Comprehensive News Analysis - 23 July 2016

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. Civilian killed in fresh J&K clashes

2. Select Committee on anti-graft amendment Bill gets extension

3. Ministry overruled panel to allow contract hiring at FCI

4. States to get sops based on Aadhaar’s DBT platform

5. Despite hype, only one firm qualified for Startup India

C. GS3 Related:

1. Shooting at Munich shopping centre: German police

2. IAF plane goes missing over Bay of Bengal

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

The Hindu

1. Reaching out to the Valley

2. We need a Nutrition Mission

The Indian Express


1. Doubling the Income of Farmers

2. Implementation of National Horticulture Mission

3. PM salutes Indian revolutionary Chandra Shekhar Azad, on his birth anniversary

4. Dr. Harsh Vardhan launches the ‘Solar Power Tree’ – an Innovation aimed at utilizing minimum land to harness maximum Solar Energy

5. Committee Constituted to Prepare Guidelines for Desiltation of River Ganga asked to Submit its Report within Three Months

6. Committee Constituted to Prepare Draft Ganga Act Asked to Submit its Report Within Three Months

The Financial Express:

1. Data usage in India up, realisation down

2. Make villages smart for Smart Cities success; migration a problem

The Business Line:

1. The name’s bond, Gold Bond

The Economic Times:

1. Compensatory Afforestation Fund Bill: Sense on regrowing degraded forests

2. Legitimate political funding holds key to stemming generation of black money

Quick Bits and News from States

1 SC directs Centre to take possession of Adarsh Society

2. Modi lays foundation for AIIMS hospital

3. Post Brexit, U.K. economy shrinking at fastest pace since 2009

4. IMF chief Lagarde to stand trial in arbitration deal

5. Public investments up 21% in FY’16

6. 23 mandis in 8 states integrated with e- agriculture market so far

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



Useful News Articles

A. GS1 Related

Nothing here today folks!


B. GS2 Related
1. Civilian killed in fresh J&K clashes Topic: Federal Relations Category: Polity Key points:

  • In a fresh flare-up a protester was killed and five were injured in Kashmir Valley, with curfew entering the fourteenth day on Friday
  • Meanwhile, an injured civilian from Kokernag area died of his injuries on Friday morning, taking the death toll to 47


2. Select Committee on anti-graft amendment Bill gets extension Topic: Accountability Category: Governance Key points:

  • The term of the Rajya Sabha Committee, which was to submit its report on the Prevention of Corruption (Amendment) Bill 2013 during the current session, was extended till the Winter Session
  • The proposed legislation has a provision that “no police officer shall conduct investigation into any offence alleged to have been committed by a public servant” under the Prevention of Corruption Act, where the alleged offence is relatable to any recommendation made or decision taken by such public servant in the discharge of his official function or duties without the previous approval of Lokpal (for central government staff) and Lokayuktas (for those working under state governments)
  • The Centre is yet to set up the institution of Lokpal and Lokayuktas — as mandated under the Lokpal and Lokayuktas Act
  • The Bill was introduced in Rajya Sabha on December 1 last year and moved for consideration two days later when members raised objections over certain clauses in it, arguing these overlapped with provisions of the Lokpal Act and more clarity was needed on them
  • The Bill, pending before the Rajya Sabha for long, provides for more stringent punishment for offences of bribery, both for the bribe giver and the bribe taker, by amending the Prevention of Corruption Act, 1988
  • It also seeks speedy disposal of corruption-related cases providing that trial should be completed within 2 years
  • It proposes to extend the protection of prior sanction for prosecution to public servants who cease to hold office after retirement or resignation


3. Ministry overruled panel to allow contract hiring at FCI Topic: Labour Issues Category: Governance Key points:

  • A workers’ union has moved the Delhi High Court against a Labour Ministry notification allowing the Food Corporation of India (FCI) to hire contract workers
  • The Labour Ministry’s July 6 notification allowing the hiring of contract workers by FCI for two years had been taken after the ministry overruled the recommendations of its own advisory board( the Central Advisory Contract Labour Board (CACLB), constituted under the Contract Labour (Rehabilitation and Abolition) Act of 1970) twice
  • As per the law, the government can grant an exemption from the Contract Labour Act of 1970 to an establishment only in case of an emergency and only for a fixed period of time
  • As per the plan, FCI wants to engage only contract labour in place of a four-tier system: regular employees, direct pay system (those getting minimum wage), no work no pay (those who get paid only when there is work) and contract labour system in a bid to save about Rs.2,000 crore a year
  • Expressing shock at high-income levels of regular employees, a Supreme Court bench had said in January that these were an example of the “malpractices” in FCI. “How can a labourer carrying sacks earn Rs. 4.5 lakh per month?” the Bench had observed


4. States to get sops based on Aadhaar’s DBT platform Topic: Social Sector Initiatives Category: Governance Key points:

  • The Centre is considering special incentives for States that take the lead in embracing the Aadhaar-based direct benefit transfer platform for delivering subsidies to the poor and succeed in saving taxpayer money by eliminating leakages
  • So far, the government has transferred Rs.1.02 lakh crore under 74 central schemes to about 30 crore beneficiaries through the direct benefit transfer or DBT system, resulting in huge savings, the Union Electronics and Information Technology Minister said
  • “We have been able to save Rs.36,500 crore of State and Central government funds that was sought to be pilfered or taken away by those that were not entitled for it,” said the minister
  • The government is considering special incentives for those states that have done good work in terms of eliminating leakages and maximising savings through the use of Aadhaar-based DBT across schemes. Thus, a good part of the savings accruing from DBT implementation would be shared with the States that do well
  • The Centre has requested States and union territories to set up DBT cells and set a deadline for union territories to dovetail their schemes with the DBT platform by September 30
  • States have been requested to adopt the DBT platform completely by March 2017. A national DBT portal, which will be an aggregator for all DBT schemes is also being unveiled


5. Despite hype, only one firm qualified for Startup India Topic: Financial Inclusion Category: Economy Key points:

  • Of a total of 728 applications received under Startup India till Monday, the government has recommended only one for tax benefits. The record for StandUp India is slightly better. Of the total Rs 1360.11 crore disbursed in loans till July 15, Rs 179.15 crore, or 13.17 per cent were given to Scheduled Castes (Dalits). The rest went to women and Scheduled Tribes, the other target beneficiary groups
  • The Finance Act provided income tax exemption for 3 years in a block of 5 years for the startups (Companies and LLPs) incorporated between April 1, 2016 and March 31, 2019 and certified as eligible by the Inter-Ministerial Board
  • The StandUp India scheme, launched on April 5, 2016 by the prime minister aims to facilitate bank loans of Rs.10 lakh-Rs.1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) and one woman beneficiary per bank branch for setting up a greenfield enterprise in trading, services or manufacturing sector
C. GS3 Related


1. Shooting at Munich shopping centre: German police Topic: Terrorism Category: Security Key points:

  • Gunmen attacked a busy mall in the German city of Munich on Friday evening, killing at least eight people and sending shoppers running for their lives in what police said was a terrorist attack
  • A police spokesman said three gunmen were on the run after the initial shooting subsided. The city was placed under a state of emergency as police hunted for them


2. IAF plane goes missing over Bay of Bengal Topic: Search and Rescue Category: Crisis Management Key points:

  • An AN-32 transport aircraft of the Indian Air Force has gone missing over the Bay of Bengal at 9:00 a.m. on Friday. Efforts are on to locate it
  • The aircraft that took off from the Tambaram Air Force base (Cnennai)at 8:30 a.m. with 29 persons on board, including its crew, was due to land at Port Blair at 11.30 a.m. at INS Utkrosh naval air station in Port Blair, sources in the Air Force said
  • The Navy has pressed 12 ships, two P-8I long range patrol aircraft and two Dornier aircraft for Full SAR efforts

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

The Hindu


1. Reaching out to the Valley Topic: Federal Relations Category: Polity Key points:

  • Two weeks after protests in the Kashmir Valley caught the authorities by surprise, a semblance of calm has been restored. It is a tenuous one, built on extended curfews, and it has come at a huge price. Even as the government faces difficult questions about the blunt tactics employed to disperse crowds of stone-pelters across Kashmir, there is an evident effort at political outreach
  • Speaking in the Lok Sabha, the Home Minister sought an all-party meeting to address the problem. The Jammu and Kashmir Chief Minister chaired another such meeting in Srinagar that asked Delhi to engage in a larger political dialogue with all stakeholders, “including separatists”. These are important, necessary steps
  • But given the record of outreach in the Valley, the Centre needs to get its framework for a political conversation right. If the proposal to include stakeholders in a larger process is to be credible, the idiom must be genuine. Regrettably, far too much of the vocabulary on Jammu and Kashmir is platitude and hollow cliche
  • The challenge before the government is to demonstrate that it is not reaching out as an automatic response learnt from some worn-out troubleshooting manual — but to show it has acknowledged the outrage, weariness, and distress in the Valley. That it cares enough to be open to being nudged out of its certitudes
  • The former Home Minister’s suggestion this week that India assure the people of Kashmir that it is conscious of the spirit of the grand bargain promised at accession almost 70 years ago has invited a rebuttal from a senior Minister at the Centre
  • But if national politics means to respond to the cries of agony from the Valley this month, it must adopt Mr. Chidambaram’s touchstone — that the issue in the Valley is not about land but about people. Former Prime Minister Atal Bihari Vajpayee had forged a way forward by seeking talks within the framework of “humanity”, thereby sidestepping the issue of allegiance to the Constitution
  • The gains of that breakthrough have long since been dissipated. Mr. Chidambaram’s appeal that India accept an “asymmetric devolution of powers” for J&K, which it has recommended for the Tamil provinces in Sri Lanka, is one such idea that could open a route forward. It should not be reflexively dismissed


2. We need a Nutrition Mission Topic: Health Category: Governance Key points:

  • The “Global Nutrition Report 2016” once again demonstrates India’s slow overall progress in addressing chronic malnutrition, manifest in stunting (low weight for age), wasting (low weight for height), micronutrient deficiencies and over-weight. Our track record in reducing the proportion of undernourished children over the past decade has been modest at best, and lags what other countries with comparable socio-economic indicators have achieved
  • In a ranking of countries from lowest to highest on stunting, India ranks 114 out of 132 countries, with the incidence of stunting at 38.7 per cent, compared with Germany and Chile at 1.3 per cent and 1.8 per cent, respectively. Even Bangladesh and Nepal rank marginally higher than India. On wasting, India ranks 120 out of 130 countries, at 15.1 per cent, compared with Australia and Chile at number 1 and 2, with 0 per cent and 0.3 per cent, and South Sudan at 130 with 22.7 per cent. On the prevalence of anaemia in women of reproductive age, India ranks 170 out of 185 countries at 48.1 per cent, compared with Senegal which is the worst at 57.5 per cent and the U.S. which is the best at 11.9 per cent
  • Aggregate levels of undernutrition in India remain shockingly high, despite the impressive reduction in stunting in the last decade. The segments most at risk continue to be adolescent girls, women and children, and among them Scheduled Castes and Tribes are the worst off, reflecting the insidious economic and sociocultural deprivation so prevalent in India. According to the most recent United Nations Population Fund (UNFPA) report, nearly 50 per cent of women in India are married before they turn 18, in violation of the law
  • The poor nutritional status of adolescent girls, combined with child marriage and multiple pregnancies even before becoming an adult, lead to another dismal fact, that 30 per cent of all children are born with low birth weight. So we add approximately seven million, potentially wasted and stunted, to our population every year! For India to be healthy and break the inter-generational cycle of malnutrition, we have to focus on the health, nutrition and social status of children, adolescent girls and women as a priority
  • Undernutrition — both protein energy malnutrition and micronutrient deficiencies like iron deficiency anaemia — among nearly 70 per cent of school-going children challenges the capacity for physical growth and cognitive development
  • The past decade has seen a steady build-up of momentum around nutrition with the setting up of the SUN (Scaling Up Nutrition) secretariat in the UN; the World Health Assembly adoption (in 2012) of the 2025 global targets for maternal, infant and young children’s nutrition, and the 2015 Sustainable Development Goals which centre-stage the ending of all forms of malnutrition for all people by 2030, to name a few. India’s progress clearly lags behind what is needed to eliminate malnutrition by 2030
  • Maharashtra was the first State in India to launch a nutrition mission, in 2005, followed by five other States, Madhya Pradesh, Uttar Pradesh, Odisha, Gujarat and Karnataka, covering a total population of 300 million. In all six States the focus of the nutrition mission is inter-sectoral coordination to improve child nutrition in the first 1000 days
  • The problem and solution framework are correctly identified, but there are hardly any targets or financial commitments or concrete and specific programmes and processes to accomplish this goal. Systemic development is a long process that requires continuity, consistency, excellence in execution and a measurement of process, output and outcome/impact metrics, and so far at least, much of this seems to be missing for converting intent to action
  • One of the reasons for persistent undernutrition in India, despite the creation of Integrated Child Development Services (ICDS) in 1975 and national coverage of the mid-day meal scheme in 1995, is that there is no structure for multi-sectoral coordination which is essential to address the inter-generational and multifaceted nature of malnutrition. The announcement therefore from the Ministry of Women and Child Development last week of plans to overhaul the ICDS is welcome and much needed
  • The need to systemically address underlying causes of malnutrition in India is an urgency that cannot be postponed for the following reasons: One, poor nutrition is poor economics. The World Bank estimates that India loses 2-3 per cent of its annual GDP by way of lower productivity, the underlying cause of which is malnutrition
  • The Ministry of Finance in its Economic Survey 2015-16 says, “Imagine the government were an investor trying to maximise India’s long-run economic growth. Given constraints on fiscal space and the state’s capacity to deliver public services, where would it invest? This chapter argues that some of the highest economic returns to public investment in human capital in India lie in maternal and early-life health and nutrition interventions.”
  • The Copenhagen Consensus has identified twice several nutrition interventions as some of the most high-yielding of all possible development assessments
  • Two, poor nutrition will fracture the dreams and aspirations of India to become a global player in manufacturing and other industries. The human dividend on which we are banking is actually a huge liability given that one out of every three children is born underweight and unable to realise the full potential for physical growth and cognitive development, leading to lower levels of productivity
  • Three, poor nutrition is poor humanity. Article 47 of the Constitution mentions the “duty of the state to raise the level of nutrition and the standard of living and to improve public health. The state shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties.” We cannot have this broken promise nearly six decades after the Constitution was written
  • Right now there is a confluence of positive factors that must be harnessed for impactful and positive transformation. Several programmes already announced by the government like Swachh Bharat, ‘Beti Bachao, Beti Padao’, etc. are critical nutrition-sensitive factors that address hygiene, sanitation and education. For the nutrition-specific areas, India already has the infrastructure and mechanism for reaching people most at risk. These have to be urgently revamped and made more effective
  • The three structures that must be prioritised are: the ICDS, which caters to the needs of pregnant and nursing mothers and children under the age of six; the mid-day meal scheme, which directly feeds approximately 120 million schoolchildren every day; and the public distribution system, which makes available subsistence rations to above and below poverty line families. All three are also excellent platforms for public-private partnerships to improve the level and quality of service and could be considered as specific areas for collaboration in CSR programmes
  • Of these, the intent to revamp the ICDS has already been announced and must move into action mode quickly. This must include streamlining the work in the 1.34 million anganwadi centres by investing in training the 2.5 million workers and helpers at these centres, standardising the nutrition component of the supplementary food offered and focussing on the overall dissemination of information and education to pregnant and nursing mothers on healthy eating habits, hygiene and sanitation, etc
  • CARE India has recently created a “job aid” which is a piloted mobile application that helps anganwadi workers plan, schedule and better coordinate their work. This and other relevant applications must be disseminated quickly to enhance the productivity and effectiveness of the anganwadi workers
  • Similarly, the mid-day meal is an excellent structure to reach 120 million children with continuity and regularity. A single intervention in that scheme to focus on nutrition in addition to food will make a critical difference. This can easily be accomplished by the addition of micronutrients to cooked food or by adding universally liked and accepted products such as milk, biscuits, etc. fortified with micronutrients as a mid-morning or afternoon snack
  • There is compelling evidence from around the world that large-scale food fortification is one of the best ways to address micronutrient deficiency. The standards of the cooked meal could be changed to using only fortified flour, fortified oil and iodised salt. A large number of children suffer from both insufficient calories and inadequate micronutrients. The most compelling argument for focusing on this group is that it is targeted, there is continuity and regularity and the impact of any intervention is measurable over a period of time
  • Borrowing from best practice in countries that have made quick and significant progress in combating malnutrition, it is recommended that a Nutrition Mission be created to orchestrate and sequence the work both in nutrition-specific and nutrition-sensitive areas so that the impact from each of these is embedded in positive and productive outcomes. There is enough evidence from other countries, especially those which have adopted a multi-sectoral framework, that the results are tangible and specific
  • There are other proven interventions like large-scale food fortification (flour, oil, milk, etc. in addition to salt) that are inexpensive and effective and must be mandated into food standards
  • The immediate actions to step change nutrition outcomes could be summarised as follows:
  • One, create a Nutrition Secretariat as part of the Prime Minister’s Office with responsibility for ensuring multi-sectoral alignment on priorities, sequencing and timelines. This would include both nutrition-specific and nutrition-sensitive initiatives. Agree on a dashboard of nutrition metrics to be tracked, just as we track economic metrics
  • Two, make the nodal Ministries accountable for revamping the ICDS, MDM, PDS with clear goals, timelines and resources. Open these up for public-private partnerships and make these CSR-eligible
  • Three, extend large-scale food fortification beyond salt to other staples like flour, oil, dairy, etc. and establish mandatory standards by category
  • Four, invest in information and education about good nutrition practices, extending from a diverse diet to deworming, breastfeeding, hygiene and sanitation, etc. Nutrition is complex and therefore needs to be simplified in behavioural terms
  • India must convert its young population to a competitive advantage, and nutrition and health are foundational to that outcome


The Indian Express




1. Doubling the Income of Farmers

To achieve the target of doubling of income of farmers by 2022, a Committee has been constituted under the Chairmanship of Additional Secretary, Department of Agriculture, Cooperation and Farmers Welfare for the following aspects:-

  1. To study the current income level of farmers/agricultural labourers
  2. To measure the historical growth rate of the current income level
  3. To determine the needed growth rate to double the income of farmers/agricultural labourers by the year 2021-22
  4. To consider and recommend various strategies to be adopted to accomplish (iii) above
  5. To recommend an institutional mechanism to review and monitor implementation to realise the goal
  6. To examine any other related issue.


2. Implementation of National Horticulture Mission

  • A total of three hundred and eighty four (384) districts under National Horticulture Mission (NHM) are covered in 23 States/UTs.
  • While finalizing/identifying districts for inclusion under NHM, a cluster approach for developing potential horticultural crops while ensuring backward and forwarded linkages was adopted. The selection of the district was decided on the comparative advantage of crops based on agro climatic conditions, potential for developing marketing opportunities were taken into consideration.
  • There is a provision under NHM scheme for setting up of infrastructure units relating to post harvest management, marketing and other project based activities in non NHM districts, provided there is a clear linkage of the units with the horticulture produce. Apart from this, activities for development of horticulture in non-NHM districts can be carried out under other Government schemes like Rashtriya Krishi Vikas Yojana (RKVY), Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Paramparagat Krishi Vikas Yojana (PKVY) etc.


3. PM salutes Indian revolutionary Chandra Shekhar Azad, on his birth anniversary

  • The Prime Minister, Shri Narendra Modi has saluted Indian revolutionary Chandra Shekhar Azad, on his birth anniversary
  • “I salute the courageous Chandra Shekhar Azad, who won the admiration of countless Indians due to his valour, on his birth anniversary”, the Prime Minister said.


4. Dr. Harsh Vardhan launches the ‘Solar Power Tree’ – an Innovation aimed at utilizing minimum land to harness maximum Solar Energy

Union Minister for Science & Technology and Earth Sciences, Dr. Harsh Vardhan, launched the ‘Solar Power Tree’ today in New Delhi. It has been developed by the CSIR-Central Mechanical Engineering Research Institute (CSIR-CMERI), a constituent laboratory of Council of Scientific and Industrial Research (CSIR).

The Solar Power Tree harnesses solar energy for producing electricity with an innovative vertical arrangement of solar cells. It thus reduces the requirement of land as compared to conventional Solar Photovoltaic layout, on one hand, while keeping the land character intact on the other. Even the cultivable land can be utilized for solar energy harnessing along with farming at the same time. The innovation finds its viability both in rural and urban areas.

The Salient Features of the Solar Power Tree are:

  • It takes only 4 square feet of land for a 5 KW Solar Power tree, whereas in a conventional layout, it requires 400 square feet of land.
  • By holding the photovoltaic panels at a higher height, on an average it gets more sunrays for one hour in a day. As a result, it is possible to harness 10-15% more power in comparison to a conventional layout on ground.
  • It has a battery back-up of 2 hours on full load, hence giving light even after sunset.
  • It is facilitated with water sprinkler at the top for self-cleaning of panels, that increases the efficiency of the solar panels.
  • The estimated cost of the device is around Rs. 5 Lakh for a 5 KW specification.

As a future prospect, the Solar Power Tree would be developed in a rotatable module, which would have a motorized mechanism to align itself with the movement of the Sun during the day. Hence, it would be possible to harness 10-15% more power over and above the current capacity.


5. Committee Constituted to Prepare Guidelines for Desiltation of River Ganga asked to Submit its Report within Three Months

Ministry of Water Resources, River Development and Ganga Rejuvenation has constituted a committee to prepare guidelines for desiltation of river Ganga from Bhimgauda (Uttarakhand) to Farakka (West Bengal). Shri Madhav Chitale (Expert Member, National Ganga River Basin Authority-NGRBA) has been appointed as Chairman of the committee. The other members of the committee are : Secretary, Ministry of Water Resources, River Development & Ganga Rejuvenation, Secretary, Ministry of Environment, Forests & Climate Change and Dr. Mukesh Sinha, Director, Central Water and Power Research Station, Pune.

The committee has also been asked to establish difference between desilting and sand mining and also to establish need for desilting for ecology and e-flow of the river Ganga. The tenure of the committee would be for a period of three months.


6. Committee Constituted to Prepare Draft Ganga Act Asked to Submit its Report Within Three Months

Ministry of Water Resources, River Development and Ganga Rejuvenation has constituted a committee to prepare draft Ganga Act. Justice Shri Girdhar Malviya (Retd.) is the Chairman of the committee. Other members ot the committee are : Shri V.K.Bhasin, Ex-Secretary, Legislative Department, Govt of India, Prof. A.K. Gosain, llT Delhi and Prof. Nayan Sharma, llT Roorkee. Shri Sundeep, Director,National Mission for Clean Ganga is the Member Secretary.

The Committee has been asked to prepre a Draft Act on Ganga ensuring wholesomeness of the River. The Act should have provisions to ensure cleanliness (Nirmalta) and uninterrupted e-flow (avirlta)) of Ganga. The Committee may take into consideration any other issue which it may deem fit in the drafting of the Act. The tenure of the Committee would be for a period of three months which may be extended by another three months, if required.

The Financial Express:
1. Data usage in India up, realisation down Topic: Internet Penetration Category: Economy Key points:

  • As mobile operators roll-out 3G and now 4G services, subscribers have been shifting to smartphones. India now has the largest smartphone base (220 million) globally after China. Yet, smartphone penetration is in the region of 20%. As device prices fall, demand for data services is expected to rise. Though voice still accounts for 76% of operator revenues, the share of data has doubled for operators over the last two fiscals
  • That number will rise once Reliance Jio rolls-out an array of data services later this year. While data consumption has been rising, data realisation has been falling. However, once 4G takes off and data consumption rises further, operators could be offering a suite of data services that includes music, video and gaming


2. Make villages smart for Smart Cities success; migration a problem Topic: Rural Development Category: Governance Key points:

  • Almost after a year of the announcement of the Smart Cities scheme, PM Narendra Modi has launched 84 ‘quick-win’ projects for the first 20 cities, costing Rs 1,770 crore. These include development of robust water supply, sewage treatment plants, solid-waste management, development of green and open spaces under AMRUT, housing projects under Pradhan Mantri Awas Yojana and technology-based pan-city solutions, installation of roof-top solar plants, pedestrian walkways, development of information system through apps and website and Wi-Fi connectivity depending upon the requirements of the city.
  • All this is very heartening, indeed. But while we do it in the right earnest, we must think hard over the fact that most of our cities are bursting at the seams because of migration from villages in search of employment. These migrants are permanently temporary workers who live in cities while maintaining their base in villages; a large part of their income is sent there. Given they form a large chunk of the urban population (about 40% in some cities), the pressure on existing infrastructure has led to cities becoming too cramped and congested
  • Despite realising this, the government has done precious little to check migration. To achieve the objective, we should look at making our villages also smart
  • First, we should develop labour-intensive manufacturing units under Make-in-India so that villagers find suitable employment locally. Such units should be established in small-scale and cottage industries. Also, some industries should be reserved for small-scale units to avoid competition from bigger units. For this, skills of village labour through Skill India needs to happen
  • Second, wherever relevant, rural and semi-urban areas should be well-connected with nearby tourist spots—enabling villagers to sell their products directly to tourists for better prices
  • Third, we need to provide suitable ICT network in and around villages under Digital India, so that villagers are informed in real time about the prices of produce—both in agricultural sector as well as industrial. Farmers are already sharing and utilising necessary information delivered via TV and mobile phones to their advantage
  • Fourth, the government must provide good sanitation facilities under Swachh Bharat Abhiyan. We also need to provide other necessary infrastructure such as efficient medical centres, potable water supply, housing and electricity for all, and power for industry, preferably from sources such as solar or wind, or even biomass
  • The Centre and states are together spending a lot of money to set up 100 smart cities in the next 5-7 years. In addition, the private sector is expected to invest in cities of their interest
  • As per a 2016 study done jointly by IESE Business School of the University of Navarra, Spain, and Centre for Globalisation and Strategy, India’s smart cities may take up to 15 years to reach global standards. This is because our four top cities—Mumbai, New Delhi, Bangalore and Kolkata—were ranked 167, 174, 176 and 179, respectively, out of 181 cities, based on the parameters of economy, human capital, technology, environment, international outreach, governance, planning, public management, social cohesion, mobility and transportation
  • In comparison, the extra expenditure to be incurred by the government in making villages smart would be a minuscule fraction. Here, we should not go by the sheer number of villages in India as they could be developed in clusters and the requirements in terms of infrastructure are moderate
  • By developing smart villages, the poor would no longer remain a problem—rather, they would become a part of the solutions to various problems faced by cities. If the influx from rural India is not checked, smart cities would again be flooded with various problems in the course of time and the scarce resources and valuable time spent on making them smart would amount to nothing. Our cities have to be environmentally-sustainable and liveable, in consonance with UN Sustainable Development Goals, to attract foreign investment and drive future economic growth. So, developing smart villages is the crux
  • Since the launch of the ‘Community Development Programmes’ on October 2, 1952, governments have been working on several rural development schemes but, alas, development has not been commensurate with the huge spending because of well-known reasons
  • Rampant corruption in implementation and lack of efficient monitoring, disjointed and fragmented planning by the concerned ministries and departments and the erstwhile Planning Commission are the factors responsible
  • As a lesson from past experience, the NITI Aayog or the Union ministry of rural development should work as a single, powerful coordinating authority to sort out various implementation issues arising from time to time. We should also reduce the number of these schemes, to the extent possible, to avoid duplication of efforts and for the ease of correct monitoring of implementation
The Business Line:
1. The name’s bond, Gold Bond Topic: Monetisation Category: Economy Key points:

  • GoI ‘s Gold Bond which provides sovereign guarantee and exempts capital gains from tax and pays (nominal) interest has delivered a 20 per cent return to investors who were lucky enough to acquire the first tranche
  • The bonds, which were issued at ₹2,684 a gram in November 2015, today change hands at ₹3,218 on the exchanges, a return of 20 per cent in the last eight months. The only problem is that hardly anyone seems to be aware of them as an investment option
  • Dreamed up by the government as an instrument to wean Indian households away from their jewellery fetish, the fourth tranche of the Sovereign Gold Bond scheme is presently open to the public. The five-day offer is set to close today
  • The first three tranches of these bonds have come and gone without making waves among retail investors. In all, the three offers from November 2015 to March 2016 have received just 4.4 lakh applications for bonds worth ₹1,320 crore. This suggests that the bonds have failed to make any material inroads into the booming market for bullion
  • While the cumulative demand for Sovereign Gold Bonds adds up to less than 5 tonnes of gold, Indian buyers lap up an estimated 850-900 tonnes of gold in jewellery, bar and coin forms every year
  • This is really hard to fathom, because, except for shoppers who buy ornamental gold that they actually plan to wear, the Sovereign Gold Bond makes better sense for every other kind of gold buyer
  • For those accumulating gold for a wedding in the far future, this bond scores over jewellery on many counts
  • One, you needn’t worry about purity because the bonds are denominated in gold of 99.9 per cent purity
  • Two, you can be assured of a fair price because the issue price for each tranche is decided by the Reserve Bank of India, based on official rates from the bullion association. The bonds will also be redeemed at official market prices and you need not suffer arbitrary deductions for wastage and losses Three, you need not worry about theft or shell out hefty locker charges, as the bonds can be held in electronic certificate or demat form. Four, you need not resign yourself to losses if you seek liquidity, either. Though these bonds come with an 8-year term, they can be sold prematurely from the fifth year onwards, or used as collateral for loans. They are listed on the stock exchanges for secondary exit too
  • These bonds offer a pretty good alternative to investors in gold exchange traded funds (ETFs) as they offer an annual interest payment of 2.75 per cent, while ETFs charge you a management fee
  • To top it all off, Sovereign Gold Bonds are exempt from capital gains tax if you sell them at maturity, while every other form of gold investment suffers this tax
  • But if Sovereign Gold Bonds are such a hot idea, why have households been so cool to them?
  • Both, the lack of investor awareness and access issues seem to be holding back retail response to the offers
  • Here are three specific fixes that the Centre must consider to have investors sit up and take notice of these bonds
  • Savvy advertising: Eggy yellow sarkari ads for Sovereign Gold Bonds are splashed all across newspapers and hoardings. But missing in these ads are the one key element that will get investors to pay attention — returns
  • With the ads merely mentioning the ‘fixed interest of 2.75 per cent’, most savers are wont to dismiss the bonds as earning less than a savings bank account
  • But as the 20 per cent price appreciation from the first tranche of bonds shows, the larger lure for investors is the prospect of capital gains if gold prices shoot through the roof over the next 5 to 8 years. Highlighting the returns on the first tranche (with due disclaimers on past performance) may drive home the point that the 2.75 per cent interest is only the icing on the cake. The cake is gold price appreciation
  • On-tap availability: Indian gold buyers get a thrill out of timing their purchases by keeping an eagle eye on daily gold rates and jumping in to buy on dips. But the Sovereign Gold Bond deprives buyers of this thrill because it is offered for limited periods of less than a week and are at a dated gold price
  • Many savers complain that the last few tranches of bond issues have come and gone even before they could scrounge up the cash to buy them. Making these bonds available on tap, like small savings schemes, and pricing based on prevailing gold rates may help up the interest quotient
  • If the worry is that the RBI will get swamped with too much demand for gold bonds and will end up having to import too much gold to back them, the problem is easily solved by capping the purchases per investor, à la small savings schemes
  • Wider distribution: Unlike PSU share sales which need to be marketed only to the tiny constituency of equity investors, Sovereign Gold Bonds need to reach out to the vast Indian middle-class which has a penchant for gold. It is, therefore, necessary to think beyond conventional distribution channels
  • The initial tranches of gold bonds were sold only through banks and designated post offices. Stock exchanges have recently been added to this list. But these intermediaries are unlikely to be enthusiastic marketers. Brokers are likely to be loath to move investors away from the high-transaction equities to passive gold bonds. Banks are hardly likely to push products that can lure away their precious CASA (current accounts savings accounts) and dent demand for their pricey lockers. In this situation, India Post, with its network of over 1.5 lakh branches reaching deep into Bharat, offers the best distribution bet for these bonds. Incentivising postal staff to inform and educate small savers about these bonds may work wonders in generating mass appeal for this excellent investment avenue


The Economic Times:
1. Compensatory Afforestation Fund Bill: Sense on regrowing degraded forests Topic: Environment Category: Governance Key points:

  • As part of the global effort to tackle climate change, India has committed to create an additional carbon sink for 2.5-3 billion tonnes of carbon dioxide equivalent via additional forest and tree cover by 2030. The Compensatory Afforestation Fund Bill is central to achieving this. Central and state agencies will spend the money, collected from project developers, to create new forests in lieu of those cleared for things like mines. Forests comprise 21.34% of India’s land mass, but 43% of this cover is degraded. Degenerating degraded forests is vital, to meet the climate target
  • Heavily forested states find it difficult to find non-forest (revenue) land for compensatory afforestation. While the government has taken this on board, it has failed to factor in the Forest Rights Act (FRA), which gives forest dwellers heritable rights, which must be protected during regeneration of degraded forests. The Congress, which moved an amendment requiring gram sabha consent for afforestation projects on forest and revenue lands, appears to have accepted the government’s assurance that this lacuna will be addressed in the Act’s rules
  • The government must do three things. One, make it clear to the project developer that settling all claims under FRA is a prerequisite for afforestation in degraded areas. Two, direct the tribal affairs ministry and the states to prioritise settling of community and individual claims in degraded forest areas. Three, involve scientists and local representatives in preparing and implementing afforestation projects
  • These measures would bring harmony — social as well as between existing and new forests. The Compensatory Afforestation Fund Bill accords an opportunity to augment the quality of India’s natural capital. It must not be squandered away


2. Legitimate political funding holds key to stemming generation of black money Topic: Prevention of money laundering Category: Governance Key points:

  • The Centre’s reported move to send notices to 7 lakh individuals, spotted as having made high-value transactions without furnishing their permanent account number (PAN), serves more a political purpose than to collect more taxes or stem the generation of black money. The annual information returns, which identify potential taxpayers by examining their spending patterns, are useful to track down high net worth individuals evading taxes. However, audit trails snap when transactions reported via the tax information network lack PAN, as was the case with about 1.4 million transactions. Taxmen should make intelligent use of technology to nab evaders, rather than blunt instruments in law enforcement. This is eminently feasible if every large financial transaction is tagged with a unique identifier — PAN or Aadhaar
  • About 250 million PANs have been issued, and four times as many Aadhaar numbers. Furnishing a unique identifier should be mandatory for all high-value financial transactions
  • Tax evasion is rife in real estate. Property registrars should require a unique identifier for both the seller and the buyer. India should adopt the Torrens system of registering land — wherein the owner’s name for any plot of land is directly entered into a registry, maintained and guaranteed by the government — to check benami land deals. The unorganised sector will come under the net when the goods and services tax is adopted and IT systems get interconnected. Audit trails will make available a unified database of tax potential on direct and indirect taxes
  • The income-tax base must be widened, given that less than 4% of people file tax returns; and just a few thousand admit to having incomes higher than Rs 1 crore a year. This, of course, must change
  • The mother-of-all-reforms is to clean up political funding. Every political party should disclose its spending and sources of financing those expenses. These claims can be contested by other parties and watchdog bodies, with the Election Commission making the final verification. Legitimate political funding holds the key to stemming the generation of black money
5. Quick Bits and News from States


1 . SC directs Centre to take possession of Adarsh Society

The Supreme Court on Friday asked the Centre to take possession and secure the 31-storey controversial Adarsh apartments in Mumbai and issued notices to various stakeholders on pleas challenging the Bombay High Court order asking civic bodies to demolish it.

(The Adarsh Housing Society is a posh, 31-storey building constructed on prime real estate in Colaba, Mumbai, for the welfare of war widows and personnel of India’s Ministry of Defence. Over a period of several years, politicians, bureaucrats and military officers allegedly conspired to bend several rules concerning land ownership, zoning, floor space index and membership get themselves flats allotted in this cooperative society at below-market rates.)


2 . Modi lays foundation for AIIMS hospital

Prime Minister Narendra Modi lays foundation for AIIMS hospital and a key fertilizer plant, which was defunct for few decades, in Gorakhpur in east UP. In the last 30 years, over 50,000 children have died due to diseases like Japanese encephalitis in the region, Gorakhpur says, hailing the new AIIMS.


3 . Post Brexit, U.K. economy shrinking at fastest pace since 2009

Britain’s economy is contracting at its steepest pace since early 2009 as a result of the vote to leave the European Union, according to a survey published on Friday.

The so-called purchasing managers’ survey, a gauge of business activity conducted by IHS Markit, shows its composite output index fell to 47.7 points in July from 52.4 in June, an 87-month low. The survey is one of the first indicators of the country’s economic health following the vote as the data was collected July 12-21.


4 . IMF chief Lagarde to stand trial in arbitration deal

France’s top court has ruled that International Monetary Fund chief Christine Lagarde must stand trial in France over a 2008 arbitration ruling that handed €400 million to a politically-connected business magnate.

Ms. Lagarde, who was French Finance Minister at the time of the deal in favour of tycoon Bernard Tapie, is accused of negligence in the case. She has denied wrongdoing.


5 . Public investments up 21% in FY’16

Public investments in India rose 21 per cent last fiscal while private sector funding, which forms 75 per cent of overall investor demand, contracted, making the overall trends “uninspiring”, says an HSBC report.

Public investments by central, state, local government and PSEs saw 21 per cent rise in 2015-16, record growth in last two decades, while private investments (households and corporate) contracted 1.4 per cent year-on-year, the worst performance.

“Since private sector forms 75 per cent of India’s investment demand, overall investment growth remained sluggish at 4 per cent year-on-year (compared to the two-decade average of 8 per cent),” HSBC said in a research note today.


6 . 23 mandis in 8 states integrated with e- agriculture market so far

“Proposals from 12 states for integration of 365 mandis with e-NAM have been approved, of which 23 mandis have been integrated with e-NAM,” the Minister of State for Agriculture said in a written reply to the Rajya Sabha. The target is to integrate 200 mandis by September this year and a total of 585 by March 2018, he said.

F. Concepts-in-News: Related Concepts to Revise/Learn:
  • The Prevention of Corruption Act, 1988
  • The Lokpal and Lokayukta Acts
  • DBT
  • Start Up India
  • Stand Up India
  • Global Nutrition Report
  • ICDS
  • MDM
  • Copenhagen Consensus
  • NFSM
  • PDS
  • National Horticulture Mission
  • Chandrashekhar Azad
  • Smart Cities mission
  • Gold Monetisation Scheme
  • Compensatory Afforestation Fund


  • The Prevention of Corruption Act, 1988
  • The Lokpal and Lokayukta Acts
  • DBT
  • Start Up India
  • Stand Up India
  • Global Nutrition Report
  • ICDS
  • MDM
  • Copenhagen Consensus
  • NFSM
  • PDS
  • National Horticulture Mission
  • Chandrashekhar Azad
  • Solar Power Tree
  • Smart Cities mission
  • Gold Monetisation Scheme
  • Compensatory Afforestation Fund
G. Fun with Practice Questions 🙂
Question1: Which of the following statements is/are correct?
  1. Chandrashekhar Azad was a revolutionary freedom fighter who wanted to build a new India based on socialist principles
  2. Chandrashekhar Azad was involved in the Kakori Train Robbery of 1925

a)1 only b)2 only c)Both 1 and 2 d) Neither 1 nor 2

Question 2: Which of the following statements is/are correct?
  1. Compensatory Afforestation Fund bill, 2015 seeks to establish setting up of a National Compensatory Afforestation Fund and also a State Compensatory Afforestation Fund
  2. The national fund will receive 10 percent of the fund set aside for afforestation, and the states will receive the remaining 90 percent of the fund

a) 1 only b) 2 only c)1 and 2 only d) All the Above

Question 3: Which of the following is/are correct about Sovereign Gold Bonds issued by the government of India?
  1. The bonds would carry a fixed rate of interest
  2. The bonds would be redeemable in terms of the face value of the gold, at the time of redemption by the holder of the bond

a) 1 only b) 2 only c) Both 1 and 2 d)All the Above

Question 4: Which of the following statements is/are correct?
  1. The Start Up India Scheme provides income tax exemption for 3 years in a block of 5 years for the startups incorporated between April 1, 2016 and March 31, 2019 and certified as eligible by an Inter-Ministerial Board
  2. The Stand Up India scheme aims to facilitate bank loans of Rs.10 lakh-Rs.1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) and one woman beneficiary per bank branch for setting up a greenfield enterprise in trading, services or manufacturing sector

a) 1 only b) 2 only c) Both 1 and 2 d) Neither 1 nor 2

Question 5: Which of the following is/are correct about Solar Power Tree?
  1. It is efficient in terms of land area usage for solar power production
  2. By holding the photovoltaic panels at a higher height, on an average it gets more sunrays for one hour in a day
  3. It has a battery back-up of 2 hours on full load, hence giving light even after sunset
  4. It is facilitated with water sprinkler at the top for self-cleaning of panels, that increases the efficiency of the solar panels.

a) 1 and 2 only b)1 and 3 only c) Both 1,2 and 3 d)All the Above

Check Your Answers

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