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Comprehensive News Analysis - 31 May 2016

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. Bad blood: 2,234 get HIV after transfusion

2. India’s ties with African countries ‘good’: Hamid Ansari

3. MGNREGA Index

C.GS3 Related:

1. Hacking scare leads to norms for smartphones

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

The Hindu

1. Enough, but much too late

2. The right to intervene

3. Grappling with our prejudices

4. No country for the old?

Indian Express

1. New conservation rules may soon apply to wetlands. What are they?

2. Data: 30% women married under age 18


1. PIB

a) WCD Minister, SmtManeka Sanjay Gandhi releases Draft ‘Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2016’

2. The Financial Express: For educating India, independent regulators are important

3. The Financial Express:Column: Equal is not necessarily equitable

4. Business Standard: Avoiding reform

5. Business Standard: Fiscal prudence

6. Business Standard: Price cap on drugs counterproductive

7. Business Standard: Need for better public sector oversight

8. Business Standard: No, Mr Modi, you are not yet transforming India

9. The Business Line: Uncertainty’s bleeding the economy

10. The Economic Times: Five steps that government can take to reduce food inflation

11. Quick Bits

a) India set to retain fastest growing economy tag-Reuters survey

b) NGT to hear plea on extending diesel vehicle ban

c) Plastic bottles contaminate medicines, says panel

d) Krishi Kalyan Cess on services from tomorrow

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! J


B. GS2 Related
  1. Bad blood: 2,234 get HIV after transfusion

Topic: Governance

Category: Health

Location: The Hindu

Key points:


  • In the last 17 months alone, 2,234 persons across India have been infected with human immunodeficiency virus (HIV) while getting blood transfusions
  • The data was revealed by National AIDS Control Organization (NACO) in response to a Right to Information query
  • It is now legally mandatory for every blood bank to screen blood samples before giving it to a patient. But in some cases, the donor may be in a window period — before his HIV viral load can be detected — when he donates the blood. In such cases, when screened, the blood sample shows a false negative



2.India’s ties with African countries ‘good’: Hamid Ansari

Topic: International Relations

Category: Indo-African Relations

Location: The Hindu

Key points:

  • Interacting with reporters on board his special aircraft en route to the Moroccan capital Rabat, Vice President, Mr.Ansari said, “With Morocco we have substantive relationship due to one product — phosphate — which is very important for us. Indian investment is also there in Morocco in this sector
  • Our relations (with Africa) are old. We will discover our space in more areas including IT and tele-medicine,” he said, adding that there is also scope for cooperation in agriculture
  • In the second leg of his tour, Mr. Ansari will visit Tunisia from June 2 to June 3


3. MGNREGA IndexTopic: Governance

Category: Social Sector Schemes

Location: The Hindu

Key points:

  • Assessment of the implementation of the MGNREGA by the States between 2015 and 2016 collated by Vision India Foundation, a not-for-profit initiative  by alumni and faculty members of various IITs
  • About 2 per cent of the Union Budget or 0.3 per cent of the GDP is allocated to the scheme
  • Findings



C. GS3 Related

Hacking scare leads to norms for smartphonesTopic: Security

Category: Data security

Key points

  • Amid attempts of hacking and data theft by Pakistan and China, the government has come up with a smartphone policy for officials dealing with sensitive information
  • Amid attempts of hacking and data theft by Pakistan and China, the government has come up with a smartphone policy for officials dealing with sensitive information



D. GS4 Related


E. Important Editorials: A Quick Glance


The Hindu

  1. Enough, but much too late

Topic: Polity

Category: Elections

Key points

  • The poll notification for two Assembly constituencies in Tamil Nadu, Aravakurichi and Thanjavur have been scrapped by the Election Commission, where money and gifts had been distributed to voters by candidates and members of the two major parties, the AIADMK and the DMK
  • In the context of the rampant distribution of favours in cash and kind to voters in the run-up to the polls, the EC was under pressure to restore popular confidence in its ability to curb electoral malpractice. Its reputation was at stake. As a result, in Aravakurichi and Thanjavur the Commission did all that it was empowered to do, baring teeth and claw, and asserting its authority vis-à-vis other constitutional authorities. Postponement was the most it could have done, after having deferred the elections earlier; disqualification of the candidates was beyond its remit
  • Unprecedented it might have been, but the calling off of the electoral process, on a maximalist exercise of power, seemed as if it was the only course open to the EC.
  • The events and happenings in the two constituencies differed in degree, and not in type, from what occurred elsewhere in the State. As reports from different parts of Tamil Nadu suggested, there were few constituencies, if any, that were totally free of the pernicious influence of money and other inducements. Therefore, the EC’s action in these two constituencies may be construed as one that did little but carry symbolic weight
  • A Commission with better resources and more manpower on the ground for the entire State — not to mention much greater courage — may have considered postponement of the entire Assembly election
  • But such a drastic course of action would have had serious ramifications for the democratic process. Even so, it must be granted that the EC went well beyond merely delivering a mild reprimand to the parties
  • Its detailed order clearly recorded its displeasure with Tamil Nadu Governor K. Rosaiah, who broke both convention and propriety by asking that the polls be held before June 1, or in time for the Rajya Sabha election
  • In doing so, the EC underlined its independence and authority and signalled that it would not be cowed down by political pressure. In taking on the Governor for his overreach and refusing to quietly acquiesce in this matter, the EC deserves to be commended



3. Grappling with our prejudices Topic: International Relations/Society

Category:  Indo-African Relations/Racism

Key points:

  • This week has clearly demonstrated the deep insecurities that define the lives of African residents in India as they negotiate racism on a daily basis
  • It seemed almost ironic that while the Indian government sent out invitations to its gala celebrating Africa Day, a few locals in Delhi were bludgeoning MasondaKetada Oliver, a Congolese national, to death and injuring several other Africans in a series of hate crimes
  • This contrast, while stark, highlights the fact that as India and various African countries encourage trade, aid and skill-based partnerships, the movement of people between these regions is on the rise, requiring urgent mechanisms to ensure the safety and security of migrant populations. Not only is this a basic expectation from a member of the community of nations, but is also critical to the hopes of a South-South axis of economic and political partnership
  • Trade between the two regions has increased from $6 billion in 2005 to $64 billion in 2013. Also, India sees African citizens as prospective medical and education tourists, further bolstering the Indian economy. Thus, the threats of reducing interaction and the powerful statement of ‘mourning’ issued by the African Heads of Mission seem to be designed to hit where it hurts India the most
  • The rampant pigment-based discrimination in India and the perception of African migrants as lawless and immoral individuals underscores the need for public intervention. It is important to note that bridges of communication are essential to ensure meaningful exchange and a healthier lifestyle for both the African migrants and Indian nationals
  • A closer look at the lives of the African migrants and their neighbours brings into view a life worn thin by constant suspicion. Africans tend to live in closed communities, and survive using tactics of invisibility. It is important to note that there is great diversity among African nationals but in the face of oppression they adopt similar tactics, and the community has attempted to move further underground. Thus they seek to minimise their interactions with Indians and the wider urban landscape by choosing social interactions that take place inside homes and at night
  • This strategy does not allow them the space or time to understand or successfully adapt to the social climate they now find themselves in.
  • Similarly, many Indians live in fear of the African population. While their ideas of Africans are regressive and absurd, to say the least, it is important to create appropriate channels of communication to allow for fraternity or at least peace to emerge. Merely shaming local residents and calling them racist will do nothing to change the situation on the ground
  • The strategies used by the Central and State governments and the embassies should be varied, and involve formal and informal processes that focus on providing security and encourage mutual respect
  • The Indian state must provide clear guidelines for African migrants to register complaints. In addition to this, sensitisation programmes are essential to reduce the overall atmosphere of hostility and improve the quality of life for all parties concerned. These are vital in particular to improve the life of undocumented migrants who may be unable to access formal channels
  • The embassies could provide more informal channels of support by focussing on discussions and visibility-enhancing local interventions with the help of NGOs
  • They could also utilise the traditional strategy of creating safe spaces for children from affected neighbourhoods, from all the concerned communities, to learn together and normalise difference
  • The Delhi government has envisaged a mohallasabha strategy for more inclusive discussions in Delhi and perhaps these could be used in conciliatory ways to question deep-rooted prejudice and allow for more progressive political tactics. Educational institutions need to debate means to ensure inclusion of African students on campus, ensure the availability of safe and affordable accommodation within or close to campus and create channels for students to register complaints. This mixture of legal and social processes could help create a more supportive environment for migrants and Indians who live in close proximity to each other.
  • The Indian government and Heads of Mission have pointed towards a technological approach to reconciliation. The ‘Atithi Devo Bhava’ campaign by Incredible India had attempted to address issues of defrauding and molesting foreigners. The ‘atithi’ in the advertisements were all white tourists. A new campaign would need to address this damaging void and widen the understanding of inclusion and peaceful co-existence. However, online platforms will be insufficient without clear on-ground activity.
  • Most of the Heads of Mission did eventually attend the Africa Day celebrations that they had threatened to boycott, but the statement had made its impact and forced the Indian government to recognise the existence of a clear problem. Since the initial spurt of tweets, the Indian government and the police have either side-stepped or denied that the violence has stemmed from racial prejudice. This is a dangerous sign and seems almost hypocritical for a polity that has taken a clear stand on instances of racial violence against Indians in other countries
  • One hopes the erstwhile strategy of willed ignorance is no longer supported by the government, and that its actions are based on the values of justice, liberty and fraternity that the Indian Constitution, and by extension India, is based upon
  • Expounding slogans of shared histories from Bandung are far easier than creating structures that support the everyday lives of migrants and Indians, given the social frictions that typify globalising cities.
  • The current pledges of support require extensive work on the ground and in terms of policy to ensure that the ideas stated by the government go beyond tokenism.


  1. No country for the old?

Topic: Governance

Category: Elderly Healthcare

Key points:


  • There are 87.6 million people aged above 60 in India India is expected to be home to 300 million elderly people by 2050
  • It is time it paid heed to the problems of those who are as old, or even older, than the independent nation itself is today. Else the country will be faced with a large incidence of degenerative diseases, accompanied with serious gaps in the geriatric medical ecosystem, a changing joint family structure, the lack of ‘grey-friendliness’ in public spaces, transport, housing, and a virtually non-existing policy framework to tackle these issues
  • With about 50 per cent of the elderly being financially dependent on others, it is affordable housing, healthcare, and the psychological and social manifestations of ageing that we will struggle to respond to as a country with no social security and dismal elderly care facilities
  • What will be the combined impact of this trend on small, nuclear families, along with an improvement in lifestyle and an increase in degenerative diseases and life spans, especially for women? Where are we going to live as we grow old and who is going to take care of us?
  • Clearly Parliament had some of these issues in mind when it passed the Maintenance and Welfare of Parents and Senior Citizens Act in 2007. The model Act makes it obligatory for children or relatives to provide maintenance to senior citizens and parents. It also provides for the setting up of old age homes by State governments
  • Despite this, however, it is a fact that most people in India would rather suffer than have the family name sullied by taking their own children to court for not providing for them. This need to maintain a façade is combined with a lack of knowledge of rights, the inherent inability of the elderly to approach a tribunal for recourse under the law, and poor implementation of the Act by various State governments
  • So what happens to those who have been turned out from their homes, or have lost a partner, or just can’t manage to live on their own anymore, especially since the number of old age homes the Centre supports under the Integrated Programme for Older Persons (IPOP) has seen a decline from 269 homes in 2012-13 to a dismal 137 in 2014-15? The Centre has asked State governments to ensure that there are old-age homes whose functioning can be supported under IPOP, but since it is optional for the State governments to do so, the total number of old-age homes remains abysmally low
  • While we hope that the Indian family continues to be stronger than in most countries and provides a caring environment for the elderly, it can’t be the basis for our ability to support the elderly. India needs to take a serious look at the needs of the elderly in a more pragmatic and holistic manner. For starters it could focus on the three key aspects of health, housing, and dignity
  • Each of these is a large issue on its own, but it is important to first strengthen the health-care system. If 18 per cent of the population is going to be over 60 years of age by 2050, then it becomes almost crucial to encourage research in geriatric diseases, and push for building capacity in the geriatric departments across the primary and tertiary health-care systems. There also seems to be a growing informal industry of home care providers, which urgently needs regulation and mandated guidelines so that a large pool of certified and affordable trained home care givers can help provide basic support, prevent unnecessary hospital admissions, and keep the elderly in the familiar environs of their homes as far as possible
  • Next, there needs to be a network of old age homes, both in the private and public sector. While the private sector has taken the lead in setting up some state-of-the-art facilities, most of these are priced well out of the reach of ordinary citizens. State governments must be mandated to set up quality, affordable homes
  • As traditionally supportive social structures are changing and the elderly are increasingly losing their ‘status’ as the family patriarchs, it is also time that we did our bit to help address the indignities and loneliness that this change is bringing. Businesses could look at harnessing the talent of elders by retaining or hiring older workers and offering flexible working hours for those who want to continue working after retirement
  • Industry will benefit by retaining their knowledge and experience and the elderly will continue to be financially independent and retain their sense of self-worth. At the community level we also need to increase the avenues for older people to participate in local issues, in resident associations, set up and manage spaces for community interaction, to leverage their experience as a resource, give them an opportunity to share their concerns, and help them feel that they contribute socially and have a purpose in life
  • The one big issue that doesn’t get enough attention today is that old people deserve dignity. Apart from ensuring appropriate medical help, there needs to be more awareness about common degenerative diseases like dementia so that family members, care-givers, and society at large are sensitised to incontinence, the momentary lack of comprehension, the hallucinations — all the painful behavioural, physical, emotional and mental struggles of those who suffer from these diseases


Indian Express
  1. New conservation rules may soon apply to wetlands. What are they?

Topic: Environment

Category: Conservation

Key points:

  • In March this year, the central government set the ball rolling on a new set of rules intended to protect wetlands. The Draft Wetland (Conservation and Management) Rules, 2016, which seek to replace the older Wetland (Conservation and Management) Rules, 2010, are open for public comments until today, May 31
  • One of the reasons cited for bringing in the new Rules has been ineffective implementation of the 2010 Rules. The draft 2016 Rules seek to decentralise wetlands management to states, with the Centre having a say only in “exceptional cases” — a provision that could potentially weaken conservation efforts in these eco-sensitive zones

Here is how the 2016 draft is different from the 2010 Rules.

  • Overseeing Body

2010 Rules: The Centre created the Central Wetland Regulatory Authority (CWRA), headed by the Secretary, Ministry of Environment, and consisting of bureaucrats and experts.

Draft Rules: Propose the removal of this body entirely, and its replacement by a State Level Wetland Authority in each state. According to the draft Rules, the power to identify and notify wetlands would be vested in the Chief Minister, who as chief executive of the state government as well as of the state wetland authority, will propose and notify wetlands after accepting or rejecting recommendations. While transferring powers from the central to the state authority, the draft has left out powers such as the one to periodically review the list of wetlands and the activities prohibited in them, and the power to issue “whatever directions (are) necessary for conservation, preservation and wise use of wetlands”. The Rules simply ask the state authorities to take “necessary directions for conservation and sustainable management of wetlands”.

  • Time-BoundAction

2010 Rules: Wetlands have to be notified within a year of the Rules coming into force, and there are deadlines for each process along the way: 6 months for identification and classification, 30 days to send it to a research institute for reference and opinion, 90 days for the research institute to submit its opinion. The rest of the time is available for fulfilling notification formalities, which pass through the central authority.

Draft Rules: Do away with the time-bound process for notification.

  • Permitted Activities

2010 Rules: Activities prohibited in wetlands include reclamation, constructing permanent structures within 50 m, setting up or expanding industries, throwing waste, etc.

Draft Rules: The entire list, apart from reclamation, has been deleted. Activities that make “wise use” of wetlands have been permitted. The state authority is to decide what does, and doesn’t, amount to “wise use”.

  • Restricted Activities

2010 Rules: 12 activities including fishing, boating, dredging, etc. are restricted without prior permission from the state government.

Draft Rules: Do not address the issue of prior permission for any activity.

  • Terminology

2010 Rules: State that the Rules apply also to “areas rich in genetic diversity” and “areas of outstanding natural beauty”, besides protected areas.

Draft Rules: Have removed those words.

  • Wetland complexes

2010 Rules: Include “wetland complexes”, which are a set of wetlands dependent on each other.

Draft Rules: Have removed the provision for wetland complexes.

  • Environmental Impact

2010 Rules: An Environment Impact Assessment (EIA) is compulsory before undertaking any activity in a wetland area.

Draft Rules: Make no mention of the need to conduct an EIA.

  • Size Specifications

2010 Rules: Cover all wetlands and wetland complexes larger than a specified area — 5 hectares for high-altitude regions, 500 hectares elsewhere.

Draft Rules: Only those wetlands notified by the state government; no size specified.

  • Citizens’ Check

2010 Rules: Allow a challenge to a decision taken by the CWRA before the NGT.

Draft Rules: CWRA is gone; there is no mention of a person’s ability to challenge the state authority’s decision.

  • Meaning: Wetlands

Wetland encompasses a broad range of ecosystems characterised by bodies of water like lakes, ponds, rivers or marshes, and their surrounding bio-networks. They are breeding grounds for fish and fowl; they store and recharge groundwater, and act as buffers against storms and floods. Wetlands are nature’s measures against both droughts and floods, of which India has repeatedly been a victim

  • Despite their vital importance to humans, across India, wetlands are seriously threatened by reclamation and degradation through processes of drainage, landfilling, discharge of domestic and industrial effluents, disposal of solid waste, and overexploitation of the natural resources that they offer. In its effort to save and protect wetlands, the Ministry of Environment, Forest and Climate Change has invoked Article 51A of the Constitution, which makes it a Fundamental Duty of every citizen “to protect and improve the natural environment including forests, lakes, rivers and wildlife”
  • India is one of the 169 signatories to the Ramsar Convention on Wetlands, signed in Ramsar, Iran, in 1971, an intergovernmental treaty that provides the framework for national action and international cooperation for the conservation and wise use of wetlands and their resources. There are 2,241 Ramsar sites across the world, including 26 spread across India from Wular Lake in Jammu and Kashmir to Ashtamudi Wetland in Kerala, and from DeeporBeel in Assam to NalSarovar in Gujarat


  1. Data: 30% women married under age 18
  • A whopping 78.5 lakh girls (2.3% of all women or girls who were ever married or were married in 2011) were married while they were not yet 10 years of age
  • an alarming 30.2% of all married women, or 10.3 crore girls, were married before they had turned 18, as per Census 2011 data released on Friday. In a silver lining of sorts, however, the trend seems to be on the decline. As per Census 2001 data, 43.5% of all married women had been married while they were under the age of 18 years



1. PIB
  1. WCD Minister, SmtManeka Sanjay Gandhi releases Draft ‘Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2016’

The Bill aims to create a strong legal, economic and social environment against trafficking of persons and related matters


Speaking on the occasion, SmtManeka Sanjay Gandhi said that the Bill is victim oriented and makes clear the distinction between the ‘trafficker’ and the ‘trafficked’

The WCD Minister said that the draft Bill plugs loopholes in existing laws and brings within its fold additional crimes pertaining to trafficking which don’t find a place in the existing laws

It also envisages creation of a fund for rehabilitation of victims of trafficking, she said. Under the Bill, an institutional mechanism is also sought to be set up to deal with this highly specialized subject which will also include members from Civil Society Organizations, the Minister explained

Since the problem is trans-border with our neighbouring countries, protocols will also be worked out for those trafficked from other countries

SmtManeka Gandhi also highlighted the major initiatives taken up by the Government to deal with the problem of trafficking and that of missing children including the new Khoya-Paya web portal, unique initiative with Railways, pasting of posters in railway coaches, expansion of Children helpline-Childline 1098 among others

The draft Bill has taken into account the various aspects of trafficking and its punishments as defined in section 370- 373 of Indian Penal Code, 1860 and aims to include other offences/ provisions which are not dealt with in any other law for the purpose of trafficking, such as (1) penal provisions for the disclosure of identity of the victim of trafficking and witness (2) use of narcotic drug or psychotropic substance or alcohol for the purpose of trafficking (3) use of chemical substance or hormones for the purpose of exploitation. The draft Bill has also taken into its ambit the ‘placement agencies’ by making mandatory for them to also register for the purposes of this Act


The proposed draft Bill aims to place dedicated institutional mechanisms at District, State and Central level

It also envisages a designated Agency for the investigation of offences. It provides for Protection Homes and Special Homes for short term and long term rehabilitation support. For speedy trial with a view to increase prosecution and to reduce the trauma faced by the victims, the proposed draft Bill provides for establishing Special Courts in each district and experienced Special Prosecutors. Recovery of back wages and other monetary losses of the victim of trafficking is also proposed

The draft Bill provides for mandatory reporting within 24 hours by a Police Officer, Public servant, any officer or employee of Protection Home or Special Home having custody of the victim of trafficking to the District Anti-Trafficking Committee or in case of child victim to the Child Welfare Committee

For the effective implementation of the proposed Act and for the welfare and rehabilitation of the victims an Anti-Trafficking Fund will be created


2. The Financial Express: For educating India, independent regulators are importantTopic: Governance

Category: Education

Key Points

  • The Education minister has yet to take a call on the recommendations of the TSR Subramanian panel, but getting in foreign universities as well as allowing more autonomy to government institutions will be a sea change, if allowed, given how various governments of the day have been loath to do so, regardless of which political party was in power
  • In order to ensure that the scores of private universities, as well as the public sector ones, strive to do better, the presence of a top-class regulatory system is critical. While the education ministry is reportedly reluctant to outsource this task, the presence of an independent non-government certifying agency is always a plus even if it is addition to a government-run one—as a parallel, the government puts out data on economic growth, but private economists/institutions and credit-rating firms are also relied upon to give a different perspective or to certify it as kosher
  • This certifying has to include the quality of research done by faculty, quality of the alumni and how up-to-date or relevant the syllabus/course material is. Indeed, once there is enough third-party attention on the quality of an institution, the government will find, even the need for the government-run bodies to fix teaching curriculum will eventually fade away—several private universities in India offer reputed degrees even today, but their courses are not those suggested by the UGC or other such government-bodies
  • Indeed, as universities, both government and private, start looking to improve their ranking as well as build up a sizeable corpus—so critical to pay teachers good salaries and offer teaching assistance to students—making their teaching more relevant to industry needs will also happen over a period of time


3. The Financial Express: Column: Equal is not necessarily equitableTopic: Governance

Category: internet

Key Points

  • In February this year, Trai took quite a historic step—ostensibly for consumer protection and as part of its net neutrality action programme—when it issued the ruling that no service provider shall charge discriminatory tariffs for data services on the basis of content
  • Further to this, the authority recently issued a consultation on ‘free data’. In the ban on discriminatory tariffs, exemption was however provided to data tariffs charged by the provider to its own subscribers for content internally provided, not received or transmitted over the internet. Discrimination, especially in the matter of tariffs, is essentially a term that has very negative connotations and hence very few would support discrimination or discriminatory tariffs because this implies unjustified, differing treatment or tariffs for similar situations or products
  • The fundamental difficulty with the regulation is that while it is supposed to be dealing with “prohibition of discriminatory tariffs for data services”, it is prohibiting differences in tariffs for services related to demonstrably different content! This being so, it is actually prohibiting even legitimate differentiation of different content-enabling services. Decreeing such sameness or equality would inevitably lead to inequitable treatment
  • It might be worthwhile to note that even the Right to Equality enshrined in the famous Article 14 of The Constitution of India involves such important principles. There is abundant case law that establishes that Article 14 guarantees equal treatment only to persons who are in similar circumstances or equally situated, that unequals are not only permitted to be treated unequally but also they have to be so treated, that equal treatment to unequals is nothing but inequality. Strong case law also shows that an important consequence of the right to equality is the element of reasonableness. Classification that is unreasonable is clearly open to challenge and judicial review
  • Reasonable differentiation of tariffs or benign discrimination for differentiated products and services has been for decades the fundamental basis of effective competition and a working, vibrant marketplace
  • If, irrespective of content or quality, every product or service had to be at same price, where then, would there be any incentive for differentially uprated quality. Wherever you look in this world, there is, and always has been, healthy differentiation. In malls, neighbouring stores sell similar products (clothing, toiletries, etc) of different brands but charge significantly different prices. Isn’t that acceptable marketing?
  • The internet is the modern marketplace and we need to permit it to function freely without extending specially favourable treatment to particular commercial entities—e.g., content producers, who happen to also be end-users. But then, so are so many other classes of commercial entities who are not content providers and who get disadvantaged in the process. It is unfair and incorrect to extend regulatory favour to the commercial category of content providers.
  • The lobbyists for non-differentiation claim that data charges are the “fuel” for travel in the internet and having paid it, there should be no differentiation or discrimination between widely differing types of content/sites, say, between, e-mail or browsing and YouTube or Emergency Remote Medical Diagnosis! This is plainly incorrect and violative of the principles of reasonableness and natural justice. It is tantamount to stating that since I have paid the basic charges for petrol, diesel or aeroplane fuel, there can be no difference in the charges for different types of travel vehicle or class of travel
  • Importantly, Trai, in its current regulation, has provided exemption to tariffs for data services to the operator’s own subscribers over its closed electronic communication network, i.e., its intranet, where data is not transmitted externally over the Internet. This effectively means that an operator who has the wherewithal or deep pockets to have his own farm of developers and content providers would be able to provide a rich portfolio of content with regulatory advantage in tariffing and thereby grow his customer base vis-à-vis his competitors.In other words, the regulatory approach would inadvertently but clearly favour and promote vertically-integrated large monolithic operators with huge efficiencies and economies of scale
  • In the immediate- or short-term, there could possibly be customer benefits through lower tariffs; however, one seriously worries that this regulatory proclivity could be significantly competition-limiting in the medium- to long-term. Small- and medium-sized operators could be edged out of the market, to the disadvantage of the customers. A vibrant and healthy market would surely need to avoid concentration in a limited number of dominant vertically-integrated players
  • It is good that Trai is set to launch its consultation paper on net neutrality. Debates on this complex subject have raged in the US and Europe for nearly two decades without an answer found. Authorities there have, however, recognised that if carte blanche permission for differentiated/discriminatory tariffs is bad, so is a blanket ban on these. Many are the opportunities for consumer welfare enhancement through the use of positively differentiated or benignly discriminatory tariffs and wisely, therefore, they adopt a case-by-case examination. India needs to seriously consider this approach for connecting the next billion to the Net


4. Business Standard: Avoiding reformTopic: Economy

Category: Reforms

Key points:

  • Reforms that can’t wait
  • The first is labour law reform:it is clear that places with more dynamic labour laws do better, and that a large source of India’s lack of competitiveness globally is its lack of flexibility in the labour market
  • Then there is the question of land acquisition. While there may be many opinions as to exactly what the best design of a land acquisition law might be, there is little doubt in many minds that the current law has problems, and may be too bureaucratic
  • Finally, there is the question of privatisation. While the government’s record on disinvestment can certainly be defended – though it has consistently missed targets – its record on shrinking the public sector is distinctly poorer


5. Business Standard: Fiscal prudenceTopic: Economy

Category: Fiscal policy

Key points:

  • The government recently announced the composition of a committee set up to enquire into the working of the Fiscal Responsibility and Budget Management (FRBM) Act, which is now 12 years old
  • The finance ministry’s direction is that the committee should review the Act given the broad needs of fiscal consolidation and the “volatility and uncertainty” in the global economy
  • Many have worried that this could mean that the current fiscal consolidation path will be abandoned in favour of a range for a fiscal deficit that a poll-bound government might find easier to deal with
  • If so, that would be unfortunate. In fact, this should be seen as an opportunity to make the FRBM Act – which was, sadly, never really given a chance to succeed – more stringent
  • The best practices worldwide for independent Budget appraisal and monitoring mechanisms should be examined. The ideal case would be that a reformed FRBM Act sets up an independent Budget scrutiny office that helps, through transparent and predetermined factors, ensure that the Centre is constrained to keep within prudent deficit limits during good times, and is allowed a reasonable amount of leeway during bad times – but not too much, as happened in 2008-09, the year that the enforcement of the existing FRBM Act was paused.
  • What are the principles that should guide the committee in its examination of the working of the Act, and in its proposals for reform? Perhaps the most important ones are simplicity and targeting. In terms of targeting, it may be tempting to dilute the emphasis of the law towards considering the combined deficit of states and the Centre. But the truth is that states have been relatively better disciplined by a combination of structural changes in the 2000s
  • The focus of the FRBM Act should be the Centre, where the fisc has so far been largely unrestrained
  • Simplicity is no less an important principle. In its essence, the structurally high fiscal deficit of the Union government is a crude problem. It should therefore be self-evident that solutions to it should not be overly complicated. Politicians and bureaucrats should be provided as little wiggle room as possible to evade the strictures of a well-designed FRBM Act
  • To be sure, the government’s commitment to return to the path of fiscal responsibility in the last few years is praiseworthy. The proposed move to a medium-term fiscal framework, a more modern and flexible way of ensuring stability to government finances, is also welcome
  • However, the changes must be well-designed – for them to be credible in the eyes of bond markets and the wider world, they should not be seen as meeting the immediate interests of the current government. This purpose would be best served by any reform of the FRBM Act being accompanied with a commitment to stick to the currently announced fiscal consolidation path


6. Business Standard: Price cap on drugs counterproductiveTopic: Governance

Category: Health

Key points:

  • With India’s enormous population, one of the biggest challenges we face is providing access to quality health care for all our citizens
  • Access to health care extends beyond the cost of medicine to the proximity, quality and functionality of health care infrastructure
  • The consumption of price-controlled medicines in rural areas declined by seven per cent over 2013 and 2014, while that of non-price controlled drugs went up by five per cent
  • the Drug Price Control Order (DPCO) of 2013 has resulted in reducing the availability of essential drugs, especially in rural areas
  • the primary beneficiaries of price controls are high-income patients, rather than low-income ones
  • Second, the average number of DPCO molecules came down from 36 in 2013 to 32 in 2015, potentially strengthening the few already dominating companies. This limits choice and impairs industry competitiveness
  • Third, price control has stalled innovation in terms of new introductions and novel treatment options
  • Our government needs to prioritise health care, strengthen infrastructure and focus on skill development; it must increase budget allocation to demonstrate this priority. We urgently need to increase our health care budget from the current one per cent to at least 2.5 per cent
  • The government should also work with industry on more effective drug procurement systems and distribution models
  • State governments could procure medicines in bulk, following the example of the Tamil Nadu Medical Services Corporation, where an efficient mechanism provides medicines at highly affordable prices
  • Implementation of the promised universal health assurance programme will benefit patients and help to increase access – the current out-of-pocket payment system cannot be sustained
  • In a country like ours, price control can play an important role in ensuring equitable access and distribution of essential public goods. However, this cannot be the sole policy instrument that is used to address the health care challenges of our citizens


7. Business Standard: Need for better public sector oversightTopic: Economy

Category: PSEs

Key points:

  • The bodies that monitor PSEs are designed essentially to monitor the functioning of the government and not commercial activities. The CAG, the CVC, Parliamentary Committees, etc. are neither mandated nor have the skills to look into financial or operational efficiencies of commercial enterprises leave alone technology issues. Nor are they the right entities to look into strategic concerns of expansion or even divestment of various product or service lines. All of this is a normal part of commercial operations but such overseeing is of extremely poor quality for PSEs
  • What is India to do, where political economic considerations favour retaining a large PSE base? A better system of overseeing PSE performance is critical. Dependence on the CAG’s accountants or committees of politicians or bureaucrats or even the judiciary is the worst method of adequately monitoring, directing or controlling PSEs. We can surely do better than this for a sector that continues to be the largest segment of India’s organised sector
  • And the scale is more than massive. There are about 250 central public sector enterprises, and about 1,500 state-level public enterprises; then there are the railways establishments and the whole of the postal department, which have a largely commercial function; and also financial organisations that range from SBI to LIC
  • Altogether the public sector including government claims about 18 million employees. Add unreported workers such as contract workers or those through agencies and subtract those in the non-commercial departments – and we have upwards of 10 million employees in such entities. This is more than all of the organised private sector employment in the country
  • Value-added by central PSEs is reported to be about six per cent of the GDP. Add value-added by financial institutions, railways, posts, and the massive scale of state-level PSEs and we have a more than a modest proportion of India’s GDP originating in this sector.
  • The point is that with such scale, the least India needs to do is run its commercial activities properly and send the right signals and directions to their managers
  • The stock exchange and its battery of analysts conduct one type of monitoring function, and since they also have to put money where the mouth is, there is some credibility to their monitoring
  • By disinvesting some equity in all central and state PSEs not only do we incentivise ongoing analysis of their functioning, the managers will also get relatively decent signals on their own performance from outside entities
  • But that is obviously not enough. A better system of operating central and state PSEs, and indeed all commercial activities of the government, would require eliminating the current system that oversees them
  • This will be replaced by a board of independent professionals that is judged on the basis of commercial performance, with all heads reporting directly to this board and not to the ministries. If we can have independent regulators, we can also have independent super-managers mandated by the government


8. Business Standard:  No, Mr Modi, you are not yet transforming IndiaTopic: Economy

Category: Economic Reforms

Key points:

  • Reforms that can make a real change
  • First: privatise those businesses the government should not be in.Air India is a national disgrace in terms of service quality, a bottomless sink for taxpayer rupees, and a constant source of undercutting and instability in the aviation sector. MTNL and BSNL are also money sinks, and holdovers from a dim and distant past
  • Second: create a flexible labour market
  • Third: Begin genuine administrative reform.The biggest thing holding back the Indian economy is the incapacity and inefficiency of the Indian state. It needs to be reformed and streamlined. The blueprints have existed for years, nay decades. Ministries need to become policy-making centres, not rule-making centres; independent agencies and regulators need to be empowered to make the rules instead; judicial and regulatory capacity needs be created through massive investment; lateral entry and accountability needs to be ensured at all levels of the bureaucracy; local government needs to be strengthened and given financial independence. Merely taking processes online will not cut it, as the Brazilian experience shows
  • Fourth: reform the Budget and expenditure mechanism. Make the Union Budget use accrual-based accounting instead of cash-based, so clever finance ministers  can’t hide and postpone expenditure to create better numbers. Don’t use the promised medium-term fiscal framework as a way to simply ignore the existing fiscal consolidation road-map. Cut the Union government out of the process of disbursing monies to the states for schemes that they are implementing and evaluating – if, that is, you are serious about “competitive co-operative federalism”


  1.  The Business Line: Uncertainty’s bleeding the economy

Topic: Economy

Category: state of Indian Economy

Key points:

  • The Government has not been successful in kick-starting the sagging economy. This is indicated by the dismal performance of the Index of Industrial Production (IIP) released recently.
  • The general index for March 2016 is 0.1 per cent higher compared to the level in March 2015
  • It is a matter of concern because lower growth is mainly due to the negative growth of 2.9 per cent in capital goods compared to a robust 6.3 per cent growth the previous year.
  • Similarly, growth in basic goods is half that of the previous year
  • The most important issue is why growth, alongside employment, is not improving, despite a revival of sentiments due to multi-spectral measures such as financial inclusion, Make in India, Stand-Up and Start-Up India, social security programmes, the MUDRA bank, and small and payments banks, among many other efforts
  • The weak performance of the economy could imply a lower purchasing power reflected in a lower demand for the industry, leading to a spiralling of weak growth
  • The clear conclusion that is emerging is the prevalence of uncertainty, despite government initiatives, that is negatively impacting growth
  • First, uncertainty impacts consumers who postpone the purchase of durables. Firms, because of low demand for consumer durables, reduce production, and postpone investment and hiring plans
  • Uncertainty impacts financial markets too as expected returns decline and the prices of collaterals change
  • Finally, industries that immediately get impacted are those with forward and backward linkages such as houses, automobiles, machinery and equipment, which then further impacts economic growth
  • The need is to address this uncertainty. This can be done in various ways
  • First, it would be helpful to evaluate the impact and efficiency of each of the existing policies announced in the last two years
  • Second, in absence of the Planning Commission, there is need for a bottom-up approach where developmental and growth issues are identified at the State level
  • Third, to achieve wider acceptability and minimise the probability of withdrawing measures after the announcement, a public debate on issues needs to be initiated. After achieving consensus through dialogue, cautious and sequential implementation could be considered
  • Finally, to instil confidence in the public that the economy is in expert hands, and initiatives are thought through, there is need to have a team of well-trained and experienced economists with domain knowledge of India to advise Prime Minister Narendra Modi and Finance Minister Arun Jaitley.
  • Such a panel of economists could also assist in planning for the future — 5 to 50 years ahead — and preparing India to become a global superpower.
  • These economists can be deputed to shoulder global responsibilities, as economic ambassadors of India, in multilateral institutions
  • To conclude, there is need for a change in strategy, and not direction, to achieve higher growth


10. The Economic Times: Five steps that government can take to reduce food inflationTopic: Economy

Category: Agriculture

Key points:

  • Here are five steps that the government can take to reduce food inflation:
  • Take tech seriously: GoI should accelerate technology dissemination, especially relating to environmental sustainability, climate change, crop yields and mechanisation. This will reduce dependence on costly inputs, labour and chemicals, and stimulate food supply.
  • The Indian Council of Agricultural Research estimates that each of its KrishiVigyanKendras transfer on an average 7.5 technologies annually. Government extension workers have been able to reach only 7% of farm households. The private sector is, therefore, important. Around 120 million hectares is suffering from soil, wind and water erosion, and chemical and physical degradation
  • Info supply chain: The government should invest in a market information system for accurate and timely data of crop production, trade and prices. This will send right price signals from consumers to the supply chain, improve bargaining power and reduce business risk and response time. Research shows that information raises net income per hectare by more than 12%.
  • Real competition: GoI should end rent-seeking in the food supply chain by encouraging competition through efficient markets. Removing barriers such as mandi licences and state taxation laws will puncture marketing margins. Consumers rarely benefit from any crop price fall because of the marketing margin commanded by the biggest players.
  • A rise in crop prices, however, is quickly passed through to protect profits. The case of onions shows how both farmers and consumers are exploited by powerful cartels. The more intense the competition, the lower price levels are likely to be
  • Calm volatility: GoI should encourage strengthening of the supply pipeline by the private sector to reduce price volatility. There is an inverse relationship between stocks in the pipeline and prices. Smaller the stocks lying in godowns, higher the prices shoot
  • Since there is virtually no chana left over from last season, price of the new crop harvested in March 2016 is spiking. Instead of treating stockists as criminals under the Essential Commodities Act (ESA), a transparent online mechanism to track commodities lying in warehouses should be introduced
  • Don’t keep poking: The government should stop market interventions in its zeal to balance consumer and farmer interests. Last year, import duty was raised and an exportwas announced to raise sugar prices so that mills could pay sugarcane farmers. Now, GoI is hurrying to protect consumers by removing the subsidy, imposing stock limits and lowering import duty
  • Ultimately, both farmers and consumers were left dissatisfied while business risk has heightened. Rising food prices are the outcome of farm costs, business risk premium and market concentration. We can lower all three through a smarter mix of technology, institutions and policies.
  • The consumer is more prosperous and demanding. But the hand that feeds her is shaky. Unless we act urgently, our economy is in double jeopardy


11. Quick Bits



The green court directed state governments to submit key figures related to vehicle pollution in the top 15 metropolitan cities by Tuesday or face bailable warrants issued to the chief secretaries of non-responsive states

c)  Plastic bottles contaminate medicines, says panelPlastic or PET (polyethylene terephthalate) bottles contaminated the medicines stored in these, concluded laboratory tests ordered by the health ministry and endorsed by the country’s top statutory authority on standards for medicines, the Drugs Technical Advisory Board (DTAB)

Based on the result of the lab tests, the board has recommended banning the bottling of medicines in plastics and PET meant for vulnerable groups, such as children and pregnant women


d)  Krishi Kalyan Cess on services from tomorrowTelephone and restaurant bills, airline tickets and visits to beauty parlours will turn dearer from June 1, when the 0.5 per cent KrishiKalyan Cess (KKC) kicks in.

It will apply to all taxable services, and CENVAT (central value added tax) credit will be available to service providers on the cess paid on input services, the Finance Ministry has said. However, the input credit on the KrishiKalyan Cess can only be used for discharge of the KKC liability


G. Fun with Practice Questions 🙂
Question 1: Which of the following can be categorised as the functions of Election Commission?
  1. PreparingElectoral Rolls
  2. Recognition of Political Parties and Allotment of Symbols
  3. Delimitation of constituencies
  4. Scrutinizing the accounts of election expenses submitted by contestants in elections

a) 1 and 2 only

b) 1 and 3 only

c) 1,2 and 3

d) 1,2 and 4


Question 2: Which of the following statements is/are correct about the Bandung Conference, 1955?
  1. It was the first large-scaleAfro–Asian Conference
  2. It was an important step toward the Non-Aligned Movement

a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2


Question 3: Which of the following Ramsar sites is/are rightly matched to its location?
  1. Chilika lake – West Bengal
  2. Bhitarkanika mangroves-Madhya Pradesh
  3. Harike Wetland-Punjab
  4. Keoladeo National Park-Rajasthan

a) 1 and 2 only

b) 2 and 3 only

c) 1 and 4 only

d) 3 and 4 only


Question 4: Infection with HIV may occur by the transfer of which of the following body fluid(s)?
  1. Blood
  2. Semen
  3. Breast milk
  4. Saliva

a) 1 and 2

b) 1,2 and 3

c) 2 and 3 only

d) 1,2 and 4


Question 5: Which of the following statements is/are correct about the National Green Tribunal(NGT)?
  1. The Tribunal is mandated to make for disposal of appeals within 6 months of filing of the same
  2. The NGT Act allows for up to 20 of expert members and judicial members each in the tribunal
  3. The Tribunal is not bound by the procedure laid down under the Code of Civil Procedure but is guided by principles of natural justice

a) 1 only

b) 2 only

c) 2 and 3 only

d) All the Above


Check Your Answers

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