# Comprehensive News Analysis - 25 April 2017

POLITY

ECONOMICS

MISCELLANEOUS

##### H. Archives

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### Useful News Articles for UPSC Current Affairs

A. GS1 Related

Nothing here for Today!!!

B. GS2 Related

1. Corruption, the top pain: poll

• Source: The poll for pledges taken under the New India campaign run by Prime Minister Narendra Modi on March 12
• Outcomes: Corruption and the ways to fight it remain a major concern for the people
• Nearly 70% of the respondents voted for a pledge to fight corruption
• This was followed by Swachch Bharat and the campaign for Accessible India, of making public spaces accessible for the physically challenged
• About the campaign: PM Modi, after the results of the Assembly polls in the five States in March, started this campaign by launching the poll on pledges to be taken on various issues of interests by those who had downloaded his personal App, the Narendra Modi App
• The findings of the polls are significant in that the “government may tap into the enthusiasm” while prioritising issues

C. GS3 Related

1. NITI to present new plan approach

• Context: A meeting of the governing council of NITI Aayog chaired by Prime Minister
• A new three-year policy action plan to replace the old system of five-year plans will be discussed
• The three-year action plan will also include a strategy to spruce up the law and order situation
• Besides the new planning process, the council is likely to take up for discussion issues such as increasing farmer incomes and urban development
• This is the first time that an economic policy document will also focus on judicial reforms and how to improve law and order and the police system. There will be an entire chapter dedicated to it
• Background: The practice of five-year plans, being followed for over six decades, ended with the 12th Plan that concluded on March 31 this year
• NITI Aayog which was set up in December 2014 after abolishing the Planning Commission, will now come out with a 15-year vision document that is to be supplemented by a seven-year strategy and three-year action plans
• Farmer incomes: The Council, that includes all chief ministers as members, will be presented with “detailed plans on doubling of farmers’ income”
• The Prime Minister had in February last year urged all state governments to give priority to boosting the agriculture sector with a target of doubling farmers’ income by 2022
• For the short-term, the Aayog is likely to recommend measures such as direct purchase from farmers by private players, direct sale by farmers to consumers, to allow farmers to get the larger share of the prices that the end consumer pays
• One of the long term strategies will be to encourage farmers to move to high-value products such as Animal Husbandry and Fishery
• Report card: The Aayog is also likely to place before the council a report card on its two years as an institution
• It has a different way of thinking. The Planning Commission used to also allocate funds to the states. NITI’s relation with the states is more equal

2. SEBI lines up reforms to check flow of black money

• Securities and Exchange Board of India (SEBI), will soon put in place stricter norms to check any flow of black money into stock market though controversy-ridden P-Notes and also initiate steps for allowing mutual fund investments through e-wallets
• Besides, SEBI will consider new norms for allowing options trading in commodity derivative market
• Rules would be relaxed for registration of foreign investors and for common license to brokers to deal in equities and commodities
• It will also consider making it easier for banks and financial institutions to get shares of the companies they have exposure to by way of conversion of loan into equity — a move seen as a major boost to the steps for handling the bad loan menace
• It will also take stock of long-pending investigations and cases, involving some big corporates, and will consider putting in place an internal guidance note for dealing with quasi-judicial matters
• Besides, it would also discuss the implementation of graded surveillance measures by the stock exchanges to check any manipulation of share price
• It will also consider new guidelines for dealing with offshore derivative instruments, commonly known as participatory notes (P-Notes), which have been long seen as being possibly misused for routing of black money from abroad

3. Rebooting PSBs

Context:

• The Government is mulling ideas to rid PSBs of their present stockpile of bad loans
• It should also initiate structural reforms to prevent their recurrence

Banks Board Bureau:

• Bank Boards Bureau (BBB) was constituted in April last year and was chaired by former CAG Vinod Rai
• It fired up expectations that the governance overhaul would move quickly ahead
• But a year on, the bureau has taken baby steps towards this objective
• The fault lies mainly with the Centre which has hamstrung its efforts through a very restrictive mandate

Reasons of Bad debts:

• Bad lending decisions at PSBs can be traced mainly to governance issues:
• Poor risk management and credit appraisal systems,
• Dual regulation by the RBI and the finance ministry,
• Political interference in lending and top level appointments,
• Poor compensation and brief tenures of their boards

Role of BBB:

• The BBB is empowered only to address the last aspect
• It can advise the Government on the appointments of chairmen and whole-time directors
• The bureau’s suggestions are also vetted, and sometimes turned down, by the finance ministry
• Given this context, it is unclear if the BBB’s latest missive mooting a new Governance, Reward and Accountability Framework for PSBs will be implemented any time soon
• In fact, the PJ Nayak committee on bank governance had envisaged the BBB only as an interim step in governance reforms

Government’s reluctance:

• To ring-fence bank boards from political interference and grant them autonomy, the committee had suggested that the Government transfer its holdings in these banks to a separate Bank Investment Company, and then dilute its equity stake to 50%
• But so far, the Centre has been reluctant to act
• Given the precarious health of many PSBs and the large deposit base they command, it seems to be wary of alarming depositors by withdrawing its perceived sovereign backing
• It is also not able to find sufficient capital given fiscal constraints to nurse the distressed banks back to health
• Therefore, the time is quite ripe for the Centre to let go of its stranglehold on PSBs

• Vesting government equity in a holding company may not be enough as this entity may still be tied to its apron strings
• To really professionalise PSB boards and convince their employees that they are accountable only to their consumers and shareholders, the Centre will need to do more
• It can consider divesting shares in select PSBs through public offers to retain a minority stake
• It can also push through legislative changes and modify reporting structures at PSBs so that they fall under the ambit of the Companies Act rather than the Bank Nationalisation Act for a level playing field with private firms
• Only this will send a clear signal, both to bank boards and their employees, that the umbilical cord with the ‘parent’ ministry has been cut for good

4. From plate to plough: The faraway fields

Context:

• A preview of Modi government’s performance in agriculture sector in the past three years
• Agriculture engages 47% of the work force, as per the Labour Bureau, and without whose development “sabka saath, sabka vikas” is not possible

Records:

• In the first three years of the Modi government, agri-GDP grew by just 1.7% per annum
• This is less than half of what was achieved during the last three years of the UPA government (3.6%)

Reason and the steps taken:

• Such a poor performance was caused primarily by droughts in 2014 and 2015
• In order to tackle droughts more effectively, the Modi government tweaked and improvised existing schemes and launched the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) and Pradhan Mantri Fasal Bima Yojana (PMFBY)
• A new scheme, e-National Agriculture Market (e-NAM), was launched to link 585 regulated agri-markets across the country

Analysis:

• These steps are in the right direction though implementation has been rather weak in most cases
• Without a champion for agriculture in the government, these schemes may fall far short of their promises and claims

PMKSY:

• PMKSY was launched on July 1, 2015, to give “har khet ko paani” (water to every field) and improving water use efficiency through “more crop per drop”
• The implementation of various components of this scheme depends on three different departments — Agriculture, Water Resources, and Rural Development
• A new mission directorate for PMKSY is set up under the Ministry of Water Resources
• The government identified 99 projects for early completion under the Accelerated Irrigation Benefit Programme (AIBP), which together will irrigate 76 lakh hectares (ha) upon completion
• Financial support was to be given through NABARD’s Long Term Irrigation Fund of Rs 40,000 crore
• Of these 99 projects, 26 are in Maharashtra which had seen long delays and allegations of corruption
• The component of micro irrigation (MI) in PMKSY has done better and 8.13 lakh ha of additional area is said to have been brought under MI
• The total area under MI is about 9 million ha while the potential for MI is almost 10 times more
• The government would do better if MI is treated at par with AIBP in terms of funding
• MI can move faster with much better results in terms of water-use efficiency

PMFBY:

• For the first time, farmers’ share of the premium was pegged at 2% for kharif crops and 1.5% for rabi crops
• As a result, the area covered under insurance increased from 27.2 million ha in kharif 2015 to 37.5 million ha in kharif 2016, and the sum insured increased from Rs 60,773 crore to Rs 1,08,055 crore over the same period
• However, the system of crop damage assessment has not changed much and most of the states could not even procure smartphones that were supposed to facilitate the faster compilation of crop cutting experiments
• Some state governments did not take the cost of cultivation as the amount to be insured with a view to saving their outgo on the premium subsidy
• Many state governments did not pay the premium on time, as a result of which the farmers’ claims could not be settled expeditiously
• In sum, there is still much work to be done on the implementation side, else the large expenditure from the government kitty will be spent without accruing commensurate benefits to farmers

e-NAM:

• The idea was to enable buyers located in distant places to purchase agri-commodities from any mandi
• The GoI also decided that state governments can apply for a grant of Rs 30 lakh per mandi (enhanced to Rs 75 lakh from this year) for related infrastructure and hardware, provided they undertake some reforms in their Agricultural Produce Market Committee (APMC) rules
• These included a single trading license to operate in any mandi in the state, single point levy of market fee, and provision for e-auction of agricultural commodities in the rules and regulations of the state
• So far, 417 mandis located in 13 states are claimed to have been connected to the e-NAM portal
• In most mandis the sales through traditional auctions are being shown as turnover through e-NAM
• An enquiry revealed that very few auctions are being conducted by using the software
• So far, there are no inter-mandi auctions and there is no evidence that farmers have gained from this system either in terms of cutting down commissions of arhtiyas or better price realization
• The ambition of creating an all-India agri-market, therefore, still remains a distant dream
• The e-NAM can be a game changer only if it is steered as diligently as the GST

Lacunas:

• All these flagship programmes are dwarfed when one looks at the money being spent on food and fertiliser subsidies, which exceeds Rs 3,00,000 crore (including arrears) in 2017
• One had hoped that the Modi government will take bold decisions to streamline these by moving towards Direct Benefit Transfer (DBT) to beneficiaries’ accounts
• The progress on this front has been tardy and one doubts whether any bold reforms are coming soon

1. Army plans to raise inclusiveness

• Source: A recently concluded Army Commanders’ Conference
• Outcomes: It debated ways of optimum utilisation of personnel
• Various measures to enhance transparency and inclusiveness were also deliberated
• Army: Its core values have not changed, and rapid “societal changes and discernible impact of socio-economic aspirations on Army” had been a focus area of the conference
• Issues:
• Pyramidal: The Service has a “highly pyramidal structure” and hence over “50% personnel are not promoted despite being highly competent”
• Orderly system: This meeting comes against the backdrop of concerns on the sahayak system in the Army after a series of videos had surfaced on social media recently
• In it, serving personnel alleged that they were forced to do menial jobs
• Under the orderly system, jawans are assigned to officers to perform certain specified personal tasks
• The government has promised a full review of the system, but no proposal has been made to abolish it

D. GS4 Related

Nothing here for Today

PIB ArticlesEditorials Roundup

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

F. BILLS/ACTS/SCHEMES/ORGS IN NEWS

 BILLS/ACTS/SCHEMES/ORGANISATIONS IN NEWS About the Article
##### G. Practice Questions for UPSC Prelims Exam
Question 1: The Lokpal Act, in its present form, provides for a five-member
panel to select the anti-corruption ombudsman, comprising the
1. Prime Minister
2. Lok Sabha Speaker
3. Rajya Sabha Chairman
4. Chief Justice of India
5. Leader of the Opposition in the lower House

Select the correct answer using the code given below:

1. 1, 2, 3, 4 and 5
2. 2 and 5 only
3. 1, 2, 4 and 5 only
4. 1, 3 and 4 only
See
Question 2: Consider the following statements with regard to the official post
of ‘Leader of the Opposition’ (LoP) in the Lower House:
1. That the speaker can recognise as LoP only the leader of the principal opposition party that has 10 per cent of the total number of Lok Sabha seats is based on precedent, not law.
2. The LoP in the Lok Sabha was accorded statutory recognition in 1977.
3. India’s first LoP was also appointed as the Law Minister.

Which of the statements given above is/are correct?

1. 1 only
2. 1 and 2 only
3. 2 and 3 only
4. 1, 2 and 3
See

Question 3: The parent organisation of the Indian Council for Cultural Relations
is the
1. Ministry of Culture
2. Ministry of Tourism
3. Ministry of External Affairs
4. It is an autonomous organisation
See

Question 4: Solid Waste Management in a particular urban area entails
the following steps:
1. Collection
2. Recycling
3. Segregation between wet waste and the rest
4. Biomethanation
5. Deposition of waste in landfills

In what sequence should these steps ideally be implemented?

1. 1-3-2-4-5
2. 1-3-4-2-5
3. 3-1-4-5-2
4. 3-1-2-4-5
See
Question 5: ‘Technosphere’, a term which recently appeared in the news,
refers to all
1. urban regions of the developed world.
2. urban regions of our planet.
3. structures that humans have constructed in urban areas.
4. structures that humans have constructed to keep them alive on the planet including farms.
See