms and train them in soft skills in line with the evolving image of Indian Railways, adopting modern technology yet traditional in its ethos of treating passengers with respect Indian Railways is working with insurance companies to offer optional travel insurance for rail journeys at the time of booking. Proposed to commence hourly booking of retiring rooms instead of the existing minimum of 12 hours to fulfil the unmet need of passengers. Retiring rooms will be handed over to IRCTC to ensure that these can be managed in a professional manner. Enhancing passenger comfort- Indian Railways will pilot availability of children’s menu items on trains, baby foods, hot milk and hot water would be made available on stations and changing boards for babies would be provided in train toilets Ensure higher carrying capacity and provision of new amenities including automatic doors, bar-code readers, bio-vacuum toilets, water-level indicators, accessible dustbins, ergonomic seating, improved aesthetics, vending machines, entertainment screens, LED lit boards for advertising, PA system and more. New SMART(SpeciallyModified Aesthetic Refreshing Travel) coaches would cater to emerging needs of our customers and also ensure lower unit cost of operations due to higher carrying capacity.   All Stations to be made Disabiled Friendly (Topic: Railways welfare schemes for vulnerable sections of the society, performance of schemes, protection and betterment of vulnerable sections) Pursuance of- Objectives of Accessible India Campaign Indian Railway will ensure that all stations under redevelopment are made disabled friendly. Highlights- At least one disabled friendly toilet in all platforms in A1 class stations will be built in the next financial year. One-time registration for the persons with disabilities for availing concessions while booking tickets online. Online booking of wheelchairs & Braille enabled new coaches were also introduced for the persons with disabilities. Increasing of quota of lower berths for senior citizens and women, middle bays reserved in coaches for women.   Railways to increase revenue through non-fare sources  (Topic: Rail revenues and services) About-Current revenue through non-fare sources is less than 5% and it will be increased to world average of 10% by next five years. Following initiatives will be taken to attain this- Station redevelopment: A major programme of station redevelopment has been initiated to monetize land and buildings through commercial exploitation of vacant land and space rights over station buildings. Monetizing land along tracks: Railways will lease out the land available adjacent to tracks to promote horticulture and tree plantation. Generate employment to underprivileged sections, augment food security and also prevent encroachment. Possibility of using these tracks for generating solar energy will also be exploited. Monetizing soft assets: Railways to monetize the data collected on passenger preferences, ticketing, commodity, train running on various services and operations. IRCTC also offers opportunities of taking of e-commerce activities on large number of hits that it receives. Advertising: Railways to use its vast physical infrastructure for commercial exploitation through advertisement. Special focus will be given to exploit extra potential of stations, trains and land adjacent to tracks. Overhaul of Parcel business: Railways to liberalize its current parcel policies to increase the non-fare revenue. Expand its service offerings especially to growing sectors such as e-commerce. Revenues from manufacturing activity: Railways to put focus to increase productivity and better manufacturing practices to become a meaningful player in the domestic and international markets. Aimed to generate annualized revenues of about Rs.4,000 crore by 2020.   E-Booking of Tickets on the Concessional Passes for Journalists to be Introduced  (Topic: e-governance in railways) About- Indian Railways intends to commence sale of tickets through hand held terminals for the benefit of the suburban and short distance travellers Enable- Deployment of multiple ‘Points of Sale’ with minimal infrastructure requirement. Intends initiating sale of platform tickets through ticket vending machines which would be made compatible with not only cash but also credit/debit cards. Highlights- To open the e-ticketing facility to foreign debit/credit cards for foreign tourists and NRIs in the next 3 months. E-booking of tickets on the concessional passes for journalists to be introduced. Proposed a new process for Cancellation of PRS tickets through the 139 helpline post verification using ‘One Time Password’ sent on registered phone number. Bar coded tickets, scanners and access control to be introduced on a pilot basis on major stations to tackle the menace of ticketless travel and ensure hassle free travel for passengers. CCTV coverage at tatkaal counters is being planned to improve services during morning Tatkaal hours. A system of third party periodic audits and certification of security features of the PRS website is being planned.   Other initiatives- ‘Vikalp’ (Alternative Train Accommodation System) scheme introduced in October 2015 will be expanded to provide choice of accommodation in specific trains to wait-listed passengers ‘Operation Five Minutes’introduced 1,780 Automatic Ticket Vending Machines, Mobile apps and GoIndia smartcard. GoIndia smartcard will enable cashless purchase of UTS and PRS tickets. Mobile apps introduced for purchasing of unreserved and platform tickets   AYUSH Systems in 5 Railway Hospitals (Topic: Agreement between various Ministries for betterment of services) About- Indian Railways will tie up with the Ministry of Health for ensuring an exchange between Railways hospitals and Government hospitals. Aim-Indian Railways will introduce ‘AYUSH’ systems in 5 Railway hospitals.   Highlights- Railway Ministry gang men will be provided with devices called ‘Rakshak’ which would be wireless enabled and will intimate them about approaching trains. Reduce the weight of the tools carried by them while patrolling on foot through value engineering. Setting up two chairs – One on Strategic Finance, research and policy development and another on geo-spatial technology for Indian Railways for promoting research in key policy areas. Indian Railways will open up the organisation to 100 students across Engineering and MBA schools for 2-6 months’ internships each year.  

Feb 28, 2016 Motivational Articles

Creative Guidance – Leadership : Strength of a Vision – Inspirational &amp; Educative Articles

Leadership - Strength of a Vision The human journey has been more about following than about anything else. Every generation awaits an extraordinary visionary; a man of strength, purpose and direction who can be followed. Leadership is the foundation of all human achievements. Most of what we have accomplished over the years would have been impossible without the necessary direction of visionary leaders. Most think that leadership is a behavioral quality possessed by few rare individuals who have been gifted with it. In truth, leadership is not a quality but a necessity. Ordinary individuals when they are driven by extraordinary vision and purpose, start exhibiting behavioral traits that can influence, inspire and lead which we collectively call Leadership. By definition, we all are leaders. Whether we use and display our leadership qualities or not depends on the vision and purpose we are trying to achieve. A Leader is simply defined by what he is trying to accomplish. It is almost impossible to develop leadership qualities without possessing a strong vision and a desire to accomplish something. The easiest and the simplest way to bring out the leader within you is by nurturing a vision; a vision that can become a life consuming purpose. Einstein, Darwin, Gandhi, Galileo and Hawking are considered as great leaders not because of their genetic trait of leadership or because of their unique ability to lead. They are leaders because they were able to nurture visions of far greater impact and purpose. Leadership is possible only through inspiration and influence; and how can you inspire when you yourself are not inspired by some grand vision. In fact, true leadership is simply an aftermath of destruction left behind by the force that is chasing a dream. Leadership is always destructive. It is positively destructive in a way that it destroys the weak desires and dreams of the ordinary so that it gave give birth to the vision and purpose of the extraordinary. Leadership is a force; it cannot create if it cannot destroy. As a leader, your vision and purpose should stand so tall that it should tower over all other petty desires and necessities. When you single mindedly move towards accomplishing your vision, you leave behind a path for others to follow. In essence, leadership is an art of inspiring without inspiring; leading without leading. A leader is not someone who urges you to follow; he is someone who makes it impossible for you not to follow, for he sees a vision far grander than you. “The articles are a copyright of The Ahamo Movement and IASBABA.” Read more such articles– Click Here

Feb 27, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 27th February, 2016

ArchivesIASbaba’s Daily Current Affairs – 27th February, 2016 ECONOMICS TOPIC:  General Studies 3 Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Government Budgeting.NOTE: This article is compilation of information from 5 different National Newspapers’ Economic Survey 2016-17: A snapshotBackground: Painting an optimistic picture of the economy despite the grim prospects for global growth, this year’s Economic Survey sees India getting on to the 8-10 per cent GDP growth trajectory over the next few years. To realise this potential Centre needs to address, three critical issues — the transition from socialism to “marketism”, which the Indian economy struggles with; expand investment in people (health and education); and sharpen the focus on agriculture. India recording GDP growth in excess of 7 per cent for the third straight year in a row in 2016-17.India grew 7.2 per cent in 2014-15 and 7.6 per cent (advance estimate) in 2015-16. There is still the promise of India due to accelerated structural reforms, competitive federalism (among) States and good economics becoming good politics all over IndiaSTATE OF THE ECONOMY FY17 GDP expected to be in the range of 7-7.75%. Current year's at 7.6% Stick to fiscal consolidation path But need to revisit medium-term fiscal policy framework Farm prices and trade policies need to account that India is a big market for the world Twin balance sheet problem - banking stress and that of the corporate sector hampering economyFISCAL DEFICIT 2016-17 expected to be challenging from fiscal point of view; time is right for a review of medium-term fiscal framework 2015-16 fiscal deficit, seen at 3.9 per cent of GDP, seems achievable Credibility and optimality argue for adhering to 3.5 per cent of GDP fiscal deficit targetPUBLIC FINANCE Remove tax incentives for small savings, as mostly the rich benefit from them Impose tax on gold since it is hoarded by the rich Rs 1-lakh-crore subsidy going to the rich from the government Fast-growth years for GDP have led to larger inequality in India; need for measures like wider property tax in the context of smart cities Only four per cent of Indians pay income tax; this has to rise to about 23 per centPRICES & MONETARY MANAGEMENT Benefits of low global oil prices transient El Niño effect on agriculture to continue for some more time Crop-wise yields in India compared to the world are low for rice, wheat and pulses Need to shift to demand-driven agri-extension services Food not the only reason for low transmission of rate cuts by RBIINFLATION CPI inflation seen around 4.5 to 5% in 2016/17 Low inflation has taken hold, confidence in price stability has improved Expect RBI to meet 5 percent inflation target by March 2017 Prospect of lower oil prices over medium term likely to dampen inflationary expectations Low inflation has taken hold, confidence in price stability has improved Slack in the private sector labor market and capacity underutilization in industry mean that higher public sector wages would not be transmitted across the rest of the economy Continuing moderation in oil prices, a return to normal monsoons, and persistent below-potential output also led to the Survey's conclusion that consumer price inflation would be between 4.5 and five per cent in 2016-17, well within the RBI's target.CURRENT ACCOUNT DEFICIT 2016/17 current account deficit seen around 1-1.5% of GDPCURRENCY Rupee's value must be fair, avoiding strengthening; fair value can be achieved through monetary relaxation India needs to prepare itself for a major currency readjustment in Asia in wake of a similar adjustment in China Gradual depreciation in rupee can be allowed if capital inflows are weakTAXES Proposes widening tax net from 5.5% of earning individuals to more than 20% Tax revenue expected to be higher than budgeted levels in FY15/16 Easiest way to widen the tax base would be not to raise exemption thresholds Favors review and phasing out of tax exemptionsBANKING & CORPORATE SECTOR Estimated capital requirement for banks likely around Rs 1.8 trillion by 2018/19 Corporate, bank balance sheets remain stretched, affecting prospects for reviving private investments Underlying stressed assets in corporate sector must be sold or rehabilitated Govt could sell off certain non financial companies to infuse capital in state-run banks Govt proposes to make available 700 bln rupees via budgetary allocations during current, succeeding years in banks Banks' gross non-performing advances (GNPA) as a proportion of gross advances increased to 5.1 per cent between March and September 2015, from 4.6 per cent. Restructured standard advances as a proportion of gross advances declined to 6.2 per cent from 6.4 per cent in the period, while the stressed advances to total gross advances ratio increased to 11.3 from 11.1. PSBs had the highest level of stressed assets (gross plus restructured) at 14 per cent of the total, followed by private sector banks (PVBs) at 4.6 per cent and foreign banks (FBs) at 3.4 per cent at end-September 2015. Net non-performing advances (NNPA) as a proportion of total net advances for all scheduled commercial banks increased to 2.8 per cent from March to September 2015, from 2.5 per cent. The contribution of five sub-sectors — mining, iron and steel, textiles, infrastructure and aviation — to the total of stressed advances was 53 per cent. Stressed advances in the aviation sector increased to 61 per cent in June 2015 from 58.9 per cent in March. That of the infrastructure sector increased to 24 per cent, from 22.9 per cent. The performance of these sectors and their impact on the asset quality of banks continue to be a cause for concern.Trade: The Survey also had particularly pointed recommendations about the direction of India's trade policy, saying "introspection is overdue" on issues including its continued support to farmers that are controversial at the World Trade Organization. The Survey concludes India should "resist calls to seek recourse in protectionist measures, especially in relation to items that could undermine the competitiveness of downstream firms". The Centre has recently imposed price controls on the import of steel, which auto firms have protested.Reforms inclined towards rich: Bounties for the Well-off The survey makes a case for unpopular reforms, such as bringing agricultural incomes in the tax net, rationalisation of fertiliser subsidies estimated at Rs. 75,000 crore (excluding arrears) and the withdrawal of tax benefits which benefit mainly the rich. Restricting the cooking gas subsidy to 10 cylinders from 12 at present, raising the levels of property tax and desisting from raising the income tax threshold. This needs to be done while taxes and duties on domestic and commercial LPG users are aligned Venturing into the politically sensitive issue of fertilizer subsidy, whose beneficiaries are ostensibly poor farmers, survey points to three forms of leakages and lacunae: black marketeering, inability of small farmers to derive full benefits, and inefficiency of fertilizer manufacture. The report identified seven areas — small savings schemes, kerosene, railways, electricity, LPG, gold and aviation turbine fuel –– where the benefits of subsidies accrue largely to the ‘well-off’, defined as the top 70 per cent of the population based on expenditure distribution as per National Sample Survey data. Reducing subsidies in these areas would do good not only from a fiscal and welfare perspective, but also from a political economy welfare perspective, and lend credibility to other market-oriented reforms “Strengthening the state by improving fiscal relations between the rich and the poor is one of the two main messages of the Budget,” Challenges ahead: Raising pay for government employees as per 7th pay commission Bail out banks without increasing borrowing. Challenge of creating good jobs is proving difficult Too many regulations have harmed job creation - worker-centric rule needed Competitive federalism is needed to reduce bottlenecks in clearances Transparency and simplicity needed in power rates Easier power supply to encourage 'Make in India'Disappointments: Failure to pass a goods and services tax, underperformance on disinvestment and privatization, Incomplete rationalization of subsidies Stressed balance sheets of banks and private companies.Need of the hour: Improved investments in education and health, where India fares the worst among BRICS nations and adequate attention to agriculture could realise the potential. In the wake of four seasons of weak rainfall and consequent adversity, agriculture has served a wake-up call, demanding attention from policy makers. In the unfinished agenda, the Goods and Services Tax, strategic disinvestment, de-stressing of the balance sheet of both banks and private companies, and the rationalisation of subsidies. Stretched corporate and bank balance sheets are affecting prospects for reviving private investments, and so the underlying stressed assets must be sold or rehabilitated. Aggressive disinvestment and subsidy reforms would have released resources for much-needed public capital expenditures to counter weak external demand and crowd-in private investments.The Survey examines the problem of "exit" - Chakravyuh Challenge of Economy: The Survey has likened the Indian economy in the 21st century to the 'Chakravyuh' legend of Mahabharata - the ability to enter but not exit - cautioning the country is facing adverse consequences due to the lack of a way out for failed ventures Just as a market economy requires unrestricted entry of new firms, new ideas and new technologies, it also requires an exit route so that resources are forced or enticed away from inefficient and unsustainable uses Stressed corporate and bank balance sheets were partly because it was difficult for capital to exit enterprises or investments that had turned unprofitable. As a consequence, India was littered with firms that were too small and unproductive, taking up scarce resources more efficiently allocated elsewhere. In addition to the proposed bankruptcy law, the Survey argues for independent sector regulators and ending resistance to privatization by sharing the resources freed up with affected employees. The underlying stressed assets in the corporate sector must be sold or rehabilitated. Future incentives for the private sector must be set right, to avoid a repetition.Decanalising urea imports: According to the Survey, this would increase the number of importers, allow greater freedom in import decision and allow supply to respond ‘flexibly and quickly’ to changes in demand. The Survey also recommends bringing urea under the nutrient-based subsidy programme, which would allow domestic producers to continue receiving fixed subsidies based on the nutritional content of their fertilizer.Spreading the JAM The Survey also recommends expanding the coverage for JAM (Jan Dhan – Aadhaar – Mobile) as in the case of the Direct Benefit Transfer scheme for LPG, since the Centre controls the fertilizer supply chain. However, the Survey points out that targeting the poor are difficult at the best of times. It therefore suggested a cap on the number of subsidized bags that each household could purchase, with biometric authentication at the point of sale.What is the difference between 2014-15 and 2016-17 economic survey? The 2014-15 Economic Survey had introduced the "JAM" acronym - standing for Jan-Dhan, Aadhaar and mobiles - to better target welfare spending. this year's Survey has given importance towards 'Spreading JAM Across the Economy' This year's Survey takes the idea further, saying that direct benefit transfers (DBT) in household liquid petroleum gas (LPG) cylinders had worked in reducing leakage - and arguing that because of close central control on spending the fertiliser subsidy should be the next target for such transfers, and that the fertilizer sector was overdue for reform. The 2015-16 survey, by contrast, emphasizes the need for “a recalibration of expectations” and making “conditional” assessments of the economy’s performance over the coming year. The main reason for this is “an unusually challenging and weak external environment”. But external factors apart, there is also an admission of internal political failure to push reforms: “Approval for the game-changing GST bills has proved elusive so far; the disinvestment programme fell short of targets, including that of achieving strategic sales; and the next stage of subsidy rationalization is a work-in-progress”. Way ahead A clear strategy on disinvestment extending to sale of majority government equity and Commitment to credible fiscal consolidation is what investors will primarily look for. But beyond the budget, the government’s efforts to get at least two important legislation — those relating to the GST and a comprehensive bankruptcy code (enabling businesses to shut as easily as to start) — through Parliament would also matter. And that requires creating the right political environment, for which the responsibility lies more with the party in power. India’s macro economy is robust and it is likely to be the fastest growing major economy in the world in 2016. For an economy where exports have declined due to weak global demand and private investment remains weak, India’s economy is performing remarkably well The Survey said that the government’s initiatives including the new bankruptcy law, rehabilitation of stalled projects, proposed changes to the Prevention of Corruption Act as well as the expansion of the direct benefit scheme holds the promise of providing a significant boost to long-run efficiency and growth. The Survey reckons that the 3.9 per cent fiscal deficit target for 2015-16 is achievable. It notes that the time is ripe for a review of the medium-term fiscal framework. The Survey stops short of recommending whether or not the government should deviate from its set fiscal goals. It says there are very good arguments for a strategy of “aggressive fiscal consolidation” as well as a strategy of “moderate consolidation”.Fiscal consolidation: While making arguments both for and against the current path of fiscal consolidation, the Survey seemed to argue overall for a less stringent fiscal consolidation path The Survey concludes that even a gradual recovery of nominal growth - which, thanks to deflationary pressure has been lower than expected, driving the debt-to-GDP ratio upward - would be sufficient in any case to deal with the debt problem it had cited as the main reason for sticking to the current fiscal consolidation path. In one of its more specific recommendations, the Survey suggested higher property taxes, which it said would “put sand in the wheels of property speculation.” Smart cities require smart public finance, the Survey noted, and sound property taxation is vital to India’s urban future. Connecting the dots : Strengthening the state by improving fiscal relations between the rich and the poor is one of the two main messages of the Budget,” Comment. MUST READWhat it means to be ‘national’HinduRelated Articles:http://iasbaba.com/2016/02/iasbabas-daily-current-affairs-25th-february-2016/http://iasbaba.com/2016/02/iasbabas-tlp-2016-24th-february-upsc-mains-gs-questions-hot-synopsis/Bolivia’s Morales transformationHindu The Quota Rush- Dominant castes demanding reservation erodes this limited, dwindling entitlement.Indian ExpressFor detailed analysis on ‘Reservation’, refer the below linkReservation: Why Jats want a quota?Reservation : boon or bane? An opportunity to reform fertiliser sector- Enabling direct transfer of subsidy will help the fisc and farmers, and enhance soil health as wellBusiness Line Do political parties matter anymore? - In the era of social media, parties are being de-emphasised in favour of personalities. This trend will be a game changerBusiness Line