20 Mar 2018: UPSC Exam Comprehensive News Analysis

TABLE OF CONTENTS

A. GS1 Related
B. GS2 Related
HEALTH ISSUES
1. Indian doctors question new global norms for diabetes
C. GS3 Related
ECONOMY
1. Draft agricultural export policy 
2. Rai alleges communication breakdown between Banks Board Bureau and govt
3. Treat labour in construction work as formal sector, says Supreme Court
D. GS4 Related
E. Editorials
ECONOMY
1. The U.S. complaint to the WTO against India’s export promotion schemes
ENVIRONMENT
1. The Neutrino Observatory and Environmental clearances
F. Prelims Fact
G. UPSC Prelims Practice Questions
H. UPSC Mains Practice Questions 

Category: HEALTH ISSUES

1. Indian doctors question new global norms for diabetes

Why in news?

• A new set of global guidelines on managing diabetes that aim to replace those followed for over three decades has stirred up a controversy within the medical community.
• Medical practitioners here in India feel the guidelines which recommend relaxing blood sugar targets will, not only lead to serious complications in diabetics but also confusion in the treatment protocol, advising that these should be ignored for Indians.
• There were over 72 million cases of diabetes in India in 2017, according to International Diabetes Federation.

What is the main issue?

• The controversial guidelines relate to relaxing the long-term blood sugar target, haemoglobin A1C (HbA1c), which through a blood test gives an estimate of a person’s blood sugar level average over the past few months.
• Generally, an HbA1c of 6.5% indicates diabetes. American College of Physicians, an organization of internal medicine physicians, recommended recently in the medical journal Annals of Internal Medicine, that clinicians should aim to achieve an HbA1c level between 7% and 8% in most patients with type 2 diabetes, as against the traditional 6.5 to 7% which has been followed over decades.
• The recommendation is leading to a conflict of views amongst doctors and physicians, with certain associations even opposing it.
• Doctors here say the guideline of lowering the blood sugar target cannot be binding and should be ignored, as diabetes in India is more aggressive, and hence riddled with complications. They say these recommendations should not be applicable as India has its own as advised by three bodies — ICMR (Indian Council of Medical Research), RSDDI (Research Society For The Study of Diabetes in India) and API (Association of Physicians of India), which are more tuned in to the Indian diabetic.

Category: ECONOMY

1. Draft agricultural export policy

• The promise of no further restrictions on processed agricultural export, a stable export policy regime for farm products and streamlining of the current APMC laws are part of the changes suggested to double the agri export to $60 billion by 2022.
• Issued on Monday by the commerce and industry ministry, the draft policy on agri export aims to push India into the list of the top 10 countries in this regard, while doubling India’s share of global export in the category.
• The policy paper recalls that between 2012-13 and 2016-17, the country’s agri trade dwindled from $36 billion to $31 billion, a 5 percent annual drop.
• Our export basket is led by marine products ($5.8 billion), meat ($4 billion) and rice ($6 billion), together 52 percent of the total in agri products.
• Despite India occupying a leading position in global trade of these products, its total agri export basket still accounts for only a little over 2 percent of world agri trade, estimated at a massive $1.37 trillion.
• In such a scenario, the target of doubling agri export to $60 billion by 2022 is ambitious — exports have dipped in the past few years. There is a lot of scope for marine products and processed food; also in high-value products. We need to rectify domestic policies and remove transport bottlenecks.
• The cost of transporting many products from the hinterland to ports is higher than the cost by sea; also, air cargoes need to be made affordable.
• The policy has a significant move suggested no restrictions in the form of a minimum export price (MEP), export duty or bans on processed agri products or organic products. However, the door has been kept open for restrictions on commodities considered essential for food security.
• Given the domestic price and production volatility of certain commodities, there has been a tendency to utilise trade policy as an instrument to attain the short-term goals of taming inflation, providing price support to farmers and protecting domestic industry.
• Examples are MEPs on onion and rice shipments. Sudden changes in policy regarding shipment of commodities such as onion, rice, wheat, oilseed, pulses or sugar have long-term impacts on economic and foreign relations with many developing nations, the policy warns.
• To boost high-value and value-added exports, the government will focus on perishables. It will provide an institutional mechanism for tackling market access barriers.
• This has been India’s focus over the past few years in most bilateral negotiations. We need to create a better environment for farm export to flourish. The policy asks for reforming the Agricultural Produce Marketing Committee (APMC) laws across states.
• The result of these, says the ministry, is that agri wholesale markets have been prey to inefficiency and cartelization. For decades, farmers have been under compulsion to sell at these official market yards, which might not offer the best price and restrict private players from setting up markets and investing in infrastructure, it concedes The policy has also identified 50 district-wise clusters for developing export-oriented infrastructure.

2. Rai alleges communication breakdown between Banks Board Bureau and govt

Why in news?

• Banks Board Bureau (BBB) Chairman Vinod Rai on Monday hit out at the government for sitting over its slew of recommendations for public sector banking reforms. He also pressed for banking regulations being made independent of ownership, a position similar to what Reserve Bank of India Governor Urjit Patel had taken in a public event a few days ago, in the light of the Rs 129 billion Punjab National Bank scam.
• Rai submitted a 60-page report titled ‘Compendium of recommendations’ barely 10 days before the tenure of all the members of the BBB is set to expire on March 31, highlighting the work done by the Bureau in the last two years.
•  In the report, Rai mentioned a communication breakdown between the National Democratic Alliance (NDA) government and the BBB, which was set up in February 2016 under the former Comptroller and Auditor General to usher in governance reforms in public sector banks.
• Rai also underlined extracts of a letter sent by him to Finance Minister Arun Jaitley on July 26 to set out a framework on the role of the BBB, seeking time for a meeting with the minister to discuss those issues, one of which included the need for “an organic relationship between the government and the bureau.”
• At present, the body is merely functioning as an appointment board, Rai said in his letter addressed to Jaitley. Rai said the BBB was not aware of the progress made on reforms as has been no further engagement with the government.
• In the letter, the BBB had suggested providing independent feedback to the FM on a half-yearly basis on the degree of implementation of its recommendations related to governance, reward, and the accountability framework.
•  Rai had told Jaitley that the BBB would be able to reduce the conflict of interests that the RBI finds itself in as a regulator and supervisor of the banking entities in the public sector. In this regard, the RBI’s role as a regulator and supervisor should be made ownership-neutral.
• He mentioned this in the light of the RBI’s concerns that its role as a regulator was limited with respect to PSBs, which is not on the same lines as its engagement with the banking entities which are not in the public sector.
• While the government retains its majority shareholding, it is very much possible for the public sector to reach the same levels of efficiency as the private sector, provided governance regulations, supervision and the developmental agenda are allowed to be ownership-neutral, Rai said in the foreword to the report.
•   Patel during a speech last week had pitched for making bank regulation ownership-neutral, saying the regulator had very limited authority over state-run banks since it did not have the power to replace the boards of these banks or force a merger, nor could it revoke the licence of a bank for any activity undertaken.
•  Rai provided a point-wise status update over the mandate entrusted upon the BBB.
• Of the 13 objectives, there was no pendency at the level of the BBB in seven, two of them were dependent upon the implementation of its recommendations by the government, three were work in progress and the BBB sidestepped from its role in one of them, according to the report.
• The report even reproduced the BBB’s recommendations on the code of conduct and ethics in government-owned banks sent to the finance ministry in March 2017, “considering the immediate nature of the challenge before the nation and the need to ensure swift implementation”.
•  The BBB said it was yet to hear from the department of financial services on recommendations made on reforms in appointments, compensation, performance assessment and governance over a year ago.
•  The BBB had to sidestep from its mandate of helping banks in developing business strategies and capital raising plans after the government did not agree to its demands to allow it to develop an independent perspective on stressed asset strategy and co-ordinated effort among PSBs towards recovery.
•  The BBB even facilitated a meeting of all chief executives of public sector banks with the director of the Central Bureau of Investigation and the Central Vigilance Commissioner, which was co-chaired by the RBI governor and Rai. However, since the government had not acceded to the bureau’s request for a specific mandate on a stressed asset strategy, the bureau stepped aside from making any further efforts in the matter.

 Process on for hiring new members

• As the tenure of the Banks Board Bureau (BBB) nears its end, the Union government has set the ball rolling for the appointment of new members. Finance ministry officials ruled out abolishing the BBB, which started functioning under its present Chairman Vinod Rai from April 2016 as an autonomous body to recommend improvements in governance at public sector banks. The tenure of all BBB members was set to expire on March 31, sources said.
•  A search committee comprising the RBI governor and secretaries of the department of financial services and department of personnel and training may soon take a call on the new members of the BBB.
•   The BBB was set up on the recommendations of banker P J Nayak and the Union government announced the setting up of the bureau in February 2016.

3. Treat labour in construction work as formal sector, says Supreme Court

Highlights

• The Supreme Court on Monday asked the Centre to treat construction workers as formal sector employees.
• The court directed the Centre to frame a scheme to ensure these workers receive proper education, health, social security and other benefits necessary to live a dignified life.
• In a bid to ensure relief to more than four crore construction workers, the Supreme Court on Monday asked the Centre to treat them as formal sector employees by bringing them within the ambit of social welfare laws and provide benefits like paid maternity leave, provident fund and minimum wage.

• The court directed the Centre to frame a scheme to ensure workers receive proper education, health, social security, old age, disability pension and other benefits necessary to live a dignified life.
• A bench of Justices Madan B Lokur and Deepak Gupta expressed concern over the Centre and states not addressing the plight of construction workers despite Parliament framing Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act in 1996 for levy and collection of 1 percent cess on cost of construction.

Nothing here for today!!!

Category: ECONOMY

1. The U.S. complaint to the WTO against India’s export promotion schemes

• India’s export promotion schemes face an uncertain future after the United States Trade Representative (USTR) decided to challenge their legality in the World Trade Organisation (WTO).
• The complaint of the USTR is that India is violating its commitments under the Agreement on Subsidies and Countervailing Measures (SCM Agreement) using five of the most used export promotion schemes, namely, the export-oriented units scheme and sector-specific schemes, including electronics hardware technology parks scheme, merchandise exports from India scheme, export promotion capital goods scheme, special economic zones and duty-free import authorisation scheme.

Terms and conditions

• The main argument of the USTR is that India’s five export promotion schemes violate Articles 3.1(a) and 3.2 of the SCM Agreement, since the two provisions prohibit granting of export subsidies.
• Until 2015, India had the flexibility to use export subsidies as it is among the 20 developing countries included in Annex VII of the agreement that are allowed to use these subsidies as long as their per capita Gross National Product (GNP) had not crossed $1,000, at constant 1990 dollars, for three consecutive years.
• This provision applicable to the Annex VII countries was an exception to the special provisions provided to the developing countries (the so-called “special and differential treatment”) for phasing out export subsidies. Except Annex VII countries, all other developing countries were allowed a period of eight years from the entry into force of the WTO Agreement, i.e. 1995, to eliminate export subsidies.
• That India had crossed the $1,000 GNP per capita threshold in 2015 became known when the WTO Secretariat produced its calculations in 2017. An interpretation provided in a 2001 report of the Chairman of the Committee on Subsidies and Countervailing Measures, which is also considered as the document providing the methodology for implementing Annex VII of the agreement, says that countries like India must eliminate export subsidies immediately upon crossing the above-mentioned threshold.
• In the Doha negotiations, India and several other Annex VII countries sought an amendment of the agreement so as to enable them to get a transition period.

Extension sought

• In a submission made in 2011, India, along with Bolivia, Egypt, Honduras, Nicaragua and Sri Lanka, argued that the Annex VII countries should be eligible to enjoy the provisions applicable to the other developing countries, namely, those that had GNP per capita above the threshold.
• The latter set of countries was required to phase out their export subsidies within eight years of joining the WTO.
• Additionally, they were allowed to enter into consultations with the Committee on Subsidies and Countervailing Measures, not later than one year before the expiry of the transition period, to determine if there was a justification for the extension of this period, after examining all of their relevant economic, financial and development needs.
• But this proposal, like all other proposals made as a part of the Doha Round negotiations, remains unaddressed.

What needs to be done?

• It needs to be pointed out that this is not the first time that the U.S. has put India’s export promotion schemes under the scanner; although this is the first instance when its Trade Administration has initiated a WTO dispute involving these schemes.
• In 2010, the U.S. had questioned the export incentives provided to the textiles and clothing sector as a whole, arguing that this sector had a share in global trade exceeding 3.25% and had, therefore, become export competitive.
• The U.S. pointed out that according to Article 27.5 of the SCM Agreement, any Annex VII developing country which had reached export competitiveness in one or more products must gradually phase out export subsidies on such products over a period of eight years. There was, therefore, considerable pressure on the Department of Commerce to consider its future strategies regarding export promotion schemes.
• It was perhaps the pressure that spoke when the Foreign Trade Policy (FTP) of the National Democratic Alliance government unveiled in 2015 did some serious introspection about the future of export promotion schemes, the first time that any government had done so. The policymakers recognised that the extant WTO rules and those under negotiation were aimed at eventually phasing out export subsidies.
• The FTP took this as a pointer to the direction which export promotion efforts in the country must take in the future: a movement towards more fundamental systemic measures and away from incentives and subsidies. A similar note was sounded in the mid-term review of the FTP released in December 2017. This document was significant also because the Indian government showed its awareness that the country was at the verge of losing the benefits of being an Annex VII country.
• Contrary to the pronouncements made in the FTP, the government has continued to increase its outlays on export promotion schemes. In 2016-17, the total outlay on export promotion schemes was Rs. 58,600 crore, an increase of more than 28% in three years. During this period, the largest export promotion scheme in place currently, the Merchandise Exports from India Scheme (MEIS), was introduced to promote exports by offsetting the infrastructural inefficiencies faced by exports of specified goods and to provide a level playing field. The scheme initially covered 4,914 tariff lines and was subsequently increased to cover 7,914 tariff lines. In recent months, there has been a two-fold expansion of the scheme: one, to enhance the MEIS rates of ready-made garments from 2% to 4%; and two, to increase the MEIS benefits for all labour-intensive and MSME sector products by 2%. These expansions in the scope of MEIS increased the total outlay on the scheme to nearly 60% over the level in 2016-17.
• The utility of export subsidies to promote exports has long been questioned. While the real impact of these subsidies has never been clearly measured, what has been quite evident is they have benefited the rent-seekers. There is, therefore, a strong case for the government to invest in trade-related infrastructure and trade facilitation measures, which can deliver tangible results on the export front.

Question 1. Consider the following statements about India-based Neutrino
 Observatory (INO):

Question 2. Consider the following statements about Neutrinos:

Question 3. Consider the following statements about Bezbaruah Committee:

1. The Ministry of Home Affairs constituted this Committee.
2. This committee was constituted to look into concerns of the persons hailing from the North-Eastern states who are living in different parts of the country.

Which of the statements are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. None of the above

See

General Studies II 

1. Why was the Bezbaruah Committee appointed? what are its recommendations and suggest measures to overcome the bias?
2. Shimla Agreement could have settled the Kashmir Conflict but rival strategies and its constructivist approach of internal transformation of Pakistan made India return empty. Critically analyze.

Also, check previous Daily News Analysis

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