14 Dec 2019 CNA:- Download PDF Here
TABLE OF CONTENTS
A.GS1 Related B.GS2 Related SOCIAL JUSTICE 1. Targets missed, Accessible India campaign’s deadline extended POLITY AND GOVERNANCE 1. Assembly unanimously passes A.P. Disha Act 2. ‘Centre in talks with J&K, Ladakh on special status’ C.GS3 Related ECONOMY 1. Moody’s cuts India GDP forecast to 5.6% for 2019 2. RBI central board meets over cooperative banks 3. No talks yet in FinMin on GST hike: FM ENVIRONMENT AND ECOLOGY 1. ‘Need community-driven, decentralised solutions to water crisis’ D.GS4 Related E. Editorials ECONOMY 1. Twin troubles 1. Savings with a bonus — financial peace of mind F. Tidbits 1. Govt. adds 30 more services to doorstep delivery scheme 2. Exports contract for fourth month in a row G. Prelims Fact H. Practice Questions for UPSC Prelims Exam I. Practice Questions for UPSC Mains Exam
A. GS1 Related
Nothing here for today!!!
B. GS2 Related
The deadline for government’s Accessible India campaign has been extended due to slow progress.
- Department of Empowerment of Persons with Disabilities (DEPwD) of the Ministry of Social Justice & Empowerment had launched Accessible India Campaign (Sugamya Bharat Abhiyan) as a nation-wide campaign for achieving universal accessibility for Persons with Disabilities (PwDs).
- Accessible India Campaign or Sugamya Bharat Abhiyan initiative is in line with Article 9 of the (UN Convention on the Rights of Persons with Disabilities) to which India is a signatory since 2007.
- The scheme also comes under Persons with Disabilities Act, 1995 under section 44, 45, 46 for equal Opportunities and protection of rights which provides non-discrimination in Transport to Persons with Disabilities.
- According to the 2011 Census of India, 2.21 percent of the population or approximately 26.8 million Indians suffer from a disability.
- The scheme envisages incremental improvements with initial targets being conservative. It envisages further development with bigger targets in the following years. In this way, the overall environment becomes more inclusive and provides equal opportunities to the PwD.
- Accessibility is about giving equal access to everyone. Without being able to access the facilities and services found in the communities, persons with disabilities will never be fully included. Accessible India Campaign will seek the cooperation of all Central Government Departments/Ministries and State Governments to seek “accessible police stations”, “accessible hospitals”, “accessible tourism”, and “accessible digital India” etc.
- Organizations, both public and private are encouraged to use their CSR funds for building accessible infrastructure. They may adopt projects of their interest e.g. making a hospital accessible or creating an accessible toilet in a school.
- Accessible India Campaign has the following three important components:
Part A: Built Environment Accessibility
Objective 1: Enhancing the proportion of accessible government buildings
- An accessible government building is one, where persons with disabilities have no barrier in entering it and using all the facilities therein. This covers the built environment – services, steps and ramps, corridors, entry gates, emergency exits, parking – as well as indoor and outdoor facilities including lighting, signage, alarm systems, and toilets.
- It involves specific targets for cities with respect to accessibility audits and conversion into fully accessible buildings.
Part B: Transportation System Accessibility
Objective 2: Enhancing the proportion of accessible airports
- An airport is accessible if a person with a disability has no barrier in entering it, using all the facilities, and boarding and disembarking from airplanes. This covers the built environment – surfaces, steps and ramps, corridors, entryways, emergency exits, parking – as well as indoor and outdoor facilities including lighting, signage, alarm systems and toilets.
- Specific targets involve conducting an accessibility audit of all the international airports and converting them into fully accessible international airports (July 2016). Conducting an accessibility audit of all the domestic airports and converting them into fully accessible airports(March 2018).
Objective 3: Enhancing the proportion of accessible railway stations
- Targets involve ensuring that A1, A & B categories of railway stations in the country are converted into fully accessible railway stations (July 2016) and ensuring that 50% of railway stations in the country are converted into fully accessible railway stations (March 2018).
Objective 4: Enhancing the proportion of accessible Public Transport
- The target involves ensuring that 25% of Government-owned public transport carriers in the country are converted into fully accessible carriers (March 2018).
Part C: Information and Communication Eco-System Accessibility
- Access to information creates opportunities for everyone in society. People use information in many forms to make decisions about their daily lives. This can range from actions such as being able to read price tags, to physically enter a hall, to participate in an event, to read a pamphlet with healthcare information, to understand a train timetable, or to view webpages. No longer should societal barriers of infrastructure, and inaccessible formats stand in the way of obtaining and utilizing information in daily life.
Objective 5: Enhancing the proportion of accessible and usable public documents and websites that meet internationally recognized accessibility standards.
- Public documents refer to all documents issued by the national government as well as all sub-national documents. They include all publications such as laws, regulations, reports, forms, and informational brochures.
- Targets involve conducting accessibility audit of 50% of all government (both Central and State Governments) websites and converting them into fully accessible websites (March 2017) and ensuring that at least 50% of all public documents issued by the Central Government and the State Governments meet accessibility standards (March 2018).
Objective 6: Enhancing the pool of sign language interpreters
- The target involves training and developing 200 additional sign language interpreters (March 2018).
Objective 7: Enhancing the proportion of daily captioning and sign-language interpretation of public television news programs.
- The target involves developing and adoption of national standards on captioning and sign-language interpretation in consultation with National media authorities (July 2016) and ensuring that 25% of all public television programs aired by government channels meet these standards (March 2018).
- The original deadlines under the Accessible India campaign were July 2016 for conducting an accessibility audit of 25-50 of the most important government buildings in 50 cities and making them completely accessible and March 2018.
- Under the Rights of PwD Act, 2016, all existing and new public buildings have to follow the accessibility standards notified on June 15, 2017. The existing buildings were given five years to comply. The deadlines have not been complied with.
- Due to slow progress, revised deadlines have been extended to March 2020.
The rape and murder of the 26-year-old veterinarian in Hyderabad, that sparked off national outrage.
- Andhra Pradesh is the first state to enact a law aimed at awarding capital punishment to the guilty in specified offenses against women and to complete the trial in such cases within 21 days of the crime.
- The A.P. Assembly has unanimously passed two Bills, Andhra Pradesh Disha Act — A.P. Special Courts for Specified Offences against Women and Children Act 2019, and A.P. Disha Act — Criminal Law (AP Amendment) Act 2019, to constitute special courts in every district for speedy trial of specified offenses against women and children and for amending sections in the Indian Penal Code, 1860, and the Code of Criminal Procedure, 1973, adding new sections and awarding capital punishment to those convicted of rape.
- The bill states that the period of disposal of appeals will be reduced to 3 months.
- The bill also deals with setting up of ‘Women and children offenders register’ in electronic form.
Abrogation of Article 370 and the subsequent formation of the Union territories of Jammu and Kashmir (J&K) and Ladakh.
- The Ministry of Home Affairs (MHA) is holding consultations with the Union Territories of Jammu and Kashmir (J&K) and Ladakh to grant them “special status” on the lines of Article 371 of the Constitution.
- Article 371 provision is applicable in the States of Maharashtra, Gujarat, Nagaland, Assam, Manipur, Goa, Andhra Pradesh, Sikkim, Arunachal Pradesh and Karnataka to protect their unique cultural identity and economic interest.
- In Maharashtra and Gujarat, the provision enables separate ‘boards’ in certain areas for “equitable allocation of funds for developmental work” and “adequate opportunity for employment in service under the control of the State government.”
- There have been demands that the UT of Ladakh be brought under the Sixth Schedule of the Constitution to provide it protection as a tribal area.
C. GS3 Related
Moody’s Investors Service has lowered its 2019 GDP growth forecast for India to 5.6%.
- Moody’s Investors Service has lowered its 2019 GDP growth forecast for India to 5.6% which is lower than the 7.4% growth in 2018.
- The agency noted that India’s economic growth has decelerated since mid-2018, with real GDP growth slipping from nearly 8% to 5% in the second quarter (April-June) of 2019 and further slipping to 4.5% in July-September quarter.
- Moody’s Investors Service expects economic growth to pick up in 2020 and 2021 to 6.6% and 6.7%, respectively, but sees the pace of growth remaining lower than in the past.
Reasons for the slowdown:
- Consumption demand has decreased notably, with slow employment growth weighing on consumption. This has led to a weak demand side in the economy.
- The lower than expected growth rate of India is a concern.
- Moody’s has stated that the fiscal measures undertaken by the government, such as corporate tax rate cuts, bank recapitalization, infrastructure spending plans, support for the auto sector and others, do not directly address widespread weakness in consumption demand, which has been the chief driver of the economy.
The RBI Central Board’s review of Urban Cooperative Banks (UCBs).
- The RBI Central Board reviewed the functioning of the urban cooperative banks and enforcement framework in the backdrop of scam in the Punjab and Maharashtra Cooperative (PMC) Bank affecting lakhs of depositors.
- The Board’s discussions focused on issues related to urban cooperative banks, the extension of the enforcement policy and framework to cooperative banks and NBFCs (non-banking financial companies).
- Co-operative banks, which are distinct from commercial banks, were born out of the concept of co-operative credit societies where members from a community come together to extend loans to each other, at favourable terms.
- Credit co-operatives (or co-operative banks) are broadly classified into urban or rural co-operative banks based on their region of operation. Urban co-op banks are classified into scheduled and non-scheduled banks.
- There are three key points of difference between scheduled commercial banks and co-operative banks.
- Unlike commercial banks, UCBs are only partly regulated by the RBI. While their banking operations are regulated by the RBI, which lays down their capital adequacy, risk control, and lending norms, their management and resolution in the case of distress is regulated by the Registrar of Co-operative Societies either under the State or Central government.
- Unlike commercial banks that are structured as joint-stock companies, UCBs are structured as co-operatives, with their members carrying unlimited liability.
- While there is a clear distinction between a commercial bank’s shareholders and its borrowers, in UCB, borrowers can double up as shareholders.
- In the event UCBs fail, deposits with them are covered by the Deposit Insurance and Credit Guarantee Corporation of India up to a sum of Rs.1 lakh per depositor, the same as for a commercial bank.
- UCBs are attractive for retail savers and small businesses because they offer attractive interest rates on deposits, far higher than commercial banks.
- UCBs in 2018 managed Rs.4.56 lakh crore in deposits, had advances of Rs.2.80 lakh crore and managed total assets of Rs.5.63 lakh crore. It constitutes a large proportion of credit in India.
- After initially encouraging UCBs to spring up all over India for financial inclusion, the RBI began to wake up to their poor governance from 2005 when it stopped issuing new UCB licenses. With many of these banks failing, and the RBI encouraging weak ones to merge, the number of UCBs operating in India has shrunk from 1,926 in 2005 to 1,551 by 2018.
- The RBI has also been trying to improve governance at these banks by putting up a Board of Management to oversee them. But the PMC Bank case reveals that a lot of the activities still escape RBI’s oversight.
- PMC Bank is one of the top five urban co-operative banks in the country.
- Statutory inspection of PMC by the RBI had revealed large group exposure towards Housing Development and Infrastructure Ltd.’s (HDIL) group companies to the tune of about Rs.6,226.01 crore pointing towards concentrated lending which is not allowed as per the current regulations.
- Out of the total exposure of Rs.6,226.01 crores at the end of March 2019 to the HDIL group, only Rs. 439.58 crores was disclosed to the RBI and the remaining Rs. 5,786.43 crores remained undisclosed. This points towards the undisclosed bad loans, which went undetected even by the regulators. The depositors’ money is being put to risk.
- Following exposure of the scam in the PMC Bank, which had over 9.15 lakh depositors, the RBI had imposed restrictions on withdrawals.
- Past investigations have revealed instances of accounting fraud, funds diversion and politically motivated lending at UCBs.
- Though the PMC Bank case is not the first such case in UCBs, yet the regulations in place have not been able to control such malpractices in UCBs.
Chief Economic Advisor’s (CEA) update on the progress made after governments reform measures to revive the economy.
Moves to revive economy:
- On steps to boost investment, the government’s continuous liberalization reforms had resulted in record foreign direct investments of $35 billion in the first half of 2019-20, up from $31 billion in the first half of the previous year. It marks an impressive 13% growth.
Increasing Government expenditure:
- The government has already undertaken 66% of the budgeted capital expenditure of Rs.3.38 lakh crore for the current fiscal year.
Repo-rate linked loans:
- Following the Reserve Bank of India’s guidelines mandating banks to link their lending rates to external benchmarks, all public sector banks had introduced repo rate-linked loan products. As of November 27, 8.18 lakh repo-linked loans, amounting to Rs.72,201 crores, had been sanctioned.
Composition of employment:
- The composition of employment in the country was gradually changing. While casual workers made up 30% of the workforce in 2011-12, they made up 25% in 2017-18. This shift has been towards salaried employment, which rose to 23% in 2017-18 from 17% in 2011-12.
- In the same period, the proportion of workers in agriculture had decreased to 44% from 49%. The proportion in services had increased to 31% from 27%, and in manufacturing to 25% from 24%.
Ramon Magsaysay awardee Rajendra Singh’s talk on “Citizen-centric Advocacy and Water Literacy in India”
The water crisis in India:
- Sharing data on water crisis in India, Dr. Singh, also the winner of the Stockholm Water Prize, said that in 2019, 190 districts were flooded while 365 districts across 17 states faced drought. He said that 72% of India faced high to extremely high water stress.
- Water in 2.65 lakh villages across the country was not fit for drinking.
- There is an urgent need for a “water literacy” movement in India and especially in urban areas to create awareness of the problem.
- There is the need for a national water-policy which must be people-centric.
- Rajendra Singh, better known as ‘The Waterman of India’, believes that community-driven, and decentralized water management solutions are the answers to the country’s water crisis. And that, though the water crisis is a global problem, the solution to it has to be local.
- Singh has asserted that the solution to the water crisis does not lie in the linking of the rivers, but in water harvesting.
- In metro cities such as Delhi, Gurugram, Faridabad, and Meerut, where the problem of depleting groundwater was even more severe, rainwater should be harvested and not allowed to be mixed with sewage.
Focus on Agricultural water productivity:
- There is a need for congruity between the crop and the rain patterns since around 80% of the water is used in agriculture.
Concept of River rights:
He has asserted that it is high time to talk about the “river rights” and not just human rights. India has had an age-old tradition of respect for water and can offer solutions to the world.
Works carried out:
- Referring to the community-based efforts in water harvesting in Rajasthan for more than four decades, Dr. Singh said that around 12,000 waterbodies were built leading to recharge of 2.5 lakh tube wells and reverse migration of around 17 lakh people.
D. GS4 Related
Nothing here for today!!!
Economic data released by the government.
- The Index of Industrial Production (IIP) contracted 8% in October 2019, as against a healthy growth rate of 8.4% witnessed in October 2018.
- Industrial output also shrunk by 4.3% in September 2019.
- Economic growth has declined for six consecutive quarters now, making it one of the longest downturns in recent history.
- Retail inflation jumped to a 40-month high of 5.5% in November 2019 fueled mainly by a sharp jump in food prices.
- Retail inflation is now in the upper band of the inflation range targeted by the Reserve Bank of India (RBI) but might drop as fresh food supplies hit the market.
- With inflation rising, the RBI, which held rates stable in its recent policy meet, is unlikely to cut rates aggressively in the next few months at least.
- The recent economic data suggest that India may be stepping closer to stagflation.
- Low growth and high inflation raise questions about the root cause of the crisis which has been attributed to a drastic fall in consumer demand.
- The fact that the aggressive rate cuts by the RBI that have extended over most of the year have not been able to stop the continuous slide in growth rate may be pointing to the fact that the supply-side is also in deep trouble.
- The growth-inflation conundrum will cause further headaches for policymakers. Further rate cuts by the RBI will only add to the government’s troubles by stoking inflation in the wider economy.
- With the RBI having limited options now, given that the benchmark interest rate have been cut five times in 2019, now it is entirely up to the government to find ways to boost growth.
- The defence of the government that the slowdown in growth is merely a cyclical one that will end sooner than later seems to be neglecting the looming crisis.
- The answer to the current slowdown lies in economic reforms that can first lift the potential growth rate of the economy.
For more on this issue refer:
Current state of flux in the financial sector of India.
Significance of a vibrant financial system:
- Indian savers have access to simple fixed return products offering safety of capital.
- The borrowers be it the government or the private players have access to finances at affordable rates.
Lack of Safe investment options:
- The confidence that ordinary Indian savers repose in guaranteed return products has been hit due to a few recent events.
- There was the scare about public sector banks being placed under prompt corrective action by the Reserve Bank of India (RBI).
- There were the defaults by some AAA-rated non-banks.
- The recent RBI’s strictures on Punjab & Maharashtra Co-operative Bank Limited (PMC) have cast doubts on the safety of co-operative banks, and the gaps in the working of deposit insurance.
Lack of financial literacy:
- A majority of households in India have a subsistence level of income and scant access to financial literacy.
- The average Indian earned a per capita income of Rs.1.26 lakh in FY19. A Global Wealth report from Credit Suisse (October 2019) found that the median wealth of an Indian adult was $3,042 (Rs. 2.1 lakh). A survey on financial literacy among Indian savers by the Tarun Ramadorai committee in 2015, found that over 30% of savers did not grasp the concept of compound interest.
- This highlights the crying need for Indian savers to have access to simple fixed return products that offer complete safety of capital without their having to dig into balance sheets.
- The small savings schemes (also called national savings schemes) from India Post caters to the needs of the Indian savers with limited financial literacy by providing an attractive investment option. Given that these schemes make up part of Central government borrowings, they are sovereign-guaranteed.
Below par performance of small savings scheme:
- Despite the attractiveness of the small savings scheme, numbers from the RBI show that by the end of FY19, while commercial banks were sitting pretty on deposits of Rs.126 lakh crore, small savings schemes managed just Rs.8.9 lakh crore. HDFC, a private sector non-bank, has managed to garner the same volume of deposits (Rs.1.2 lakh crore) as post office time deposits with their massive outreach.
- There is immense scope for reviving the popularity of the post office schemes, if the Central government can make five design changes that tailor them to better meet the needs of small savers.
- In a bid to wean savers away from administered interest rates, post office schemes were transitioned to floating rates by pegging their interest rates to government securities with comparable maturity. Over time though, the quarterly rate changes have acquired a life of their own, bearing limited correlation to market rate movements.
- There is nothing wrong, in the Central government offering small savers with special needs, a premium over prevailing market interest rates. But to make such rate moves transparent, it is best that the Government specifies and sticks to a fixed spread over G-sec rates for each scheme.
- The banking lobby is bound to be up in arms against “high” rates on small savings impeding transmission. But the caps on individual investments in the more popular schemes (Rs.1.5 lakh for Public Provident Fund, Rs.15 lakh for Senior Citizens Savings Scheme (SCSS), Rs.4.5 lakh for Monthly Income Account) restrict the sums that savers can park in these schemes. Such caps can be extended to all schemes with high spreads.
Long term schemes:
- Indian savers have felt a need for 10-year or 20-year fixed return instruments to park their long-term money. Presently though, a majority of debt options available to them are in the one to five-year bucket.
- Even among the post office schemes, six of the nine available ones cater to savings needs for one to five years only. Investors who would like a longer-term option have just two choices — the Public Provident Fund (PPF, 15 years) and Kisan Vikas Patra (KVP, 9 years), as the Sukanya Samriddhi Yojana is restricted to those with a girl child.
- Re-introducing National Savings Certificates in the 10, 15 and 20-year tenors can meet this need while helping the Central government source long-term funds for capital spending.
- While deposits with private entities offer both regular income and cumulative options, with post office schemes it is an “either or” choice. Having both options on the menu can help savers decide whether they want regular cash flows or compounding benefits.
Friendlier tax breaks
- Today, most post office schemes offer tax breaks on the principal invested under Section 80C but their returns are taxed at income tax slab rates (the only exceptions being PPF and Sukanya Samriddhi).
- Reversing the above position may render these schemes more attractive to small savers. For savers whose income levels are likely to be at or below the lowest tax slab, the 80C benefit has limited utility. But an extra percentage point in tax-free returns can mean a great deal.
- If the Central Government is loath to extend such tax benefits to all post office schemes, it can restrict them to special-purpose schemes.
- Taxation on more than three-year small savings products that accumulate interest, needs to be brought on a par with market products and given inflation indexation benefits.
- Small savers may like the predictability of a fixed return for the long term. But given their limited savings, they also need early exit options in case they are beset by an emergency.
- While the time deposits and SCSS offer early exit on fairly simple terms, early withdrawals from the PPF or Sukanya Samriddhi are subject to convoluted conditions. Doing away with bureaucratic rules for investors to get their hands on their own money is critical to make post office schemes more attractive to their target audience.
Better customer service:
- The foremost reason savers cite in shying away from post office schemes despite their safety and reasonable returns is the woefully poor customer service that they need to deal with.
- At a time when Indians from every strata have taken to digital transactions, India Post continues to rely on archaic modes of working in dealing with customers.
- Its insistence on a paper application process, old-fashioned passbooks, cheque payments and branch visits ensures a process that is time-consuming and arduous for those seeking to invest their money with it.
- If India Post can shed its half-hearted attempts to transform itself into a payments bank and convert itself into a digitally enabled, pure deposit-taking bank, it can render a yeoman service both to the government and small savers of this country.
- 30 more services have been added to the Delhi government’s doorstep delivery scheme, taking the total services offered to 100.
- Hailed as a “revolutionary initiative” in governance, under the given scheme the citizens don’t need to stand in long lines in government offices. It also avoids multiple visits to the government offices and touts to get public services.
- Under the scheme, citizens can call on the number — 1076 — to avail government services. After the call, a person will visit the citizen and collect documents required for the service and process the request. Citizens can book an appointment online.
- Due to mobile Sahayaks’s intervention to ensure that all documents are complete and attached in the right order along with the applications the success rate has also been high.
- India’s exports contracted for the fourth month in a row in November, dipping 0.34% to $25.98 billion, mainly on account of poor shipments of petroleum, gems & jewellery and leather products. Out of the 30 key sectors, as many as 17 segments showed contraction in exports during the month under review.
- Imports too declined by 12.71% to $38.11 billion in November, narrowing the trade deficit to $12.12 billion, according to government data released.
- Though engineering exports had put up a reasonably good show with 6.32% growth in November 2019, the external trade environment remains challenging and subdued.
G. Prelims Facts
Nothing here for today!!!
H. Practice Questions for UPSC Prelims Exam
Q1. Which of the following statements are correct?
- Indian states of Assam and Mizoram are the only two states with which Tripura shares a border.
- Tripura was a part of an independent princely state under the protectorate of the British Empire which joined the independent India in 1949.
a. 1 only
b. 2 only
c. 1 and 2 only
d. Neither 1 nor 2
Q2. Which of the following statements are wrong?
- Article 371 appears in Part XXI of the Constitution, titled ‘Temporary, Transitional and Special Provisions’.
- Article 371 was part of the Constitution at the time of its commencement on January 26.
a. 1 only
b. 2 only
c. 1 and 2 only
d. Neither 1 nor 2
Q3. which of the following statements are correct?
- Urban Cooperative Banks (UCBs) are regulated only by the RBI.
- Deposits in UCBs are not covered by the Deposit Insurance and Credit Guarantee Corporation of India.
a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2
Q4. Which of the following statements are correct?
- The accessible India Campaign was launched by the Ministry of Social Justice & Empowerment.
- Accessible India Campaign envisages improvements in built Environment Accessibility, Transportation System Accessibility and Information and Communication Eco-System Accessibility.
a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2
I. Practice Questions for UPSC Mains Exam
- In the light of an impending water crisis in India, a community-driven decentralized approach provides a viable way forward. Comment. (10 marks, 150 words)
- Discuss the importance of Co-operative banks in the financial sphere of India and the concerns associated with their functioning. (10 marks, 150 words)
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14 Dec 2019 CNA:- Download PDF Here