TABLE OF CONTENTS
A. GS1 Related SOCIAL ISSUES 1. New panel for welfare of nomadic communities B. GS2 Related POLITY AND GOVERNANCE 1. Goyal unveils Vision 2030, highlighting 10 dimensions 2. Not really bullish on native cow breeds INTERNATIONAL RELATIONS 1. U.S. to pull out of nuclear Treaty C. GS3 Related D. GS4 Related E. Editorials INDIAN ECONOMY 1. The return of targeted cash transfers 2. Distributing the rewards of reform F. Tidbits 1. Govt. gives up on triple talaq Bill G. Prelims Facts 1. Interim Budget and Vote on Account H. UPSC Prelims Practice Questions I. UPSC Mains practice Questions
A. GS1 Related
- The Centre will form a welfare panel for nomadic, semi-nomadic and de-notified communities, Finance Minister Piyush Goyal announced in his Budget speech.
Highlights of the initiative
- “Our government is committed to reach the most deprived citizens of this country…These communities are hard to reach, less visible, and therefore, frequently left out,” said Mr. Goyal.
- To start with, a committee will be set up under NITI Aayog to complete the task of identifying de-notified, nomadic and semi-nomadic communities, especially as they move from place to place in search of a livelihood. The committee will follow up on the work of the Renke Commission and the Idate Commission.
- A Welfare Development Board will also be set up under the Ministry of Social Justice and Empowerment to design and implement programmes for these hard-to-reach communities, Mr. Goyal said. He said a substantial increase is proposed in the allocation for welfare of the scheduled castes and scheduled tribes.
Denotified and Nomadic Tribes
- The Denotified Tribes are communities that were listed or notified as ‘born criminal ‘by the British under a number of laws.
- The term, ‘Denotified and Nomadic Tribes’, can be traced to the Criminal Tribes Act (CTA) of 1871.
- The colonial government notified nearly 200 tribal communities to be hereditary criminals, cementing their societal identity as outcasts and subjecting them to constant harassment by the administration.
- Forest laws that came into force from the mid-nineteenth century onwards deprived a large number of communities of their traditional rights of hunting and gathering. The new laws criminalised their very source of livelihood when it practiced.
- When the forests were cleared by the British for commercial use and forest communities asked to contribute to labour, some communities resisted and were declared ‘criminal’.
- The British thought that communities had lost their legitimate means of livelihood, they must have been living by indulging in criminal activities due to arrival of road and railway networks.
- After India gained Independence, these tribes were ‘de-notified’ from the list of Criminal Tribes.
B. GS2 Related
- Presenting the Interim Budget, Finance Minister Piyush Goyal has laid out the government’s vision for India in 2030, highlighting “10 most important dimensions.”
Most important dimensions of the Vision 2030
- To build physical as well as social infrastructure and to provide ease of living.
- To create a Digital India, digitise government processes with leaders from youth.
- Making India pollution-free by leading transport revolution with Electric Vehicles and focus on Renewables.
- Expanding rural industrialisation using modern digital technologies to generate massive employment.
- Clean up rivers, provide safe drinking water to all Indians and ensure efficient use of water through micro-irrigation.
- Scale up Sagarmala, develop other inland waterways faster, harness India’s long coastline and oceans to power India’s development and growth.
- Aim at our space programme – Gaganyaan, India becoming the launch-pad of satellites for the world and placing an Indian astronaut into space by 2022.
- Making India self-sufficient in food, exporting to the world to meet global food needs and producing food in the most organic way.
- A healthy India via Ayushman Bharat with women having equal rights, ensuring their safety and promoting their empowerment.
- Transforming India into a ‘Minimum Government, Maximum Governance’ nation with pro-active and responsible bureaucracy.
Highlights of the – Interim Budget 2019-20
- Farmers who rear the best indigenous breeds of cattle win prizes from the government. The Finance Minister Piyush Goyal announced the allotment of ₹750 crore to the Rashtriya Gokul Mission (RGM).
- The objective is to get native breeds to produce more milk, be more fecund, and to raise the quality of Indian cows and bulls to eventually outdo Jerseys and Holsteins. Though Mr. Goyal talked of “cow welfare” and farmer distress, the RGM doesn’t look at ageing and unproductive cattle, posing a problem for farmers.
Rashtriya Gokul Mission
- Potential to enhance the productivity of the indigenous breeds of India through professional farm management and superior nutrition is immense. For this it is essential to promote conservation and development of indigenous breeds.
- The “Rashtriya Gokul Mission” aims to conserve and develop indigenous breeds in a focused and scientific manner
- To undertake breed improvement program for indigenous cattle breeds so as to improve genetic makeup and increase the stock
- To enhance milk production and productivity of indigenous bovines
- To upgrade nondescript cattle using elite indigenous breeds like Gir, Sahiwal, Rathi, Tharparkar, Red Sindhi
- To distribute disease free high genetic merit bulls of indigenous breeds for natural service
- Establishment of village level Integrated Indigenous Cattle Centres viz Gokul Gram
- Strengthening of bull mother farms to conserve high genetic merit Indigenous Breeds
- Establishment of Field Performance Recording (FPR) in the breeding tract.
- Assistance to Institutions/lnstitutes which are repositories of best germplasm
- Implementation of Pedigree Selection Programme for the Indigenous Breeds with large population
- Establishing Gopalan Sangh- Breeder’s Societies
- Distribution of disease free high genetic merit bulls for natural service.
- Incentive to farmers maintaining elite animals of indigenous breeds
- Award to Farmers (Gopal Ratna) and Breeders” Societies (Kamadhenu)
- Organization of Milk Yield Competitions for indigenous breeds
- Organization of Training Programme for technical and non technical
- The U.S is suspending its obligations under the Intermediate-Range Nuclear Forces (INF) Treaty effective February 2 and will withdraw from the treaty in six months, Secretary of State Mike Pompeo said at a press briefing that lasted less for about eight minutes.
- The Trump and Obama administrations have repeatedly alleged that Russia was violating the treaty by fielding a ground-based cruise missile, the Novator 9M729 (“SSC-8” in NATO terminology) that could strike Europe at a short notice, an allegation that Russia has repeatedly denied. The Russians have raised counter-allegations against the U.S., with regard to launchers for antiballistic missile systems in Europe.
- The U.S. has also been concerned that China has been gaining a strategic advantage over it as it is not party to the treaty and bound by its terms. Withdrawal from the treaty will increase the weapons options for the U.S. in the Pacific, where China has increased its influence.
Intermediate- Range Nuclear Forces (INF) Treaty
- The 1987 Intermediate-Range Nuclear Forces (INF) Treaty required the United States and the Soviet Union to eliminate and permanently forswear all of their nuclear and conventional ground-launched ballistic and cruise missiles with ranges of 500 to 5,500 kilometers.
- The treaty marked the first time the superpowers had agreed to reduce their nuclear arsenals, eliminate an entire category of nuclear weapons, and utilize extensive on-site inspections for verification. As a result of the INF Treaty, the United States and the Soviet Union destroyed a total of 2,692 short-, medium-, and intermediate-range missiles by the treaty’s implementation deadline of June 1, 1991.
- Despite its name, the INF Treaty covers all types of ground-launched cruise and ballistic missiles — whether their payload is conventional or nuclear. Moscow and Washington are prohibited from deploying these missiles anywhere in the world, not just in Europe. However, the treaty applies only to ground-launched systems. Both sides are free to deploy air- and sea-launched missiles within the 500-to-5,500-kilometer range.
- The treaty, signed during the Cold War in 1987, bans ground-launched missiles with a range of 500 km-5,500 km. It was key to ending the arms race between the (then) two superpowers and helped protect the U.S.’s NATO allies in Europe from Soviet missile attacks. The U.S. will formally give Russia and the other treaty parties a formal notice that it is withdrawing under Article XV of the Treaty, Mr. Pompeo said. Article XV mandates a six-month notice period before withdrawal.
C. GS3 Related
D. GS4 Related
Brief Perspective on Pradhan Mantri Kisan Samman Nidhi:
- In an effort to provide an assured income support to the small and marginal farmers, the Government is launching the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).
- As a matter of fact, while presenting the Interim Budget 2019-20 in Parliament on 1st February, 2019, the Union Minister for Finance, Corporate Affairs, Railways & Coal, Shri Piyush Goyal said, “Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year.
- This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs. 2,000 each.
- This programme will be funded by the Government of India. Around 12 crore small and marginal farmer families are expected to benefit from this.
- The programme would be made effective from 1st December 2018 and the first installment for the period upto 31st March 2019 would be paid during this year itself. This programme will entail an annual expenditure of Rs.75,000 crore”.
- PM-KISAN would not only provide assured supplemental income to the most vulnerable farmer families, but would also meet their emergent needs especially before the harvest season. PM-KISAN would pave the way for the farmers to earn and live a respectable living.
- Some experts have pointed out that with the announcement of a minimum income guarantee (MIG) scheme by the Congress president, the agenda of universal basic income (UBI) has moved from an academic discussion to the political arena.
- As of now the proposal of minimum income guarantee (MIG) is only an electoral promise with no further details available.
- On 1st February, 2019, the general budget announced a scheme, Pradhan Mantri Kisan Samman Nidhi, under which vulnerable landholding farmer families, having cultivable land up to 2 hectares, will be provided direct income support of Rs. 6,000 a year.
- The appeal of some form of income transfer is now seriously being discussed by all political formations.
- The idea is not new and has been in discussion for some time among academics in India but attracted attention after it was proposed in the Economic Survey of 2017.
Who will benefit?
- In simple terms, the proposal of transferring some income to every citizen is built on the twin principles of universality and a notion of minimum basic income to those living at the poverty line.
- The principle of universality is at the core of it given the problems of targeting.
- However, some form of income support to those who are unable to participate in labour market has been there in most countries in some form or other including in India, like the National Social Assistance Programme (NSAP) pensions for widows, elderly and disabled.
- Although the idea of UBI has been in discussion for decades, no country has implemented it.
- Further, it is important to note that while a proposal for UBI was rejected by a three-fourth majority in Switzerland, Finland which started a pilot has now discontinued it.
- But even in Finland, the pilot was not a strict UBI but a social protection scheme aimed at only the unemployed.
- While there have been some pilots by NGOs in developing countries in Asia and Africa, they have varied in content of transfer and coverage with only few being fully universal and only the Namibia pilot experiment provided income transfer to people in the poverty line.
The Indian Context:
- The proposals in the Indian context have mostly been for a targeted income transfer scheme and not UBI.
- In developed countries, the UBI is supposed to supplement existing social security provisions and a top-up over and above universal provision of health, education and so on.
- In the Indian context, most arguments in favour of UBI are premised on the inefficiencies of existing social security interventions and seek to replace some of these with direct cash transfers.
Not leakage proof:
- It is important to note that several studies on cash transfers including one by J-PAL South Asia for NITI Aayog found that cash transfers are not greatly superior in terms of leakages compared to other schemes of in-kind transfer such as the public distribution system (PDS).
- On the other hand, numerous studies have documented that a move towards universalisation and use of technology enabled Chhattisgarh and Tamil Nadu to reduce leakages in the PDS.
- However, the real message from these experiments is also that universalisation is the key to efficient delivery of services against targeting proposed by these cash transfer schemes.
- The obsession with cash transfers also comes with an understanding that these will take care of all problems.
- The current sets of proposals claim these as silver bullets for agrarian crisis to malnutrition to educational deficit and also a solution for the job crisis. This is a tall order with different reasons for persistence for some of these.
- A good example is the public distribution system (PDS) where it is clearly established that in-kind transfers are twice as effective in increasing calorie intake compared to equivalent cash transfer.
- The real issue with the approach of a targeted cash transfer scheme is that it envisions the role of the state to only providing cash income to the poor.
- Critics point out that this kind of ‘Robin Hood’ approach seeks to absolve the state of its responsibility in providing basic services such as health, education, nutrition and livelihood. However, it is also iniquitous since it seeks to create demand for services without supplying the services, leaving the poor to depend on private service providers.
- Further, there is now sufficient evidence which shows that privatisation of basic services such as health and education leads to large scale exclusion of the poor and marginalised.
- In any case, India is among the countries with lowest expenditure to GDP ratio as far as expenditure on health, education and so on are concerned.
The Way Forward:
- The best antidote to poverty is enabling citizens to earn their living by providing jobs. For those who are willing to work, schemes such as the Mahatma Gandhi National Rural Employment Gurantee Scheme should be strengthened to enable them to earn decent incomes. Similarly, the crisis in agriculture is unlikely to be resolved by income transfers.
- But even with free and universal access to public services and access to livelihood opportunities, there may be a role for cash transfers, particularly for those who are unable to access the labour market or are marginalised due to other reasons.
- The NSAP seeks to do exactly that by providing pensions to elderly, widows and disabled. But even for these vulnerable and marginalised groups, the Central contribution to pensions has been only Rs. 200 per month.
- In conclusion, critics assert that if governments cannot ensure decent incomes to the poor, then the issue is not of details of minimum income transfers but that of intent of those who are promising to eradicate poverty through income transfers. On this, there is no ambiguity.
- Since Budget 2019 is the last before the general election this year, it was widely expected to be an assessment of the government’s performance. There was a debate on whether the Budget should have announced any substantive measures since they would bind the next government, post-election.
- It turns out the report card is good enough to create space for some substantial measures.
- Painstaking fiscal consolidation, tax reform, more efficient delivery of subsidies, and a rise in the share of capital expenditure, have created the space to reward tax-payers as well as announce a relief measure for farmers in distress without substantially compromising fiscal consolidation.
- Some experts believe that it is fair that the present government, which imposed the painful reforms and undertook difficult action, should also distribute some rewards of that reform.
Rewards of higher growth:
- It may be asked how payment of Rs. 20,000-Rs. 75,000 crore can be made to farmers and the tax benefits given with only a marginal impact on the fiscal deficit.
- Experts point out that a larger size economy can afford to spend larger absolute amounts with only a small rise in deficit ratios and borrowing requirements.
- The fact that India is the sixth largest and fastest growing economy in the world has some advantages as well as responsibilities to equitably share the rewards of growth.
- Demonetisation, the goods and services tax (GST) and other steps towards formalisation increased the tax base, and it follows that tax rates can themselves be cut. Again it is fair that the aam aadmi, who bore some of the costs of reform, should now benefit from the success of these.
- It makes good economic sense to move towards a system of a wider base and lower rates. Tax receipts have grown from 10% of GDP — a level at which they had stagnated since the tax cuts after the global financial crisis — to 12%. Although the GST has not yet resulted in a rise in indirect tax ratios above 5.5%, it is likely to do so in the future as it stabilises. The transfers to farmers and tax cuts amount to only 0.4% of GDP this year and are partially funded by a 0.3% rise in tax ratios.
- The JAM (or Jan Dhan-Aadhaar-Mobile) complex is the other major set of reforms that enable a smaller expenditure to have a larger impact on social welfare. Jan Dhan bank accounts opened through the country and the Aadhaar data base make a cost-effective Direct Benefit Transfer (DBT) possible for farmers.
Rewards of lower inflation:
- Experts point out that a slight rise in fiscal deficits to fund transfers to farmers does not threaten macroeconomic stability when inflation is low and food prices are crashing.
- In fact they are likely to help stabilise prices so that farmers do not cut production in the next crop cycle.
- Moreover, this year, the revenue deficit has been maintained, the primary deficit been reduced, and expenditure on capital account been increased.
- Better quality of government expenditure as well as the GST tax cuts, reductions in obstacles to inter-State trade, and soft commodity prices will keep inflation low.
- The Budget points out that highways are being built at the rate of 27 km per day, which makes India the fastest builder in the world.
- It is important to note that Railway safety has improved. Better implementation and reduction in waste brings down costs across the board.
- The shift in the Budget date to earlier in the year and the focus on spending in the first half have resulted in a better achievement of sectoral spending targets this year.
A Perspective on Government borrowing:
- The size of government borrowing is larger than what the market anticipated, and this has raised G-Sec rates. The rise in gross borrowing is because of higher redemptions but net borrowing is similar to that last year (2018).
- There was a sharp rise in G-Sec yields that year. As a result, interest payments as a ratio to GDP rose to 3.2 against the budgeted 3.
- But 3.4% of GDP is not a large fiscal deficit, and market conditions are likely to be more supportive of government borrowing this year.
- First, the international rate rise has peaked, with the U.S. Fed turning dovish and indicating that there will be no more rise; it is likely to maintain its balance sheet. Emerging market inflows are set to rise, creating demand for G-Secs up to the current cap of 6% of the domestic market.
- Soft oil prices will encourage foreign investors to return to Indian markets. But since global growth is slowing, inflows are unlikely to be as large as they were in 2017.
- Therefore, there will be more room for open market operations (OMO) from the Reserve Bank of India that support the debt market. Softening interest rates will also make banks more willing to hold G-Secs.
- When international demand is slowing, it is important to maintain domestic demand. Therefore, tax cuts, more income to farmers and various schemes to improve demand for housing, which has been under stress, are all appropriate.
- While the budgetary contribution to capital expenditure remains at about 1.6% of GDP there is a rise in internal and extra-budgetary resources, which are now larger than gross budgetary support. But public enterprises must be able to raise and use internal resources.
- This is a healthy sign of efficiency, market viability and reduced dependency on the government. Even market borrowing by such enterprises used for investment when private investment remains low, is likely to crowd in (rather than crowd out) private investment.
- It will raise demand which will induce more private investment. The latter remains still constrained by low demand at present, except for a few sectors where capacity constraints are appearing.
Perspective on Improving Efficiencies:
- Coming back to the issue of binding the next government, post the election, it is necessary that sharing of growth benefits is done in ways that sustain growth, reduce distortions, and improve capabilities to participate in growth.
- Well-targeted transfers can be made without destroying fiscal consolidation and creating macroeconomic vulnerabilities.
- It is important to note that as competitive populism creates talk of unfunded universal income schemes, or farm loan waivers that hurt growth of farm credit, it is better to bind the next government to schemes that are less distorting.
- The Budget continues the effort to reduce transaction costs and improve compliance incentives. Stamp duty amendments that seek to tax just one transaction, which will be shared across State governments, on the basis of the domicile of the buying client, will reduce a major market irritant, increase transactions and take the country further toward becoming one effective market.
- As income tax returns rise, a less than 0.05% will be selected for scrutiny in non-discretionary, machine-based ways without any interface between the tax-payer and the examining officers, thus reducing potential tax-payer harassment.
- In conclusion, India is a very difficult country to change. Problems remain, but the rewards are beginning to appear and should be greeted with cheers.
- The government has effectively given up on at least two of its more controversial legislations — the Citizenship Amendment Bill and the triple talaq Bill — that were awaiting consideration by the Rajya Sabha, after opposition parties made it clear that they could not guarantee smooth functioning of the House if any contentious bills were tabled.
- With the numbers stacked against the government on both the contentious issues in the Upper House, the two bills, which were cleared by the Lok Sabha in the last session, will now lapse once the 16th Lok Sabha’s term ends.
- The Rajya Sabha will now take up only six legislative proposals. The bills slated to be debated include The Companies (Amendment) Bill, 2019, the Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2018, the Arbitration and Conciliation (Amendment) Bill, 2018, the New Delhi International Arbitration Centre Bill, 2019, the Personal Laws (Amendment) Bill, 2019, and the Aadhaar and other Laws (Amendment) Bill, 2019.
G. Prelims Facts
- An Interim Budget is not the same as a ‘Vote on Account’. While a ‘Vote on Account’ deals only with the expenditure side of the government’s budget, an Interim Budget is a complete set of accounts, including both expenditure and receipts. An Interim Budget gives the complete financial statement, very similar to a full Budget.
- Full Budget deals with both expenditure and revenue side but Vote-on-account deals only with the expenditure side of the government’s budget.
- The vote-on-account is normally valid for two months but full budget is valid for 12 months (a financial year).
- As a convention, a vote-on-account is treated as a formal matter and passed by Lok Sabha without discussion. But passing for budget happens only after discussions and voting on demand for grants.
H. UPSC Prelims Practice Questions
Question 1.With reference to RTI Act 2005, consider the following statements:
- RTI Act derives its authority from the Article 19 of the Indian Constitution.
- The agencies with strategic importance like NIA, RAW etc. are exempted under the Act.
Select the correct code:
- Only 1
- Only 2
- Both 1 and 2
- None of the above
Question 2. Which of the following languages is/are included in the Eighth schedule of the Indian Constitution?
Select the correct code:
- Only 1 and 2
- Only 2 and 3
- Only 1, 2 and 4
- Only 3 and 4
Question 3. Consider the following about the Senior Citizens Welfare Fund.
- It was established along with the Central Social Welfare Board (CSWB).
- It will be administered by an Inter-Ministerial Committee.
- The fund shall not be audited by the CAG due to its fundamental character as a welfare fund.
Select the correct answer using the codes below.
- Only 2
- Only 1 and 3
- Only 1 and 2
- Only 2 and 3
I. UPSC Mains Practice Questions
- The Interim Budget 2019-20 has laid out the government’s vision for India in 2030, highlighting 10 most important dimensions. Critically examine these dimensions (12.5 Marks; 200 words)
- The U.S is suspending its obligations under the Intermediate-Range Nuclear Forces (INF) Treaty effective February 2 and will withdraw from the treaty in six months. In this context write a note on the significance of the INF Treaty (12.5 Marks; 200 words)
See previous CNA