Comprehensive News Analysis – 06 April 2016

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. Nitish imposes total ban on alcohol in Bihar

2. Modi unveils scheme to make Dalits entrepreneurs

3. We understand India’s security concerns: U.S.

4. Expectations high from Ranil’s China visit

C. GS3 Related:

1. Green court tells aviation regulator to turn down the noise

2. Govt. notifies new rules on waste management

3. As RBI cuts repo rate, home loans could become cheaper

4. Black money hunt yet to yield results

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

The Hindu:

1. Staying accommodative

2. Delhi to Riyadh

Others:

The Hindu Business Line:

1. The bank audit extravagance

2. Will Delhi’s odd-even rule work?

Business Standard:

1. The shameful state of MCI

The Economic Times:

1. India Ranking 2016: A good initiative in higher education

F.Concepts-in-News: Related Concepts to Revise/Learn:
G.Fun with Practice Questions 🙂
H.Archives

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Useful News Articles

A. GS1 Related

– Nothing here for today folks! –

B. GS2 Related

1. Nitish imposes total ban on alcohol in Bihar

Topic: Governance

Category: government policies and intervention

Location: The Hindu

Key points:

  • The Nitish Kumar government on Tuesday declared Bihar a dry State while imposing total prohibition on the sale and consumption of liquor, both country-made and Indian-Made Foreign Liquor, with immediate effect
  • The government will stick to the 1991 guidelines on the sale and consumption of toddy

Note: Read this news item along with Article 47(DPSP)

 

2. Modi unveils scheme to make Dalits entrepreneurs

Topic: Governance

Category: government policies and intervention

Location: The Hindu

Key Points:

  • The Stand Up India scheme is to promote entrepreneurship among women, scheduled castes and tribes by enabling them secure easier loans
  • Under the scheme, SC/ST and women entrepreneurs will be provided loans of between Rs.10 lakh and Rs.1 crore for setting up new enterprises
  • Every bank branch will be required to provide two such loans – to a Dalit or SC/ST person and a woman
  • It is being unveiled on April 5 to mark the birth anniversary of Congress Dalit Leader Babu Jagjivan Ram
  • Modi also distributed 5,100 erickshaws under the scheme
  • These rickshaws will run on batteries charged using solar power. These e-rickshaws have been distributed for use in Delhi-NCR region

Note: Also read about  Babu Jagjivan Ram

 

3. We understand India’s security concerns: U.S.

Topic: International Relations

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

Location: The Hindu

Keypoints:

  • A White House statement talked about the S. concern about South Asian region — the possibility of a nuclear flareup between India and Pakistan, and called upon the countries to de-escalate tension as a priority
  • It was also mentioned that the S. is committed to developing the U.S.-India relationship into one of the defining partnerships of the 21st century

 

4. Expectations high from Ranil’s China visit

Topic: India’s neighbourhood

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

Location: The Hindu

Keypoints:

  • The Sri Lankan government formally cleared the stalled $1.4 billion Colombo Port City last month
  • the China-Sri Lanka strategic cooperative partnership is to get a great push
  • China also attaches centrality to Sri Lanka to amplify its Maritime Silk Road
  • Observers say that China’s growing influence in South Asia poses a challenge to New Delhi, which could do well to revamp of its neighbourhood policy

 

C. GS3 Related

1. Green court tells aviation regulator to turn down the noise

Topic: Environment

Category: Pollution

Location: The Hindu

Keypoints:

  • The NGT (National Green Tribunal) took the government and the directorate general of civil aviation (DGCA) to task over lack of norms on noise pollution in residential areas in close proximity to airports across the country
  • Hearing petitions filed by the residents of South Delhi and Indian Spinal Injuries Centre (ISIC), the green court asked the directorate general of civil aviation (DGCA) to provide data on flights landing at IGIA.
  • The petitioners have alleged that the noise of aircraft at IGIA was badly affecting health of nearby residents
  • The government told the bench it was adopting various aircraft noise mitigation measures like Continuous Descent Approach and mixed mode approach to bring down noise levels at airports
  • Continuous Descent Approach or Optimized Profile Descent is a landing method designed to reduce fuel consumption and noise compared to other conventional descents.

 

2. Govt. notifies new rules on waste management

Topic: Environment

Category: Pollution

Location: The Hindu

Key points:

  • The Environment Ministry has notified rules making polluters (hotels, residential colonies, bulk producers of consumer goods, ports, railway stations, airports and pilgrimage spots) liable to ensure that the solid waste generated are treated and recycled
  • The onus on garbage management would continue to be the responsibility of municipal bodies but they would be allowed to charge user fees and levy spotfines for littering and non-segregation
  • A key provision is to formalise the profession of rag-picking

Note: Please read our DNA article on this topic

 

3. As RBI cuts repo rate, home loans could become cheaper

Topic: Indian Economy

Category: Monetary Policy

Location: The Hindu

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Keypoints:

  • Banks have reduced lending rates by 25 to 50 bps since adopting a new loan pricing mechanism — the marginal cost of funds based lending rate
  • The RBI also announced further measures to ease liquidity in the banking system. The daily requirement for maintaining cash reserve ratio has been reduced to 90 per cent from 95 per cent, the marginal standing facility rate (the penal rate at which banks borrow from the RBI) was cut by 75 basis points and the reverse repo rate (the rate banks earn when they park money with the RBI) raised by 25 bps

 

4. Black money hunt yet to yield results

Topic: Indian Economy

Category: Monetary Policy

Location: The Hindu

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

The Hindu

1. Staying accommodative

Topic: Indian Economy

Category: Monetary Policy

Key points:

  • RBI continued its accommodative stance by cutting the repo rate by 25 basis points
  • the RBI’s aim is to help give a monetary fillip to private investment, which is currently reduced by low capacity utilization
  • The announcement comes in a time when IMF chief Christine Lagarde warned that the global economy is losing momentum, with the recovery being “too slow, too fragile”
  • For agriculture, this year’s monsoon will be a critical factor. Above average monsoonal rain would boost rural demand and the availability of farm produce
  • Consumer Confidence Survey shows a marginal improvement in consumer sentiment and the manufacturing purchasing managers’ index is reflecting a continuing expansion
  • food inflation eased in the second half of the last financial year, notably as a result of a decline in prices and not as a result of the base effect
  • retail inflation is expected to continue to decelerate and remain around 5 per cent this year
  • But the historic lows in reservoir levels, the recent upturn in prices of commodities, especially oil, and the impact of the implementation of the Seventh Central Pay Commission’s recommendations are to be closely watched by the RBI
  • The central bank’s efforts to clean up banks’ balance sheets will also help augment funds availability in the real economy

1.Delhi to Riyadh

Topic: International Relations

Category:  Bilateral, regional and global groupings and agreements involving India

and/or affecting India’s interests

Key points:

 Prime Minister Narendra Modi’s recently concluded visit to Saudi Arabia, produced a joint statement that is unprecedented, both, in terms of the strong words used and also with reference to the space devoted to terrorism.

 The joint statement builds further on the 2010 Riyadh Declaration and unveils an expansive security cooperation agenda that can help reconfigure India’s substantive engagement with Gulf Arabia.

 The 2010 Riyadh Declaration, was in turn, built on the 2006 Delhi Declaration.

 It is important to note that just a couple of days  before PM Modi landed in Riyadh, Saudi Arabia and the US announced joint sanctions against Lashkar-e-Taiba.

 This was seen as an overture to Delhi, but there appears to be an enlightened self-interest behind Saudi Arabia’s recent move. In a post- Arab Spring era, Arab monarchies have become increasingly wary of the altered security paradigm.

 This situation also owes to the rise of Sunni extremism by the Islamic State of Iraq and Syria

(ISIS), the removal of sanctions on Iran, withdrawal of American troops and shrinking oil revenues.

 Thus, a new window opened for India to enter the Gulf as a strategic and security partner.

 

Others

The Hindu Business Line:

1.The bank audit extravagance

Topic: Indian Economy

Category:  Banking Sector

Key points:

 The new president of the Institute of Chartered Accountants of India (ICAI), M Devaraja Reddy, recently said that the system of appointment of bank auditors is to blame for the problem of rising non-performing assets (NPA) and low audit quality.

He has proposed the following three-point solution:

  1. The Reserve Bank of India or the Comptroller and Auditor-General of India should appoint bank auditors.
  1. Banks should have multiple auditors instead of one or two.
  1. Banks should do more branch audits.

Appointment of Auditors

 Central auditors and branch auditors of public sector banks (PSBs) are appointed by an elaborate process that involves the ICAI, the CAG, the RBI and the banks’ audit committees.

 Private banks’ shareholders appoint their auditors according to the Companies Act. In no case does a bank’s chairman or executive management appoint the auditors.

 The government has allowed PSBs to appoint their auditors as part of its plan for giving them greater functional autonomy.

Multiple auditors

 It is unclear how adding more auditors can lead to better audit quality. Views differ on whether joint audits improve or impair audit quality.

 One view is since “two heads are better than one”, audit evidence precision improves in joint audit. In the best case, joint auditors act as mutual monitors. The opposite view is that some joint auditors may enjoy a free ride on the others. Audit coverage

 The ICAI president’s demand for more branch audits gives the impression that the current audit coverage in PSBs is inadequate.

 The fact is PSBs are already subjected to a lot more external auditing compared to private banks. PSBs have year-end branch audits and year-round concurrent audits by external auditors.

 Branch auditors, along with central auditors, are responsible for ensuring proper asset quality classification and adequate provisioning for NPAs. Concurrent auditors are expected to verify loan transactions and documents in branches. They are in the best position to detect and report many kinds of frauds.

 

Conclusion

 Rising bad loans has serious economic and political repercussions.

 The accounting industry should work with the banks, the RBI and the government on enhancing audit quality in order to regain the society’s faith in auditing.

 

2. Will Delhi’s odd-even rule work?

Topic: Governance, Environment and Ecology

Category:  Government policies and interventions for development in various sectors, environmental pollution and degradation

Key points:

There are questions that remain with reference to the Delhi Government’s initiative of the odd-even rule. How effective is the current odd-even rule in addressing Delhi’s pollution at large? And what can be done to make it more acceptable and hence enforceable?

The data does not provide any conclusive evidence on the pollution front. Interpreting pollution statistics becomes difficult, given the impact of weather on readings and variations across localities. This also makes a citywide measure impossible at times. Despite these difficulties, available data points to other bigger sources of pollution such as dust and waste burning, coal burning in brick kilns and emissions from diesel generator sets. All these need to be looked into in order to arrive at a holistic solution.

Infrastructural Issues

  1. a) Issues relating to the public transport system:

 The public transport system in the city is short of around 5,000 buses leading to a dependence on private buses which suffer from poor fleet maintenance and non-availability of drivers.

 The Delhi Metro suffers from concerns of accessibility of stations. There is a lack of adequate private parking space and last minute connectivity to work is an issue.

  1. b) Other Issues

 Available road space for buses is another infrastructural issue.

 The Delhi government has announced the construction of two elevated bus-rapid transit (BRT) corridors in the city.

 

Issues of concern and a way forward

 In October 2014, a Thompson Reuters Foundation report identified Delhi with Bogota as being among the most dangerous cities with the world’s worst transport system for women.

 Even after ensuring quality and safety, changing people’s mind-set is a must in making public transport the most acceptable means of travelling.

 It is important to note that, repeated pilot testing comes in handy only if each subsequent implementation is able to address concerns raised in the previous phases.

 An effective regulatory mechanism needs to be thought of and implemented to protect commuters from being overcharged or refused. Merely issuing challans is unlikely to be an effective deterrent.

 Efforts should be taken to popularise carpooling.

 Ensuring safe and easily accessible rideshare matching services on a continuous basis along with incentives could be thought of.

 

Business Standard:

1. The shameful state of MCI

Topic: Governance, Ethics (GS Paper IV)

Category: Government policies and interventions for development in various sectors, Code of  Conduct

Key points:

 The parliamentary standing committee for the Union Ministry of Health and Family Welfare has produced an alarming report on the Medical Council of India (MCI).

 The report has validated a lot of the relevant media coverage and, through the committee’s own investigations, laid down solid fundamentals for bringing about systemic change.

 V K Babu, a doctor from Kerala, and his spouse, M V Bindu, had sent a representation to the committee, in which they had stated that they had complained to the MCI in 2008 and 2010.

Their complaint was regarding the Indian Medical Association (IMA) endorsing commercial products of private companies (PepsiCo, in one instance), which was in violation of the MCI’s code of ethics. As a result of this, he was issued show cause notices by the IMA for complaining to the press, the MCI and the ministry.

 The MCI took no action against the IMA office despite the fact that its ethics committee held them guilty for violating the MCI code of ethics.

  When the parliamentary committee went into the matter, the MCI president informed it that its ethics committee has closed the case.

 The parliamentary committee asked the MCI to complete all formalities for closing the case and report back to the committee within one month from the presentation of its report.

 The committee was “astonished” to note that MCI early this year notified an amendment to its ethics regulations. This sought to delete the words “and professional association of doctors”, thus exempting the IMA, the professional association of doctors, from the ambit of the MCI’s ethics code.

State of Medical Education

 The quality of medical education is “at its lowest ebb” and the current model of medical education is not producing the right type of health professionals needed. Medical graduates lack competence in performing basic tasks like conducting normal deliveries.

 

Conclusion

 The oversight of professional conduct is seen as the most important function of MCI “but it has been completely passive on the ethics dimension”.

 Other than validating a lot of what the media has been saying, the parliamentary committee has made many suggestions for reinventing regulation of medical education and ethics of doctors and other medical stakeholders.

 The regulator should have diverse stakeholders “such as public health experts and social scientists, health economists, health NGOs with an established reputation, legal experts, quality assurance experts, patient advocacy groups.”

 

The Economic Times:

1. India Ranking 2016: A good initiative in higher education

Topic: Governance

Category: Government policies and interventions for development in various

sectors, Education

Key points:

 India Ranking 2016, is the first, state-sponsored, comparative assessment of universities and higher education institutes. This would help institutions identify their shortcomings, and should help channel resources for improvements.

 The idea of the ministry of human resource development and ranking committee is to create a competitive environment in the higher education sector to improve the quality and output of institutions.

Role of Higher Education Institutions

 The purpose of higher education institutions and universities is to extend the frontiers of knowledge.

 This can be cutting-edge research in science, technology, engineering and medicine, or research in social science, design of institutions or instruments that tackle social and economic questions and impact on public policy.

 A university must also be judged by the quality of the human resource it produces, and the impact it has on systems and policy.

Conclusion

 The Indian Ranking should spur higher education institutions to higher levels of excellence.

 Universities which create new knowledge are integral to the promise of Made in India and Stand Up India.

 Industry should use the rankings to fund research in university departments.

F. Concepts-in-News: Related Concepts to Revise/Learn:
  1. India Ranking 2016
  2. Medical Council of India (MCI)
  3. Bus-rapid transit (BRT) corridors
  4. 2010 Riyadh Declaration
  5. CRR
  6. MSF
  7. DPSP
  8. Black Money
G. Fun with Practice Questions 🙂

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