Comprehensive News Analysis – 01 February 2017

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. SC rejects plea to stay jallikattu law

2. Kathmandu meet to finalise SAARC budget, agenda

3. Russia makes big military push in Arctic

4. Rohingya refugees to be relocated on remote island

5. ‘U.S. visa rules to hit Indian IT majors’

C. GS3 Related:

1. Note ban a radical measure: CEA

2. ‘Reward States’ good fiscal show’

D. GS4 Related:
E. Important Editorials : A Quick Glance

The Hindu

1. Cricket’s new order

2. Demonetisation’s long shadow

Economic Times

1. Universal Basic Income: Pie in the sky, given India’s tax revenues

PIB

1. Economic Survey: Universal Basic Income (UBI) Scheme an alternative to plethora of State subsidies for poverty alleviation;

2. Economic Survey advocates reforms to unleash economic dynamism and social justice

F. Concepts-in-News: Related Concepts to Revise/Learn:
G. BILLS/ACTS/SCHEMES/ORGS IN NEWS
H. Fun with Practice Questions 🙂
I. Archives

Need Expert Guidance on how to prepare for Current Affairs

.

+++++++++++++++++++++++++++++++++++++++++++++++

Useful News Articles

A. GS1 Related
B. GS2 Related
1. SC rejects plea to stay jallikattu law

Category: Polity and Governance

Topic: Judiciary

Key Points:

  • It is important to note that, a few hours after the President gave his assent on 31st January, 2017 to the Tamil Nadu amendments in the Prevention of Cruelty Act of 1960 to allow jallikattu, the Supreme Court refused to stay the new State law.
  • A Bench of Justices Dipak Misra and Rohinton F. Nariman declined the plea of NGO Compassion Unlimited Plus Action for an interim stay on the operation of the Prevention of Cruelty to Animals (Tamil Nadu Amendment) Act, 2017.
  • Referring to the amendments made by the Tamil Nadu Assembly to the 1960 Central Act, Justice Misra pointed out that the declared object of the new legislation is the preservation of a particular breed of bulls.

 

2. Kathmandu meet to finalise SAARC budget, agenda

Category: International Relations

Topic: India and its Neighbours- Relations

Key Points:

  • Indian and Pakistani officials will meet to finalise the budget and agenda of the SAARC during the February 1-2 meeting in Kathmandu.
  • The meeting will mark the beginning of the annual calendar of events of the organisation which failed to meet in Islamabad for a summit and is in focus as it is the first time high officials of member-countries will meet since the cancellation of the summit.

 

3. Russia makes big military push in Arctic

Category: International Relations

Topic: Effect of policies and politics of developed and developing countries on India’s interests

Key Points:

  • Russia is on the march in the Arctic and building new nuclear icebreakers.
  • It is part of a push to firm Moscow’s hand in the High North as it vies for dominance with traditional rivals Canada, the United States, and Norway as well as newcomer China.
  • Russia’s build-up is the biggest since the 1991 Soviet fall and will, in some areas, give Moscow more military capabilities than the Soviet Union once had.

 

Implications:

  • The expansion has far-reaching financial and geopolitical ramifications.
  • The Arctic is estimated to hold more hydrocarbon reserves than Saudi Arabia and Moscow is putting down a serious military marker.
  • In fact, under President Vladimir Putin, Moscow is rushing to re-open abandoned Soviet military, air and radar bases on remote Arctic islands and to build new ones, as it pushes ahead with a claim to almost half a million square miles of the Arctic.

 

4. Rohingya refugees to be relocated on remote island

Category: International Relations

Topic: Effect of policies and politics of developed and developing countries on India’s interests

Key Points:

  • Bangladesh will push ahead with a controversial plan to relocate tens of thousands of Rohingya refugees from Myanmar.
  • The Rohingya refugees will be moved to a remote island despite warnings it is uninhabitable and prone to flooding.
  • The government has set up a committee comprising state officials in the coastal districts, ordering authorities to help identify and relocate undocumented Myanmar nationals to Thengar Char in the Bay of Bengal.
  • “The committee will assist transferring both registered and unregistered refugees from Myanmar to Thengar Char near Hatiya island in Noakhali district,” according to an order issued by the Cabinet Division last week and posted online.
  • Hatiya is situated on the estuary of the River Meghna and is a nine-hour journey away from the camps where the Rohingya have taken shelter.

 

5. ‘U.S. visa rules to hit Indian IT majors’

Category: International Relations

Topic: Effect of policies and politics of developed and developing countries on India’s interests

Key Points:

  • The IT industry’s apex body Nasscom on 31st January, 2017 said that a proposed legislation in the U.S. to overhaul norms covering the H-1B and other work visas will prove to be a challenge for the Indian IT sector.
  • The industry lobby also said that the bill could have loopholes that would nullify the objective of saving American jobs.

 

C. GS3 Related
1. Note ban a radical measure: CEA

Category: Indian Economy

Topic: Government Policy

Key Points:

  • The government’s Chief Economic Adviser Arvind Subramanian on 31st January, 2017 said that there was a sense of anxiety about the economy’s prospects following demonetisation and stressed the need to allay the fears of an overzealous tax regime in its aftermath.
  • Subramanian termed the move to cancel the legal tender nature of high-value currency notes a “radical currency-cum-governance-cum-social engineering measure to permanently and punitively raise the cost of illicit and unaccounted transactions or kala dhan(black money).”

 

2. ‘Reward States’ good fiscal show’

Category: Indian Economy

Topic: Government Policy, Budgeting

Key Points:

  • The Economic Survey recommended the Centre to incentivise good fiscal work by States to keep the overall fiscal performance on track.
  • It, however, added that incentivising good performance by the States will require the Centre to be an exemplar of sound fiscal management itself.
  • The Economic Survey pointed out that there has been an improvement in the financial position of the States over the last few years. 

Significantly, it went on to add the following:

  • The average revenue deficit has been eliminated, while the average fiscal deficit was curbed to less than 3% of GSDP.
  • The average debt to GSDP ratio has also fallen
  • Pointing out that the progress cannot be attributed entirely to Fiscal Responsibility Legislations (FRL) adopted in the States, the Survey noted that much of the improvement in financial positions was possible because of exogenous factors, most notably assistance from the Centre in the form of increased revenue transfers, the assumption of state debt, and the introduction of centrally sponsored schemes.

What is RRT?

Redistributive Resource Transfer or RRT to a state (from the Centre) is defined as gross devolution to the state adjusted for the respective state’s share in aggregate GDP.

The top 10 recipients are: Sikkim, Arunachal Pradesh, Mizoram, Nagaland, Manipur, Meghalaya, Tripura, Jammu and Kashmir, Himachal Pradesh and Assam.

 

D. GS4 Related
E. Important Editorials: A Quick Glance
The Hindu
  1. Cricket’s new order

Category: Polity and Governance

Topic: Judiciary

Key Points:

  • The Supreme Court has named a four-member Committee of Administrators to run the affairs of the Board of Control for Cricket in India.
  • This effort should be seen as part of a continuing judicial exercise to reform the way the body is administering the game. 
  • It has been suggested that the court could have asked the Board to come up with suggestions to draw up a committee of interim administrators from among former players and administrators with an established connect with the game.
  • Also, by appointing a panel of its own, the court has rendered itself vulnerable to the charge of massive judicial overreach.
  • It is important to note that there is an undoubted element of public interest in the manner in which the highest court has engaged itself with the game’s administration in recent years. 
  • Last year, the court declared that running cricket in India is a public function. 
  • The Supreme Court accepted most of the recommendations of former Chief Justice of India R.M. Lodha and its sweeping recommendations for reform, and made them binding on the BCCI. 
  • Following this, the reluctance shown by the BCCI to accept the Lodha panel reforms led to its president Anurag Thakur being held prima facieguilty of contempt of court.
  • In conclusion, the situation is ripe for a new set of administrators and the next election, which will be overseen by the four-member committee.

 

2. Demonetisation’s long shadow

Category: Indian Economy

Topic: Government Policy

Key Points:

  • The Economic Survey emphatically asserts that while there have been short-term costs to the economy, which would need to be expeditiously addressed, there will be long-term benefits.
  • Real GDP growth in the current fiscal, the Survey projects, will see a likely reduction by one quarter to half a percentage point relative to the baseline of about 7% as a result of the demand shock triggered by demonetisation.
  • Devoting a whole chapter to demonetisation, the Survey recommends fast, demand-driven remonetisation, further tax reforms, including bringing land and real estate under the ambit of the Goods and Services Tax, and reducing tax rates and stamp duties.
  • It cautions against tax authorities turning overzealous.
  • It flags the risks that Brexit and the U.S. election result pose to the world economic order, and to India’s economy.
  • The prospect of “shifts in the direction of isolationism and nativism” could threaten the global market for goods, services and labour. 

 

Economic Times

1. Universal Basic Income: Pie in the sky, given India’s tax revenues

Category: Indian Economy

Topic: Government Policy

Key Points:

  • The Economic Survey makes a case for replacing India’s many direct and indirect subsidies for the poor with one Universal Basic Income (UBI) scheme.
  • This idea, being tossed about by academics and policymakers recently, proposes a lumpsum income transfer, calculated according to poverty lines or any other criterion, to be handed over unconditionally, to anyone who qualifies for these grants.
  • It is an appealing thought, but alas, inapplicable in India.
  • The virtues and vices of UBI schemes have been debated for decades. Its detractors argue that a scheme that guarantees a basic income could reduce work effort: by as much as 5% per person per year.
  • Supporters argue this cost will be more than offset by lower administrative costs of running large welfare programmes. 

It is important to note that a basic income scheme for the poor already exits, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which guarantees 100 workdays per year at minimum wage, to whoever wants it.

Important statistics:

  • MGNREGA costs just 0.3% of GDP, far lower than any UBI scheme; it benefits about 50 million people, mostly women, and has had an enduring knock-on effect in boosting rural incomes and wage rates.
  • It has been suggested that when India can raise tax revenues adding up to a mere 16.5% of GDP, and manages a general government expenditure of about 27% of GDP — 57% for France and 38% for the US — only by running up a fiscal deficit of close to 7% of GDP, talk of UBI is meaningless.
  • Exclusion errors would afflict UBI as well, given India’s political economy.

 

PIB

1. Economic Survey: Universal Basic Income (UBI) Scheme an alternative to plethora of State subsidies for poverty alleviation;

Category: Indian Economy

Topic: Government Policy

Key Points:

  • The Economic Survey 2016-17 tabled in Parliament by the Union Finance Minister Shri Arun Jaitley has advocated the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty. The survey juxtaposes the benefits and costs of the UBI scheme in the context of the philosophy of the Father of the Nation, Mahatma Gandhi. The Survey states that the Mahatma as astute political observer, would have anxieties about UBI as being just another add-on Government programme, but on balance, he may have given the go-ahead to the UBI.
  • The Survey says the UBI, based on the principles of universality, unconditionality and agency, is a conceptually appealing idea but with a number of implementation challenges lying ahead especially the risk that it would become an add-on to, rather than a replacement of, current anti-poverty and social programmes, which would make it fiscally unaffordable.
  • Based on a survey on misallocation of resources for the six largest Central Sector and Centrally Sponsored Sub-Schemes (except PDS and fertilizer subsidy) across districts, the Economic Survey points out that the districts where the needs are greatest are precisely the ones where State capacity is the weakest. This suggests that a more efficient way to help the poor would be to provide them resources directly, through a UBI.
  • Exploring the principles and prerequisites for successful implementation of UBI, the Survey points out that the two prerequisites for a successful UBI are: (a) functional JAM (Jan Dhan, Aadhar and Mobile) system as it ensures that the cash transfer goes directly into the account of a beneficiary and (b) Centre-State negotiations on cost sharing for the programme.
  • The Survey says that a UBI that reduces poverty to 0.5 percent would cost between 4-5 percent of GDP, assuming that those in the top 25 percent income bracket do not participate. On the other hand, the existing middle class subsidies and food, petroleum and fertilizer subsidies cost about 3 percent of GDP.
  • The Survey concludes that the UBI is a powerful idea whose time even if not ripe for implementation, is ripe for serious discussion.

 

  1. Economic Survey advocates reforms to unleash economic dynamism and social justice

Category: Indian Economy

Topic: Government Policy

Key Points:

  • India needs an evolution in the underlying economic vision across the political spectrum and further reforms are not just a matter of overcoming vested interests that obstruct them.
  • This was stated in the Economic Survey 2016-17 presented in the Parliament today by the Union Finance Minister Shri Arun Jaitley.
  • The Survey lists the some of the challenges that might impede India’s progress. These challenges are classified by the Survey as follows: ambivalence about property rights and the private sector, deficiencies in State capacity, especially in delivering essential services and inefficient redistribution.
  • The Survey highlights difficulties in privatizing public enterprises, even for firms where economists have made strong arguments that they belong in the private sector.
  • In this context, the Survey points towards the need to further privatize the Civil Aviation, Banking and Fertilizer sectors.
  • The Survey points out that the capacity of the State in delivering essential services such as health and education is weak due to low capacity, with high levels of corruption, clientelism, rules and red tape.
  • At the level of the states, competitive populism is more in evidence than competitive service delivery, the Survey adds.
  • Constraints to policy making due to strict adherence to rules and abundant caution in bureaucratic decision-making favours status quo, the Survey cautions.
  • According to the Survey, redistribution by the government is far from efficient in targeting the poor.
  • This is intrinsic to current programs because spending is likely to be greatest in states with better institutions and which will therefore have fewer poor.
  • The Survey notes that over the past two years, the government has made considerable progress toward reducing subsidies, especially related to petroleum products.
  • Technology has been the main instrument for addressing the leakage problem and the pilots for direct benefit transfer in fertilizer represent a very important new direction in this regard, the Survey adds.
  • Noting that India has come a long way in terms of economic performance and reforms, Economic Survey 2016-17 says that there is still a journey ahead to achieve dynamism and social justice.
  • Completing this journey will require broader societal shifts in the underlying vision, the Survey adds.
F. Concepts-in-News: Related Concepts to Revise/Learn:
  • Universal Basic Income (UBI)
  • Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
G. BILLS/ACTS/SCHEMES/ORGS IN NEWS
BILLS/ACTS/SCHEMES/ORGANISATIONS IN NEWS Links to Refer
The National Policy for Children http://pib.nic.in/newsite/PrintRelease.aspx?relid=118660
H. Fun with Practice Questions 🙂
Question 1: Consider the following statements, 
  1. Hatiya is situated on the estuary of the River Meghna and is a nine-hour journey away from the camps where the Rohingya have taken shelter.
  2. The Rohingya people are Muslim Indo-Aryan peoples from the Rakhine State, Myanmar.

Which of the above statements is/are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2

Question 2: Consider the following statements, 
  1. Redistributive Resource Transfer or RRT to a state (from the Centre) is defined as gross devolution to the state adjusted for the respective state’s share in aggregate GDP.
  2. The Economic Survey pointed out that there has been an improvement in the financial position of the States over the last few years.

Which of the above statements is/are incorrect? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2

Question 3: Consider the following statements, 
  1. The Economic Survey 2016-17 tabled in Parliament by the Union Finance Minister Shri Arun Jaitley has advocated the concept of Universal Basic Income (UBI) as an alternative to the various social welfare schemes in an effort to reduce poverty.
  2. The Survey points out that the two prerequisites for a successful UBI are: (a) functional JAM (Jan Dhan, Aadhar and Mobile) system as it ensures that the cash transfer goes directly into the account of a beneficiary and (b) Centre-State negotiations on cost sharing for the programme.

Which of the above statements is/are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2

Question 4: If a government is unable to pass the budget in Lok Sabha, then:

Which of the above statements is/are correct? a) A totally new budget is presented b) The budget is revised and presented again c) The government has to resign d) None of the above

Question 5: Consider the following statements, 
  1. The ‘Annual Financial Statement’, laid before both the Houses of Parliament constitutes the Budget of the Union Government.
  2. Article 265 provides that ‘no tax shall be levied or collected except by authority of law’

Which of the above statements is/are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2

Check Your Answers

“Proper Current Affairs preparation is the key to success in the UPSC- Civil Services Examination. We have now launched a comprehensive ‘Online Current Affairs Crash Course’. Limited seats available. Click here to Know More.”

 

I. Archives:

You can check out some more recent News Analysis sections to build even more context

List of all DNA Articles

Practice More: Enroll for India’s Largest All-India Test Series

Leave a Comment

Your email address will not be published. Required fields are marked *