Comprehensive News Analysis - 12 September 2016

A. GS1 Related

Nothing here today folks!

B. GS2 Related

1. Reforms in the Indian Railway budget

Category: Polity and Governance     

Topic:   Executive

Key Points:

• Dovetailing the Railway Budget into the Union Budget is one thing, but divorcing the Indian Railways administrative decisions and its finances from the political realm would need a whole lot more steamrolling as reflected in the reaction to its surge pricing experiment for premium passenger trains.

• An unanticipated dip in gross earnings in the first five months of 2016-17 has triggered the Railways’ scramble for ideas to enhance revenues by every single penny possible in the middle of the year. Although the Passenger traffic volumes have been flat, the earnings from freight operations that account for about two-thirds of Railways’ revenues, have dropped about 10 per cent from a year ago. Apart from the lukewarm performance of core industries such as steel and cement in recent times, the biggest pain for the Railways’ balance-sheet is emanating from the power sector which has otherwise been painted as a success story by the Union government.

• Coal Tariff: Within the commodities, it ferries, half of the Railways’ freight income accrues from transporting coal from pitheads (and ports in case of imported coal) to power plants and a few other end-user industries. As opposed to its coal loading target of 200 million tonnes for April 2016 – July 2016, the Railways carried 177 million tonnes during the period.

A few days before the announcement of the surge pricing experiment, the Railways tweaked its tariffs for carrying coal – raising them by 7 per cent to 13 per cent for distances between 200 km and 700 km and slashing rates by four per cent to 13 per cent for transport beyond 700 kms. While it claimed this was a revenue-neutral move, it’s a timely attempt to align the Railways with the Coal Ministry’s new approach to rationalise and swap coal linkages for power plants so that distances over which coal is carried, are shortened.

• Role reversal – Before the nationwide strike by trade unions on September 2, 2016 the Union Power Minister had reiterated that the country has sufficient supply of coal to tide over any production outages at state-run Coal India Limited. This is a far cry from about two years ago when thermal power generation plants were clubbed on the basis of their fuel supply status as critical (with coal to last seven days or less), supercritical (with coal to last less than 3 days coal) and normal.

From that scenario, where the Supreme Court had cancelled coal block allocations en masse and power plants couldn’t start production without fuel, there has indeed been a turnaround, with officials pointing out that most power plants now have enough coal to last them for 30 days. However, this neither augurs well for the Railways nor for Coal India Limited, which has been asked to double its capacity to 1 billion tonnes a year by 2020.

Earlier, lack of coal was squeezing the power sector and was blamed for high stressed assets in the banking system. Now the power sector is impacting the coal sector. For the first time in Coal India’s history, we have had to back down on our production capacity

• Coal supplies – Power players have been writing to Coal India requesting to hold off coal supplies, dues are piling up and if there is no pick-up in demand, coal production would have to are cut further and the railways will suffer, even more.

• Power sector reforms – Coal India is prepared to mine the coal and the Railways can deliver. But the power sector should want it and for that, state electricity distribution boards need to sign power purchase agreements with generators. Effective implementation of UDAY (Ujwal Discom Assurance yojana) is the key – it aims for a time-bound reform of indebted state electricity distribution companies, would be critical to ensure that number is a blip rather than the norm.

Analysts attribute the crisis in the power sector to the low plant load factor (capacity utilisation) of around 60 per cent at most thermal power generation plants, as indebted inefficient state distribution companies or discoms are shying away from signing power purchase pacts.

2. Countdown begins for GST

Category: Polity and Governance

Topic:  Tax reforms

Key Points:

• Following the President’s assent to constitutional amendment enabling the roll-out of the Goods & Services Tax (GST), India’s move to introduce the new indirect tax is all set to enter a crucial stage. The Union Cabinet is likely to take up the constitution of the GST Council.

• GST council will be a constitutional body headed by the Union Finance Minister and comprising of all the State Finance Ministers. It will decide the rates at which the GST will be levied and collected and have to be paid across the country by consumers. The council will also have to finalise the number of slabs the GST will be pegged at for different categories of goods and services. Besides the standard rate, there could be a lower rate for wage goods consumed by the poor and another one for demerit or luxury goods, also called sin goods.

It has been learnt that the Centre and States could also consider a fourth category for services, currently taxed at about 15 per cent or lower in case of abatements. For example, Railways currently attract a service tax of 4.5 per cent (after abatement of 70 per cent). The GST Council will have to decide if it would be politically feasible to tax the service at the standard GST rate, which could be 18 per cent or even higher.

Before the Council is set up, the Empowered Committee of State Finance Ministers is likely to meet to thrash out these and two other issues crucial to determining the GST rates: The list of goods, such as food grains, to be made exempt from the new tax and the threshold level below which sellers will be exempt from charging the GST, a tax on consumption. States would like to see the GST rate closer to 20 per cent as they are concerned about revenue collections after the transition.

• Issues involved – While the Opposition’s stand is united in seeking the standard GST rate, the rate at which the new tax will fall on a majority of the goods and services, be kept below the 18 per cent-mark, the States are keen to fix it at a higher level, closer to 20 per cent, to protect revenue collections.

Several states have expressed their worries over the calculations of the revenue neutral rate for the GST. A government committee under Chief Economic Advisor Arvind Subramanian had given the Centre in 2015 recommended that the standard rate for the GST should be about 18 per cent. The calculations, they have found, underestimate the current indirect tax collections revenue by nearly Rs.7 lakh crore.

Note – Under the new GST regime, CBEC to be renamed:

The centre said, Central Board of Excise and Customs (CBEC) will be re-christened and re-named as the Central Board of Indirect Taxes (CBIT) as the countdown begins to roll out Goods and Services Tax (GST) from April 1, 2017. The mammoth exercise, which will entail training of over 60,000 officers on the new indirect tax law, tentatively also, includes a revamp of the CBEC as well as the field formations.

At the field level, the CBEC is also considering setting up about seven zones across the country, which would then be divided into regions for administrative purposes. Each State will be divided into smaller units or GST ranges that would have a maximum of 1,000 assessees. These will then be grouped to form a GST division with 5,000 assesses. There would also be similar structure for customs and central excise. The CBEC is also hoping to improve efficiency in its functioning through the re-structuring.

3. China, Russia to hold joint naval exercises in S. China Sea

Category: International Relations    

Topic:  Effect of policies and politics of developed and developing countries

Key Points:

• China and Russia will hold joint naval exercises in the South China Sea (SCS), sending a calibrated message to the United States and its allies that China has a powerful partner in waters riven by rival territorial claims. The eight-day Navy drill in the South China Sea off southern China’s Guangdong Province will showcase its strength.

Joint Sea 2016 – China said that the drill will feature Navy surface ships, submarines, and fixed-wing aircraft, ship-borne helicopters Marine Corps and amphibious armored equipment from both navies.

• Geo and naval analysts say that the exercises are being held in a non-disputed area, and are therefore unlikely to stir up fresh tensions significantly.

• PCA ruling: The exercises follow a spike in tensions after an arbitration court – Permanent court of Arbitration (PCA) in The Hague rejected China’s claims in the SCS, and slammed it for causing environmental damage there. China has rejected the ruling in a government white paper that was released in the aftermath of the Award.

4. North Korea demands ‘nuclear state’ status

Category: International Relations    

Topic:  Effect of policies and politics of developed and developing countries

Key Points:

• A defiant North Korea restated its demand for recognition as a legitimate nuclear-armed state, as world powers pondered ways to punish the nation for its latest and largest atomic test. The North also vowed to increase its nuclear strike force in quality and in quantity, two days after its fifth test in a decade sparked international condemnation and moves for tougher UN sanctions. North Korea also mocked U.S. President Barack Obama’s totally bankrupt policy on the country and said U.S. is trying hard to deny the DPRK’s [North Korea’s] strategic position as a legitimate nuclear weapons state but it is as foolish an act as trying to eclipse the sun with a palm.

U.S. and Japan were seeking the strongest possible measures in response.

• UNSC Sanctions – The UN Security Council to start work on new measures even though five sets of UN sanctions since the first nuclear test in 2006 have failed to halt the North’s nuclear drive.

• Japan and U.S. are likely to work closely in the Security Council and beyond to come up with the strongest possible measure against North Korea’s latest action. It was also said that the U.S. may launch its own unilateral sanctions in response to the provocative and unacceptable behaviour by the North Koreans.

• South Korea – The government in Seoul will take all diplomatic and military efforts to counter North Korea’s continued provocation.

C. GS3 Related

1. Coalition for Epidemic Preparedness Innovations (CEPI)

Category: Science and Technology      

Topic:  Developments

Key Points:

• India is all set to lead the global fight against epidemics as it is a key member of the newly formed Coalition for Epidemic Preparedness Innovations (CEPI) with its headquarters at the Norwegian Institute for Public Health, in Oslo.

The coalition will not focus on diseases that already have sufficient attention, but will be guided by WHOs R&D blueprint (2016), which lists eleven illnesses to focus on, including Chikungunya, Middle East Respiratory Syndrome (MERS), Crimean-Congo Haemorrhagic fever.

Dr K Vijay Raghavan, secretary, Department of Biotechnology, India, has been chosen as the chairperson of the interim board.

• CEPI funding: The anticipated requirements for funding are about 200 million US dollars per year. India will have a role in contributing, but the scale of contribution is not yet defined.

• India’s role in CEPI: India, represented by the Ministries of Science and Technologies and Health and Family Welfare, intends to stand shoulder-to-shoulder with governments and agencies, such as the World Health Organization, the Welcome Trust and others to develop the strategies for partnerships, technical development, regulatory and ethical approaches and find the resources and commitments needed for the coalition.

When disease outbreaks occur, depending on the mode of transmission they can spread very rapidly to affect people very far from where the outbreak starts. In India, we recognise that preparedness to handle outbreaks also includes strategies for prevention. For known and as yet unknown diseases, vaccines offer the potential to be deployed rapidly and on scale to prevent both disease and its further transmission.

India is home to one sixth of the world’s people. Our people live and travel everywhere. This is important for us, but we must also bring other partners on board. India will play a role in working not only with industrialised countries, but also with less resourced settings, particularly in Asia and Africa. The India-Africa Health Summit, organised by the ICMR and supported by four Indian ministries is an example of the kind of engagement where we could work with African countries likely to be affected by outbreaks that need to build capacity in science, medicine and manufacturing.

• India’s success story – There are actually relatively few ‘effectiveness’ or efficacy studies of vaccines developed in India. The last vaccine developed in India which underwent an efficacy study was the Rotavirus vaccine made by Bharat Biotech with the support of the Department of Biotechnology, and this is now being used by the MOHFW in four States, with plans to expand nationally in the near future.

The coalition will not focus on common diseases like rotavirus, but will focus on diseases that have the potential for causing outbreaks. Among the known diseases that may be targeted is Chikungunya, for which a vaccine has been developed in India, but its effectiveness in preventing the disease needs to be evaluated. It is possible that support for such studies for existing, partially tested vaccine may be available.

• Diseases being actively targeted and the strategy – The targets will largely reflect the WHO R & D blueprint which has been evolved over the past couple of years. The goal of the coalition is to focus on diseases which do not have a large market in global terms.

CEPI has already made much progress has been made on Zika , and for dengue, there is already one licensed vaccine available and at least three other candidates are in late phases of development, so it is unlikely to be considered. Swine flu and other influenza  viruses cause diseases with the potential to result in pandemics, and for such diseases, there will be big markets and the bigger vaccine manufacturers will be developing vaccines in any case.

2. Climate change and Anthropocene effect

Category: Science and Technology      

Topic:  Climate change

Key Points:

• A few days back, a group of geoscientists gathered at Cape Town, South Africa, and have recommended that mankind’s impact on Mother Earth has been so profound in recent years, that it is time to describe a new geological epoch in the history of earth, calling it Anthropocene (Anthropo, from the Greek for humankind, and cene from the Greek kainos, Latinised as caenus or cene, meaning new). They suggested that the present epoch, described so far as the Holocene (Holo, from the Greek for whole/entire), has given rise to the Anthropocene.

It is suggested to start from 66 years ago (1950), thus halting Holocene, an epoch that started about 11,700 years ago, when the last Ice Age occurred. At that time, most of the Ice Age animals – the woolly mammoths, sabre-toothed tigers and giant bears – had died out, and by 11,000 years ago, humans had occupied a significant part of the earth as hunter gatherers as well as settled communities, inventing farming and agriculture.

• What hath man wrought! What has led us to redefine our epoch, from a natural one into a man-induced one? Back 11,000 years ago, the carbon dioxide (or CO2) level in the atmosphere surrounding the globe was about 220 parts per million (ppm); even 8,000 years ago, it was about 260 ppm.

But starting the nineteenth century, when the industrial revolution started in the West, coal from the earth and beneath it was used extensively as the fuel for transport and industry. The other major fossil fuels, oil (petroleum) and natural gas were discovered and put to use on a large scale. Burning carbon-rich fossil fuel liberates CO2. And CO2 is an example of what is referred to as a Greenhouse gas, which lets sunlight in, but traps the heat radiation that the earth and its oceans emit in return. (An easy example is when a car is parked in the sun, with its glass windows shut, sunlight enters the inside of the car, warming it, but the outgoing heat is trapped by the closed windows; the same effect is utilised in greenhouses, where plants and vegetables are grown in cold climate; hence the name greenhouse effect).

• Non-stop burning of fossil fuels for industry, transport and other uses over these years has accumulated a large amount of CO2, which does not escape the earth (thanks to the gravitational pull of the earth; lighter gases such as hydrogen or helium gases escape, which is why they are not earthbound). Thus, over time, the level of CO2 in the atmosphere has shot up from 280 ppm at the start of the Industrial Revolution to 413 ppm today. As a result, the average surface temperature over these two centuries has gone up by 1.5 degrees Centigrade. This has also started melting glaciers and raised the sea level by 3.2 mm every year. (Indeed, the island nation, Maldives, is worried that at this rate, some of its islands may be submerged in the near future, and had actually asked Australia whether they could buy land and move there!).

• Added to the warming of the oceans and landmass caused by the Greenhouse gases (CO2, NO, Ozone, methane…), are the plastics and their debris, strewn all across the world and its oceans. Plastic pollution is an even more recent phenomenon. In addition, increase in human population from 1.2 billion in 1850 to the current 7 billion, has led to massive destruction of forests and animals therein has led to a crowding problem, and its associated effects.

• Oxygen Catastrophe – Is this the first such massive upheaval of the earth’s atmosphere through a gas? Well, such a thing happened long long ago, during what is called the Oxygen Catastrophe (or more politely as the Great Oxygenation Event) which occurred about 2.4 billion years ago. Those days, the earth was rich in a set of microbes called Cyanobacteria, which started the early events of photosynthesis, wherein the microbe used CO2 for energy production and emitted oxygen gas (O2) as the waste material. Cyanobacteria reproduce very fast (doubling every 30 minutes), thus leading to vast amounts of oxygen in the atmosphere. Some of this was ‘fixed’ by iron and organic matter of earth, but the rest soon led the ‘poisonous’ gas, oxygen, attain levels of about 20 per cent in the air. This burnt off many living forms and it took a long time before oxygen- using life forms (aerobics) started flourishing about 500 million years later.

3. AIDS epidemic worse than ever before

Category: Science and Technology      

Topic:  Developments

Key Points:

• International AIDS Vaccine Initiative said the AIDS epidemic is the worse than it has ever been. The major problem is it is less visible and governments are paying less focus because of the sense that effective treatment is available. Providing life-long treatment for millions of infected people is a major, long-term obligation. While there has been progress on getting more people on treatment, we haven’t made any progress in decreasing the number of new infections in any meaningful way. Basically, we are accumulating more and more HIV-infected people every year and that’s going to cost a big bill.

International AIDS Vaccine Initiative further said while some people have been projecting that if we simply treat enough people, we will prevent additional infections and eventually AIDS will end, that is not a realistic perspective.

• N. General Assembly has a global 2030 target to end the AIDS rhetoric – The Global Fund to fight AIDS, Tuberculosis and Malaria (GFATM) is now going through replenishment process.

Major scientific challenges are involved in developing an HIV vaccine. That being said, the science dedicated to HIV vaccine development is remarkable. We have tremendous insights into the biology of developing vaccine and it has transformed how the scientific community thinks about developing vaccine for other diseases as well.

There are trials in South Africa that are testing important concepts. International AIDS Vaccine Initiative is engaging with communities at risk in India and Africa to understand what makes someone at risk of getting HIV – to understand the biology that is responsible for making some susceptible to getting infected. They are using the information to design vaccines. In South Africa, we are now testing a monoclonal antibody that is intended to block the infection and make someone resistant to getting infected. We are looking at people infected with HIV to see who of them make potent responses. Specimens are collected from them later for identifying those antibodies to better understand what kind of vaccines we need.

D. GS4 Related

E. Important Editorials: A Quick Glance

1. An office of loss

Category: Polity and Governance       

Topic:  Judiciary 

After the categorical verdict of the Delhi High Court last month that the Capital is a Union Territory, it was quite clear that any decision made by Chief Minister Arvind Kejriwal without the Lieutenant Governor’s approval will be rendered illegal. Counsel for the Delhi government had to concede the point in court, leading to the appointment of 21 Delhi legislators as parliamentary secretaries being set aside. The appointments, made in March 2015, suffered from multiple legal infirmities. Apart from the lack of the LG’s concurrence, it raised the question of whether it was an ‘office of profit’ under the government, something legislators are barred from holding. The penalty stipulated in the Constitution for a legislator holding an office of profit is disqualification. The Election Commission has reserved its verdict on the question whether these 21 MLAs have incurred such disqualification, and it is possible for the Aam Aadmi Party now to ask the matter to be closed, citing the court’s setting aside of the appointments. At the same time, it cannot be denied that the EC could still choose to decide whether these MLAs had indeed held an office of profit for nearly a year-and-a-half. They had been rendered further vulnerable after the President withheld assent to a Delhi Bill to protect them from incurring disqualification — once again because it was introduced without the LG’s approval.

Delhi’s CM could have avoided this setback had he not given executive oversight responsibilities to so many of his party’s legislators. In practice, parliamentary secretaries are junior ministers. In this case, their appointment could also have been challenged on the ground that after their inclusion, the strength of the Council of Ministers had exceeded the constitutional limit of 10 per cent on the strength of the Delhi Assembly. In the case of other States, the limit is 15 per cent. In some States, parliamentary secretaries have been able to stave off disqualification by getting the post saved from disqualification by legislation. However, no one has been able to get around the numerical cap on the size of the Ministry under Article 164(1A) of the Constitution. All told, Mr. Kejriwal got himself into a legal quagmire by seeking to take on the LG in the belief he had the same leeway as other CMs did. He will continue to maintain that the post of parliamentary secretary, inasmuch as it entails no salary or perquisites, is not an office of profit. Yet, it cannot be denied that the issue has caused him loss of face, of credibility and some of the moral righteousness that propelled him to power.

F. Concepts-in-News: Related Concepts to Revise/Learn:

• Union railway budget
• Goods and Service tax (GST)
• South China Sea
• Coalition for Epidemic Preparedness Innovations (CEPI)
• HIV and AIDS

G. BILLS/ACTS/SCHEMES/ORGS IN NEWS

H. Fun with Practice Questions 🙂

Question 1: Which of the following countries are nuclear weapon states according to the nuclear non-proliferation treaty?

Question 2: Which of the following diseases have been completely eradicated from India –

Question 3: Which of the following statements are correct –

Question 4: Which of the following schemes of the centre aims to reform the power sector by rejuvenating DISCOMS?

Question 5: Which of the following statements are correct –

I. Archives:

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