Comprehensive News Analysis – 07 May 2016

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. Differences stall Kashmiri Pandits’ return plan

2. Uttarakhand floor test on May 10; Cong. rebels can’t vote

3. Nepal recalls ambassador, cancels President’s visit

4. 8,000 social auditors to monitor, assess works carried out under MGNREGA

C. GS3 Related:

1. Panel on FRBM: Finance ministry, state representatives to be on board

2. Gold monetisation scheme attracts deposits from eight temples

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

The Indian Express

1. Most on death row poor, from backward caste groups, minorities: Law University report

Others:

1. PIB update

i) RASHTRIYA MAHILA KOSH lending guidelines simplified

ii) Protection and Preservation of Genotype of Gir Cows

iii) Enhancing Insurance Coverage of Farmers

iv) Implementation of PMKSY

v) Exercise Chakravyuh-II

vi) Unified Payments Interface: the product to enable money transfers – both ‘Push’ and ‘Pull’ through Smart Phones

vii) Internationalisation of Rupee

2. The Business Line: A case for the rupee in the SDR basket

3. Business Standard: The urge to control

4. Business Standard:Guns, thieves & ghosts

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. Differences stall Kashmiri Pandits’ return plan

Topic: Governance

Category: Federal Relations

Location: The Hindu

Key points:

  • Differences between centre and the state of J & K in the issue of resettlement of Kashmiri Pandits is delaying the return of the displaced Pandits
  • The state government had opposed “exclusive” colonies for Pandits and stressed on their “absorption in the Kashmiri milieu
  • Job schemes are being implemented for the migrant Pandit community

Note: What is the place of the Pandits in the culture of Kashmir?

 

2. Uttarakhand floor test on May 10; Cong. rebels can’t vote

Topic: Polity

 Category: Federal relations

Location: The Hindu

Key points:

  • The SC orders floor test to be conducted between 11 a.m.and 1 p.m in the Uttarakhand state assembly.; President’s rule will be back in operation immediately after that
  • It held that the nine Congress MLAs disqualified by the Speaker would not be able to vote
  • In case former Chief Minister is unable to prove his majority on the floor of the Uttarakhand Assembly on May 10, the baton would go to the Governor to invite the leader of the majority group to form a new government

 

3. Nepal recalls ambassador, cancels President’s visit

Topic: International Relations

Category: Indo- Nepal Relations

Location: The Hindu

Key points:

  • Kathmandu recalled its ambassador to India hours after cancelling President Bidhya Devi Bhandari’s visit to the SimhasthaKumbh at Ujjain
  • According to political sources, one of the  charges against the ambassador was that he had facilitated the agreement between Nepali Congress and Unified Communist Party of Nepal –Maoist (UCPN-M)which almost toppled the present government

 

4. 8,000 social auditors to monitor, assess works carried out under MGNREGA

Topic: Governance

Category: Social Sector Schemes

Location: The Economic Times

Key points:

  • Struck by the poor state of monitoring and evaluation of work carried out under the Mahatma Gandhi National Rural Employment Guarantee Act, the government is preparing an army of social auditors, almost 8,000 to start with.
  • The Ministry of Rural Development is collaborating with the Mumbai-based Tata Institute of Social Sciences to form a curriculum for a one-month training programme for existing and new batches of social auditors

(The rural employment guarantee scheme has been criticised for delays in over 50% of the payments, which has affected the demand for work. The scheme has drawn criticism for alleged corruption and leakages, with poor monitoring mechanisms in place. The Comptroller and Auditor General of India recently pulled up the government for inefficient social audit of the scheme at the state level)

 

C. GS3 Related

1. Panel on FRBM: Finance ministry, state representatives to be on board

Topic: Economy

Category: Fiscal Consolidation

Location: The Hindu

Key points:

  • The finance ministry is likely to constitute a committee of up to six members to review the implementation of the Fiscal Responsibility and Budget Management (FRBM) Act
  • The committee will have 5-6 officials from the finance ministry itself. It is also likely to co-opt 4-5 representatives from states along with 1-2 academicians/economists
  • Why the new committee?
  1. To examine the possibility of a fiscal deficit range as the target, instead of the current practice of fixed numbers as targets
  2. To review the FRBM Act in the context of the uncertainty and volatility of global economy

3. To look into whether fiscal expansion or contraction should be aligned with credit contraction or expansion in the economy

 

2. Gold monetisation scheme attracts deposits from eight temples 

Topic: Economy

Category: 

Location: The Financial Express

Key points:

  • Four temples from Tamil Nadu, two from Maharashtra, and one each from Andhra Pradesh and Jammu and Kashmir have deposited their gold under the Gold Monetisation Scheme
  • According to estimates 20,000 tonnes of gold is lying with households and temples. In March, the government allowed redemption of long-term and mediumterm deposits in the form of gold.
  • India imports about 1,000 tonnes of gold every year and the precious metal is the second highest component of the import bill after crude oil
  • The scheme is intended to mobilise idle gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, reduce the country’s reliance on the import of gold

 

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

The Indian Express

1. Most on death row poor, from backward caste groups, minorities: Law University report

Topic: Judiciary

Category: Judicial Reforms

Key points:

  • The Death Penalty Research Project, undertaken by researchers at the National Law University in Delhi to study the socio-economic profile of prisoners serving the death sentence in India has revealed that most of those prisoners are from economically vulnerable sections, backward communities and religious minority groups
  • Over 80 per cent of prisoners facing capital punishment had not completed school and nearly half had begun working before the age of 18
  • One third of them are persons belonging to OBCs. Dalits and Adivasis constituted 24.5 per cent (90 prisoners) among those on death row, whom the study gained access to, while members of religious minorities were over 20 per cent (76 prisoners). About 75% of them are from the economically vulnerable section
  • Speaking on the occasion of the release of the study, Supreme Court judge Madan B Lokur said: “There is a huge problem with our criminal justice system.It not only needs procedural reforms but also substantive reform. Legal aid in India is nothing but a joke… nobody has faith in the legal aid system. I don’t think we have a jurisprudence philosophy on imposing death penalty, whether it is a deterrent, reformation or retribution.”
  • Justice Lokur added that he was “optimistic” that “reports like this can make a huge difference”
  • The report has revealed major structural flaws in the criminal justice system, including access to legal services. For instance, less than five per cent of death sentences awarded by trial courts between 2000 and 2015 were confirmed by the Supreme Court. In a total of 1,486 cases, only 73 persons were on death row at the end of the appeal process. According to the report, the trials of 127 prisoners (34 per cent) of the 373 interviewed lasted more than five yearswhile those of 54 (14.4 per cent) continued for more than 10 years.
  • The lead author of the study said: “The report demonstrates that we rely on a completely broken criminal justice system to administer the death penalty in this country… the real question in this context is whether we should be relying on such a criminal justice to administer a punishment like the death penalty. It is evident from our study that burdens imposed by our criminal justice system while handing out death sentences are incapable of being met by the economically and socially vulnerable sections. As a result, you see the death penalty disproportionately affecting those who have the least capabilities to negotiate the criminal justice system.”
  • The findings regarding legal aid are revealing: * 64 per cent of prisoners had private lawyers at the trial stage but the trend shifted at the Supreme Court — only 30 per cent had private lawyers, the rest depended on legal aid lawyers or lawyers who had agreed to fight their cases pro bono. * 70 per cent of the 258 prisoners who spoke to the research team about their interaction with trial court lawyers said they did not discuss case details

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deathrow-graphic4-759

 

Others:

1. PIB update

i) RASHTRIYA MAHILA KOSH lending guidelines simplified

    • RashtriyaMahilaKosh (RMK) is an autonomous organization under the Ministry of Women & Child Development (MWCD).
    • It is a society registered under the Societies Registration Act 1860 and an apex micro-finance organization.
    • The main objective of setting up of RMK was to provide micro-credit to poor women for various livelihood support and income generating activities at concessional terms in a client-friendly procedure to bring about their socio-economic development.
    • As a result of review of the functioning of RMK during 2014-2015, the following measures have been taken by the Government to revamp the RMK

i) Simplification of Loan Procedures
ii) Downward revision in Rate of Interest

  • Mahila E-haat was launched by MWCD in March, 2016.

 

To know more about the issue and vision, goal of Mahila E- Haat please click here to go to BEST of PIB section.

 

ii) Protection and Preservation of Genotype of Gir Cows 

  • As per the 19thLivestock Census -2012, there is an increase in the female cattle of the country
  • To compliment and supplement efforts made by the States to protect genotype of indigenous bovine breeds including Gir cow using new scientific methods Government of India is implementing following schemes
    • RashtriyaGokul Mission- is aimed at development and conservation of all indigenous bovine breeds including Gir breed of cattle and Jaffarabadi breed of buffalo in a scientific and holistic manner.
    • National Dairy Plan-I (NDP-I) covers genetic upgradation indigenous bovine breeds including Gir breed of cattle and Jaffarabadi breed of buffalo.
    • Rs 25.00 crore each has been released to Madhya Pradesh and Andhra Pradesh for establishment of National Kamdhenu Breeding Centre in northern region and southern region respectively.

 

iii) Enhancing Insurance Coverage of Farmers

  • About 20% of the farmers and 23% of total cropped area in country has been insured so far in the country.

( Note: Aspirants should have rough idea about this data on farm insurance)

  • To ensure more coverage, crop Insurance Schemes viz. National Crop Insurance Programme (NCIP) with its three component schemes
    • Modified National Agricultural Insurance Scheme (MNAIS),
    • Weather Based Crop Insurance Scheme (WBCIS) & Coconut Palm Insurance Scheme (CPIS) and
    • National Agricultural Insurance Scheme (NAIS) were

comprehensively reviewed and Government of India has approved the Pradhan MantriFasalBimaYojana (PMFBY) to replace National Agricultural Insurance Scheme (NAIS) & Modified National Agricultural Insurance Scheme (MNAIS) from Kharif 2016.

  • Premium rates under Weather Based Crop Insurance Scheme (WBCIS) have also been reduced and brought at par with new scheme.
  • The scheme envisages coverage of 50% of the total cropped area under Crop Insurance in the country within next 2-3 years.
  • In addition to the above, Government is undertaking a comprehensive publicity and awareness programme to educate the farmers about the benefit of crop insurance schemes.

 

iv) Implementation of PMKSY

  • Pradhan MantriKrishiSinchayeeYojana (PMKSY) has been operationalized from July, 2015
  • Its objective is to enhance irrigation coverage and improve the delivery system at farm level.
  • The programme aims at end-to-end solutions in irrigation supply chain, viz. water sources, distribution network and farm level applications.
  • All the States and Union Territories are covered under the programme.
  • The scheme envisages decentralized state level planning and projectised execution, allowing the states to draw their irrigation development plans based on district/blocks plans with a horizon of 5 to 7 years.
  • The scheme has four components which are as under
    • Accelerated Irrigation Benefit Programme (AIBP): To focus on faster completion of ongoing Major and Medium Irrigation including National Projects.
    • HarKhetKoPani (HKKP): Creation of new water sources through minor irrigation (both surface and ground water); repair, restoration & renovation of traditional water bodies etc.
    • Per Drop More Crop (PDMC): Precision irrigation systems, efficient water conveyance, secondary storage, water lifting devices, extension activities etc.
    • Watershed Development (WD): Ridge area treatment, drainage line treatment, soil and     moisture conservation, rainwater harvesting and other watershed interventions etc.
  • Major and Medium irrigation projects  are incorporated under Accelerated Irrigation Benefit Programme (AIBP) and
  • Minor irrigation along with Command Area Development (CAD) comes under HarKhetKoPani component of PMKSY.
  • PMKSYis administered by Ministry of Water Resources, River Development & Ganga rejuvenation.

 

v) Exercise Chakravyuh-II 

  • In a follow up to ‘Exercise Shatrujeet’by the Strike Corps (Strike One) in Apr 2016, the pivot formations are holding major military training exercise codenamed “Exercise  CHAKRAVYUH-II” in Rajasthan.
  • The exercise involves rapid mobilization and execution of plans in sync with Air Force.
  • The exercise aims to validate the battle readiness and operational effectiveness of the pivot formation and RAPID divisionalong with all its affiliated components.

 

vi) Unified Payments Interface: the product to enable money transfers – both ‘Push’ and ‘Pull’ through Smart Phones

  • Reserve Bank of India has given in-principle approval to National Payments Corporation of India (NPCI) for implementing Unified Payments Interface (UPI).
  • The product will enable money transfers – both ‘Push’ and ‘Pull’ through smart phones.
  • The two important features of UPI are,

(i) It facilitates customer convenience by eliminating the need for providing detailed account/beneficiary details, through the use of virtual address and

(ii) it facilitates interoperability of person-to-merchant payments (both push and pull).

 

vii) Internationalisation of Rupee 

  • Internationalization of Rupee will facilitate greater degree of integration of Indian economy with rest of the world in terms of foreign trade and international capital flows.
  • Recently, a framework was put in place for issuance of Rupee denominated bonds overseas by Indian corporates.

 

Please click here to read more about the issue from BEST of PIB section.

 

2. The Business Line:A case for the rupee in the SDR basket

Topic: Economy

Category: International Organisations

Key Points

  • The SDR is a basket of certain select currencies(the dollar, the euro, the pound and the yen and the yuan)
  • The US dollar value of the SDR is calculated as the sum of the specific amounts of four currencies valued in US dollars, on the basis of exchange rate quoted at noon each day in the London market
  • With the end of recession and consequent recovery since March 2009, all the emerging economies in Asia witnessed surging capital flows, causing significant appreciation of their currencies
  • Since the Chinese currency has been included in the SDR basket, several other countries such as Australia, Canada, Singapore and Switzerland are likely to press their claims for inclusion of their respective currencies, too
  • India is one of the leading emerging markets in the world and has built up huge reserves of $3,60,250 million — more than that of countries currently in the SDR basket, namely, Germany ($1,63,514) million, France ($1,36,150) million and the UK ($1,54,351 million)
  • India’s record of its exchange rate management has been quite clean and its reserves and exports have been doing quite well. Its inflation rate came down to 3.59 per cent in July 2015 (currently 4.83 per cent) from an all-time high of 11.18 per cent in November 2013
  • India has also been moving in the direction of full capital convertibility since the last ten years
  • In the event of the SDR being further expanded to include more currencies, there is enough justification to consider including the Indian rupee as well in the SDR basket.

 

3. Business Standard: The urge to control

Topic: Governance

Category: Price Determination

Key Points

  • The difference between an interventionist government and a reformist one is that the first prefers administrative solutions, the second prefers to let markets work out solutions
  • Governmental interventionism is now evident in many spheres. On one day it is airfares, on another it is Bt cotton, and on a third it is the pricing of internet services. Every other month, new price control orders are passed on one or other bunch of pharmaceutical products
  • After the freeing of diesel (and earlier of petrol), the subsidy on cooking gas is yet to be withdrawn and market forces left free to work out prices. Instead, the prime minister has moved to create a new category of users for subsidised cooking gas.
  • The consequences of such price intervention are often quite different from what administrators intend. In the case of pharmaceuticals, those in the industry argue that irrational price controls have led to the shutting down of production in India, its place in the market taken by imports from China
  • In petroleum products, it has long been established that subsidised kerosene and cooking gas leak out into commercial markets.
  • There are of course situations (like natural monopolies) where price regulation is necessary — but politicians are yet to figure out that keeping prices unnaturally low is not necessarily a welfare measure
  • The government in Delhi did no favour to residents of the capital when it banned surge pricing by cab aggregators; that step merely caused a scarcity of taxis on the city’s roads, thereby further inconveniencing commuters who were struggling to cope with the state government’s odd-even initiative
  • The Centre has not done any better, for the Delhi Metro has not been allowed a fare hike for seven years — putting at risk its capacity to repay loans, perhaps even its operational viability. Already, it has impaired the system’s ability to invest in further expansion of its services, in a city crying out for more mass transport services.
  • In water-scarce Marathwada, the popularity of water-intensive sugarcane is a product of the administratively-determined pricing system that has long governed the sugar industry. Indeed, no one has cared to make the connection between the wasteful use of water in farming (which accounts for 80 per cent of all water consumption) and the gross underpricing of water
  • In a time of suicides by farmers, the idea of charging a higher price for water seems unthinkable as a way of incentivising efficiency in use; but it costs money to create and maintain irrigation systems, and the fact is that much of water use in the country is avoidably wasteful. It is counter-intuitive, but farmers will actually benefit from more rational pricing
  • Across the board, the notion that a properly functioning price system is as much a public good as law and order is a point that politicians find it hard to grasp. It is a pity that the government, which began on the right note when it came to pricing issues, has changed colour and become interventionist in its impulses.

 

4. Business Standard: Guns, thieves & ghosts

Topic: Governance

Category: Defence

Key Points

  • Most of our military acquisitions become scandals. Many are then terminated, leaving our forces with a fraction of the needed inventory, and short of spares and ammunition. Nobody is caught and punished
  • India has acquired no fresh artillery in the 30 years after Bofors. Most importantly, nobody was ever punished for the bribery, no money recovered.
  • German HDW submarines, called Type 209 were to be the Navy’s first SSKs (submarine-to-submarine killers). The programme was wound down. Only two vessels were bought and two assembled in India, 10 years late. Technology transfer, expansion never happened
  • Something similar has happened now with the latest submarine Scorpene entering the seas without torpedoes. The company that makes these, WASS, is
    a subsidiary of Agusta which is now under the scanner
  • When Germany’s Rheinmetallwas banned in 2012, it also excluded nearly a hundred other western armament companies that the conglomerate now owned. Companies from Europe, Singapore, even Israel are in the banned list
  • Since it is an incontrovertible fact that bribes have been paid by Agusta, the case must be speedily investigated and the guilty punished. The test, however is, can we have the sagacity to distinguish this scam from the larger issue of modernisation?
  • We can talk about Make in India. But most “Indian” systems will also depend on large foreign imports for engines, avionics, sensors, weapons, guidance systems and so on
  • These include the most visible ongoing developments like Tejas, ALH, stealth frigates, even the MBT Arjun, nearly 30 years behind schedule
  • India has to opt for one of three possibilities now. The first is, to concede that tender-based, vendor purchases are no longer possible in the murky arms bazaar. All future purchases would therefore be purely on government-to-government basis or what the Americans call FMS (Foreign Military Sales)
  • This is how the IAF’s and the Navy’s new C-130s, C-17s and P-8Is were ordered
  • India is now buying two squadrons of the French Rafale through the same route and exploring American artillery. This narrows the buyers’ options and negotiating space but get the commission agents out
  • The second is to bring in a fool-proof system of purchases which is an impossibility given how broken our politics is
  • The third is to accept the limitations inherent in our system on timely acquisitions (the need for a so-called VVIP helicopter was first approved in 1999 and we still don’t have it). You then mould your diplomacy and strategic posture accordingly

 

F. Concepts-in-News: Related Concepts to Revise/Learn:
  • Insolvency and Bankruptcy code
  • CURIE,KIRAN,DISHA
  • PPP model
  • Finance Bill
  • Crude oil prices
G. Fun with Practice Questions 🙂

 

Question 1: Which of the following statement(s) is/are true about Gold Monetisaton Scheme
  1. The designated banks under the scheme may sell or lend the gold accepted under short-term bank deposit
    2. The earnings under the scheme are exempt from capital gains tax, wealth tax and income tax

a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2

Question 2:Which of the following statement(s) is/are true?

1)SDRs(Special Drawing Rights) must be exchanged into a currency before use

2)The SDR basket has maximum weight assigned to US dollars followed by Chinese Yuan

a) 1 only

b)2 only

c)Both 1 and 2

d) Neither 1 nor 2

Question 3:Which of the following statement(s) is/are true?

1) Fiscal Responsibility and Budget Management Act (FRBMA) aims to better manage public funds

2) All the states have passed FRBMA at the state level

a) 1 only

b) 2 only

c) both 1 and 2

d) Neither 1 nor 2

Question 4: Which of the given below statement(s) is/are true about Pradhan Mantri Krishi Sinchayee Yojana(PMKSY)?

1. PMKSY has been formulated amalgamating ongoing schemes -Accelerated Irrigation Benefit Programme , Integrated Watershed Management Programme and the On Farm Water Management

2. States are to draw up a District Irrigation Plan (DIP) and a State Irrigation Plan (SIP) to plan and implement the Yojana

a) 1 only

b) 2 only

c) both 1 and 2

d) Neither 1 nor 2

Question 5:Which of the following state(s) share(s) border(s) with Nepal?

1.West Bengal

2.Sikkim

3.Bihar

4.Himachal Pradesh

a)1, 2 and 3

b) 1 ,2 and 4

c)2, 3 and 4

d) All the above

Check Your Answers

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