Comprehensive News Analysis - 21 July 2016

A. GS1 Related

Nothing here today folks!

B. GS2 Related

Topic: Rights Issues

Category: Governance

Key points:

• The issue of attacks on some Dalit men in Una, Gujarat, for allegedly skinning a dead cow rocked Parliament on Wednesday, with the Rajya Sabha being adjourned five times and the Home Minister issuing a statement defending the actions of the Gujarat government in the Lok Sabha. His reply saw the Opposition stage a walkout in protest
• The constitution of a joint parliamentary committee to investigate the incident was demanded by a Congress MP, terming it an “emergency-like” situation

Topic: Turkey

Category: International Affairs

Key points:

• Turkey’s President on Wednesday declared a three-month state of Emergency following a failed coup attempt, giving the government sweeping powers to expand a crackdown on individuals and institutions allegedly associated with the coup
• The state of Emergency announcement needs to be published in a state gazette and lawmakers have to approve it for it to take effect
• In an apparent attempt to calm fears that the military’s powers will be increased during the emergency period, the President said the military will be under the government-appointed Governors’ command and work closely with the regional Governors
• Authorities have rounded up about 9,000 people including 115 generals, 350 officers, 4,800 other military personnel and 60 military high school students for alleged involvement in the coup attempt. Turkey’s defence ministry has also sacked at least 262 military court judges and prosecutors, according to Turkish media reports
• The government said it has fired nearly 22,000 education ministry workers, mostly teachers, taken steps to revoke the licenses of 21,000 other teachers at private schools and removed or detained half a dozen university presidents in a campaign to root out alleged supporters of a U.S.-based Muslim cleric blamed for the failed insurrection
• In other moves, Turkey demanded the resignations of 1,577 university deans and halted foreign assignments for state-employed academics. A total of 50,000 civil service employees have been fired in the purges, which have reached Turkey’s national intelligence service and the prime minister’s office

Topic: Bangladesh

Category: India’s Neighbourhood

Key points:

• Officials on Wednesday announced that at least 261 people across Bangladesh were missing. The country’s elite security force, the Rapid Action Battalion (RAB), published the list on Facebook around midnight and called on citizens to report the whereabouts of the missing
• Local media outlets have reported that dozens of people, including doctors, engineers and students from elite universities have travelled to the Middle East to join the IS

Topic: Sri Lanka

Category: India’s Neighbourhood

Key points:

• Improving on his 2003 idea of converting south India-Sri Lanka sub-region into a single market, Sri Lanka’s Prime Minister RanilWickremesinghe is now for economic collaboration among his country, Singapore and the five southern States of India
• Describing his proposal as a “vision of convergence that is inextricably interwoven with the future of South Asia as a whole,” he said the proposed arrangement had the potential of enhancing economic cooperation among the three countries which would also have a “positive impact on the Bay of Bengal trade.”
• Presenting his new idea at the South Asian Diaspora Convention a few days ago in Singapore, he reminded the audience that India and Singapore had Comprehensive Economic Cooperation Agreement (CECA) [signed in June 2005]. His country was negotiating a Free Trade Agreement (FTA) with the south-east Asian country
• On Sri Lanka’s efforts to enter into Economic and Technology Cooperation Agreement (ETCA) with India, the Prime Minister expressed the hope that the pact, which would go beyond the present FTA arrangement of trade in goods and include “trade in services, investments and technology cooperation,” would be signed by “the end of this year.”

Topic: Executive

Category: Polity

Key points:

• On July 18, the Cabinet Secretariat notified the amendments made by the President to the Government of India (Allocation of Business) Rules, 1961 pertaining to the Ministry of Electronics and Information and the Ministry of Science and Technology and Earth Sciences
• The government has bifurcated the Ministry of Communications and Information Technology to form a new Ministry of Electronics and Information Technology
• The newly formed ministry will have the Department of Electronics and Information Technology under it
• Under the new rules, the Ministry of Electronics and Information Technology will have complete jurisdiction over the Unique Identification Authority of India (UIDAI) and National Informatics Centre
• Significantly, all matters relating to cyber laws, administration of the Information Technology Act, 2000 (21 of 2000) and other IT-related laws would be part of the domain of the new Ministry
• The Electronics and Information Technology Ministry has been entrusted with the task of promotion of the Internet, IT and IT-enabled services, assistance to other departments in the promotion of e-Governance, e-Commerce, e-Medicine, e-Infrastructure and promotion of IT education and IT-based education
• It would deal with matters relating to promotion and manufacturing of Semiconductor Devices in the country excluding all matters relating to Semiconductor Complex Limited (SCL), Mohali
• Interaction in IT-related matters with international agencies such as Internet for Business Limited (IFB), Institute for Education in Information Society and International Code Council (ICC) would also be under its ambit
• The Ministry would lead the ‘Initiative on bridging the Digital Divide: Matters relating to Media Lab Asia’, Promotion of Standardisation, Testing and Quality in IT and standardisation of procedure for IT application and Tasks
• Also, with the change, there will be two departments in the Ministry of Communications – Department of Telecommunications and Department of Posts

C. GS3 Related

Topic: Biotechnology

Category: S &T

Key points:

• The Environment Ministry is unlikely to prescribe fresh tests to ascertain the safety of genetically-modified (GM) mustard even as environmental activists on Monday alleged that the GM mustard, under scrutiny, contained genes that conferred herbicide tolerance (HT). However, these crops are unlikely to be recommended for release anytime soon
• As part of an ongoing case on GM crops in India, a Supreme Court Technical Expert Committee has already recommended a ban on HT crops
• The GEAC is an expert body of the Environment Ministry tasked with assessing if GM crops posed a health or environmental risk
• The technology used in GM Mustard involves using a complex of genes, sourced from soil bacterium, which makes it easier for seed developers to easily develop hybrid varieties of mustard, generally a self-pollinating plant. Hybrid varieties are generally known to produce greater yields but they necessitate farmers to keep going to seed companies every year to buy fresh seed. The technology, according to the developer, will contribute to increasing yields of such hybrids by 25% of existing varieties

Topic: Shipping

Category: Economy

Key points:

• The Union government cleared a plan to set up Sagarmala Development Company (SDC) to provide equity support to port-led economic development projects, with an initial authorised share capital of Rs 1,000 crore and a subscribed share capital of Rs.90 crore,” according to an official statement
• The SDC’s role will be to identify port-led development projects and assist special purpose vehicles (SPVs) in project development, bid out projects for private sector participation and put in place suitable risk management measures for strategic projects. Under the administrative control of the Shipping Ministry, it will also be responsible for obtaining the required approvals and clearances for the port projects
• It will prepare detailed master plan for coastal economic zones and work as a nodal agency for coordination and monitoring of all the identified projects

Topic: labour

Category: Economy

Key points:

• The Labour Ministry has put on hold its plan to fix minimum wages for all contract workers at Rs.10,000 per month, following objections from industry
• The Labour Ministry received more than 40 objections from industrial groups and companies on its draft notification dated March 30 to amend the Contract Labour (Regulation and Abolition) Central Rules, 1971 taking the minimum monthly income for contract workers to Rs.10,000.
• “The fixation of minimum wages is a state subject and therefore cannot be an identical wage; say of Rs.10,000 for every village or city and industrial town etc. Hence, the proposed amendment will certainly affect the competitiveness of MSMEs,” said Chamber of Small Industry Associations, in its submission to the labour ministry. The Apparel Exporters and Manufacturers Association said the move will “create disharmony” and “result in loss of export of Rs.11,000 crore in a year.”
• Some companiesopposed the proposal saying the amendment will “impose a heavy financial burden to the manufacturers” as this will be an “additional liability” on them apart from paying provident fund, gratuity and other contributions. The Federation of Indian Chamber of Commerce and Industries (Ficci) said the move will “reduce product competitiveness with countries such as Bangladesh, Pakistan and Vietnam.”
• Both the Centre of Indian Trade Unions and the Indian National Trade Union Congress had requested the ministry to raise the minimum monthly wage to Rs.15,000

Topic: Exchanges

Category: Economy

Key points:

• The National Spot Exchange Ltd (NSEL) and Financial Technologies India Ltd (FTIL) must be considered as a single business entity and FTIL’s objections to the merger are “orchestrated,” the Centre told the Mumbai High Court, as the government attempts to push through a merger of both the entities
• The merger would force FTIL to assume all the liabilities of the Mumbai-based spot exchange. It would also make FTIL a party to the ongoing litigations involving NSEL
• Regulatory probes revealed that only a handful of entities were trading in so-called paired contracts and were making money based on the difference between the buy and the sell price(It was discovered after the exchange defaulted on 31 July 2013 that most of the underlying commodities did not exist and the buying and the selling of commodities like steel, paddy, sugar, ferrochrome etc. was being conducted only on paper.In the process, about 13,000 investors are believed to have lost their money)

D. GS4 Related

E. Important Editorials: A Quick Glance

The Hindu

Topic: Caste

Category: Society

Key points:

• Even as the reverberations of the violence inflicted on a group of Dalit men by “cow protection” vigilantes near the small Gujarat town of Una are felt in Parliament, the protests continue to spread across the State. Large parts of Saurashtra, the region rocked most by agitations led by Dalit groups, were practically shut down on Wednesday after a bandh call, and different modes of protest have been adopted
• It is a protest that appears to have grown organically in response to the violence the men bore on July 11, a video of which had been posted online by one of the assailants. They were stripped, flogged, bound and paraded on accusations that they had killed a cow for skinning. It is a videographic record of both random and systemic cruelty. The various modes of protest must be seen as a cry for redressal and systemic social change all around
• Some have protested by attempting suicide, and one died after consuming a poisonous substance. Certain protesters have taken to dumping animal carcasses near a district official’s office. There has been mobilisation on the streets across Gujarat, with one policeman succumbing to injuries after stone-pelting by protesters. There are plans for more State-wide protests. This is a rage that needs a comprehensive and holistic response rather than a confrontationist approach relying heavily on firefighting
• Gujarat Chief Minister Anandiben Patel has met the victims. Prime Minister Narendra Modi condemned the atrocity and Union Home Minister Rajnath Singh spoke about the assault in Parliament, terming such acts against Dalits a social evil that everyone must come together to combat
• The victims of the Una assault must be reassured by the authorities seeing to it that their assailants are punished; moreover, the administration must ensure their safety, so that reprisals are not visited upon them. But for this to happen, the Central and State governments need to level with the people
• Cow protection (gauraksha) cannot be a cover for the pursuit of the kind of aggressive vigilantism that has been witnessed in different parts of the country, more often than not as an exercise in communal consolidation. That violence and intimidation in the name of the cow (or beef) will not be tolerated is a message that needs to go out quickly and unequivocally — not only from the Gujarat government but also from the Centre

Topic: Justice

Category: Polity

Key points:

• Consecutive prison terms for those convicted of more than one offence in a single trial are infrequent in India. When those who have attracted great public odium by the enormity of their crimes are found guilty, the judges are seen to have the option of awarding sentences that are ‘consecutive’, to be undergone one after another as opposed to concurrently, where the longest jail term subsumes the shorter ones
• The Supreme Court has now provided clarity on the question of whether two or more sentences of life imprisonment can be made to run one after another. It is basically irrational and anomalous, says the Constitution Bench. As life imprisonment is for the remainder of one’s life, unless ended by remission or commutation, multiple life terms should be counted concurrently. Accordingly, judgments that run contrary to this principle have been overruled. Consecutive sentences are still permissible if one is a fixed term and the other is one of life, provided the term sentence is completed first and the life sentence begins later
• Unbelievably lengthy prison sentences are not common in India, unlike in some jurisdictions in the West. However, most of these countries balance it with a robust system of probation or parole. On the other hand, the idea of releasing a prisoner under supervised probation after a part of the sentence has been served is still rare in India; both state and society expect convicts to be imprisoned for as long as possible
• This highlights an issue that occasionally crops up in judicial discourse: the absence of sentencing guidelines in India. In theory, sentences can be deterrent, retributive, reformative or restorative. However, the present sentencing paradigm is judge-centric, leaving much to the court’s discretion. Some believe this may be right because no two offences, or even offenders, are likely to be the same. Circumstances (aggravating or mitigating), motive and nature of the crime are all taken into account by judges in sentencing. For heinous crimes, the ideas of deterrence and retribution inform judicial discretion, and hence the more popular verdicts are those that award deserved punishment
• Until sentencing guidelines are framed by the legislature or the superior judiciary, individual judges will have to carry the burden of awarding punishment that befits the crime. By holding that there shall be no consecutive life terms, the court has offered a ray of hope to even those locked away for life, even if it may not guarantee release. For, justice ultimately cannot be merely retributive

Topic: Textiles

Category: Economy

Key points:

• India’s textile and apparel industry is all set for an overhaul as the new National Textile Policy will soon be placed before the Cabinet for approval
• The government has already accepted a Rs.60 billion special package for this sector with an aim to create 10 million new jobs in the next three years, attract investments of $11 billion, as well as generate an additional $30 billion in exports
• The organised textile industry has been facing a slowdown for quite some time, due to which a large number of mills are reported to have shut. Workers who have been displaced are left with no choice other than to move to the unorganised segment or work on a contractual basis
• It has been reiterated time and again that the stringent labour laws and the cumbersome nature of compliance with labour regulations and norms act as a barrier to growth of the manufacturing sector. The textile industry is affected the most owing to its labour-intensive nature and hence high potential to absorb people
• While the government has agreed to reform the archaic labour laws to generate more employment in this industry, in some cases it may require changes in the legislation, which is a challenge in itself
• The system of labour regulations in India is quite complex, with over 200 labour laws, including 52 Central Acts. Each State has its own way of dealing with the industry and making amendments in the labour laws
• Among many laws, the biggest challenge is to bring reforms in the Industrial Disputes Act (IDA), 1947, that forms the basis for regulation of job security in the organised manufacturing segment, due to strict dismissal norms laid down under it. As per Chapter V-B of the Act, any firm employing 100 or more workers has to seek permission from the labour department, with jurisdiction over the firm, before any layoffs or retrenchment. The concerned labour department rarely gives such permission, even in cases where the unit is unprofitable and on the verge of closure. As a result, the industry may find it advantageous to either employ people on a contractual basis or shift to the unorganised segment
• The restrictive impact of this Act and also other regulations impinge largely upon industries such as textiles majorly employing unskilled or low-skilled workers. The problem becomes more intricate knowing that the textile industry has a significant number of women workers on the rolls, which may require modifications in the existing laws along with new schemes and incentives to retain them
• Statistics show that India’s textile industry is the second largest employer after agriculture, providing direct employment to around 45 million people. The sector also accounts for 14 per cent of India’s total industrial production, which is close to 4 per cent of the country’s gross domestic product
• The annual rate of growth in employment in the organised sector has been modest at 2 per cent since 2000-01 with some signs of deceleration, especially from 2007, a period that coincided with the removal of the Multi Fibre Arrangement that governed world trade in textiles and garments with quotas on exports from developing countries to developed countries
• However, an increase in employment is accompanied by a growing share of contract workers in total workers from 8.42 per cent to 13.45 per cent (see graphic). The trend in organised manufacturing overall is similar to that observed in the textile sector, where the share of contract workers has risen from 21.3 per cent to 34.6 per cent during this period

• An increasing informalisation of employment within the formal sector could be explained by the labour market rigidities and growing competition, among other factors. The industry may employ temporary or contract workers in a bid to escape Chapter V-B of the Act despite the contract labour system being more expensive
• Furthermore, the share of contract workers in total workers is much higher in firms employing less than 100 workers, and not falling under the ambit of Chapter V-B of the IDA. The share has significantly gone up in two segments, viz. preparation and spinning of textile fibres and weaving of textiles, from 8.21 per cent to 20.72 per cent and 18.38 per cent to 24.95 per cent in a span of 11 years. It is much higher compared to the firms employing more than 100 workers falling outside the domain of Chapter V-B
• This clearly indicates that the organised industry could be following an escape route by employing contract workers to replace the regular workers. Since firms employing less than 100 workers do not fall under the ambit of the Chapter V-B, they have an incentive to remain outside by hiring more contract workers. On the other hand, the firms which have already crossed this threshold of 100 workers have a much lower incentive to hire contract workers
• Such informal arrangements may hamper the industry’s growth in productivity and development in the long run. The trend, which has been continuing since the nineties, needs to be reversed
• The Economic Survey 2016 has rightly pointed out that stringent labour regulations act as “regulatory cholesterol”, inhibiting the industry from generating employment and hiring regular workers. It is therefore important that as part of the ‘textile package’ the government should at least try to reduce, if not remove labour market rigidities for creation of gainful employment
• Provision of better wages to casual workers, along with social security and other benefits, will contribute to higher productivity. The industry would also avoid hiring contract workers, be able to reduce contracting cost and move towards expansion. Some propositions have been in the offing, such as considering fixed-term workers on a par with permanent workers in terms of wages and allowances, providing tax benefits to firms employing permanent workers for at least 150 days, making provident fund contribution by employees earning less than Rs.15,000 per month optional, and the government contributing on behalf of the employer towards Employees’ Provident Fund Organisation for the first three years. These initiatives, if implemented, can go a long way in reviving growth and generating gainful employment in the textile industry
• The government must also focus on bringing amendments in the IDA which may otherwise act as a stumbling block. Rajasthan, Gujarat, Madhya Pradesh and Haryana are making some headway in this direction. There are provisions to reform labour laws in the new textile policy. It is hoped that the Ministry of Textiles will get the new National Textile Policy approved and speed up the reforms

Topic: Federal Relations

Category: Polity

Key points:

• The Supreme Court verdict in the Arunachal case leaves no doubt that the Governor is a mere figurehead
• Most recently, the Supreme Court implicitly relied on the “basic structure” laid by it and struck down the unilateral actions of the Governor of Arunachal Pradesh in summoning an Assembly session and sending messages to the Assembly as unconstitutional
• As in most other cases where a facet of the basic structure doctrine has been pressed into service, the ends sought to be achieved in the Arunachal Pradesh judgment were lofty — upholding the rule of law, safeguarding the power of judicial review and circumscribing the role that an unelected Governor could play in determining the future course of State politics. However, in reaching these unarguably desirable results, the judgment contains some troubling reasoning that has potential consequences for the future of government- judiciary relations in India
• In the lead opinion of the SC, three propositions of law are clearly laid down — first, the Governor has no power to unilaterally summon an Assembly session unless the government has, in his view, lost its majority; second, he cannot take steps relating to disqualification of the Speaker; and third, he is barred from unilaterally sending messages to the Assembly on any matter. The underlying justification for each of these is the constitutional role of the Governor as the titular head of the State executive
• According to it, the Governor is bound by the “aid and advice” of the elected Council of Ministers as the default rule. While he has the discretion to act on his own in certain matters, those matters must be specified “by or under the Constitution”. Inviting the leader of the majority party to form a government is an example of such a matter since there is no Council on whose aid and advice the Governor can act. On the contrary, calling an Assembly session, dictating its agenda and sending messages to the House are not
• According to it, this understanding concords with the larger scheme of the Constitution pertaining to the role of Governors. Unelected Governors were never envisaged as wielding significant powers relating to State administration. They merely possessed the formal authority of state and could act as a safety valve in case there was a breakdown of constitutional machinery. This view is correct, albeit partially — discretion being vested in Governors was a thorny issue in discussions in the Constituent Assembly. The analogous power of the colonial Governor had created great disaffection leading to a strong sentiment to remove discretion of the Governor altogether
• However, in a seminal speech in the Constituent Assembly on July 15, 1947, Vallabhbhai Patel attempted to strike a balance. While ministerial responsibility would be the fundamental rule, the Governor could exercise his discretion in a few matters which were either widely accepted or necessary in an emergency. It is telling that summoning and dissolving Assemblies was one such matter
• Equally, it would be remiss to not point out that the same scheme of the Constitution never envisaged judicial review to correct any such actions of the Governor. In fact, Article 163 specifically provides that in determining which matters fall within the discretion of the Governor, the Governor’s decision will be final. A literal interpretation of this clause would mean that were there any doubts in the constitutional scheme as to whether a Governor could act on his own accord in relation to a matter or not, such decision would rest with the Governor as the highest constitutional authority in a State. It would not be the domain of the courts
• However, for the Supreme Court, an appeal to the scheme of the Constitution and the basic structure doctrine was sufficient to deny the Governor such discretion. This view is founded on the baseline assumption that judicial review is all-pervasive, irrespective of what the Constitution actually says. There is little doubt that such creativity in interpretation was crucial in this case to strike down the actions of the Governor as unconstitutional, which was unquestionably the right result
• However, the bluntness of the tool, combined with the blitheness with which judicial review, a basic feature, was used as an interpretive tool contrary to its original intent, means that larger questions about checks and balances in the constitutional framework must be confronted
• Any reference to theoretical questions pertaining to checks and balances must necessarily be seen in light of the reality of politicised gubernatorial appointments. There is a marked mismatch between the understanding of the Constitution of the Governor as the dignified head of the State executive and the regular turnover of Governors depending on the party in power at the Centre.
• This mismatch earlier manifested itself through regular invocations of President’s Rule in States; now that invoking such rule has become onerous owing to strict scrutiny by the Supreme Court, in Arunachal Pradesh the Governor attempted a more direct interference
• The court’s response, acutely cognisant of this history, firmly shuts the door on all such actions. It circumscribes the role of the Governor to an extent that no doubts remain that he is a mere figurehead at the apex of the State administration. While political reality demanded such an interpretation, its definitiveness means that what is lost in the process is any possibility of the Governor acting as a bulwark against abuse of power by an elected State government
• The phenomenon of Speakers acting politically, not allowing a no-confidence motion to be tabled and minority governments not summoning the Assembly are not uncommon. In such situations, the Constitution envisaged a restorative power being responsibly exercised by the office of the Governor. However, the propensity of successive governments to hijack such powers for partisan ends trumped this checks and balances function. The Supreme Court, by this judgment, has provided its imprimatur against any such role for the Governor in the future
• In substitution, the court has itself taken on the mantle of checking constitutional infractions by a government whenever and wherever they might occur. There are two simultaneous trends at play here — first, a circumscribing of the powers of the legislature and executive based on a careful reading of the Constitution; second, a creeping extension of judicial power based on a nebulous understanding of the basic structure coupled with an intrinsic belief about the court’s own good intentions
• This interplay is not unique to this case. Variants of it are clearly visible in three of  recent and seminal constitutional law opinions — striking down the National Tax Tribunal Act for being excessively executive-centric; declaring the National Judicial Appointments Commission unconstitutional for taking away judicial primacy in appointment of judges; widening powers of contempt of court
• The rigour that justifies these views on why the Constitution ought to be interpreted in a manner that keeps the executive and legislature in check is in sharp contrast to the assertions that justify judicial expansionism
• This dissonant understanding of the Constitution has consequences far beyond the facts of this case. First, it reinforces the truly independent nature of the Indian higher judiciary. That the court can so boldly speak truth to power, unseating Chief Ministers and turning back the clock, is testament to the respect accorded to it by the people and governments
• Second, it causes a subtle shift in perception of the court from an apolitical institution to an intensely political one. This perception has little to do with the rightness or wrongness of its judgment, but is rather an inevitable by-product of a court that takes its functions of checking and balancing political organs of state very seriously
• Third, it adds grist to the clamorous mill demanding greater and more meaningful accountability for judges who exercise such immense power in India’s constitutional framework. With judges using both the basic structure doctrine to strike down constitutional amendments and its facets as tools for interpretation of the Constitution, greater public knowledge on diverse aspects pertaining to their appointments, performance and functioning are going to be continually sought
• Taken together, these tectonic shifts pertaining to government-judiciary relations might ultimately be contested at a fundamental level, questioning the legitimacy of the basic structure doctrine that lies at the heart of the Supreme Court’s current expansionist avatar

Topic: The UNO

Category: International Organisations

Key points:

• The United Nations Security Council (UNSC) will conduct the first straw poll to elect the ninth secretary general of the UN today presided over by Japan
• The UN is facing a severe crisis. Threats to international peace and security are more serious today than at any time since its inception. The “use of force”, with or without the UNSC’s authorisation, and the arming of rebels has resulted in much turmoil. Iraq 2003, Libya 2011, the ongoing crisis in Syria, and Ukraine 2014 constitute, at the very least, a severe indictment of the UN and, at its very core, the functioning of the security council
• The situation has, if anything, gone from bad to worse. A security council hamstrung by the exercise of vetoes even in situations of mass atrocities, member states accused of war crimes buying their way out after being publicly incriminated, and an overall atmosphere of impunity, poses an existential threat to the UN. Unless rectified, the UN runs the risk, not of disappearing — multilateral institutions seldom wither away — but suffering a thousand cuts and ultimately becoming the world’s largest non-governmental organisation. At stake is the unique and unparalleled convening power of the UN, which carries both moral and legal weight
• Theelection of the new SG will be “business as usual”. The GA will only be left to endorse the choice of the security council. Since the permanent members of the council wield a veto, the candidate finally selected must be acceptable to the US and Russia, two countries that have not hesitated to use the veto in the past. This alone increases the chances of the SG being more secretary and less general
• It is unlikely that any of the twelve candidates will establish a decisive or even a commanding lead in the first straw poll. It is equally conceivable that none of them will meet the “acceptability cut” of the permanent members. A final choice is likely to emerge by October, when Russia will hold the rotating presidency of the council

Topic: Social Sector Initiatives

Category: Governance

Key points:

• In the Indian context, studies related to credit accessibility of women show that relative access to institutional credit of rural women may be limited vis-a-vis their urban counterparts. By studying the SBI MUDRA accounts details, we see that there is indeed traction, though limited, across Jan Dhan and Mudra accounts — primarily in the shishu category of loans, that is loans less than Rs 50,000
• 23 per cent of Mudra loan account holders with the SBI are women with an average ticket size of around Rs 55,000. Alternatively, this implies that most of the women account holders have taken loans under the shishu category only. In contrast, 65 per cent of the Mudra loan account holders are men with an average exposure of around Rs 87,000, of which there is a good chunk from the economically backward classes. But the most remarkable finding was that the distribution of the women entrepreneurs across India with 36 per cent of the accounts coming from southern India (Andhra Pradesh, Tamil Nadu and Telangana) and 16 per cent from eastern India (West Bengal, Odisha and Assam). Maharashtra, Gujarat and Madhya Pradesh accounted for another 17 per cent
• Thus, it clearly seems that states that were slow in terms of economic growth in the past are seeing more traction in women entrepreneurship through the Mudra route
• In terms of the average exposure amount for women entrepreneurs across states, results were even more interesting. On an average, in most of the states as mentioned above, activities were related to grocery and kirana stores, retail shops and even public utility services. But in some of the smaller states like Uttarakhand, Jammu and Kashmir, Nagaland, Mizoram, Himachal Pradesh, Arunachal Pradesh and even eastern states like Bihar and Jharkhand, the average exposure was significantly higher than the national average. It is possible that though limited in number, loans may have been availed by women in such states for activities like buying trucks, cars for passenger and freight transport, given the inhospitable terrains which necessitates the need for an efficient transport infrastructure
• In this context of empowering women, an analogy may be drawn directly to the self-help group or SHG-bank linkage programme — often considered as the ultimate benchmark in women’s empowerment and socio-economic development. Loans like the ones under the Mudra scheme are analogous to microfinance and remain a powerful tool for development as it brings down the capital and the operating costs and helps women entrepreneurship blossom from mere superficiality to productivity.
• The second major finding: Nearly 35 per cent of the total inward remittances in the SBI sample are also from states with high women literacy rates, of which 25 per cent are below the age group of 45 years. Similarly, 48 per cent of the cash withdrawal — with a larger probability of women withdrawing cash from their accounts compared to their male counterparts — also comes from such states. This clearly indicates that the inward remittances sent by their male counterparts are possibly being put to more productive use by women facilitating independent decision making
• To sum up, research has confirmed that investing in women’s capabilities results in the well-being of the family, especially children. The experience of the successful SHG-bank linkage is a case in point in the Indian context. There is no harm in emulating this in the context of better Mudra loan targeting by using the Jan Dhan account interface.
• As our results show, even as women entrepreneurs, specifically the rural ones, are somehow using the Mudra route, we must encourage them even more. This can be achieved by better targeting using big data analytics. For example, states with high literacy across women may be specifically targeted for more of Mudra loans. Simultaneously, the government must think seriously about creating a database of women entrepreneurs across states pursuing similar activities. This will create a successful Mudra-bank linkage. After all, as the SHG example shows, women save more, repay on time and promptly attend the SHG meetings. This is all we need for making women a visible part of Indian growth story

Topic: Accountability

Category: Governance

Key points:

• Resolving citizen grievances is a job for the department of administrative reforms and public grievances (DARPG). The DARPG has a public grievance portal. For 94 central government ministries and departments, citizens can write in with their complaints. The awareness that this portal exists is evidently increasing. There were 132,751 complaints between May 2014 and September 2014. Between May 2015 and September 2015, that number increased to 466,406
• In gauging citizen evaluation of the Union government, this database can be used with three sampling biases. First, not everyone knows this portal exists. Second, citizens write in when there is a grievance. A satisfied citizen doesn’t necessarily bother. Third, everyone doesn’t have access to the internet nor does everyone with a grievance write in
• Data analysed was for a longer period — January 2012 to September 2015. Seventy-three per cent of the grievances concerned just 20 ministries/departments. In descending order of importance, they are: Department of telecom, the Railways, financial services, home ministry, central board of direct taxes, higher education, ministry of external affairs, department of posts, health & family welfare, petroleum & natural gas, labour& employment, defence, school education & literacy, personnel and training, road transport & highways, urban development, department of justice, central board of excise and customs, department of revenue, and the department of ex-servicemen welfare
• In the list of the top-20 ministries/departments, the Railways is second. Number one is the department of telecommunications (DoT). Ostensibly, these grievances are about the DoT. As is perhaps natural, grievances are mostly about service providers, not quite the DoT proper.Therefore, inevitably, having analysed grievances, there is not much the DoT can do, except track and redirect complaints better. Corrective action is quite different from that for the Railways. That’s true for financial services as well since most complaints are about banks
• Despite obvious sampling biases, one could use these as rough indicators of how citizens perceive the government (at least the Union government) and to track improvements over time. Interpreted thus, priorities are telecom, the Railways, banking, home ministry, income taxes and higher education. Improvements in these will improve citizen perceptions substantially

To Read:Why the govt’s new income declaration schemes are different from the amnesties of earlier times

The Union Cabinet has given its approval for introducing amendments to the Benami Transactions (Prohibition) (Amendment) Bill, 2015 in Parliament.

It empowers the Government to confiscate benami property by following due procedure. It therefore promotes equity across all citizens. However, those who declare their benami properties under income declaration scheme will get immunity under the Benami Act.

 
b) Cabinet approves a MoU signed between India and the Swiss Confederation for cooperation in skill development 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post-facto approval for a Memorandum of Understanding (MoU) signed between India and the State Secretariat for Education, Research and Innovation of the Swiss Confederation for cooperation in skill development. The MoU was signed on 22.6.2016 during the visit of a delegation led by the Minister of State (Independent Charge) for Skill Development and Entrepreneurship to Switzerland from 20th – 22nd June, 2016.

The MoU broadly focuses on capacity building and exchange of best practices in the area of skill development. The MoU envisions the establishment of Joint Working Group (JWG) to create, monitor and review the implementation framework for the MoU. The MoU will establish a framework for bilateral cooperation between the two countries in the area of skill development and will formalise and deepen this partnership.

The Union Cabinet has approved signing of the Air Services Agreement between India and Mozambique.

This agreement allows designated airlines of either countries to establish offices in the territory of other country for the promotion and sale of air services.

The Union Cabinet has been apprised of a Memorandum of Understanding (MoU) signed between India and Tunisia on 2nd June 2016 for strengthening bilateral cooperation in the field of Information and Communications Technology (ICT) and Digital Economy.

The MoU intends to foster active cooperation and exchange between private entities, Governments, institutions involved in enhancing capacity building and other public and private organisations of the two countries in the field of ICT and Digital Economy.

The Union Cabinet has approved The Transgender Persons (Protection of Rights) Bill 2016.

Through this Bill the Government has evolved a mechanism for their social, economic and educational empowerment. The Bill will benefit a large number of transgender persons, mitigate the stigma, discrimination and abuse against this marginalized section and bring them into the mainstream of society. It will lead to greater inclusiveness and will make the transgender persons productive members of the society.

Consequent upon Civil Nuclear Cooperation, the Department of Atomic Energy (DAE) has been importing Uranium Ore to meet the Fuel requirements of Safeguarded Nuclear Power Plants. Agreements for import of uranium have been signed with M/s. JSC TVEL Corporation, Russia; M/s. JSC NAC Kazatomprom, Kazakhstan, and M/s. CAMECO, Canada.   

Russia, Kazakhstan and Canada are the countries supplying  uranium as on date for creating uranium reserve.

The sites at ChhayaMithiVirdi in Gujarat and Kovvada in Andhra Pradesh were accorded ‘In Principle’ approval and designated for setting up nuclear power plants in technical cooperation with United States of America (USA). In this regard, discussions were in progress with two US companies, Westinghouse Electric Company (WEC) and GE Hitachi Nuclear Energy (GEH).

In order to step up the launch capacity within the country, ISRO is in the process of exploring the possibility of involving Indian industry in a greater role to meet the increased national requirements and possible commercial demand for launch services. Discussions are being held with the Indian industry towards formulating a plan & strategy to enhance the capacity and capability of managing the Polar Satellite Launch Vehicle (PSLV) programme on an end to end basis.

The Election Commission of India (ECI)gives utmost importance to enrolment of all eligible citizens and to assist electors to reach and cast their votes in a hassle- free way by establishing Polling stations (PSs) at a conveniently located building. “No voter to be left behind”is the motto of ECI for year 2016. National Electoral Roll Purification” (NERP) programme has been launched this week across the country with intensive verification by the Commissions’ field functionaries and stakeholders interaction,to enhance the purity and fidelity of Electoral Rolls (ERs) and to standardization of PS for electors convenienceand facilitate electors’reach his PS with ease.

The Government of India has deployed the Coastal Research Vessel [CRV] SagarPurvi to study about ocean parameters along the coastal waters of India.

CRV SagarPurvi was deployed for implementing various programmes of Ministry of Earth Sciences such as Monitoring of marine pollution levels and conservation and management of coastal resources including coral reef

An Expert Committee has been constituted by Union Public Service Commission (UPSC) under the chairmanship of Shri B. S. Baswan to comprehensively examine the various issues, raised from time to time regarding the Civil Service Examination, with respect to the eligibility, syllabus, scheme and pattern of the Examination vide notice dated 12.8.2015. The committee has been given extension of time till August 2016 to submit its report.

Imparting training to the officers is a continuous process. The course content of the training is modified regularly as per the requirement.

Topic: Reforms

Category: Economy

Key points:

• In order to deal with risks in relation to investments in capital markets and with a view to protect investors, regulatory bodies have been constituted all over the world as watchdogs to the gateway of the securities world.
• Prior to the nineties, the Controller of Capital Issues (CCI) set up under the Capital Issues (Control) Act, 1947 was in charge of regulating capital issuances in India. The price, quantity and type of capital issuance was to be approved by the CCI ahead of an issuance
• Accordingly, this legislation provided for an arbitrary system in which all issuances were ultimately left to the CCI to decide. In order to liberalise the process of issuance of securities, amongst other things, the Act was repealed in 1992, which paved the way for the Sebi Act, 1992
• The Sebi Act, 1992 established the Securities and Exchange Board of India (Sebi) to protect the interests of investors in securities, and to promote the development of and to regulate the securities market. Thereafter, by separate amendments, the power to adjudicate upon lapses of securities laws was provided to Sebi, with statutory appeals from such adjudication lying with the securities appellate tribunal (SAT) set up for this specific purpose
• Following through with liberalisation of the process for issuance of securities, and for setting up a transparent regime for the listing of securities at prices determined by market forces, the Sebi (Disclosure and Investor Protection) Guidelines, 2000 were enacted
• This allowed for book built issues along with a definite disclosure regime akin to international securities offerings. For the first time, Sebi specified the disclosures that would be required in a prospectus in order for a person to make a well informed investment decision in securities
• These guidelines, not only led to evolution of disclosure regime, but detailed rules with respect to the advertising of issuances and regulating the distribution of research material were also formulated. In other words, the whole of the offering process in an initial or a follow-on public offering was, for the first time, set in stone; a far departure from the arbitrary system under the CCI
• Separately, though the stock exchanges were in operation, there was no legislation for their regulation. Under the constitution which came into force in 1950, stock exchanges and forward markets came under the exclusive authority of the central government
• The Securities Contract Regulation Act was enacted in 1956 to provide for direct and indirect control of virtually all aspects of securities trading and the running of stock exchanges, and to prevent undesirable transactions in securities. While it has undergone several modifications since its enactment in 1950, it is still the central legislation for regulating stock exchanges
• From the securities laws regulations point, India has seen extensive changes in the last 20 years. Sebi has become particularly active in both regulating capital issuances and takeovers of listed companies, and the adjudication of offences pertaining to securities laws
• The regulations in relation to capital markets disclosures have also evolved significantly, as have the laws on takeovers. The enactment of the Sebi (Issuance of Capital and Disclosure Requirements) Regulations, 2009, the successor law in relation to public offerings and private placements, has paved the way for further evolution of the disclosure laws in India
• While law making is an evolving process, and securities laws are being enacted/modified continuously to combat the mischiefs that the regulator is faced with, Sebi has ensured that the securities market functions in a transparent manner. For instance, Satyam and Sahara examples have led to multiple changes in securities laws in relation to corporate governance and public offers. However, Sebi continues to provide a stable securities laws regime that ensures that the stakeholders receive their dues and market sentiments are not buoyed by scams and instances of corruption

Topic: State of Indian Economy
Category: Economy

Key points:

• While the International Monetary Fund’s July World Economic Outlook shows India remains the fastest growing economy since last year, the investment cycle in the country is still sluggish. Weak demand—both external and domestic—has led to low capacity utilisation, inconsistent factory output and all-time low industrial credit growth. The balance sheet of companies also remains stressed
• Gross fixed capital formation, an indicator of new capacity addition by companies, contracted 1.5% in the three months to March this year, for the first time in seven years. At 26.9% of GDP in the January-March quarter, capital formation is the lowest ever (in base year 2004-05 and 2011-12), highlighting the muted trend in private sector investments; it also raises concerns about the quality of growth
• Private corporate capex has been on a weak footing for the last four years. Using the old series (2004-05) of national accounts, private corporate capex has declined from 12.8% of GDP in FY11 to 7% in FY16, according to Morgan Stanley research. However, public capex, which accounts for about 25% of overall investments, has held up better than private capex in the last 12 months, which is especially visible in road construction
• While the government did take some major steps to revive investments, the green shoots are yet to take root. Capacity utilisation in factories, according to RBI’s OBICUS, has been range-bound at 71-72% for the past two years, clearly indicating excess capacity in manufacturing sector
• Some high frequency indicators too show that growth is wobbly. Production of capital goods, which is a reflection of the industrial and investment activity in the country, has shrunk for seven successive months. Import of capital goods has contracted since August last year, barring the month of March. The growth of eight core industries, which have 38% weight in the Index of Industrial Production, slowed to a five-month low of 2.8% in May. Credit to industry grew 0.9% in May 2016—second successive month of below 1% growth as bank lending dropped significantly in sectors such as infrastructure, food processing and transport equipment
• Cost and time overruns and slower-than-expected growth in the economy have made many capital-intensive projects financially unviable and companies are reluctant to invest. Banks are no longer lending aggressively to large projects, especially in stressed capital-intensive sectors such as power, metals and mining, which account for more than 60% of the overall corporate capex
• Stressed advances in the banking system rose to 11.5% of total advances in March 2016, from 9.2% in March 2013, according to the latest Financial Stability Report of RBI.

Corporate debt and leverage are sticky issues and will take time to resolve. Public sector banks are rationing credit due to mounting losses and capital constraints. A study done by India Ratings & Research shows that nearly half of the top-500 corporate borrowers hold 42% of the total outstanding debt of R28 lakh crore. Of this, R5 lakh crore is stressed and R6.7 lakh crore falls in the elevated risk of refinancing (ERR), raising concerns of financial stress for India Inc. It shows that already R4.6 lakh crore of the R6.7 lakh crore in the ERR category may have become delinquent. Incremental stress is likely to emanate from the remaining R2.1 lakh crore and refinancing could be a challenge for ERR entities whose interest cover ratio is below one

• A pick up in investments can come from an uptick in private consumption. Much of the consumption spending push can come from the Pay Panel bonanza as the government will be spending an additional R84,900 crore on pay and pensions in FY17. Of this, the Union Budget will bear R60,600 crore, while the Railways will bear R24,300 crore
• An increase in private spending will push up demand for consumer durables and automobiles. The boost to private consumption stimulus would be around R46,800 crore, or 30 basis points (bps) of GDP, according to an analysis done by Kotak Economic Research. The government will get an additional tax revenue of R13,000 crore and households would be able to save R25,000 crore. Moreover, a normal monsoon will also drive consumption spending, especially in rural India
• The revival of private investment, however, will be a slow process, and the cracks in the private investment cycle are likely to continue this fiscal. While the government has made efforts to improve the business environment by strengthening public-private partnership through dispute resolution mechanism in the Budget, policy-related issues will have to be resolved at the earliest so that companies step up investment and create employment opportunities

To Read:Reforms: Narendra Modi govt moves swiftly from GST, kerosene to disinvestment

Topic: Railways

Category: Governance

Key points:

• Indian Railways is looking to drive down its power cost through purchase agreements with independent power producers. That is a smart move. Any commercially run organisation, irrespective of whether or not it has social obligations, should seek to cut out wasteful expenditure and seek lower cost suppliers in order to become competitive
• The Railways, like every service funded by taxpayers’ money, needs to become more efficient, improve its operating margin and generate enough resources to replace ageing assets and invest in expansion
• It is unfortunate that this effort on the part of the Railways is sought to be scuttled by State governments that are seeking to protect the earnings of the electricity utilities they run
• The delay on the part of States such as Odisha, Bihar, Uttar Pradesh, Haryana, Punjab, Delhi, Rajasthan, Chhattisgarh and West Bengal to issue no-objection certificates to independent power producers to wheel electricity into the grid is preventing the Railways from procuring cheap power. The Railways procures power for traction at an average rate of ₹6.7 a unit. In comparison, power from independent producers is available at tariffs between ₹3.69 and ₹5.5 a unit
• Indian Railways consumes 2,100 MW for traction and 400 MW for non-traction purposes and this demand is only set to increase as more tracks are electrified and train trips increase. That will also lead to ballooning of the Railways’ electricity bill, which is already ₹12,000 crore a year. The Railways estimates it can save up to ₹5,000 crore annually if all its plans to procure power from non-State utilities materialise
• If independent power producers are able to drive down tariffs to about half of that charged by State utilities, it reflects tellingly on the efficiency levels at which State generating companies operate. The State electricity utilities may not always be able to match the tariff levels offered by new producers for reasons such as technology and choice of feedstock. However, there is no denying that the costs and losses of State utilities can be brought down and earnings improved. Making procurement of feedstock and power generation more efficient is one part of the solution. Earnings will also improve by reducing what is euphemistically referred to as transmission and distribution losses — that is, theft and under-payment for power consumed. Unfortunately, State utilities have been slow to address this problem
• The Railways is not the only organisation seeking to buy cheaper power from non-State players. Many industries are doing so too. Rather than block free market in power trading, State governments need to push utilities to continuously reform. Transmission lines, like toll roads, should be available to anyone willing to pay the charges. State governments should not be allowed to hold consumers to ransom by denying or delaying access of private producers to transmission lines. Rather, competition should spur reforms within State utilities

Topic: Reforms

Category: Governance/Polity

Key points:

• A quarter century of reform has transformed India in ways Indians used to the Hindu rate of growth could not have imagined. What would happen a quarter century hence, as India continues to reform and grow? India would have overtaken China in population, have a $20 trillion-plus economy and the world’s largest middle class and experience an explosive growth in the number of people growing old
• Africa would have the youngest population on Earth, and Indian and Singaporean universities would compete with Chinese and American ones to set up educational institutions in the countries of that continent. Indian multinationals would throng the world’s cities and Indian food, apart from Indian film, song and dance, would be mainstream fare across the globe
• Such a scenario is not wishful thinking, but extrapolation of existing trends, which could well be disrupted by technology, disease or natural or manmade calamities. Artificial intelligence, robotics, solar power and new materials are poised to change the world as we know it. The ongoing major US project to study the human brain will supplement the understanding of the human genome achieved by a previous US project, to yield new cures and disease prevention
• India has to act now to emerge among the winners, as chaotic change churns the present. This would mean investing in human creativity as never before. Public health, nutrition, pre-school nourishment of the mind and the body, a new culture of questioning and creativity in education at all levels, readiness to dump rather than venerate old orthodoxies — these would be imperative
• Of course, India will need to continue to invest in physical infrastructure. Without that, human beings cannot be productive. But policymakers will have to reorient themselves to appreciate that building large scale human capital calls for inclusive social policy as well. Peace and social harmony can arise only from respecting the rights of individuals and groups, and aligning them for mutual reinforcement. And that calls for a new kind of politics, not just more economic reforms

The Central Reserve Police Force (CRPF), which has seen an unusually high number of injuries in its ranks as it battled crowds staging agitation over the past several days, says for now there is no concrete alternative to the ‘pellet’ guns, known as ‘pump-action guns’ in defence parlance.In fact, it had said last year that as “pellet guns, a non-lethal weapon, are causing injuries”, they were looking for an alternative that “would be less harmful and also help our men to disperse the protesters.” However, a year later this is yet to happen.

Announcing a significant continuation of national policy on the Nuclear Non-Proliferation Treaty (NPT), the government on Wednesday told the Lok Sabha that it will never sign into the treaty which was regarded by previous governments as “discriminatory.”

A day after the Australian Foreign Ministry cited proliferation concerns while rejecting an Indian engineer’s visa application to study in Australia, the country said that the “specific” case should not be used to examine its support to India’s outreach for hi-tech.The Department of Immigration and Border Protection had rejected the application of a student of IIT-Kharagpur saying that his planned research in high tech (“fluid dynamics”) was against the foreign policy objectives of Australia.

After protests from organisations of priests and saints who had raised objections to placing Tamil savant Thiruvalluvar’s statue on either the banks of the Ganga in Har Ki Pauri or near the statue of AdiSankara in Haridwar’sShankaracharya Chowk, Uttarakhand Chief Minister Harish Rawat has now given instructions for the statue to be placed on the premises of Haridwar’s Mela Bhavan.

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

• The department of administrative reforms and public grievances (DARPG)
• GEAC
• GM Crops
• GM Mustard
• Sagarmala Development Company
• NSEL
• The Industrial Disputes Act, 1947
• The UNO
• MUDRA Scheme
• SAT
• SEBI
• Thiruvalluvar

G. Fun with Practice Questions 🙂

Question 1: Which of the following statements is/are correct?

Question 2: Which of the following statements is/are correct?

Question 3: Which of the following are considered part of the Basic Structure of the constitution?

Question 4: Which of the following statements is/are correct?

Question 5: Which of the following statements is/are correct?

H. Archives:

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

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