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IASbaba’s Daily Current Affairs 22nd Sep, 2017

IASbaba’s Daily Current Affairs – 22nd Sep 2017 Archives INTERNATIONAL TOPIC: General Studies 2: India and its International relations. 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. India- Afghanistan ties Background: Afghanistan, counterterrorism and defence ties are expected to be the prime issues on the table during U.S. Defence Secretary James Mattis’s visit to India next week. President Donald Trump announced the latest U.S. policy on Afghanistan on August 21. Mr. Trump’s policy envisages: more pressure on Pakistan. No early U.S. withdrawal from Afghanistan. Robust military action on counterterrorism. A greater role for India. Change in US's stance: It is for the first time that a U.S. President has been publicly so critical of Pakistan. In 2009, President Barack Obama had spoken of Pakistan’s lack of action, but not so strongly and harshly as his successor. Sharp words on Pakistan have been said at different levels by earlier U.S. administrations too. They were also codified in the form of conditions in various assistance laws, including the Kerry-Lugar-Berman Bill. The U.S. strategy differs from the past in terms of addressing concerns regarding Pakistan’s role in Afghanistan, particularly in view of a shift in Pakistan’s strategic priority towards China. India-Afghanistan ties: Indo-Afghan relations are unique. Just after Independence, on January 4, 1950, India signed a Treaty of Friendship with Afghanistan which also permitted opening of consulates in each other’s country. More recently, in October 2011, India was the first country Afghanistan signed a strategic partnership agreement with. The basic tenets of India’s aims, policy and approach towards Afghanistan in respect of bilateral and regional cooperation remain unchanged. India has always wanted a democratic, stable and strong Afghanistan able to decide its own future. India is in favour of a reconciliation process which has overall Afghan support and is based on internationally accepted redlines. India supports the Afghan quest for peace and reconciliation. India has a close strategic partnership with Afghanistan covering a broad spectrum of areas which include political, security, trade and economic cooperation as well as capacity development. India’s assistance in the defence sector has been modest and based on specific requests by the government of Afghanistan. The cumulative level of committed Indian assistance to Afghanistan amounts to $2 billion. New Delhi is always ready for more intensive bilateral relations. It has been at the forefront in respect of assistance for the reconstruction of Afghanistan and can be expected to do more in different sectors. Perception for India in Afghanistan: Surveys conducted by various Afghan and foreign news agencies over the years show that the Afghan people ranked Indian assistance as the most suitable because of the positive role India played in the development programme of Afghanistan. Furthermore, India is considered as non-threatening with its democratic traditions upheld as a model. The Afghans also appreciate that India had never interfered in their internal affairs. What needs to be done? Speedy augmentation, training and supply of equipment for the Afghan National Security Forces is important to enable Afghanistan to protect its interests and maintain peace in the country. The Afghans want more help, for instance, at present for their air force. India could assist Afghanistan in training as per their requirement and supplying much-needed spare parts and such equipment as is possible without deployment of Indian troops in Afghanistan. Asia is a region of energy and resources stretching from the Persian Gulf to the Caspian Sea and Central Asia to Siberia and Russia’s Far East. The energy basket needs to be exploited for the benefit of Afghanistan and the surrounding region. The Turkmenistan-Afghanistan-Pakistan-India pipeline is one example. SAARC (South Asian Association for Regional Cooperation) and SCO (Shanghai Cooperation Organisation) should help in encouraging regional economic cooperation between Afghanistan and its neighbours. Expeditious action on completion of the Chabahar port will help in increasing Afghanistan’s contacts with India and the outside world. Ensuring there is no outside interference: It is essential that there is no outside interference in Afghanistan. To enable this, the infrastructure of terrorism has to be dismantled. It is important to deny sanctuary and support to the Taliban’s Quetta Shura and the Haqqani network, as terrorism and insurgency cannot end without action taken against them. For any effective counterterrorism policy, all major terrorist groups operating in the area should be considered a single group. President Trump has stated in his policy statement that “Pakistan gives safe haven to agents of chaos, violence and terror”. The elimination of terror outfits will bring peace to Afghanistan. It is also imperative to redouble counter-narcotics efforts as Afghanistan remains the world’s largest producer of opium accounting for 90% of the world’s supply. Success in this field will have a positive effect on its neighbours. For regional security there must be closer involvement of regional powers in international efforts to ensure non-interference and a stable Afghanistan; this also requires involvement of the Central Asian Republics, which border Afghanistan. It is important for India to coordinate its efforts with those of Russia and Iran to ensure success. Conclusion: The root cause of the Afghan problem has been clearly stated in President Trump’s policy statement of August 21 and also mentioned in his address to the UN General Assembly on September 19. Now Afghanistan, and the region, await to see how it is implemented. Connecting the dots: India and Afghanistan share a unique relationship. Comment. Also, in the light of latest S. policy on Afghanistan, discuss why India needs to strengthen its role in Afghanistan and how it can be done. 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 fora- their structure, mandate Reforming United Nations Background: The Trump administration is leading a high-profile effort this year for UN reforms. In his remarks at a UN “Management, Security and Development” meeting convened by UN secretary general António Guterres, the US President said that “in recent years, the UN has not reached its full potential due to bureaucracy and mismanagement”. Trump had also earlier accused the UN of causing problems than solving them. “When do you see the UN solving problems? They don’t. They cause problems,” he said. “So, if it lives up to the potential, it’s a great thing. And if it doesn’t, it’s a waste of time and money.” Reforming the UN is big on the Trump administration’s agenda and this reforms agenda is largely based on two principles: sovereignty and accountability. The principle of sovereignty: In his main speech to the UN General Assembly, Trump underscored the centrality of sovereign states which worked for the betterment of their citizens. Trump’s vision is anchored in his “America First” approach with national sovereignty as the main pillar of the internal system. The principle of accountability: The US is also keen that the management of the UN becomes more accountable and transparent as it remains the largest contributor to the UN budget, in-line with its position as the world’s largest economy. It pays 25% of the UN’s regular operating budget and over 28% of the separate peacekeeping budget. The Trump administration has been critical of the UN’s overreliance on the US and wants a more equitable sharing of burden. It has been instrumental in the $600-million cut to the UN peacekeeping budget this year. Challenge: The challenge remains of how to operationalize these reforms. The UN is structured in such a way that the decision-making process is distributed among a wide range of countries and constituencies with often competing and contradictory views and interests. Russia and China, for example, did not attend the UN meeting on reforms. India's stand: India has suggested that the UN reforms need to be “broad-based and all-encompassing” and the changes should not be restricted to its secretariat only. India’s permanent representative to the UN, Syed Akbaruddin, has made it clear that reforms cannot sidestep issues related to the governance of UN bodies. India has extended its support to Trump’s efforts at UN reforms, saying it should include the expansion of the world body’s permanent and non-permanent members to keep pace with the changed times. Since the end of the Cold War, India has been spearheading a move for reforms at the UN to make the world body more representative of the changing global realities while enhancing its credibility and effectiveness. New Delhi has been concerned about the post-Cold War international acceptance of the UN’s questionable “right to intervene” where it believed it to be necessary, allowing the UN to act with little debate. India- Largest contributor to the UN peacekeeping operations: India remains one of the largest contributors to the UN peacekeeping operations, providing almost 200,000 troops in nearly 50 of the 71 peacekeeping missions mandated over the past six decades. The nature of the military operations increased both in number and complexity over an extremely short timescale. Additionally, the UN peacekeepers were deployed to environments in which the belligerent parties were not entirely on board with the deployment, thus seriously threatening the safety of the troops under the UN flag. India has repeatedly underlined the dangers inherent in such a rapid transformation from traditional UN missions to these new operations. Inadequate efforts towards reform: Since the cessation of the Cold War there have been attempts to reform the international legal system to reflect the rights of the individual over and above those of the state. But India, along with other largely non-Western nations, has remained sceptical of these attempts at reforms, believing that any such reforms would afford the privileged few with the means to intervene, the moral justification to do so. Therefore, the Trump administration’s focus on “sovereignty” as the defining feature of UN reforms will be welcomed by New Delhi. Conclusion: As India continues to expend its diplomatic capital on finding a seat at the UN Security Council, it will also have to articulate new ways of how the UN can be made more effective and efficient. There is a need to create a new balance between India’s pursuit of its narrow national interest and its responsibility as a rising power to maintain global peace and stability. Connecting the dots: The UN reforms are long overdue. With India aspiring to be a regional power, its time the diplomatic capital is expended to see that the UN is made more efficient and effective. Discuss. MUST READ The Sardar Sarovar dam- Boon or bane The Hindu Turn the page to a new chapter The Hindu The missing jobs Indian Express The land of soma Indian Express GM crops, a failure to heed scientific evidence Livemint The need for reforms in healthcare finance Livemint Mollycoddled by anti-dumping duties Business Line

MindMaps

IASbaba’s MINDMAP : Issue - Economic Growth and Social Progress

IASbaba’s MINDMAP : Issue - Economic Growth and Social Progress Archives NOTE – Instructions to download Mind Maps/Images Right Click on the image and ‘Open in a new tab’ Remove/Delete the resolution part from the URl. Eg. “-1024×869” and Press Enter/Load Again Afterwards the URL will look something like this – “iasbaba.com/..../.../..-IASbaba.jpg” Right Click and Save As/Download (You’ll get the maximum resolution)

Daily Prelims CA Quiz

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 48]

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 48] Archives Q.1) Consider the following statements about INS Kalvari It is a diesel-electric attack submarine It is a part of Project 75 of Indian Navy It is built in association with Russia Select the correct statements 1 and 2 2 and 3 1 and 3 All of the above Q.2) Consider the following statements about Peer-to-peer lending (P2P) in India All peer-to-peer lending (P2P) platforms will be regulated by the SEBI All peer-to-peer lending (P2P) platforms will be treated as non-banking financial companies (NBFCs) Select the correct statements 1 Only 2 Only Both 1 and 2 Neither 1 nor 2 Q.3) Rooppur Nuclear Power Plant is located in Sri Lanka Bangladesh Myanmar Afghanistan Q.4) Joint Comprehensive Plan of Action refers to which of the following The Chilcot Report India-Iran Nuclear Deal The Heart of Asia - Istanbul Process None of the above Q.5) Which of the following statements is/are correct? Near-Earth Objects (NEOs) are NEAs (near-Earth asteroids) and NECs (near-Earth comets) Spacewatch and Pan-STARRS are asteroid survey projects of NASA’s Near Earth Object Observations Program Select the correct statements 1 Only 2 Only Both 1 and 2 Neither 1 nor 2 To Download the Solution - Click here All The Best  IASbaba

IASbaba’s Daily Current Affairs 21st Sep, 2017

IASbaba’s Daily Current Affairs – 21st Sep 2017 Archives NATIONAL TOPIC: General Studies 2 Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Reforming fuel prices Background: The sharp increase in petrol and diesel prices has caused furore. Prices of these fuels in India had increased due to a sharp rise in their international prices. When the price of crude oil has halved since mid-2014, critics ask, why does petrol and diesel today cost almost the same as in mid-2014. They point out that when the crude oil rout was underway, the governments, central and State, instead of passing on the benefit to consumers, chose to pocket most of the gains through regular hikes in excise duty and VAT. And now, despite rise in prices, the Government is holding on to these high taxes instead of cutting them and giving relief to consumers. The consumer price of oil remains the same as it was when the crude price was twice as high. Fundamental issues: Pricing mechanism flaw In India, the prices of petrol and diesel are not determined by the actual costs incurred by refiners on crude oil sourcing, refining and marketing and allowing for profits. Rather, a formula — trade parity price (TPP) — is the starting point for pricing these products. The TPP is determined based on prices for these products prevailing in the international market assuming that 80 per cent of the petrol and diesel is imported and 20 per cent is exported. This legacy pricing mechanism is meant to protect the margins of the public-sector oil refiners — Indian Oil, HPCL and BPCL. It probably made some sense in the earlier days when petrol and diesel pricing were controlled, and the oil refiners suffered huge under-recoveries due to selling below the market price. Trade Parity Pricing also gives unwarranted benefits to private sector refiners such as Reliance Industries and Essar Oil. These refiners get to sell their petrol and diesel at rates close to that of the PSU refiners in the domestic market. This, despite the superior refineries and crude sourcing abilities of private sector refiners that give them the leeway of pricing petrol and diesel competitively. Increased competition among PSU refiners will also encourage private refiners to price their products more competitively. Way ahead: With the prices of these products decontrolled — petrol in 2010 and diesel in October 2014 — and made market-linked, the PSU oil companies suffer no more under-recoveries on this count. So, continuing with the TPP to offer protection to PSU refiners no longer seems justified. There is a need to move to a pricing model that factors costs of refiners plus margins. These refiners will likely have different cost structures, based on their crude oil sourcing, and refining capacities and operational efficiencies. They should be encouraged to price their products independently and transparently based on market principles. Truly ‘dynamic’ fuel pricing not only means more frequent resets, but it should also translate into also true competition among fuel retailers, both public and private, based on cost efficiencies and free market pricing, to give customers more choice. Also, there is an urgent need for an empowered, independent petroleum regulator to enforce price competition in the sector. Only then can the product pricing reforms be said to be complete. High taxes: The sale price of oil is as high as it was when the crude price was twice as high. During that time, the government used to subsidise consumers; the government, OMCs and upstream public sector oil companies were bearing the losses. The level of under-recoveries (the difference between sales realisation and cost of supply — which is the subsidy to the consumers) over 2002-2003 to 2012-2013 was Rs 25,000 crore for petrol users and Rs 3,38,000 crore for diesel users. In any case, increase in the cost of diesel or petrol does not increase the revenue of the central government as the excise duty is specific, that is, it remains at the same level in rupee terms. Excise rate on diesel is Rs 17.33 per litre and on petrol it is Rs 21.48 per litre. Way ahead: The excise duty rates can be adjusted and be made equal for both diesel and petrol. This can be done in a way that does not change the excise duty revenue of the central government. It will increase the price of diesel by two per cent and reduce the price of petrol by six per cent. The benefits of doing this will be reduction in distortion, reduced demand for diesel, a fall in demand for diesel-driven vehicles, reduced air pollution, a fall in carcinogenic emissions and a decline in diesel imports. The sale prices of diesel and petrol have increased because of the very high VAT rates imposed by the states. These vary from state to state. Since the VAT rates are in percentage terms, whenever the cost of diesel or petrol increases, revenues of states go up. Thus, the states have a scope to reduce their VAT rates so that sale price of petrol and diesel can be moderated. Ideally, all states should have a uniform GST rate for diesel and petrol. The states insist on keeping diesel and petrol out of GST as they would suffer a huge reduction in their revenues — the tax on diesel and petrol constitutes the bulk of the revenues of many states. A mechanism needs to be developed to get the states to agree on the GST for petroleum products. Then the prices of diesel and petrol will come down dramatically. Even if gradual, shift of these products to the GST regime is imperative to provide meaningful relief to consumers. The resultant lower prices of petrol and diesel can have a multiplier effect on economic growth. Besides, it can solve problems being faced by oil companies on stranded input tax credit and higher costs arising from these two tax regimes not talking to each other. Conclusion: The Government must explore innovative ways of providing relief to consumers and protecting its pocket at the same time. It needs to rise up to the challenge. Connecting the dots: What are the issues regarding fuel pricing? How is the price mechanism of petrol, diesel still flawed and what changes must be brought to tackle the challenge of price rise? ECONOMY TOPIC: General Studies 3 Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment Inclusive growth and issues arising from it Adopting service-based model in tax administration Background: While tax administration has seen some paradigm shifts both in the domain of direct and indirect taxes, the taxpayer still seems to be wanting for greater certainty and fairness in the levy, assessment and collection of taxes. This is where an internationally recognised concept such as taxpayer rights holds well even in the Indian context. Ensuring trust between tax collector and taxpayer: The Central government has development strategies in the form of campaigns like ‘Make in India’ and ‘Startup India’. The recent introduction of the Goods and Services Tax (GST), which is the most significant overhaul of the taxation system in India ever, aims to achieve a unified market across the nation for the first time. The intent is to transform India into a manufacturing, investment and research and development hub and consequentially, there would also be an increase in revenue generation. In the light of such economic aspirations, a fair balance between taxpayer rights and obligations will only ensure a higher degree of trust between the tax collector and taxpayer, thus leading to a higher tax yield. Tax disputes: India has seen key tax disputes ever since a similar growth-oriented road map was adopted by the government in the early 1990s. For instance, in order to attract investments, the government signed Double Taxation Avoidance Agreements (DTAAs) with states like Singapore and Cyprus on similar treaty terms as the India-Mauritius DTAA signed in 1983. These agreements proved to be detrimental in the long run for India. Multiple disputes relating to capital gains surfaced due to exploitation of legal loopholes in these DTAAs. Another example is of ‘transfer pricing’ mechanism (the rules and methods for pricing transactions between enterprises under common ownership or control), where there was little clarity with respect to international transactions between associated enterprises before April 2001. Even after the introduction of a dedicated transfer pricing segment in the Income Tax Act, the chaos could not be curtailed as the determination of arm’s length price (the price of such international transactions in open market conditions) would almost always be a contentious exercise. After the debacle the government had to face when it lost to Vodafone on a capital gains dispute in the Supreme Court, retrospective amendments were made to the Income Tax Act to supersede the adverse judgment of the Supreme Court in 2012, which were not limited in effect to only Vodafone but several such disputes relating to taxation of capital gains and deemed income of numerous MNCs having their interest or investments in India, directly or indirectly. Issues with recently introduced reforms: The GAAR provisions have been made effective in India from April 1, 2017, and they can be considered as the latest chapter on the mismatch between taxpayer rights and obligations. Some major concerns with respect to taxpayer rights are left grossly unaddressed. A major example is the revocation of ‘presumption of innocence’ of the taxpayers. It is now a burden ab initio on these business entities to prove that their tax mitigation techniques do not qualify as ‘impermissible avoidance arrangements’. This goes against the fundamental principle of ‘innocent unless proven guilty’. With dual GST, the path ahead is not simple. For example, the GST Network will process billions of invoices every month, with its concomitant economic and fiscal impacts of technical glitches and other such situations. These snags will impact traders with genuine transactions, as the processing of their tax collections, input tax credit claims and tax refunds might get affected. A precedent is the GST in Malaysia which was implemented in 2015: cash crunch woes due to the delayed refunds were among the prominent grievances of the trading community. Service-based strategies: The government has adopted a constructive approach, aiming to improve tax administration and as a result ensuring better tax compliance. The recommendations of the Tax Administration Reform Committee, submitted to the Finance Ministry in 2014, tried to reintroduce a fair balance between the rights and obligations of taxpayers. Several of these recommendations, such as improvement in taxpayers’ service, enhanced use of information and communication technology, exchange of information with other agencies, expansion of tax base, compliance management, etc. have either been accepted or implemented to ensure a better relation between the taxpayer and the tax collector. Shift towards service-based strategies: Tax administrators in India have for long implemented enforcement-based strategies and it is only in recent years that there has been a shift in stance to service-based strategies. Introduction of a citizen’s charter in both direct and indirect tax statutes of India. It helps in enforcing existing rights. India has also renegotiated the much-abused provisions in some of its DTAAs, namely with Switzerland, Mauritius, Cyprus and Singapore. Capital gains-related issues and exchange of information on taxation matters have been better addressed in these amended agreements. Conclusion: Taking everything into account, there is more awareness on taxpayers’ obligations and rights. While attempts are there to increase the rights and to provide better service for genuine taxpayers, the taxpayers who deliberately abuse tax provisions should not expect much leniency. A quest for balance between the rights and obligations of a taxpayer must be achieved. Shifting tax administration from an enforcement to a service-based model will lead to higher yields Connecting the dots: With major reforms in tax administration like GST an GAAR in process its time India shifts towards a service-based model in tax administration. What benefits such a shift will yield. Discuss. MUST READ States of the opposition The Hindu A time of strategic partnership The Hindu The new technology of trust The Hindu The business of learning higher education Indian Express Losing the way with words Indian Express Behind the 100 percent swayamsevak Indian Express Towards a better economic curriculum Livemint Is FDI the new engine of growth? Livemint A PPP approach to transform healthcare Business Line Horticulture woes Business Line Revisiting the strategy in the Indo-Pacific Business Line

Daily Prelims CA Quiz

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 47]

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 47] Archives Q.1) Consider the following statements about Kinnal Craft It is a traditional wooden craft local from Odisha It has been granted Geographical Indication Select the correct statements 1 Only 2 Only Both 1 and 2 Neither 1 nor 2 Q.2) Foldscope is a It gives pictures the appearance of solid forms, as seen in nature An instrument for viewing the interior of the eye, particularly the retina An instrument for observing or exhibiting fluorescence None of the above. Q.3) Consider the following statements about Brahmaputra Biodiversity and Biology Boat (B4) The first laboratory under the Brahmaputra Biodiversity Biology Boat (B4) initiative will cover the state of Assam It will place a barge equipped with laboratories to analyse soil, plants, microbes and water at different points along the river to generate new knowledge for multiple agencies involved in river management Select the correct statements 1 Only 2 Only Both 1 and 2 Neither 1 nor 2 Q.4) Which of the following statements about 'qubits' is/are correct? It can exist in both '0' and '1' states at the same time It is an arrangement of four bits It is the fundamental building block of a quantum computer Select the correct statements 1 and 2 2 and 3 1 and 3 All of the above Q.5) The ‘Golden Triangle’ of South-East Asia refers to The shallow seas near Straits of Malacca where high-density fishing is done An extensive opium producing area An area infested with insurgency, terrorism and trafficking An area prone to maximum cyclone and Tsunami hits To Download the Solution - Click here All The Best  IASbaba

AIR

All India Radio (AIR) : Centre’s Approval on Interest Subsidy to Farmers

Centre’s Approval on Interest Subsidy to Farmers ARCHIVES Search 14th June 2017 http://www.newsonair.com/Main_Audio_Bulletins_Search.aspx TOPIC: General Studies 2 Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Structure, organization and functioning of the Executive In news: Union cabinet approved the total expenditure of Rs. 20399 crore for current financial year for the interest subsidies scheme on short term crop loans. This is significant in the backdrop where there is demand for farm loan waivers is growing with UP and Maharashtra farm loan waivers already being announced. It is expected that decision will lessen the hardship of the farmers. From 2006-07, the interest subvention scheme is in operation. As against the interest rate on certain crop loans, the government says that farmers will get short term credit upto Rs. 3 lakhs at 4% for those who are paying their loan on time. Similarly, small and marginal farmers who borrow at 9 per cent for the post harvest storage of their produce will get an interest subvention of 2 per cent, bringing down the interest burden to 7% per annum. The farmers who have to sell their produce immediately after the harvest in distress because they can’t store it, now they can get subsidised loan to keep their produce in warehouse for six months and sell when market prices are high. In an event of natural calamities such as drought, flood, the banks will restructure the loan. For this, the interest subvention of 2% will be allowed then. This will send the message that central government is keen to solve farmer issues. Catch 22 situation Farmers get in a bad situation when there is a bumper crop and not getting prices which they should get. They also get into bad situation when there is loss in crop. So some people misuse the interest subvention scheme and other segment which needs these kind of interest subvention is deprived of it. If people are misusing subsidised credit, lending on higher amount of interest rate, there should be a check. There should be provision at local level to keep a check on that kind of mechanism. If this becomes a regular phenomenon then it leads to indiscipline. Also it leads to disruption in whole state financial system and banking system and further there wouldn’t be much scope for operating properly and wouldn’t be able to give loans to farmers. What should be done? If only when there is extremely distressing situation that such farm loan waivers should be carried out. The message shouldn’t go that if you don’t pay till a certain period, it will be waived off at some point of time, especially during election. The interest rate at which farmers borrow is adequate because if they have to borrow from private money lender they have to pay 30-40%. So as compared to that, they are getting highly subsidised credit. However, the farmers are not concerned with interest rate or institution of credit but that it should be timely available. Rise in interest subsidies In the last two years, interest subsidy scheme has got doubled and now it is 20000 + crore in 2017-18. This is not a big change as every year the credit provided to farmer is increasing so proportionally the government also gives interest subvention. The farm loan credit has increased from 9 lakh core to 10 lakh crore. Farmers need this credit for investment in farms. And also at the same time agri business like input dealers and traders also need support as they are also part of agriculture. Conclusion The overall agriculture credit flow- direct and indirect must improve significantly to accelerate the agriculture. The farmers who are indebted to private traders and commission agents, they will continue to be in debt traps and would never be able to invest on their own. Thus credit support to them should be also provided. For the farm loan waiver which is undertaken by any state government, the central government has made clear that if any state wants to go beyond any interest subvention scheme, they will take their burden on their own books. Farm crisis affects our overall productivity growth- agricultural as well as economic growth. The central government must discuss with the state government when such decisions are taken. The premium on crop insurance is shared by both centre and state although it is a central government scheme. So if there are any farm loan waivers, even they can have to be shared, depending upon the level of distress and amount of loans waived. Also, there is a need for national policy which will help farmers in longer term perspective than resort to short term measure that government is forced to take. The real relief to farmers can only come through systematic structural reforms in the sector, focussed on achieving greater incomes especially for the small and the marginal farmers. Connecting the dots: How are farm loan waivers affecting the economy of a nation? Critically analyse steps to be taken to lower farm distress.

IASbaba’s Daily Current Affairs 20th Sep, 2017

IASbaba’s Daily Current Affairs – 20th Sep 2017 Archives HEALTH/NATIONAL TOPIC: General Studies 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Issues relating to development and management of Social Sector/Services relating to Health Ascertaining quality healthcare Background: The death of children in the recent Gorakhpur tragedy has drawn significant attention towards the state of public health institutions in Uttar Pradesh (UP). An analysis shows that within the state, the public health infrastructure is far worse than Gorakhpur in most districts. The disease in the public health system of UP is much worse than symptoms like Gorakhpur reveal. Misallocation of resources- Case Study: In terms of CHCs, UP has a suspicious surplus of 190% CHCs compared to what is required. The data shows that most of these CHCs were constructed in 2014 and 2015. These CHCs have a severe shortage of human resources and basic infrastructure. Less than half these CHCs have a functioning X-ray machine. Fundamentally, this suggests gross misallocation of resources and wastage of public funds. Shortage of human resource and basic infrastrucutre: There is a drastic shortage of human resources and basic infrastructure required to run public health institutions effectively. The data from the government’s Rural Health Statistics—2016 shows that there is an overall 84% shortage of specialists, 77% shortage of lab technicians and 89% shortage of radiographers in the CHCs of UP. There are similar shortages in SCs and PHCs in the state as well. Almost 91% of the PHCs do not have a lady doctor on duty and 60% do not have a functional operation theatre. Many of the PHCs and CHCs do not have regular supply of drugs for common ailments. High incidence of diseases like diarrhoea raises concern about the ability of the public health institutions to treat common ailments such as diarrhoea. Lowest ranking states: UP, Bihar, and Jharkhand are the lowest ranked states in terms of overall quantity and quality of public health infrastructure in India. The worst performing districts of Chhattisgarh, which is ranked second among the 21 big states, are comparable to the best performing districts of UP, Bihar and Jharkhand. This disparity across states might have several underlying causes but it also reflects systematic neglect of public health in some states. UP’s per capita public spending on healthcare in 2015-16 was less than half of Chhattisgarh’s. Moreover, within UP, some districts such as Kushinagar have hardly any rural health facilities at all. Citizens probably need to travel to nearby districts for most basic healthcare. Top ranking states: In the overall ranking, the top 5 states are Jammu and Kashmir, Chhattisgarh, Gujarat, Karnataka and Rajasthan, while the worst six states are Bihar, Jharkhand, UP, West Bengal, Odisha and Haryana. While Gujarat has relatively lesser quantity of public health infrastructure than Kerala, it has significantly higher quality as measured by availability of doctors, nurses, supply of drugs, etc. This makes the overall condition of public health infrastructure of Gujarat superior to Kerala. Similarly, Delhi has more public health infrastructure than most states, but the relative quality is poorer than several large states. Governance reforms: The long-term quality of local public health infrastructure will be fundamentally determined by the governance reforms that we introduce in this sector. Health being a state subject offers great opportunities for experimentation. Some states have chosen to empower their medical officers. These states, for example Kerala, have given greater authority for decision-making to their medical officers and also, therefore, hold them more accountable. In many parts of India, however, most local decisions are routed through the district magistrate’s office. This is inefficient and undesirable for sustained improvement of public health institutions in these states. There are several such examples of good governance and best practices available within the country and that could be adopted by the states that are struggling with the knotty problem of poor public health systems. Conclusion: While there has been a massive drive to expand the quantity of public health infrastructure in India, particularly in rural areas, the focus must urgently shift to staffing of doctors, nurses, technicians, availability and maintenance of equipment and supply of drugs. Connecting the dots: Several examples of good governance and best practices are available within the country in public health systems. These could be adopted by the states that are struggling with the problem of poor public health systems. Discuss. The Gorakhpur tragedy reveals how grim the situation is when it comes to public health systems in India. Analyze. ENVIRONMENT 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: Conservation, Environmental pollution and degradation, environmental impact assessment. Rethinking on Interlinking of rivers- Part II Background: Interlinking of rivers is a very expensive proposal. It has huge adverse environmental impacts on land, forests, biodiversity, rivers and the livelihood of millions of people. It is a socially disruptive proposition. It will not only add to climate change impact (destruction of forests means destruction of carbon sinks, and reservoirs in tropical climate are known sources of methane and carbon dioxide), but will also reduce our capacity to adapt to climate change. Issues with the Ken-Betwa link: The link will facilitate export of water from drought-prone Bundelkhand to the upper Betwa basin, as the detailed project report (DPR) makes clear. The Ken-Betwa link’s hydrology is not known, so there is no way to check if the claim of Ken river being surplus is valid. There has been no credible environmental impact assessment of the link and no public hearings in canal and downstream affected areas. The link’s environmental management plan is still being prepared. The Ken-Betwa link threatens about 200 sq. km of the Panna tiger reserve, and with it the Ken river and large parts of Bundelkhand. Yet, it does not have an environment clearance, a final forest clearance, and its wildlife clearance is being scrutinized by the Central-empowered committee appointed by the Supreme Court. Issues: The government justifies the river interlinking project by saying that it will provide irrigation, water supply, hydropower and flood control. However, each of this thought of benefits may not be actually achieved. Providing irrigation: Most of India’s water benefits, including irrigation, come from groundwater. In fact, in the past two-and-a-half decades, the net national irrigated area from big dams has decreased by about 1.5 million hectares from a peak of 17.79 million ha in 1991-92, according to government data. But in the same period, India’s total irrigated area has gone up—primarily due to groundwater. Groundwater is our water lifeline and whether we like it or not, whether we want it or not, groundwater is going to remain our water lifeline for decades to come. However, our current use of groundwater is not sustainable. The focus of our water resources development should be on how the groundwater lifeline can be sustained. Interlinking of rivers entails a large number of dams that will lead to destruction of rivers, forests, wetlands and local water bodies, which are major groundwater recharge mechanisms. Thus, river interlinking project is likely to create more problems than benefits. Hydropower: As far as hydropower is concerned, it is clear that large hydropower projects are no longer a viable option in India. The power minister has repeatedly said in Parliament over the last two years that hydropower projects of over 11,000MW are stuck due to lack of finances and questions over viability. The chief minister of Himachal Pradesh has stated that private developers are exiting the sector as they consider the projects to be non-viable. The situation in Sikkim and Arunachal Pradesh is similar. It costs over Rs10 crore to produce one megawatt of hydropower, which in turn produces less than four million units of electricity. This means the per unit cost of power from such projects is in excess of Rs8 per unit, when there are no takers for power that costs even Rs3 per unit. Flood control: While theoretically, a large reservoir can help moderate floods in the downstream areas, our experience on the ground is different. For example, heads of government, state officials, and the Comptroller and Auditor General have on numerous occasions pointed out that big dams such as the Ranganadi dam, the Damodar dams, the Farakka and Bansagar dams, and the Hirakud dam have brought avoidable flood disasters to Assam, West Bengal, Bihar and Odisha, respectively. When some rivers are flooded it is assumed that the excess of water can easily be transferred to deficit basin. But when the Brahmaputra is in floods, so is the Ganga and all the rivers through which the water needs to be transferred, including the Subarnarekha, the Mahanadi, the Godavari, the Krishna, the Pennar, and so on. So, these transitory rivers won't be in a position to accept the excess water to pass on to deficit basins. Seeing groundwater aquifer as storage option: The other problem with the river interlinking project is that of storing large quantities of waters. Most of the sites suitable for the big reservoirs are in Nepal, Bhutan and in the North-East—and each one has made clear their opposition to big storage reservoirs. If we can store water during the monsoon, we can make it available in the post monsoon months. The water resources establishment sees big dams as the only storage option. We instead need to focus on the the groundwater aquifer which is the biggest, cheapest, most benign, possibly fastest and most decentralized storage option for India. Connecting the dots: What India needs is not interlinking of rivers but something else to achieve water, agriculture and livelihood security. Critically analyze. Also Read: Re-Thinking on River-Linking Project MUST READ India needs to push for a new deal The Hindu If dissent is not allowed it will take a different form The Hindu In Vivekananda's country The Hindu A year from Uri Indian Express Business of cleanliness Indian Express Asia's new leaders Livemint    

MindMaps

IASbaba’s MINDMAP : Issue - Railways

IASbaba’s MINDMAP : Issue - Railways Archives NOTE – Instructions to download Mind Maps/Images Right Click on the image and ‘Open in a new tab’ Remove/Delete the resolution part from the URl. Eg. “-1024×869” and Press Enter/Load Again Afterwards the URL will look something like this – “iasbaba.com/..../.../..-IASbaba.jpg” Right Click and Save As/Download (You’ll get the maximum resolution)

Daily Prelims CA Quiz

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 46]

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 46] Archives Q.1) Which of the following states shares its border with Nepal Arunachal Pradesh Assam Bihar West Bengal Sikkim Select the correct code: 3, 4 and 5 2, 3 and 5 1, 2 and 5 1, 2, 3 and 4 Q.2) Which of the following is/are correctly matched? CNG – Methane LPG – Propane Both (a) and (b) Neither (a) nor (b) Q.3) Ghantasala will be developed as a major Buddhist destination and it will be themed on Mahaparinirvana of the Buddha. ‘Mahaparinirvana’ signifies Renunciation Buddha’s first sermon Search of Truth Liberation Q.4) Hamas, is a Islamic fundamentalist organization from Syria Palestine Nigeria Yemen Q.5) Bezbaruah Committee is concerned with Police reforms Caste discrimination Communal Violence Racial discrimination To Download the Solution - Click here All The Best  IASbaba

AIR

All India Radio (AIR) : NPAs of Public Sector Banks

NPAs of Public Sector Banks ARCHIVES Search 12th June 2017 http://www.newsonair.com/Main_Audio_Bulletins_Search.aspx TOPIC: General Studies 2 Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Structure, organization and functioning of the Executive Background For years, Indian lenders, especially state-run banks, were engaged in volume game to balloon their balance sheets and appease their promoter (the government). That has been so ever since nationalisation of these banks happened in two stages (beginning 1969). Governments often treated these banks as their extended arms and used them for populist measures. There was a time from 2011-13 when every bank rushed to give money to corporations, no matter what the credit perception was as everyone expected a miraculous pick-up in the economy. Picture credit: http://s1.firstpost.in/wp-content/uploads/2016/02/bad-loans-of-39-banks.jpg Today, the total values of NPAs in India is 6 lakh crore. What is NPA? NPA in terms of RBI regulations result out of non-payment of interest for a period of 90 days or non-payment of principle amount for 90 days or more. So beyond that point, it is called Non-Performing Asset. The loan is taken by the company on its assets from the bank. When the asset is not performing because they become doubtful and NPAs from doubtful become bad loans. Can’t collateral be used to write off loans? When the banks give loans, they take something from the entity taking it as collateral for that loan. Lot of people give collaterals but in case of large projects, it is not possible to give collaterals. In such cases, the land purchase, the building purchase, the plant machines, the debtors and inventory are mortgaged to the bank. These assets are available but if they are able to produce enough to really repay to the bank remains doubtful. The question than arises what should the banks do with those assets. Suppose a car is a collateral, it can be sold to anybody but a petrochemical complex or steel complex cannot be sold to anybody. The banks have the right to sell the assets. But selling is not the question. When these assets are sold in distress, there is chance that against Rs. 50000 crore loan, the banks get only Rs. 20000 crores. Out of 6 lakh crores, 80-90% of them large borrowers. Now the government doesn’t want to kill these companies, create employment problems and take people’s job. Huge areas such as steel, cements, energy industries are country’s development backbone. Such companies cannot be shut down and hence there bad loans are continued to be carried forward. How NPAs arose? After 2008, there was international financial crisis. The prices have fallen significantly in the international market. In last two years the commodity market is very bad for example, the Sugar industry and steel industry. Power sector was not operating properly. Halfway through the plants being operational, the banks stopped giving them money due to policy paralysis. People had extended their business beyond their means and higher interest was creating more problems Had the financial planning and financial management not compromised while giving the loans, the issue wouldn’t have been this grave. In certain cases, the money has been diverted by entrepreneurs, they did not bring in promoters, did over invoicing of expenditure and took out money from that. So all kinds of speculations are there which led to increase in NPAs. Challenges to payback policies The rate of interest is so high that at times the people are unable to pay it back. There are policy errors when the government policy change and the enabling environment is not there. Solution Government will have to do mix and match of various things. No single solution for all the problems. The solution has to be derived on case to case basis. The government is thinking of setting up committees for this purpose. There can be learned people appointed in each and every case who know their industry very well. Whether government should run the business is also a big issue. It makes sense for the government to convert part of the loan into equity and take majority ownership possible. The banks will be able to take over the management and revive the company. It is important to do the financial restructuring. There are many who get repeated in the defaulters list. So some long term solution is required. They can’t be allowed to benefit on their own fault. There should be certain benchmark on the performance. If they are not able to perform, then entire debt can be converted into equity or part of the debt can be waived and bring in other promoters. Many banks, especially PSBs do a lot of work. They do PSL, they give educational loans and housing loans. Because of bad loans, the entire system of PSBs, their priorities are compromised and entire structure gets vulnerable. However, it doesn’t mean private sector banks have suffered less due to NPAs. Conclusion Start up, initial capital, turn business into amateur industry. They should take the risk as far as possible. Whatever money they take as loan is for repayment. People who pay the banks in time keep on growing and prospering. Unfortunately, a tendency has come to a section of borrowers that this money of bank is like a free money. This kind of feeling is a major reason for the disaster. Lot of people don’t have enough capital on their own. Only those succeed who plan with due care. Contingency is important.  When going for larger projects, there should be more concentration on equity and borrowing kept on minimum. The capital inflow is not much in India. So the government has to plan regarding the same. Capital can be channelized into equity and people can expand business. Another idea is to create a bad bank which would be a centralised agency that would take over the largest and most difficult stressed loans from public sector banks in order to help clean their balance sheets, and would take politically tough decisions to reduce debt, providing an impetus to further lending to spur economic activity. NPAs will cause pain to banks by those who have not paid back the loan. But some part of the money have to come back to the system as it is common man’s money. Connecting the dots: Issue of NPAs have been reaching to unexpected levels. What is the reason for such high levels and suggest possible measures to tackle them.