Civilsdaily

Author: Explains

  • UDAN scheme : Opportunities and Challenges

    Note4Student:

    UDAN (‘Ude Desh ka Aam Naagrik’) is a first-of-its-kind scheme globally to stimulate regional connectivity through a market-based mechanism. It is also linked to UPSC mains Syllabus (Infrastructure). Every year UPSC is asking 1-2 questions on infrastructure related issues. Therefore, this scheme is important for the exam.

    Need for schemes like Udan:

    1. There are as many as 398 “unserved” airports which have no commercial flights and 18 “under-served” airports host less than seven flights per week.
    2. Besides, a major reason for the poor regional air connectivity in India is that airlines do not find it lucrative to operate from small cities. The government has tried to address this concern by an adroit combination of subsidies and fare caps.

    Key features of the UDAN scheme

    Image result for UDAN scheme

    Pros of the scheme

    1. It could lead to development of smaller cities as faster air connectivity will attract infrastructure & investment
    2. It could ease passenger pressure from Railways & Roads.
    3. It may provide major boost to Tourism industry in India
    4. Smaller Airlines could successfully compete with bigger airlines.
    5. 5.Moreover, of the 35 crore middle class citizens, only 8 cr people fly. Capping of fares, enhancing connectivity will lead to an increase in the number of citizens who can fly and can take some burden off railways
    6. It will give impetus to India’s ambition of becoming third largest aviation market by 2020

    Challenges/issues in implementing this scheme

    1. Administration of VGF would require scrutiny of airlines balance sheet which would be a messy process. It has the potential of becoming another hotbed for controversy
    2. Vgf would result in additional subsidy burden at a time when economic survey argued in favour of removing subsidies for the rich
    3. Subsidy based regime would be impacted by the vagaries of price changes in oil prices
    4. Capping of fares (1200 for half hour, 2500 for an hour) is criticized as airlines argue that it should be a fn of demand/supply
    5. Significantly, the success of RCS depends on the state lowering tax rates and providing security at airports. Each state has to agree to this – and it may not be as simple as the centre has envisioned it to be.
    6. Airports in many Tier 2 and Tier 3 cities do not have big runways, so they can’t take regular aircraft. That means airlines will need to induct smaller aircraft for short take-offs and landings. Such aircraft needs specialised crew. India produces 200 to 300 pilots every year, and it’s safe to say that training specialised crew will take time.
    7. There are 476 airstrips in the country out of which 90 are in usable state, among which 76 are operational currently. It can be challenging to develop so many ports in the span of 10 years.

    Conclusion:

    Analysts say even as the intent of the policy is good and the efforts laudable, its success will depend on proper implementation and traffic demand/load factors. It’ll be a while before the results are visible, and its success can be measured. Needless to say, if the scheme is successful, it will have a positive impact on travel- and hospitality-related sectors. Domestic air-travel demand could get a fillip, which will be positive for the aviation sector from a long-term perspective. Developing regional routes is expected to eventually feed into major routes, and that augurs well for the sector.

    Questions:

    Q.) Discuss the main features and significance of the Udan scheme.

    Q.) It is commented that success of UDAN scheme will depend on proper implementation and traffic demand/load factors.

  • Should Agriculture be taxed

    Note4Students

    As the focus of the Government is on black money, looking at agriculture for enhanced tax collection appears a logical corollary. This issue is definitely politically sensitive with several vested interests involved. The Government has been bold enough to operate the National Agricultural Market which breaks the traditional stronghold. The next step would be to start reforms in the direction of taxes so as to bring about greater accountability in the system while plugging the lacuna.

    Introduction

    1. The recent discussion on taxing farm income is nothing new.
    2. This kind of thinking was doing the rounds even in British India, when as early as 1925, a committee was set up to assess the feasibility of taxing agriculture income.
    3. The most famous attempt in post-Independence India was the K.N. Raj committee report of 1972, which also examined feasibility and implementation issues.
    4. The Kelkar task force report of 2002 estimated that 95% of the farmers were below the tax threshold.
    5. The underlying argument in the current discussion is to bring more people under the tax net to expand the tax base and also curb tax evasion because income from other sources is usually shown as agricultural income and thus evasion is easy.

    Fact and figure

     

    https://lh5.googleusercontent.com/heg_f96CJMwtJ_7ZyH__sGWONUKD_8ybm0Yrcaygudy-RUhKVc2Co84qdbSXOMNKnOLu6f11ebgFb50iFF9EbMiMDAGiO1NBjHfs2uHHf0EcvORgfe_5RVoVmzu-ncfoGBeMJnURCr7aAkJ-OQ

    Fig: growth of agriculture

    1. The major problem is identifying the individuals given that many of them own small pieces of land or are landless labourers
    2. 42 million-odd people in the organised sector around 17 million are salaried and pay taxes.
    3. In the unorganised sector which has 56 million workers, another 18 million pay taxes. Hence, the strike rate for a population of 100 million workers is just 35 per cent. In the case of agriculture with 120 million potential assessees, it will be hard to identify them.
    4. During the period 1991 to 2016, the share of agriculture decreased from 32% to 15%.
    5. Compared with this, the workforce dependence on agriculture is still very high, at 49.7%
    6. During the period of economic reforms, the gross capital formation of agriculture, which is the capacity to produce and an increase in productivity, has gone down tremendously

    Key issues affecting agricultural productivity include

    1. The decreasing sizes of agricultural land holdings.
    2. Continued dependence on the monsoon.
    3. Inadequate access to irrigation.
    4. Imbalanced use of soil nutrients resulting in loss of fertility of soil.
    5. Uneven access to modern technology indifferent parts of the country.
    6. Lack of access to formal agricultural credit, limited procurement of food grains by government agencies.
    7. Failure to provide remunerative prices to farmers.

    Analysis

    It should be taxed

    1. 80 years ago Dr. B.R. Ambedkar said he favoured taxing agricultural income.He was of the view that tax should be levied on tax-paying capacity or income of the taxpayer, and that the rich must be taxed more and the poor less. Ambedkar criticised the land revenue system of the British but held the view that income from agriculture must attract tax.
    2. Verified income tax returns provide credibility to the farmer which can be used to obtain adequate loans from formal credit channels.
    3. Banks get easier access to reliable, valid and quantifiable data upon which the credit can be advanced without fear of default on loan.
    4. Adequate formal documentation would help the Government to identify the difference between small and big farmers by which the targeted subsidy schemes in future can be rolled out to benefit the needy.
    5. We can develop our GDP only when our agriculture income is taxed. We do not even have a sense of the extent of agricultural income right now
    6. No taxes on Agriculture encourages laundering of non-agricultural income as agricultural income. e.g In 2014-15, a company made profits of Rs 215 crores, but claiming the agricultural income exemption, it paid no tax.
    7. Have a slab of taxes like we have in other sectors and let each pay according to his income from agriculture.
    8. The farmer with a small landholding of less than 2-3 hectares should be exempted from income tax.
    9. If the small farmer is a reality, so also are the big agricultural farmers with their luxury cars and rich industrialists who own farmlands.
    10. Here, if the government takes a decision to levy tax on their income earned from agriculture, the government revenue will not only rise but there will be an increase in the GDP ratio of agriculture.

    Taxing agricultural income has not found favour mainly because of two factors.

    1. A majority of farmers in India — nearly 60% — are small farmers, with small holdings and a small marketable surplus. Their incomes are erratic.
    2. There is no climate insurance for them when the rains fail or in the event of floods. Droughts leave them reeling just as the fury of floods.
    3. Very often, when we talk of farmers, we assume they are all men — 40% of these farmers are women who do not have patta (title deed to the land they till) and do not have Kisan Credit Cards either.
    4. Given the technological and environmental constraints, the performance of the agriculture sector has not been encouraging, and consequently, the welfare of the population living in the countryside has not visibly improved.
    5. The average per month income of a farm household in India in 2012-13 as per the National Sample Survey Office was just ₹6,491.
    6. The income-expenditure gap for a majority of farmers is in the negative.
    7. More than one-third of the farmers have expressed their choice to leave the non-remunerative occupation.
    8. The agrarian distress has been deepening, and there has been a rise in farmer suicides. The agrarian sector is in deep crisis. Instead of finding a viable policy to solve the crisis, floating the idea of taxing farming income is a great disservice to the sector.

    Concerns

    1. The other issue is what can be taxed? Should it be value of output or the net income earned by farmers?
    2. While the value of output sold can be gauged and tracked to the extent that it enters the market, this is not net income as there are expenses incurred in growing crops which include seeds, fertilisers, water, and so on. Also for those owning equipment a depreciation value has to be imputed.
    3. This means farmers have to be treated on a par with companies or self-employed professionals and not income tax assessees. How can one draw up such a profit and loss account?
    4. There is a lot of produce that does not enter the market and the marketable surplus can range from anywhere between 65 to 100 per cent depending on whether it is a food crop or a commercial product such as cotton and jute.
    5. Hence, a large part of the value will be hard to fathom on this score. Also there is a lot of under-reporting given the state of logistics in the country.

    Way Forward

    1. A bold and dynamic approach is needed in India whereby all the political parties and all the Chief Ministers of India organize a conclave to debate and discuss the issues concerning taxation of agricultural income in India.
    2. The discussion should be held primarily with reference to the national outlook and not personal gain or otherwise to a political party.
    3. If this type of debate or discussion takes place in the country, then surely the policy makers may  be able to come to the conclusion that after decades of exemption of agricultural income now is the time that agricultural income be put to tax like any other normal income of the tax payer.
    4. A way out is to tax the product which is presently also being done in some States through a mandi tax or something else.
    5. This tax will be finally passed on to the consumer who will then have to pay a higher price for the product.
    6. Such a move will ensure that the tax does not come in the way of the farmer’s income. Strictly speaking this would be an indirect tax on commodities, like an excise or sales tax, which will get subsumed under GST. The income of the farmer will still be outside the ambit of income tax.
    7. The procurement policy plus pricing policy and the public distribution system have to be factored in before there is any talk of bringing the sector in the income tax net.
    8. Need to devise a method that takes into account agricultural income beyond a certain threshold
    9. Don’t give subsidies after a certain threshold.
    10. We can devise methods to tax agricultural income.
    11. have differential subsidies. Remove subsidies in the case of irrigated farming as opposed to rain-fed farming. A majority of the farmers are dependent on monsoons.

  • Merger of Banks: Need & Challenges

    Type:
    Subjects:

    Note4Students:

    The talk of bank mergers is thicker in the air now, than never before. Government has started with merger of SBI and its subsidiaries. This merger has initiated a debate with some economist calling it a landmark decision while others believe that it will make the financial system more risky.

    Context:

    Recently The boards of State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), the unlisted State Bank of Hyderabad (SBH), State Bank of Patiala (SBP) and Bharatiya Mahila Bank approved the scheme of merger with State Bank of India.

    Background

    1. The various committees appointed by the Government of India have advocated consolidation They argue that we need to have three to four large nationalized banks in order to improve the operational efficiency and distribution efficiency. The Narsimhan committee ii has specifically emphasized the need to have Indian Banks which are comparable in size with global leading banks.. The Narsimhan committee proposed a three-tier banking structure in India with around 3-4 large banks to take a stand in global scenario,8-10 banks to provide national coverage and rest to take care of local coverage.
    2. Most of the mergers in the pre-reform period have been forced ones. The post-reform era has witnessed both forced and voluntary mergers. The forced mergers have been caused by the financial ill health of the acquired banks. Banks witnessing erosion in net worth, huge NPAs and decline in capital adequacy ratio have been forced by the regulatory authority to undergo merger. Oriental Bank of Commerce’s acquisition of Global Trust Bank is an example of forced merger. Voluntary mergers have expansion, diversification and growth as the main motives. HDFC’s acquisition of Times Bank and ICICI’s acquisition of Madura Bank are a few examples of voluntary mergers. India has also witnessed cross- border acquisitions in the recent past. SBI’s acquisition of a Mauritian bank is one such example.

    What is bank consolidation?

    1. Bank consolidation occurs when two or more banks become one bank. Bank consolidation can lead to expansion for the newly merged institution. Banks consolidate for multiple reasons, including to mitigate competition, gain capital power both domestically and internationally, to compete with larger banking institutions or to expand the services that the newly merged bank can provide both internally and geographically by decreasing overall operating costs.

    Why do we need Consolidation of Banks?

    1. Economies of scale: Assocham Survey has found that size of Indian banks in terms of their assets stands very small to make optimal use of their capacities to raise funds at internationally competitive rates. Combined assets of top ten banks constitute less than 60 per cent of the GDP unlike the banking system of European economies, where even after the global financial turmoil, assets of only top five banks has grown to four times of GDP.
    2. Indian Banks are too small: Even as India is the second largest growth market for banking services after China in terms of the number of wealthy households, the ASSOCHAM Chief said, only two Indian banks, State Bank of India at the 64th position and ICICI Bank Ltd at 81st, figure among the global top 100 by tier I capital – a core measure of a bank’s financial strength that consists largely of shareholders’ capital.
    3. Similarly, in terms of assets, India’s largest bank, SBI is now the world’s 70th largest bank. On the other hand, ICICI Bank Ltd, the largest private sector lender has attained the 148th position. None of the other Indian banks features among the top 200 banks in the world-in terms of size of assets.
    4. Many experts in Banking field feels that hampered by the fragmented nature of the banking industry, Indian banks are not able to compete globally in terms of fund mobilisation, credit disbursal, investment and rendering of financial services. The balance sheets of top 10 Indian banks suggest the greater scope of consolidation to reap the benefits of large sized globally competitive Indian banks
    5. Merger will increase Capital efficiency: Consolidation will also increase capital efficiency. Merged entity will have more leg room to raise capital.
    6. Would decrease NPA: At a time when NPAs are high, and banks are putting more effort in recovery, the ability to recover by smaller number of banks will be higher though a individual bank’s exposure may go up. This is because there are smaller number of voices … in the joint lenders’ forum today there are too many voices and each lender has a differential right with the borrower and they often not agree to a common recovery programme. With consolidation the recovery will be far more focused. Thus consolidation could decrease NPA in India.

    Advantages of merger of SBI with associate banks

    1. SBI will have global presence among top 50 Banks, bringing confidence, investment and greater lending.
    2. SBI can become one of the anchor banks to finance large infrastructure projects like dedicated freight corridor, solar energy, Sagarmala etc.
    3. It will increase networking of SBI all over India, thus better services of SBI compared to its associate branches will be able to reach remote locations.
    4. It will reduce duplication as SBI and its associates target the same clients with similar products.
    5. It will consolidate resources and infrastructure, reducing the cost on operations, human resource and technological solutions, overlapping bank branches, reduce inter-bank transaction cost etc.

    Disadvantages of merger

    1. Presently these banks have huge NPAs thus merger should be planned after sufficient capital is injected.
    2. Banking competition may be affected, as SBI is likely to be five times larger than its nearest competitor.
    3. RBI has declared SBI as Domestic Systemically Important Bank (D-SIBs) and its failure can shock other parts of financial system.
    4. Past example of large banks and their failure with financial crisis in Japan, USA, etc.
    5. Workers resistance from associations like AIBEA calling for strikes
    6. India has poor financial inclusion, thus needs variety of banks and differentiated services.

    Suggestions

    1. The govt should not rush through the process – all stakeholders must be involved in the process
    2. In the event of further divestment, the govt. share shall not fall below 51% in any case
    3. Acquiring bank shall not dominate the smaller ones- good practices of both should be combined; conscious and organized efforts to synthesize the differences must be made.

    Conclusion

    Bank consolidation is a tricky issue. While it is said that the long-term benefits of consolidation outweigh the short-term concerns, it must not be made a general policy. It is only to be done with right banks for right purpose with proper safeguards.

    (Q) What do You Understand by Bank consolidation? Do Indian Banking sector need banking consolidation? Highlight Pros and cons.

    (Q) Examine various implications of proposed merger of the State Bank of India with its five associate banks and the Bharatiya Mahila Bank.

     

     

  • Do India require High speed rail

    Note4Students:

    High speed rail is one of the most ambitious project of the Modi Government. It is also related to Infrastructure topic in the GS paper 3

    Context

    The government of India recently decided to build a high-speed rail (HSR) corridor between Mumbai and Ahmadabad at a cost of Rs 97,636 crore with Japanese financial and technical assistance.

    What do we understand by High Speed Rail?

    High-speed rail is a type of rail transport that operates significantly faster than traditional rail traffic, using an integrated system of specialized rolling stock and dedicated tracks.

    India has one of the Largest rail Networks in the world, but as of now it does not consist of any line classed as  (HSR), which allows an operational speed of 200 km/h or more. The current Fastest Train in India is the Gatimaan Express that runs with a top speed of 160 km/h, with average speed of above 100 km/hr between Delhi and Agra.

    The first Proposed High speed Train in India would run some 500 kilometers (310 miles) between India’s financial capital Mumbai and the western city of Ahmadabad, at a top speed of 320 km/h. Under the Japanese proposal, construction is expected to begin in 2017 and be completed in 2023. It would cost about 980 billion (US$15 billion) and be financed by Low interest loan from Japan.

    Recently Government has introduced Tejas Express which is India’s first semi-high speed full AC train fleet introduced by Indian Railways, featuring newer modern on-board facilities.

    Image result for high speed rail in India

       

    Points in Favour of High speed rail Corridor

    1. Cheap: The negotiated terms — the rate of interest of 0.1 per cent per annum and tenure of 50 years with 15 years grace — is the best till now for any project financed through a bilateral/ multilateral agency in India.
    2. Speed: High speed is one of the biggest reasons for the proposal of this idea when it was first initiated in India. Major cities connecting with towns of economic growth face the problem of fast transportation. This would save time and boost businesses amongst the connected cities. Reduction in commuting time is greatly required in Mumbai and other metro cities where a lot of time is consumed in the process.
    3. Promote Make in India: Second, the assistance programme involves transfer of technology and a Make in India component, which will have long-term benefits for Indian manufacturing.
    4. Stronger and eco-friendly: Not only these High speed trains are stronger enough to carry heavier weight but are also eco-friendly as they do not require deforestations to set tracks. It is a modern and technologically advanced means of transportation which can be a step towards growth and development in India.
    5. Gestation period is long: Fifthly The bullet train between Mumbai and Ahmedabad will cost Rs 97,636 crore and will be built over seven years. Hence, the entire Rs 98,000 crore (approximately) will not be spent in one year.
    6. Will have multiplier effect: Sixthly A growing economy like India needs investment in infrastructure and railways, which has a multiplier effect. The Indian Railways is not constrained by demand but by capacity, and any substantial investment in railways will enable economic growth.
    7. Will enhance transport capacity: Seventhly The HSR will enhance transport capacity by four to five times of the normal capacity and facilitate the movement of a large number of people. Train passenger volume between Wuhan and Guangzhou in China rose by 40 per cent after the construction of the HSR. Similarly, passenger volume between Beijing-Tianjin increased by 86 per cent within one year of the operation of the HSR. The high cost of the project is offset by much higher utilisation rates of the network and rolling stock per km than conventional rail.
    8. Highly Safe: Eighthly Since the HSR system is highly safe, they reduce external costs (accidents, air/ noise pollution, impact on climate, etc). There has been no casualty due to accidents on Japanese high-speed trains since they started in 1964 .

    Challenges /Criticisms

    The project looks ambitious but challenges are many

    1. Land acquisition: Bullet trains require seamless straight tracks on a flat terrain. Though France managed it in the existing tracks itself, but if new lands needs to be acquired, it can come only at an expensive compensation in Mumbai-Ahmedabad industrial cluster. It will also demand huge political will.
    2. Operation& maintenance: Considering the existing scenario of the quality of O&M in Indian railways, the maintenance of this new elephant will pose many challenges even if it is privatized. Fencing all along the track and over bridges at all the line crossings will cost too dearer. The power demand will be more too. It will require the infrastructure of existing railway stations from where bullet train will pass to be upgraded as per the specifications which again will cost enormously.
    3. Utility: Indian Railways is the lifeline of a common man. Who is going to utilize this service which is meant to connect mega cities? People who have means prefer swift air services to reach megacities. Common man will find it expensive. In the era of multimodal integrated transportation, isn’t it wise to better utilize the existing infrastructure more wisely? Invest to improve all existing tracks to make them sustain 160+ speeds. An airport even 20-25 kms away from Common Business District but well connected to it by a dedicated link is still quite time efficient. Best example being Shanghai airport at a distance of 30km or 30 minutes from city centre. Instead we must focus on low cost air services at even class III level cities for decentralized development. Major part of the city population are middle and lower income household, who demand more capacity rather than ultra high speed.
    4. Cost-Benefit: The bullet trains in china run in losses. China being an infrastructure driven economy could sustain it. We need to analyze can we bear such a loss. We need huge investment in infrastructure in coming 2 decades. With limited resources we must ensure that cost benefit ratio is most efficient. A person earning 1000 rs a day cannot afford saving a day by spending 2000 on regular basis. And for emergencies Airways offer a good choice

    Conclusion:

    Bullet train has sets of pros and cons under India’s present situations and they need to be properly handled so that it brings prosperity and development in the country and not debacles. Every factor must be considered wisely and safeguarding of people’s living should not be compromised. There are risks in this project but without risks nothing big can be acquired

    (Q) What do we understand by High speed rail? Does India need high speed rail? Give Pros and cons.

    (Q) The government of India recently decided to build a high-speed rail (HSR) corridor between Mumbai and Ahmedabad at a cost of Rs 97,636 crore with Japanese financial and technical assistance.  Does India need projects such as this at such a high cost? Comment.

    Source:

    http://indianexpress.com/article/opinion/columns/mumbai-ahmedabad-high-speed-rail-india-2773376/

    http://www.bbc.com/news/world-asia-india-35099426

  • All about Cashless Economy

    Note4Students:

    Cashless Economy has been in news frequently since Government has taken number of initiatives in last few years to promote cashless transaction. This makes it a probable topic for mains 2017

    Introduction

    1. India continues to be driven by the use of cash; less than 5% of all payments happen electronically however the finance minister, in 2016 budget speech, talked about the idea of making India a cashless society, with the aim of curbing the flow of black money.
    2. Even the RBI has also recently unveiled unveiled a document — “Payments and Settlement Systems in India: Vision 2018” — setting out a plan to encourage electronic payments and to enable India to move towards a cashless society or economy in the medium and long term.

    What is a cashless economy and where does India stand?

    1. A cashless economy is one in which all the transactions are done using cards or digital means. The circulation of physical currency is minimal.
    2. India uses too much cash for transactions. The ratio of cash to gross domestic product is one of the highest in the world—12.42% in 2014, compared with 9.47% in China or 4% in Brazil.
    3. Less than 5% of all payments happen electronically
    4. The number of currency notes in circulation is also far higher than in other large economies. India had 76.47 billion currency notes in circulation in 2012-13 compared with 34.5 billion in the US.
    5. Some studies show that cash dominates even in malls, which are visited by people who are likely to have credit cards, so it is no surprise that cash dominates in other markets as well.

    http://letstalkpayments.com/wp-content/uploads/2015/10/Cashless-Society.png

    source

    Benefits of Cashless economy

    1. Reduced instances of tax avoidance because it is financial institutions based economy where transaction trails are left.
    2. It will curb generation of black money
    3. Will reduce real estate prices because of curbs on black money as most of black money is invested in Real estate prices which inflates the prices of Real estate markets
    4. In Financial year 2015, RBI spent Rs 27 billion on just the activity of currency issuance and management. This could be avoided if we become cashless society.
    5. It will pave way for universal availability of banking services to all as no physical infrastructure is needed other than digital.
    6. There will be greater efficiency in welfare programmes as money is wired directly into the accounts of recipients. Thus once money is transferred directly into a beneficiary’s bank account, the entire process becomes transparent. Payments can be easily traced and collected, and corruption will automatically drop, so people will no longer have to pay to collect what is rightfully theirs.
    7. There will be efficiency gains as transaction costs across the economy should also come down.
    8. 1 in 7 notes is supposed to be fake, which has a huge negative impact on economy, by going cashless, that can be avoided.
    9. Hygiene – Soiled, tobacco stained notes full of germs are a norm in India. There are many such incidents in our life where we knowingly or unknowingly give and take germs in the form of rupee notes. This could be avoided if we move towards Cashless economy.
    10. In a cashless economy there will be no problem of soiled notes or counterfeit currency
    11. Reduced costs of operating ATMs.
    12. Speed and satisfaction of operations for customers, no delays and queues, no interactions with bank staff required.
    13. A Moody’s report pegged the impact of electronic transactions to 0.8% increase in GDP for emerging markets and 0.3% increase for developed markets because of increased velocity of money
    14. An increased use of credit cards instead of cash would primarily enable a more detailed record of all the transactions which take place in the society, allowing more transparency in business operations and money transfers.

    This will eventually have the following chain effect:

    1. Improvement in credit access and financial inclusion, which will benefit the growth of SMEs in the medium/long run.
    2. Reduce tax avoidance and money laundering thanks to the higher traceability of all the transactions.
    3. The increased use of credit cards will definitely reduce the amount of cash that people will carry and as a consequence, reduce the risk and the cost associated with that.

    Challenges in making India a cashless economy

    1. Availability of internet connection and financial literacy.
    2. Though bank accounts have been opened through Jan Dhan Yojana, most of them are lying un operational. Unless people start operating bank accounts cashless economy is not possible.
    3. There is also vested interest in not moving towards cashless economy.
    4. India is dominated by small retailers. They don’t have enough resources to invest in electronic payment infrastructure.
    5. The perception of consumers also sometimes acts a barrier. The benefit of cashless transactions is not evident to even those who have credit cards. Cash, on the other hand, is perceived to be the fastest way of transacting for 82% of credit card users. It is universally believed that having cash helps you negotiate better.
    6. Most card and cash users fear that they will be charged more if they use cards. Further, non-users of credit cards are not aware of the benefits of credit cards.
    7. Indian banks are making it difficult for digital wallets issued by private sector companies to be used on the respective bank websites. It could be restrictions on using bank accounts to refill digital wallets or a lack of access to payment gateways. Regulators will have to take a tough stand against such rent-seeking behaviour by the banks.

    Steps taken by RBI and Government to discourage use of cash

    1. Licensing of Payment banks
    2. Government is also promoting mobile wallets.Mobile wallet allows users to instantly send money, pay bills, recharge mobiles, book movie tickets, send physical and e-gifts both online and offline. Recently, the RBI had issued certain guidelines that allow the users to increase their limit to Rs 1,00,000 based on a certain KYC verification
    3. Promotion of e-commerce by liberalizing the FDI norms for this sector.
    4. Government has also launched UPI which will make Electronic transaction much simpler and faster.
    5. Government has also withdrawn surcharge, service charge on cards and digital payments
    6. Launch of BHIM APP
    7. A discount of 0.75 per cent will be offered on purchase of petrol and diesel through either credit/debit cards, e-wallets and mobile wallets.
    8. Credit/debit card transactions up to Rs 2,000 will be exempt from service tax.
    9. Online booking of railway tickets will get Rs 10-lakh accident insurance.
    10. 1 lakh villages with population less than 10,000 will get 2 PoS machines (swipe machines) each, free of cost supported through financial inclusion fund.
    11. Demonetization (Will be dealt in a separate article)

    What else needs to be done?

    1. Open Bank accounts and ensure they are operationalized.
    2. Abolishment of government fees on credit card transactions; reduction of interchange fee on card transactions; increase in taxes on ATM withdrawals.
    3. Tax rebates for consumers and for merchants who adopt electronic payments.
    4. Making Electronic payment infrastructure completely safe and secure so that incidents of Cyber crimes could be minimized and people develop faith in electronic payment system.
    5. Create a culture of saving and faith in financial system among the rural poor.
    6. The Reserve Bank of India too will have to come to terms with a few issues, from figuring out what digital payments across borders means for its capital controls to how the new modes of payment affect key monetary variables such as the velocity of money.
    7. RBI will also have to shed some of its conservatism, part of which is because it has often seen itself as the protector of banking interests rather than overall financial development.
    8. The regulators also need to keep a sharp eye on any potential restrictive practices that banks may indulge in to maintain their current dominance over the lucrative payments business.

    Though it will take time for moving towards a complete cashless economy, efforts should be made to convert urban areas as cashless areas. As 70% of India’s GDP comes from urban areas if government can convert that into cashless it will be a huge gain. Therefore different trajectories need to be planned for migration to cashless for those having bank account and for those not having.

    Source: http://www.dailymail.co.uk/indiahome/indianews/article-3300738/Why-India-banking-cashless-economy.html

    http://www.business-standard.com/article/economy-policy/demonetisation-steps-taken-by-govt-to-promote-cashless-transactions-116112300967_1.html

    http://www.livemint.com/Opinion/UPu9N5gINQpmk0j1QpkA9K/Moving-to-a-cashless-economy.html

    Questions:

    Q.1) What hurdles exist in making India a cashless economy? Discuss benefits of becoming a cashless economy and suggest how government can speed of this transformation.

    Q.2) What challenges does government face in rural areas in its efforts towards a cashless economy? How these challenges could be overcome?

  • Air India disinvestment: Need & Challenges

    Note4Students

    The Cabinet recently approved the disinvestment plan for Air India and its five subsidiaries. It is being seen as Government’s one of the boldest reform moves till date. The Government is hopeful that the decision will attract a positive response and will revive Air India. The carrier has already been surviving on a bailout package. Last month, the NITI Aayog in its report had recommended the disinvestment of Air India

    Introduction

    1. The Union Cabinet gave its ‘in-principle’ nod to divest stakes in Air India — a wholly owned government airline.
    2. The Cabinet decided to go for Air India’s strategic disinvestment, which means the government is willing to shed a substantial portion of its stake and hand over the management of the ailing airline to the private sector.
    3. The Cabinet also approved strategic disinvestment in five of Air India’s subsidiaries — its MRO unit Air India Engineering Services (AIESL), ground handling arm Air India Transport Services, Air India Charters which operates Air India Express and Airline Allied Services which operates Alliance Air and Hotel Corporation of India (which owns Centaur Hotels), along with a joint venture AISATS.
    4. The three profit-making subsidiaries are
    5. the low-cost airline Air India Express Ltd,
    6. the ground handling company Air India Air Transport Services Limited
    7. Air India’s joint venture with SATS Limited for ground handling activities in Delhi, Mumbai, Trivandrum and Bengaluru.

    Analysis

    Operational strategy

    Group of ministers (GoM) to decide,

    1. The quantum of equity to be offered,
    2. ays to deal with Air India’s “unsustainable” debt
    3. Housing some of the airline’s assets into a shell company.
    4. This group will also decide whether to demerge three of the airline’s profitable subsidiaries and do a strategic sale of these.
    5. This group decides if foreign investors and/or foreign airlines can also bid for the national carrier.

    Argument For Disinvestment

    1. Market competition in a note the aviation ministry has argued that since there are several Indian owned private airlines operating in the domestic and international sectors, there is no need for the government to be involved in the aviation business.
    2. The Niti Aayog had submitted its recommendations on the strategic disinvestment of Air India and five of its subsidiaries,
    3. Citing the carrier’s monthly losses to the tune of Rs 200-250 crore as the primary reason why such a move is required.
    4. Air India’s cash deficit is expected to double from Rs 1,050 crore in 2015-16 to Rs 2,069 crore in 2016-17, according to the provisional figures in a report submitted by the ministry of civil aviation to the standing committee on transport, tourism and culture.
    5. There will ease the fiscal pressure on the union government — especially in indirectly servicing the airline’s outstanding debt burden of Rs52,000 crore.
    6. The airline has so far received Rs 23,993 crore of the Rs 30,231 crore equity infusion promised by the government under a financial restructuring plan in 2012.
    7. It reported a loss of about Rs 3,587 crore in 2015-16, compared with a loss of Rs 5,859 crore in the previous year.
    8. ₹50,000 crore could be invested in social welfare sectors instead of financing Air India’s debt.
    9. Economic Survey 2017 recommended that the government privatize Air India.
    10. Market share Air India’s market share has also eroded rapidly over the years due to competition from private players — from 19.4% in 2013 to around 13.3% in May 2017 — in the domestic sector, which made it unattractive to continue running its operations.
    11. Workers Problem Wooing professionals to work with Air India – assuming they come from the private sector – could be challenging. Many professionals would be reluctant to work with a loss-making entity, especially in a public enterprise set-up. In India, public sector companies, albeit profitable, have rarely attracted professionals from the private sector.

    Challenges

    The government will have to streamline its FDI policy so that foreign investors can buy a stake in Air India. The Civil Aviation Ministry has also made a case for the sale of non-core assets first to pay off existing creditors, so that the airline becomes more attractive to private buyers.

    The task of strategic disinvestment of Air India is complex.

    1. The balance sheet of Air India is not only debt-ridden but has some unusual assets.  Air India showed the traits of Raja Maharaja, over the years there has been huge collection of artwork in form of sculptures, murals and paintings.
    2. Valuing these assets is a challenge. The other valuable assets include premium commercial space in major cities in India as well as London, Tokyo and Hong Kong.
    3. Air India owns prime slots of the takeoff and landing at the major international airports. Air India’s association with Star Alliance that provides global connectivity to the airline too has commercial value.

    The sale’s purpose should guide the sale’s rules.

    1. Air India’s debt, now about $8 billion, is growing unsustainably. It was bailed out with $5.8 billion of taxpayer money in 2012. The sale’s purpose should be to compensate taxpayers for shouldering the burden of keeping the national carrier afloat. Air India’s disinvestment could deliver this if it results in reduced government interference and increased competition. Remember, most taxpayers are also flyers.
    2. Competition in the air travel market will not increase if Air India gets acquired by a private airline in India. The rules should provide foreign airlines a level playing field. Sharp scrutiny of objections can expose and thwart hidden vested interests.

    Conclusion

    1. The need of the hour is a good assessment of Air India’s assets and liabilities plus a workable plan so that the airline can be made attractive to any prospective buyer.
    2. This decision does convey to the investors that India is serious about reforms and will not throw good money into something not working out well.

    “Government should only be a facilitator of business rather than doing business itself”. Analyse the statement in the light of disinvestment of air India

  • 10 Sep 2017 | Target Mains | 3rd Weekly Test

    Attempt the questions individually by clicking on them.

    Q.1) What hurdles exist in making India a cashless economy? Discuss benefits of becoming a cashless economy and suggest how government can speed of this transformation.

    Source: https://www.civilsdaily.com/story/cashless-society/

    Answer:

    • A cashless economy is one in which all the transactions are done using cards or digital means. The circulation of physical currency is minimal.
    • India uses too much cash for transactions. The ratio of cash to gross domestic product is one of the highest in the world—12.42% in 2014, compared with 9.47% in China or 4% in Brazil.

     

    Hurdles?

    1. Availability of internet connection and financial literacy.
    2. Though bank accounts have been opened through Jan Dhan Yojana, most of them are lying un operational. Unless people start operating bank accounts cashless economy is not possible.
    3. There is also vested interest in not moving towards cashless economy.
    4. India is dominated by small retailers. They don’t have enough resources to invest in electronic payment infrastructure.
    5. The perception of consumers also sometimes acts a barrier. The benefit of cashless transactions is not evident to even those who have credit cards. Cash, on the other hand, is perceived to be the fastest way of transacting for 82% of credit card users. It is universally believed that having cash helps you negotiate better.
    6. Most card and cash users fear that they will be charged more if they use cards. Further, non-users of credit cards are not aware of the benefits of credit cards.

     

    Benefits of Becoming Cashless Economy

    1. Reduced instances of tax avoidance because it is financial institutions based economy where transaction trails are left.
    2. It will curb generation of black money
    3. Will reduce real estate prices because of curbs on black money as most of black money is invested in Real estate prices which inflates the prices of Real estate markets
    4. In Financial year 2015, RBI spent Rs 27 billion on just the activity of currency issuance and management. This could be avoided if we become cashless society.
    5. It will pave way for universal availability of banking services to all as no physical infrastructure is needed other than digital.
    6. There will be greater efficiency in welfare programmes as money is wired directly into the accounts of recipients. Thus once money is transferred directly into a beneficiary’s bank account, the entire process becomes transparent. Payments can be easily traced and collected, and corruption will automatically drop, so people will no longer have to pay to collect what is rightfully theirs.
    7. There will be efficiency gains as transaction costs across the economy should also come down.
    8. 1 in 7 notes is supposed to be fake, which has a huge negative impact on economy, by going cashless, that can be avoided.

     

    How government can speed of this transformation?

    1. Open Bank accounts and ensure they are operationalized.
    2. Abolishment of government fees on credit card transactions; reduction of interchange fee on card transactions; increase in taxes on ATM withdrawals.
    3. Tax rebates for consumers and for merchants who adopt electronic payments.
    4. Making Electronic payment infrastructure completely safe and secure so that incidents of Cyber crimes could be minimized and people develop faith in electronic payment system.
    5. Create a culture of saving and faith in financial system among the rural poor.
    6. The Reserve Bank of India too will have to come to terms with a few issues, from figuring out what digital payments across borders means for its capital controls to how the new modes of payment affect key monetary variables such as the velocity of money.
    7. RBI will also have to shed some of its conservatism, part of which is because it has often seen itself as the protector of banking interests rather than overall financial development.

    Q.2) Discuss the salient features of the Maternity Benefit (Amendment) Bill, 2016? It is considered that the bill will provide women with much needed work life balance. Critically analyse.

    Source: http://www.prsindia.org/billtrack/the-maternity-benefit-amendment-bill-2016-4370/

    The Maternity Benefit (Amendment) Bill, 2016 that seeks to amend the old Maternity Benefit Act, 1961 that entitles women to receive maternity benefits has been passed by the Parliament.

    It is considered that the bill will provide Women with much needed work life balance since it has following Provisions

    1. Expecting mothers who are working in the organised sector can now avail 26 weeks of paid maternity leave instead of 12 weeks.
    2. Bill allows 12 weeks of paid maternity leave to mothers who are adopting a child below the age of three months and also to commissioning mothers who opt for surrogacy.
    3. This entitlement is applicable only upto first two children. For third child, the entitlement will be for only 12 weeks. The leaves further reduce to six weeks if the woman wants to become a mother for the fourth time.
    4. It makes it mandatory for employers with 50 or more employees to provide crèches in close vicinity of the workplace, and by allowing women up to four daily visits to the crèche.
    5. The enhancement of paid maternity leave for women is a progressive step and would benefit about 1.8 million women in the organised sector.

    However

    1. An increase in maternal leave and a mandate to provide crèches might result in adverse incentives for employers to hire women.
    2. The Bill ignores roughly 90 per cent of the Indian women who are employed in the unorganised sector which includes domestic workers, agricultural labourers, seasonal and construction workers.
    3. The Bill continues to reinforce the stereotype about childcare being exclusively a woman’s responsibility and excludes paternity leave from its ambit.
    4. It discriminates against almost all adoptive mothers, particularly those who adopt older babies or children. It also discriminates against adoptive fathers and transgendered persons who may adopt, as it does not recognise their right to parental benefits.

    Conclusion:

    1. The long list of barriers that women face in accessing employment opportunities, such as the risk of exploitation particularly in the informal sector, the lack of wage parity, concerns regarding safety and security, etc., need to find a solution.
    2. India’s problem is not just about ensuring women return to the workforce after childbirth but in bringing women into the workforce in the first place. Resolving this will require more than just maternity leave.

    Q.3) It is commented that Criminal defamation law have a chilling effect on freedom of expression. In the light of the above statement do you think that Criminal defamation should be amended. Critically comment.

    Source: http://indianexpress.com/article/explained/simply-put-the-what-why-of-defamation/

    http://www.hindustantimes.com/india/explained-supreme-court-verdict-on-defamation-law-its-implications/story-sCH7oeumka5daGHJGp5u9L.html

    Recently Supreme Court of India in subramnanian swamy case upheld the validity of the criminal defamation law. 

    It is commented by many experts that Criminal defamation law have a chilling effect on freedom of expression and therefore Criminal defamation should be amended.

     

    Why Criminal defamation law should be amended?

     

    1. These restrictions have a chilling effect on freedom of speech; they create an anomaly whereby the threshold for criminal prosecution for defamation is now possibly lower than the threshold for civil damages;
    2. “Constitutional fraternity” is not a part of Article 19(2) of the Constitution, which specifically limits the circumstances under which the state can restrict speech to eight enumerated categories.
    3. It is also nowhere in the fundamental rights chapter of the Constitution, so the question of “balancing” free speech against constitutional fraternity does not arise.
    4. Article 21 which is a shield to protect the individual against State persecution or indifference, is used as a sword to cut down the fundamental right to freedom of speech and expression because of this provision.
    5. Freedom of speech and expression of media is important for a vibrant democracy and the threat of prosecution alone is enough to suppress the truth. Many times the influential people misuse this provision to suppress any voices against them.
    6. Considering anecdotal evidence, every dissent may be taken as unpalatable criticism. Sections 499 and 500 of IPC prescribes two years’ imprisonment for a person found guilty of defamation.

     

    Why Should be retained as it is?

     

    1. Reputation of an individual, constituent in Article 21 is an equally important right as free speech 
    2. It has interpreted art 21 to provide for right to reputation and brought a new concept of constitutional fraternity – that is, an assurance of mutual respect and concern for each other’s dignity.
    3. The Supreme Court declared that the right to free speech under Article 19(1)(a) had to be “balanced” against the right to “reputation” under Article 21.
    4. It has been part of statutory law for over 70 years. It has neither diluted our vibrant democracy nor abridged free speech
    5. Protection for “legitimate criticism” on a question of public interest is available in the Civil law of defamation & Under exceptions of Section 499 IPC
    6. Mere misuse or abuse of law can never be a reason to render a provision unconstitutional rather lower judiciary must be sensitized to prevent misuse
    7. Monetary compensation in civil defamation is not proportional to the excessive harm done to the reputation

    Conclusion:

    1. While the right to reputation may be protected by the Constitution, it should not be at the cost of freedom of speech.
    2. Free speech is necessary because, it enables the media to hold governments and individuals accountable. Freedom of speech should also protect the right to offend within reasonable limits.
    3. If the ability to legitimately criticize is not protected, voices throwing light on important issues will continue to be silenced by the rich and powerful

    Q.4) The government’s idea of providing proxy voting rights to NRIs is seen as a historic decision in the field of providing voting rights to its citizens. Discuss the pros and cons of this decision.

    Source:  http://indianexpress.com/article/india/government-clears-proxy-vote-move-for-nris-4779759/

    https://thewire.in/165868/nri-proxy-voting/

    Introduction:

    The Union Cabinet has cleared a proposal to extend proxy voting to overseas Indians by amending electoral laws.

    Proxy voting is a type of voting whereby a member can delegate his or her voting power to a representative, to enable a vote in their absence.

    The representative can be another member of the same body, or external. A human so designated is known as a “proxy”. Presently, only service personnel are permitted to vote through proxy.

    Pros

    1. The government’s decision to allow NRIs to vote could emerge as a decisive force in the country’s electoral politics as there are 114 countries that conduct such voting.
    2. It will enable India to provide voting rights to NRIs which are enshrined to be given under Article 326.
    3. This decision also, historically, removes an “unreasonable restriction” posed by Section 20(A) of the Representation of the People (Amendment) Act of 2010, requiring overseas electors to be physically present in their constituencies to cast their votes.
    4. There are 10 million Indian citizens staying abroad. The additional votes, polled through this way, will obviously play a crucial role in state and general elections.
    5. The traditional argument against such external voting has been that NRIs lack knowledge of domestic conditions. But, today with increased awareness among people who live in other nations, India’s move towards enabling voting from overseas is an instance of a larger global trend towards increased citizen participation.

    Cons

    There are arguments that a provision of proxy threatens the very core of democracy as how can we give special privilege of distance voting to some people who have migrated abroad when there are many times more domestic migrants who also seek to have a voting right at their homes? It is patently discriminatory. If a person from Bihar moves to Delhi or Mumbai in search of a job or education, he loses his right to chose his legislator in his village but if he goes to London, he will be entitled to special privilege.

    1. It cannot be guaranteed that the proxy voter will vote as per the wishes of the actual voter. The method of proxy voting suffers from an inherent problem of trust deficiency and violates the principle of secrecy of voting.
    2. Voting from abroad is fraught with other practical challenges like confirming NRI voters before every election and ensuring their post is received on time.
    3. There can be no guarantee of NRI voters exercising their vote in a free and fair manner as there can be no check on coercion or inducements by the employers.
    4. There is no guarantee that votes would not be sold to the so called proxy.
    5. The commission would have to fix the number of votes a proxy could cast in an election. This calls for a drastic amendment to the Representation of People Act. For, currently the Act permits a person to cast only one vote and on introducing the new system, it would have make amendments and also fix the number of vote a person could cast.

    Conclusion

    Ascertaining the genuineness of the proxy selected by an NRI for casting vote would be the toughest challenge. Before experimenting it in Lok Sabha or Assembly elections, the Election Commission would have to devise a system or work out norms to ensure that a proxy delegated by an NRI is voting as per his desire.

    Q.5) Discuss the pros and cons of having permanent river water tribunal in India where there is significant number of such disputes.

    Source:  http://www.prsindia.org/billtrack/the-inter-state-river-water-disputes-amendment-bill-2017-4671/

    http://indianexpress.com/article/opinion/columns/inter-state-river-water-disputes-amendment-bill-2017-a-stronger-river-referee-4761698/

    http://www.thehindu.com/opinion/editorial/Grappling-with-water-disputes/article16906692.ece

    Hints:

    In view of the ongoing water disputes in the country, Union Cabinet has proposed to have a permanent tribunal that will subsume existing tribunals and is expected to provide for speedier adjudication.

    Problems in the Present Set up?

    1. With increasing demand for water, inter-state river water disputes are on the rise.
    2. Under the present Act, a separate Tribunal has to be established for each dispute and there is no time limit for adjudication or publication of reports.
    3. Only three of the eight tribunals have actually given awards accepted by the states. Tribunals like those on the Cauvery and Ravi Beas have been in existence for over 26 and 30 years respectively without any award.

    Features of the new structure

    1. A single, permanent tribunal subsuming all the existing tribunals is proposed to be established to resolve grievances of states with speed and efficiency.
    2. The proposed tribunal is expected to deliver its verdict within a span of three years.

    Pros

    1. A permanent tribunal to adjudicate river water disputes between States will undoubtedly be a vast improvement over the present system of setting up ad hoc tribunals as it is expected to provide for speedier adjudication.
    2. An expert agency to collect data on rainfall, irrigation and surface water flows acquires importance and looks like an ideal mechanism to apportion water because party-States have a tendency to fiercely question data provided by the other side.
    3. The Dispute Resolution Committee, an expert body that will seek to resolve inter-State differences before a tribunal is approached will discourage for needless litigation.
    4. Water disputes are highly politicised and a strong public opinion forms around these issues. A single tribunal would address this issue as it would not be questioned for being politically biased.

    Cons

    1. Given the number of ongoing inter-State disputes and those likely to arise in future, it may be difficult for a single institution with a former Supreme Court judge as its chairperson to give its ruling within three years.
    2. The finality and enforcement of a tribunal’s award may remain elusive as its interlocutory orders as well as final award are likely to be challenged in the Supreme Court. .
    3. The benches of the permanent tribunal are going to be created to look into disputes as and when they arise. It is not clear in what way these temporary benches would be different from the present tribunals.
    4. There is a severe lack of comprehensive data that looks at hydrology, meteorology, ecology and economy in an integrated fashion. Without having that data backbone, it will be difficult for a state-level tribunal or a central body to solve any issue.
    5. The new tribunal does not address the problem of non-compliance by state governments like in the recent Beas-Satluj Tribunal award.

    Conclusion

    1. Having an institutional mechanism is one thing, but infusing a sense of responsibility in State governments is quite another. Water disputes have humanitarian dimensions, including agrarian problems worsened by drought and monsoon failures.
    2. The Centre’s proposal to set up a single, permanent tribunal, subsuming all existing ad hoc tribunals, to adjudicate on inter-state river water disputes could be a major step towards streamlining the dispute redressal mechanism. But it alone will not be able to address the different kinds of problems—legal, administrative, constitutional and political—that plague the overall framework. Institutional mechanisms should be backed by the political will to make them work.

    Q.6) “Transgender Rights Bill 2016 is grossly ignorant of the very issues it is attempting to address” Critically comment.

    Source:  http://www.prsindia.org/billtrack/the-transgender-persons-protection-of-rights-bill-2016-4360/

    http://www.hindustantimes.com/india-news/transgender-bill-does-not-address-important-issues-parliamentary-panel/story-kXubecBoWjC6dZH9AGL22L.html

     

     

    Q.7) According to many experts by passing Child Labour (Prohibition and Regulation) Amendment bill, 2016 in its present form, India has failed its children. Discuss?

    Source: http://thediplomat.com/2016/08/indias-new-child-labor-law-billed-to-fail/

    http://www.thehindu.com/opinion/columns/A-law-that-allows-child-labour/article14560563.ece

    As per International Labour Organization, child labour refers to work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development. A 2015 report by the International Labor Organization (ILO) puts the number of child workers in India aged 5 to 17 at 5.7 million, out of 168 million globally. Most of these children are engaged in the unorganized and unregulated sector forming the disempowered bulk of the country’s “invisible labor” force. Despite earlier bans on children under 14 working in hazardous industries, hundreds of children continue to toil in factories, even dangerous mines, where entire families are virtually bonded to contractors. It was precisely to address this social inequity, and human rights infractions, that India recently amended the long-overdue and controversial Child Labor (Prohibition and Regulation) Amendment Bill, after 30 years.

    Some of the key and salient provisions include:

    • The amendments intend to preserve Indian art and craft by enabling parents with traditional skills to pass them on to their children.
    • The setting up of a Child and Adolescent Labour Rehabilitation Fund will help to improve the condition of the children and sponsor education for them.
    • It prescribes more stringent penalty for Violators and high term of jail and fine with non bailable charges.
    • It gives more autonomy to various institutions involved in child labour protection rehabilitation and redevelopment  empowering the government to make periodic inspection of places.

    However, this legislation is being criticized by human right activists and experts for its flawed nature due to the following reasons:

    • Under the mask of family work: The new exemption now allows children to work for “family businesses” after school hours and during holidays, which will give legal sanction to their continued exploitation thanks to the omnibus term. Under the new Child Labor Act, some forms of child labor may become invisible and the most vulnerable and marginalized children may end up with irregular school attendance, lower levels of learning, and could be forced to drop out of school.
    • The flawed definition of family and family enterprises: This bill uses Indian family values to justify economic exploitation of children. It is misleading the society by blurring the lines between learning in a family and working in a family enterprise
    • Inconsistent with UNICEF’s Critical Clause: By allowing children to work before and after school hours, the bill contravenes their most fundamental right to a childhood and their entitlement to live a life with dignity as guaranteed by the constitution and the the UN Convention on the Rights of the Child, to which India is a signatory.
    • Reversing the gains:

    In 1986, the Child Labour (Prohibition and Regulation) Act had after much discussion and expansion included 83 occupations. The new amendment reverses the gain by bringing down the list of hazardous occupations for children to include just mining, inflammable substances and explosives.

    • Open discretion of government authorities:

    Further, the occupations listed as hazardous can be removed, according to Section 4 — not by Parliament but by government authorities at their own discretion. This leaves it to open discretion.

    • Non-uniform implementation :

    List of hazardous factories can be amended by the state government, thus, leading to non-uniform implementation of this act.

    • Making lawful what was unlawful earlier:

    It allows that the children may work after school hours or during vacations, thus, actually making lawful a large part of child work that was earlier unlawful.

    • Roughly defined purpose of Fund:

    Funding from child rehabilitation fund is not directly linked to education and development rather it aims towards these goals without any mentioned method thus not giving any specific list of objectives.

    Way forward:

    If the amendments intended to preserve Indian art and craft by enabling parents with traditional skills to pass them on to their children, this should be done through reform and investment in education. Slashed budgets should be restored; mid-day meals should re-instituted; and secure housing should be provided through the Sarva Shiksha Abhiyan boarding schools to homeless children. Artisans should be hired as teachers to pass on traditional knowledge and skills to the next generation. Though the increased penalty and rehabilitation fund are welcome inclusions which will act as deterrent and provide relief to child labour. However, the amended Act, display a lack of national commitment to abolishing all forms of child labour and do not resonate with the constitutional objectives of elimination of child labour in India (Article 15(3), Article 24, Art 39(e), Art 45, Art 21A).

    Child are future of a country and their holistic development must be the sole aim of a country and this requirement becomes more important for a developing country like India which has a significant part of its population  in the working age. So let us not fail our children as per Kailash Satyarthi and set the right imperative by overcoming all the shortcomings.

     

    Q.8) What do you understand by Fake news. Discuss its dangers in multi-cultural and democratic country like India.  What needs to be done to prevent this phenomenon?

    Source: http://www.bbc.com/news/world-asia-india-40657074

    http://www.firstpost.com/india/how-alt-news-is-trying-to-take-on-the-fake-news-ecosystem-in-india-3513879.html

    Fake news is a type of yellow journalism or propaganda that consists of deliberate misinformation or hoaxes spread via traditional print and broadcast news media or online social media. Fake news is written and published with the intent to mislead in order to gain financially or politically, often with sensationalist, exaggerated, or patently false headlines that grab attention.

    Dangers in multi-cultural and democratic country like India

    1. People’s faith in social, print and electronic media reduces which could affect the benefits of these Media.
    2. It can lead to violence between two or more communities thereby creating enmity and hatred between them.
    3. It can disturb the social fabric of the society and tensions among communities persists for long times.
    4. It reduces the tendencies of cooperation between different communities.
    5. Political parties try to gain political advantages by polarizing the voter’s mind which further intensifies the tensions between different sections of society.
    6. Politics of development takes back seat and communal tendencies emerge in politics.
    7. In its purest form, fake news is completely made up, manipulated to resemble credible journalism and attract maximum attention and, with it, advertising revenue.
    8. Political campaigning has progressed from mere appeals in the name of identity or loyalty or tall promises to something akin to psychological warfare. Parties that master the tools of such psych ops have a distinct edge over those stuck in the traditional mud. Fake news spreads on social media.

    How to tackle it

    1. The government must take the initiative to make all sections of the population aware of the realities of this information war and evolve a consensus to fight this war. It must also take strict action
    2. News being spread using chatbots and other automated pieces of software should automatically be selected for special screening. Ordinary consumers of news can play a big role by, first, waking up to the reality that all they read on WhatsApp and Twitter is not the gospel truth, and then, by refusing to pass on what they cannot independently verify with other sources.
    3. Websites that mimic well-known, credible media outlets in their name should be exposed with the vigour with which jokes are shared on social media.
    4. An ombudsman deals with the credibility of news sources, it gains the privilege to ensure facts are reported
    5. Government should have independent agency to verify the data being circulated in social and other media. The agency should be tasked with presenting real facts and figures.
    6. Government should have mechanism for immediately issuing of notice against sites/people/agencies involved in spreading fake news.
    7. There should be a provision of effective balances and check of filtering fake posts before it getting viral.
    8. Social media websites should be made accountable of such activities so that it becomes their responsibility to have better controlling restricting the spread of fake news.
    9. Government should take active measures for promoting awareness among people about fake news and their consequences.
    10. Government should enlist penal provisions to perpetrators of fake news if it causes violence or deaths.

    Government should make mandatory for Print and Electronic media to have internal mechanism for verifying incidents, facts and figures.

    Q.9) The Union cabinet’s decision to merge-and-consolidate India’s public sector banks (PSUs) is in direct opposition to the post-2008-crisis consensus that big banks are a systemic risk to their national economies. In the light of the above statement discuss the pros and cons of merger of Banks in India?

    Source: https://thewire.in/173425/bank-mergers-risky-crisis-imf-india/

    http://www.financialexpress.com/opinion/will-a-merger-of-banks-lead-to-too-big-to-fail/308004/

    Introduction:

    • Post 2008 crisis, the financial vulnerability of marked and banks have been witnessed practically by all major countries of the world. Rising Non-Performing Assets in India, growing financial burden over the banks, leveraging management etc. has compelled Indian Government to merge several small banks with one big bank. The decision will facilitate consolidation among the nationalized banks to create strong and globally competitive banks.

    Pros:

    Merger will help Banks, to expand its coverage beyond its outreach gearing up small banks at par with international standards for innovative products and services with the accepted level of efficiency.

    • This will also help in improving the professional standards by ending the unhealthy and intense competition among Banks. In the global market, the Indian banks will gain greater recognition and higher ratings with improved competitions.
    • Technical inefficiency is one of the main factors responsible for banking crisis. The scale of inefficiency is more in case of small banks. Hence, merger would be good.
    • The size of each business entity after merger is expected to add strength to the Indian Banking System in general and Public Sector Banks in particular. However, the strength of the Bank is going to be increased with more effective and centralized management.
    • Synergy of operations and scale of economy in the new entity will result in savings and higher profits.
    • A great number of posts of CMD, ED, GM and Zonal Managers will be abolished, resulting in savings of crores of Rupee.
    • Customers will have access to fewer banks offering them wider range of products at a lower cost.
    • Mergers can diversify risk management as the recapitalization burden to the PSBs on the central government in case of crisis will come down substantially which will help in meeting more stringent norms under BASEL – III, especially capital adequacy ratio.
    • From regulatory perspective, monitoring and control of less number of banks will be easier after mergers. This is at the macro level.

    Cons:

    • Immediate negative impact of merger would be from pension liability provisions (due to different employee benefit structures) and harmonization of accounting policies for bad loans recognition.
    • Mergers will result in shifting/closure of many ATMs, Branches and controlling offices, as it is not prudent and economical to keep so many banks concentrated in several pockets, notably in urban and metropolitan centers.
    • New power centers will emerge in the changed environment. Mergers will result in clash of different organizational cultures. Conflicts will arise in the area of systems and processes too. The weaknesses of the small banks may get transferred to the bigger bank also.
    • Also, India right now needs more banking competition rather than more banking consolidation. In other words, it needs more banks rather than fewer banks. This does not mean that there should be a fetish about small-scale lending operations, but to know that large banks are not necessarily better banks.

    Conclusion:

    • Given the economic scenario considering the increased banking inclusion in India the merger is a good step to reach the far flung areas especially to the women and poor labourers who are absent from the mainstreaming of banking institutions.
    • Since the merger is about people, a huge amount of planning is required to make consolidation process smoother. However, the consolidated effort from the part of the government, the banking institution and customer is needed to bring the positive result of merger.

    Q.10) Judicial activism and judicial overreach are separated by very thin line, and the judiciary has to be careful of it. If that line is crossed, judicial activism may be considered an encroachment on legislature? Discuss.

    Source: http://www.hindustantimes.com/analysis/judicial-overreach-it-s-the-order-of-the-day/story-a24UnXJ2AST3aAxqnES39H.html

    http://www.thehindu.com/todays-paper/tp-opinion/Judicial-activism-romanticism-amp-overreach/article15177963.ece

    Introduction:

    • Judicial Activism is pro active role taken by Judiciary to dispense social justice. However, there is a set limit drawn by our Constitution for three organs of the state i.e. Legislative, Executive and Judiciary to act within.
    • All three organs are not supposed to encroach on each other’s domain but to keep effective checks and balances with each other. However, when the line has been crossed it becomes Judicial Overreach which is not in consonance with the working democracy.

    Judicial Activism:

    • When we speak of Judicial Activism, we point fingers to the invented mechanisms which have no constitutional backing (Eg: Suo moto (on its own) cases, Public Interest Litigations (PIL) etc). This strengthens our system of checks and balances.
    • This Judicial Activism has invented many fruitful concepts such as Basic Structure Doctrine in Kesavananda Bharati Case. This has further expanded the scope of Judicial Review, use of due process of law instead of procedure established by law, collegium system for judges’ selection etc. apart from many others.
    • Through judicial activism, judges can use their own personal feelings to strike down laws that they would feel are unjust. Whether it is an executive order, an immigration issue or a criminal proceeding, judges would have a good vantage point in deciding a certain case’s outcome.

    Judicial Overreach:

    • However, when Judicial Activism crosses its limits and becomes Judicial Adventurism, it is known as Judicial Overreach. In simple words, when Judiciary oversteps the powers given to it, it may interfere with the proper functioning of the legislative or executive organs of Government.
    • This Judicial Overreach destroys the Doctrine of Separation of Powers by taking on the function such as law enforcement, policy making, and law making etc.
    • Striking down of NJAC bill and the 99th constitutional amendment, the order passed by the Allahabad High Court making it compulsory for all Bureaucrats to send their children to government school, misuse the power to punish for contempt of court etc. comes under Judicial Overreach.
    • Judicial Overreach by the court may prove lethal as Judiciary passes orders on social justice without having any practical knowledge about the particular issue. Whereas, Government does proper inquiry, investigation with its own expert research fallows on various issues before launching any projects and schemes.
    • Recent ban on Liquor selling on the vicinity of National Highway by the SC is the burning example of Judicial Overreach.

    Conclusion:

    However, Judicial independence requires judges to be able to apply the law and ‘to exercise their constitutional powers impartially and fearlessly to all persons alike and at all times’. Similar independence is also required in the functioning of other two organs for their smooth functioning and effective results. However, arbitrary action by the legislature and executive must be curbed by the Judiciary with effective checks and balances which very much comes under Judicial Activism. Hence, the Judiciary should and must recognise the thin line drawn between Judicial Activism and Judicial Overreach.

    Q.11) Explain the following in the context of a Civil Servant.

                                                       (100*4=400 words) (5*4=20 Marks)

    (a) Self control

    (b) Conscientiousness

    (c) Trustworthiness

    (d) Non-partisanship

    Q.12) A state was affected by an unprecedented flood which has caused wide spread damage to infrastructure and loss of private properties. Almost 10,000 (Ten thousand) people were washed away in the flood. After the flood, epidemic engulfed the state. The local people experienced the livelihood problems. State bureaucracy was badly demoralized due to apparent failure of government machinery. At this stage, a young and energetic Chief Minister (CM) took the full command of the situation. Now the responsibility lies on him to tackle the situation.

    Think over the situation and answer the following questions.

    (a) How the chief Minister would recharge the state bureaucracy?

    (b) How he would convert problems into opportunity?

    (c) What steps he would take to win the confidence of the people?

  • 10 Sep 2017 | Target Mains | Question 12

    Q.12) A state was affected by an unprecedented flood which has caused wide spread damage to infrastructure and loss of private properties. Almost 10,000 (Ten thousand) people were washed away in the flood. After the flood, epidemic engulfed the state. The local people experienced the livelihood problems. State bureaucracy was badly demoralized due to apparent failure of government machinery. At this stage, a young and energetic Chief Minister (CM) took the full command of the situation. Now the responsibility lies on him to tackle the situation.

    Think over the situation and answer the following questions.

    (a) How the chief Minister would recharge the state bureaucracy?

    (b) How he would convert problems into opportunity?

    (c) What steps he would take to win the confidence of the people?

     

  • 10 Sep 2017 | Target Mains | Question 10

    Q.10) Judicial activism and judicial overreach are separated by very thin line, and the judiciary has to be careful of it. If that line is crossed, judicial activism may be considered an encroachment on legislature? Discuss.

    Source: http://www.hindustantimes.com/analysis/judicial-overreach-it-s-the-order-of-the-day/story-a24UnXJ2AST3aAxqnES39H.html

    http://www.thehindu.com/todays-paper/tp-opinion/Judicial-activism-romanticism-amp-overreach/article15177963.ece

  • 10 Sep 2017 | Target Mains | Question 9

    Q.9) The Union cabinet’s decision to merge-and-consolidate India’s public sector banks (PSUs) is in direct opposition to the post-2008-crisis consensus that big banks are a systemic risk to their national economies. In the light of the above statement discuss the pros and cons of merger of Banks in India?

    Source: https://thewire.in/173425/bank-mergers-risky-crisis-imf-india/

    http://www.financialexpress.com/opinion/will-a-merger-of-banks-lead-to-too-big-to-fail/308004/

     

  • 10 Sep 2017 | Target Mains | Question 8

    Q.8) What do you understand by Fake news. Discuss its dangers in multi-cultural and democratic country like India.  What needs to be done to prevent this phenomenon?

    Source: http://www.bbc.com/news/world-asia-india-40657074

    http://www.firstpost.com/india/how-alt-news-is-trying-to-take-on-the-fake-news-ecosystem-in-india-3513879.html

  • 10 Sep 2017 | Target Mains | Question 7

    Type:
    Subjects:

    Q.7) According to many experts by passing Child Labour (Prohibition and Regulation) Amendment bill, 2016 in its present form, India has failed its children. Discuss?

    Source: http://thediplomat.com/2016/08/indias-new-child-labor-law-billed-to-fail/

    http://www.thehindu.com/opinion/columns/A-law-that-allows-child-labour/article14560563.ece

  • 10 Sep 2017 | Target Mains | Question 6

    Q.6) “Transgender Rights Bill 2016 is grossly ignorant of the very issues it is attempting to address” Critically comment.

    Source:  http://www.prsindia.org/billtrack/the-transgender-persons-protection-of-rights-bill-2016-4360/

    http://www.hindustantimes.com/india-news/transgender-bill-does-not-address-important-issues-parliamentary-panel/story-kXubecBoWjC6dZH9AGL22L.html

  • 10 Sep 2017 | Target Mains | Question 4

    Q.4) The government’s idea of providing proxy voting rights to NRIs is seen as a historic decision in the field of providing voting rights to its citizens. Discuss the pros and cons of this decision.

    Source:  http://indianexpress.com/article/india/government-clears-proxy-vote-move-for-nris-4779759/

    https://thewire.in/165868/nri-proxy-voting/

  • 10 Sep 2017 | Target Mains | Question 3

    Q.3) It is commented that Criminal defamation law have a chilling effect on freedom of expression. In the light of the above statement do you think that Criminal defamation should be amended. Critically comment.

    Source: http://indianexpress.com/article/explained/simply-put-the-what-why-of-defamation/

    http://www.hindustantimes.com/india/explained-supreme-court-verdict-on-defamation-law-its-implications/story-sCH7oeumka5daGHJGp5u9L.html

  • 10 Sep 2017 | Target Mains | Question 2

    Q.2) Discuss the salient features of the Maternity Benefit (Amendment) Bill, 2016? It is considered that the bill will provide women with much needed work life balance. Critically analyse.

    Source: http://www.prsindia.org/billtrack/the-maternity-benefit-amendment-bill-2016-4370/

  • 10 Sep 2017 | Target Mains | Question 1

    Q.1)  What hurdles exist in making India a cashless economy? Discuss benefits of becoming a cashless economy and suggest how government can speed of this transformation.

  • 3 Sep 2017 | Target Mains | 2nd Weekly Test

    Q.1) Do you think failure of SAARC can be offset by a strong BIMSTEC? Critically comment.

    Source: http://www.indiaglobalbusiness.indiaincorporated.com/bimstec-viable-alternative-saarc/

    http://www.livemint.com/Politics/4JsOSUC4N81BK0T7zNYecK/Why-is-Bimstec-so-important-for-India.html

    The cancellation of SAARC summit at the behest of growing bilateral differences between India and Pakistan has reinvigorated the potential of BIMSTEC to take forward the geo-politic discourse in the subcontinent. The South Asian regional cooperation and coordination on various developmental projects is in limbo as fallout of SAARC failure. In this backdrop, BIMSTEC aims to bring South Asia and South East Asian connectivity to the forefront which envisages to revive the much needed sub regional cooperation in the region. It is believed that a strong BIMSTEC can offset the misgivings of SAARC in the following ways:

    1. BIMSTEC naturally fills the vacuum created by the inactivity of SAARC. The bilateral problems extending in SAARC have made it all the more important for India to engage in BIMSTEC nations.
    2. BIMSTEC could act as a natural platform to fulfill India’s “key foreign policy priorities of ‘Neighborhood First’ and ‘Act East policy’
    3. Majority of members of BIMSTEC are the members of SAARC and India has well settled relations with them including Myanmar and Thailand too.
    4. BIMSTEC is home to 1.5 billion people, accounting for approximately 21 per cent of the world population, and a combined GDP of US$ 2.5 trillion. Considering the growth rate sustained by the BIMSTEC countries (around six per cent per annum), the future seems promising for these member nations.
    5. BIMSTEC has at last three major projects that, when finished, could transform the connectivity and coherence of the countries in the grouping:
    • Kaladan Multimodal project that seeks to link India and Myanmar.( especially benefitting North East )
    • Asian Trilateral Highway connecting India and Thailand through Myanmar.
    • Bangladesh, Bhutan, India and Nepal (BBIN) have signed a pact for the movement of goods and vehicles among them.

    6. BIMSTEC can be leveraged along with ASEAN to stem the Chinese intrusions and dominance in the region in the interests of all nations of the grouping.

    But BIMSTEC has its own challenges and SAARC its own aura-

    1. SAARC has a more targeted objective of South Asian cooperation and regional stability which is equally critical.
    2. The absence of countries like Afghanistan, Pakistan and Maldives in the BIMSTEC will prevent holistic development of the region. Afghan and Pakistan as critical links to the Russia and central Asian markets and west can’t be ignored either.
    3. India has long been accused of not taking up the leadership role in BIMSTEC initiative.
    4. Thailand and Myanmar are criticized for having ignored BIMSTEC in favor of ASEAN.
    5. Absence of permanent secretariat for very long time and lack of commitment to invest in several areas are holding BIMSTEC back.
    6. In the span of 20 years there have only been 3 annual meetings and 4th one is scheduled to happen this year.
    7. Another sub -regional grouping BCIM (Bangladesh, China, India and Myanmar) has posted doubts over the exclusivity of BIMSTEC grouping.

    Way Forward
    Though BIMSTEC is a viable alternative as a sub regional cooperation especially to counter Chinese dominance and influence but failure of South Asia is also not completely in the interest of India. Smooth working of SAARC is in the interest of south Asian countries to enhance cooperation with west Asian countries in terms of trade and investment. Failure of SAARC would increase the dominance of China in west Asia as well as in south Asia economically and militarily.

    Both SAARC and BIMSTEC have their own importance. Therefore, it is imperative on part of India to actively
    engage and maneuver both the forums to secure good relation and cooperation with South East Asia through
    BIMSTEC and with west through SAARC.

    Q.2) The stark differences in water availability in the river basins in the country has thrown up the idea of interlinking of rivers. However, River Linking Project involves multifaceted issues and challenges related to environmental, economic, ecological, legal, political and social costs. Discuss.

    Source: http://www.thehindu.com/data/last-drop-interlinking-an-idea-with-flaws/article8567203.ece

    http://www.business-standard.com/article/government-press-release/inter-linking-of-rivers-117081000816_1.html

    http://indianexpress.com/article/opinion/columns/india-water-crisis-drought-marathwada-latur-water-train-2771756/
    Inter Linking of Rivers refers to inter-basin water transfers between 2 or more rivers through human interventions on natural systems. India’s National Water Development Agency (NWDA) has suggested the interlinking of rivers of the country. The interlinking of rivers has two components: the Himalayan and the Peninsular. All interlinking schemes are aimed at transferring of water from one river system to another or by lifting across natural basins. The project will build 30 links and close to 3000 storages to connect 37 Himalayan and Peninsular rivers to form a gigantic South Asian water grid.

    Why we require interlinking of rivers?

    • Large variation in rainfall and subsequent availability of water resources in space and time.
    • Because of this variability of available water, floods and drought coexist in our country in same time and space. ( Kerala, T.N and South Karnataka is facing drought while Rajasthan, Gujarat , Assam reeling under floods)

    However, River Linking Project involves multifaceted issues and challenges related to environmental, economic, ecological, legal, political and social costs. River Linking Project involves multifaceted issues and challenges related to environmental, economic, ecological, legal, political and social costs. It has potential for disastrous and irreversible adverse after-effects which has been comprehensively discussed below:

    Ecological Costs:

    • Water scientists and Environmentalists have remarked that the water flowing into the sea is not waste. It is a crucial link in the water cycle. With the link broken, the ecological balance of land and oceans, freshwater and sea water, also gets disrupted
    • It is feared that diversion of water from the Brahmaputra and the Ganges, which provide 85% of the country’s fresh water flow in the dry season, would result into an ecological disaster.

    Economic Costs:

    • As this project is of massive estimated cost, a long term planning and a sound financial simulation are required to meet the standard for such proposals.
    • The huge expenditure of the project and the maintenance costs associated with the dams, canals, tunnels, and captive electric power generation will involve huge financial burdens.
    • This may generate fiscal problems that are difficult to handle.
    • This certainly requires financial assistance from the private sector as well as global capital agencies.
    • Mobilization of global capital may ultimately entail the risk of destroying social welfare measures.

    Environmental costs

    • It will result in massive diversion of forest areas and submergence of land leading to deforestation and soil- erosion. (For example The Ken-Betwa link project puts in danger over 4,100 hectares of forest land or 8% of the Panna National Park).
    • There will be destruction of rivers, aquatic and terrestrial biodiversity, fisheries and groundwater recharge.
    • Possible downstream impacts, salinity ingress, pollution concentration, and increased methane emission from reservoirs are other adverse repercussions.
    • Scientists are also of the view that river diversion may bring significant changes in the physical and chemical compositions of the sediment load, river morphology and the shape of the delta formed at the river basin.
    • It could most likely create trigger points of natural disasters like landslides, earthquakes etc. as seen in case of Koyna dam and Tehri dam.

    Legal costs:

    • Domestic and regional geo-politics play a pivotal role on the discussions on ILR. As of now, there is no mechanism as of now to deal with matters concerning inter-basin transfers. There are also important institutional and legal issues to be sorted out.
    • Each of the 30 schemes of the ILR is supposed to get through several statutory, legal and procedural steps.

    Social Costs:

    • Reconstruction and rehabilitation due to displacement is not an easy task as seen before.
    • The construction of reservoirs and river linking canals in the peninsular component alone expect to displace more than 5, 83,000 people and submerge large areas of forest, agriculture and non- agriculture land.
    • It is likely to create social unrest/psychological damage and cultural alienation due to forced resettlement of local indigenous tribal community.

    Political Implications:

    • Water being a state subject, the ILR plan further complicates existing water sharing and management problems between the riparian states.
    • Some of the ILR schemes have international implications, which may create strained relationship with neighboring countries like Bhutan, Nepal and Bangladesh.

    Way forward:

    NRLP has its fair share of positives and negatives. Though there are enough apprehensions over the project but they are not backed by any comprehensive scientific evidence to it. Inter basin water transfer is not a new concept. Large direct benefits of irrigation, water supply and hydropower and indirect benefits navigation, tourism, employment generation etc can be accrued in ILR program. Formation of River Basin Authority for coordinated action and subsequent building up of consensus among concerned States is prima facie needed. Legal provisions for implementation of ILR related to rehabilitation and appropriate afforestration
    through CAMPA is to be concurrently addressed.

     Q.3) Is Cloud Seeding a solution for rising irrigation problems in Indian Agriculture Sector.” Critically examine.

    Source: http://www.thehindu.com/news/national/tamil-nadu/the-cloud-seeding-myth/article17529580.ece

    http://www.livemint.com/Politics/L0nbjdpMzCSc1yhC9UeLjK/Can-cloud-seeding-salvage-failing-rains-in-Karnataka.html

    http://www.newindianexpress.com/states/karnataka/2017/aug/17/karnataka-government-gets-ready-for-cloud-seeding-project-1644311–1.html

    Cloud Seeding is an artificial technique of inducing rainfall precipitation through dispensation of chemicals namely, Sodium Chloride, Silver Iodide and Potassium Chloride amidst rain bearing clouds. With the country facing consecutive droughts, continued agrarian distress, recurrent monsoon failures as a result of climate change, global warming all threaten to make agriculture unviable today, which employs 75 percent of the workforce. In the backdrop of growing water use issues of agriculture; water conservationists and weather experts have recommended cloud seeding as a potential alternative to resolve this.

    Cloud seeding has much success in tropical and semi-tropical regions such as India as seen in cloud seeding experiments of TN and Karnataka. The cloud seeding has been suggested as a solution to rising irrigation problems and is justified in following ways:

    • The water resource capacity is unevenly distributed and persisting monsoon vagaries making large tracts of agricultural land still non-irrigated and dependent, cloud seeding can be a game changer to the faming distress.
    • Visible results: The past cloud seeding experiments in TN and Project Varshadhari in Karnataka have yielded heavy rainfall for at least an hour.
    • Scientific backing: The research by IITs has shown the increased ability of clouds to condensate in presence of aerosols.
    • Easy availability of Common Salt required for cloud seeding

    However, as per reports and studies the success of Cloud Seeding is not guaranteed and is an unrealistic and unsustainable solution to irrigation problems due to reasons as follows:

    • Typical Conditions are required as only a certain kind of clouds can be seeded and it needs to have enough nuclei to process cloud seeding and thunder cloud development.
    • This cannot be done in dry weather conditions. We can experiment cloud seeding only when the cloud is in a developing stage.
    • We cannot quantify the volume of rainfall that the experiment will bring. This means in case of excess rainfall it may likely lead to flash floods and cause micro climatic disasters.
    • Chemical contamination due to residues in resultant rainfall can destroy planted crops and degrade soil fertility.
    • Due to flying of aircraft for long hours, high cost of Silver in Silver Iodide and usage of weather Doppler Radars, it can be a costly investment as compared to investments in water conservation, water use efficiency projects.
    • Undesired results and resource wastage in case clouds shift from target area to other regions.
    • Uncertainty: Difficulties in prediction of resultant rainfall due to cloud seeding makes it a non reliable alternative.

    These are all reactionary approaches to manipulate the weather which may provide short term relief. Though cloud seeding is helpful in creating artificial rain, it is unrealistic and not a long term unsustainable solution to irrigation woes. It is no magic wand which will provide sufficient rainfall by itself. Increased focus on On-farm water use efficiency through rigorous implementation of PM Krishi Sinchayee Yojana, revival of traditional water storages and implementing institutional measures as per Mihir Shah Report on water conservation and recycling are the ways forward. Avoiding piecemeal approach, Cloud seeding should play a supporting pillar to the above long term irrigation redressal mechanism.

    Q.4) What do you understand by Compensatory Afforestation? Critically comment on the provisions of Compensatory Afforestation Fund Bill.

    Source: http://www.prsindia.org/billtrack/the-compensatory-afforestations-fund-bill-2015-3782/

    http://indianexpress.com/article/explained/campa-afforestation-bill-rajya-sabha-green-india-mission-narendra-modi-2817475/

    https://scroll.in/article/812753/understanding-the-compensatory-afforestation-fund-bill-and-why-it-spells-doom-for-adivasi-rights

    Compensatory afforestation is defined as afforestation done in lieu of the diversion of forest land for non-forest use. The bill seeks to establish a permanent National Compensatory Afforestation Fund under the Public Account of India and it also allows the states to establish State Compensatory Afforestation Fund.

    Firstly, through this bill an institutional mechanism will be put in place which can lead to utilisation of funds in an efficient and transparent manner at the centre, state as well as union territory level, which were hitherto managed under the aegis of ad-hoc body called CAMPA

    Secondly, this bill seeks to the proper devolution of funds to the states for compensatory afforestation purpose, which was a long pending demand from the states as it was only 10% of the CAMPA funds which were devolved earlier

    Thirdly, this programme will lead to creation of productive assets in the rural areas and also generation of employment opportunities

    Fourthly, funds for the programme will be coming from the promoters of various projects who will be utilising the forest lands for their projects. So, it will put responsibility on the promoters to make judicious use of forest resources

    1. Loss of biodiversity:- Since it leads to diversion of original forests, the result is fragmentation, that is, the breaking up of large forest blocks into smaller and more vulnerable patches. Fragmentation in turn leads to biodiversity loss. Moreover, non- native species planted in the name of artificial plantation often have served as a threat to even the existing ecosystem.
    2. Artificial vs original:– Natural ecosystems take thousands of years to develop over a place. Raising artificial plantations elsewhere such as those along the flanks of railway lines, highways, and so on can’t be supposed to have the same biodiversity value as the original ones. Often, they have a poor survival rate.
    3. Unavailability of land for planting new forests:- which has often led to use of CAMPA funds for purchasing forest department vehicles or repairing buildings defeating the original purpose.
    4. Infrastructure development:- It could have both restorative and destructive connotations. Safeguards on what kind of infrastructure CAMPA money should create need to include wildlife impact assessments.

    The bill is a step in right direction however the bill needs to pay more attention towards the ecological perspective by conserving and protecting the endangered species of wildlife and trees by utilising the CAMPA funds with the creation of productive assets while having wildlife impact assessment in mind rather than producing more woods.

    Q.5) In view of the multiple sets of rules and sub-regulations prescribed by UGC and AICTE, which have unfortunately, acted as a deterrent to the development of premier educational institutions, the time is ripe for single unified authority for the regulation of higher education in the country. In this context, discuss the advantages of HEERA, a proposed body.

    Source: http://www.thehindu.com/education/the-heera-conundrum/article19384415.ece

    With an aim to simplify and consolidate the mass of regulations and compliances that currently operate in the sector, the Central Government has proposed to do away with the All India Council for Technical Education (AICTE) and the University Grants Commission (UGC) and replace them with a single body, tentatively titled Higher Education Empowerment Regulation Agency (HEERA).

    Why does India’s higher education need a reform?

    • The idea to have a single higher education regulator is not a new one, but has been recommended by various committees set up by previous governments. While the National Knowledge Commission (2006) had recommended an
      independent regulatory authority for higher education, the Committee on Renovation and Rejuvenation of Higher Education (2009) had also advocated an apex regulatory body by converging multiple agencies in the field of higher
      education.
    • The TSR Subramanian committee, which had been tasked with coming up with a new education policy, too called for the scrapping of the UGC and AICTE.
    • The UGC Review Committee in 2014 had also recommended the commission be replaced with an apex institution named National Higher Education Authority.

    What will be HEERA’s role and function?

    • HEERA is expected to eliminate the overlaps in the jurisdiction and remove irrelevant regulatory provisions.
    • It will bring the regulation of both technical and non-technical higher education institutions under one umbrella.
    • The way UGC and AICTE have been roundly criticized for their poor handling of higher education so far, HEERA is likely to be structured in a manner that addresses these deficiencies.

    Advantages of HEERA:

    • The introduction of a unified regulator for both UGC and AICTE would eliminate all overlaps in jurisdiction and also do away with regulatory provisions that may no longer be relevant.
    • Sponsoring bodies of institutes of higher education would no longer be required to approach multiple authorities for clearances, which is likely to promote ease of development of institutions of higher learning.
    • HEERA is also expected to have sharper teeth than the extant AICTE and UGC: the HEERA Law is likely to empower HEERA to take strict penal action against defaulting institutions.
    • The multiple sets of rules and sub-regulations prescribed by UGC and AICTE, unfortunately, seem to have acted as a deterrent to the development of premier educational institutions would be done away with by setting up of a single body.
    • India has separated technical and non-technical education which is “outmoded and out of sync” with the rest of the world. Having a single regulator would result in better outcomes.
    • Having a single statutory body for higher education will simplify and consolidate the mass of regulations and compliances that currently operate in the sector.

    Conclusion:

    • The multiple sets of rules and sub-regulations prescribed by UGC and AICTE, unfortunately, seem to have acted as a deterrent to the development of premier educational institutions. There has long been a need for change in the regime governing higher education in India.
    • The separation between the standards governing technical and non-technical education is seen as unnecessary and illusory. Therefore, the time is ripe for single unified authority for the regulation of higher education in the country.

    Q.6) The court may seem to believe that acting in public interest, as a guardian of people’s rights, its powers are unfettered. However, such outright overreach can prove to be highly problematic for the entire system of governance in the country. In the light of the above statement critically discuss the consequences of Supreme court’s recent ban of liquor shops on highways.

    Source: http://www.thehindu.com/news/national/other-states/rajasthan-revokes-state-highway-status-for-stretches-within-city-limits/article17806885.ece

    http://www.thehindu.com/todays-paper/tp-opinion/my-way-on-the-highway/article17819995.ece

    The Supreme Court’s order prohibiting the sale of alcohol within 500 meters of national and State highways highlights the perils of polycentric adjudication.  While our constitution mandates a separation of powers between the executive, the legislature, and the judiciary, Article 50 of the constitution clearly places policymaking firmly in the domain of the executive. For this reason the Supreme Court’s order has come under criticism. Apart from its polycentric consequences, it has been argued that banning alcohol — and micromanaging the distance from the highways where alcohol cannot be sold — is a classic example of policymaking, and that the Supreme Court has indulged in “judicial overreach”. Intentions of the SC order- positive perspective:

    • The stated reason for this order is the overriding imperative of preventing road accidents due to drunken driving stressing that the apex court acted in interest of Public.
    • The SC said it was acting to enforce the Right to Dignified Life under Article 21 of Indian Constitution in case of State inaction.
    • India has recently ratified to the BRASILIA DECLARATION as its long term commitment towards preventing road accidents and road safety.
    • The Supreme Court also said road accidents was unacceptable due to its costs in form of family sufferings.
    • Based on road statistics and expert views of National Road Safety Council & Ministry of Road Transport and Highways, it was pointed to Driving under Influence of Alcohol was a major cause of road accidents

    Polycentric Consequences: Perspective against the order

    • Affects separation of powers: The Supreme Court’s order to ban liquor along highways and micromanage the distance between two falls under Executive’s purview and hence affects separation of powers under Article 50.
    • Subverting ways to accommodate: States are now re-classifying State Highways into local roads following the Supreme Court order on the ban of liquor outlets to subvert the order for instance The Rajasthan government passed an order recently to convert a portion of their State Highway roads passing through populous areas into urban and district roads.
    • Revenue Loss: Collateral consequences like lost livelihoods and a substantial hit in tourism for States such as Goa and Kerala, to name just two. Goa which has closed 30% of liquor shops and loss of revenue from state run liquor shops such as in TN’s TASMAC
    • Illogical: The judgment ignores the fact that liquor need not be necessarily purchased alongside highways and that it can be purchased at other places or before starting journey.
    • The Supreme Court did not seem to recognize the provision “within its jurisdiction” in Article 142 while doing complete justice.

    Way Forward:

    Thus, while the intentions of public interest behind Supreme Court’s directive cannot be disputed, it has in reality created polycentric consequences and its arguments under article 142 and article 21 is too far fetched. Better traffic policing like in Maharashtra, continued awareness and information dissemination about ill- effects of liquor should be promoted. Ban culture seldom works and respecting each other’s jurisdiction and Judiciary’s self correcting tendency alone can resolve the so called judicial overreach.

    Q.7) Taxing agriculture income is an idea whose time has come. Critically discuss.

    Source: http://blogs.economictimes.indiatimes.com/et-commentary/taxing-agricultural-income-selectively-is-an-idea-whose-time-has-come/

    http://www.thehindu.com/todays-paper/tp-opinion/should-agricultural-income-be-taxed/article18579636.ece

    http://www.livemint.com/Opinion/IjHS4ld7qFwApFx5NzVpXO/Why-India-should-tax-agricultural-income.html

    Introduction:

    • The NITI Aayog has recently re-raised an issue of taxing farm income which at present is exempted from tax under section 10 (1) of IT Act. This has also been recommended by various committees such as Y. K. Alagh, K. N. Raj, Kelkar taskforce etc.
    • Farm income comprises of agricultural income as rent/revenue from land used for agricultural purposes, income derived from this land through agriculture and income derived from buildings on that land provided the building is required as a dwelling house, a store- house or other out-building and the land is not situated in any area which is comprised within the jurisdiction of a municipality or a cantonment board and which has a population of not less than 10,000.

    Why Agricultural Income should be taxed?

    • The economic and governance necessity of such a tax has always been apparent.
    • Non-agricultural income by large land holders are being shown as agricultural income and have prevented from being taxed. This triggers the generation and circulation of black money in huge manners. This has also been proved by the Planning Commission’s study on cooperative farms which has shown that the exemption provided is being misused in large
      context.
    • The underlying argument in the current discussion is to bring more people under the tax net to expand the tax base and also curb tax evasion because income from other sources is usually shown as agricultural income and thus evasion is easy.
    • The exemption for agricultural incomes ends up benefiting medium and large farmers and agricultural companies, which was surely not the intended outcome.
    • The agriculture sector has long acted as a tax shelter. Taxpayers wishing to convert black money into white money show ownership of ancestral property in villages. They are able to obtain fictitious receipts from traders of agricultural commodities as evidence that they have produced and sold agricultural produce.
    • The reality in India is that the agricultural sector is hugely unequal, both in terms of land holdings and incomes. Almost 70% of farmers have marginal land holdings of below 1 hectare and a very small percentage only 0.4% holds significant lands of over 10 hectares.
    • Even the proportion of agricultural households holding a decent sized plot of land which could yield a sufficient amount of income for a household, i.e., between 4 and 10 hectares is very small.
    • So, just by bringing to tax the incomes of the top 4.1% of total agricultural households, at an average tax of 30%, as much as Rs. 25,000 crore could be collected as agriculture income tax. The amount that would be brought to tax as a result of plugging the tax loophole would be in addition to this direct revenue.

    Criticisms:
    Taxing farm income from all the farmers will not be a good idea given the present circumstances of farmers under huge debt burden and erratic nature of rainfall and farm productivity. A majority of farmers in India — nearly 60% — are small farmers, with small holdings and a small marketable surplus. Their incomes are erratic. There is no climate insurance for them when the rains fail or in the event of floods. Droughts leave them reeling just as the fury of floods. Very often, when we talk of farmers, we assume they are all men — 40% of these farmers are women who do not have patta (title deed to the land they till) and do not have Kisan Credit Cards
    either. The share of agricultural products to GDP has shrunk at an alarming rate from 32% to 15% as compared to high number of workforce involved in this. Taxing will be burden on small land holding farmers who are highly dependent on agricultural products or even work outside as daily wage labourers to compensate his/her income.

    The widespread illiteracy among farmers will lead them to be exploited by tax authorities. Also with the dynamic nature of productivity will lead the government in difficulties to identify and monitor the bogus and real beneficiaries. Filling and paying income tax will exclude them out of many social schemes (as an automatic exclusion criterion) and also this income might not be regular or permanent which will made them more vulnerable.

    Way Forward:

    The need of the hour is to factor procurement policy plus pricing policy and the public distribution system before there is any talk of bringing the sector in the income tax net. Before we tax, we should aim at increasing the flow of credit, especially to those who are dependent on the rains, or in coastal and hilly areas, and aim for enhancing the quality and cost competitiveness of farm commodities to make them globally competitive. In order to make tax evasion consistently difficult, CBDT must make it mandatory for all individuals, who disclose agricultural income in excess of, say, Rs 20 lakh (limit for family Rs 40 lakh), to provide the following information in their income-tax returns: break-up of agricultural income into sale value of produce; rent from land and farm house; acres of agricultural land owned and leased with location, crops grown, yield and sale realization per acre; and details of fertilisers, seeds and pesticides purchased. Since every state has a land ceiling act, this information would ascertain if the assessee is showing
    income from more land than prescribed under the act.

    Q.8) The risk borne by a single party is extreme in case of both the PPP models (BoT and EPC). In the light of above statement, explain how Hybrid Annuity Model will resolve this problem? Also highlight its key features and analyze how the adoption of this model can help in completion of stalled projects?

    Source: http://www.thehindubusinessline.com/opinion/columns/slate/what-is-ham-in-india/article9773587.ece

    http://www.indianeconomy.net/splclassroom/131/what-is-hybrid-annuity-model-in-ppp/

    http://www.financialexpress.com/opinion/nhai-hybrid-annuity-model-ham-model-tailored-to-cut-risk-for-developers-but-bankers-need-more-comfort-to-lend-to-these-projects/551589/

    Most of the earliest highway projects allocated through PPP mode were implemented through BOT –TOLL MODE. Under this model the private party is selected to build, maintain and operate the road based on the fact that which private bidder offered maximum sharing of toll revenue to the government. Here, all the risks- land acquisition and compensation risk, construction risk (i.e risk associated with cost of project), traffic risk and commercial risk lies with the private party.  The private party is dependent on toll for its revenues. The government is only responsible for regulatory clearances. Thus in this model all the risk was borne by the Private sector.

    • To solve this Problem Government Brought EPC model. EPC stands for engineering, procurement and construction. It is a model of contract b/w the government and private contractor. The EPC entails the contractor build the project by designing, installing and procuring necessary labour and land to construct the infrastructure, either directly or by subcontracting. Under this system the entire project is funded by the government rather than the PPP model where there is cost sharing. Thus it shifts all the risk from the private players to the government and is the other extreme of BOT model where all risk was borne by the private player. Even though in EPC Model the private sector was absolved of the financing Risk as whole contribution was made by the Government however it was not a sustainable model in Long run since it suffered from one inherent limitation i.e. the financial resources available with the government.
    • HAM model is a Combination OF EPC model and BOT-Annuity model. Under this model. The government will provide 40 percent of the project cost to the developer to start work while the remaining investment has to be made by the developer. Thus under this model Risk is shared equally between both the parties i.e. Government and Private player and thus it resolves the problem of extreme risk borne by a single under the previous 2 models.

    Key features of the HAM Model

    • Under this the government will pay 40 per cent of the project cost to the concessionaire during the construction phase in five equal installments of 8% each.
    • HAM is a mix of BOT Annuity and EPC models. As per the design, the government will contribute to 40% of the project cost in the first five years through annual payments (annuity). The remaining payment will be made on the basis of the assets created and the performance of the developer. Here, hybrid annuity means the first 40% payment is made as fixed amount in five equal installments whereas the remaining 60% is paid as variable annuity amount after the completion of the project depending upon the value of assets created.
    • Revenue collection would be the responsibility of the National Highways Authority of India (NHAI); developers will be paid in annual instilments over a specified period of time. There is no toll right for the developer.
    • An important feature of the hybrid annuity model is allocation of risks between the partners—the government and the developer/investor. While the private partner continues to bear the construction and maintenance risks as in BOT (toll) projects, it is required only to partly bear the financing risk. The developer is insulated from revenue/traffic risk and inflation risk, which are not within its control.

    How the adoption of this model can help in completion of stalled projects?

    • In the hybrid annuity model, one need not bring 100 per cent of finance upfront and since 40 per cent is available during the construction period, only 60 per cent is required to be arranged for the long term. It would be easier for Private Players to raise the remaining 60% fund from the Market since Lending for hybrid annuity- modelled projects would be comparatively easier as there is no traffic risk associated. Lenders would be comfortable as the execution risk is less for contractors as the bidding rolls out only after 90% land is available.
    • This makes it attractive and viable for the private player to invest in Highway projects as In last few years many of the highway projects were stuck due to Lack of fund availability for private players due to high NPA,s of the banks and lack of long term financing options in India. This will help in completion of stalled Projects.

    Q.9) Critically analyse  India’s deepening strategic relationship with Israel and its benefits for both the countries. 

    Source: http://www.livemint.com/Opinion/rZefifXVCYRdleMNxAP5QI/India-Israel-and-a-natural-ideological-affinity.html

    Introduction:

    India-Israel diplomatic relationship started since 1992 and we have moved with much pace in order to strengthening the relationship further. Since the Upgradation of relationship, defence and agriculture have been the main pillars of bilateral engagement. In recent years bilateral ties have expanded to areas such as education, science & technology, homeland security, space technology and water management etc.

    Benefits of India-Israel Relation:

    • Since 1991, with the break-up of Soviet Union and end of Cold War, Indo-Israel relations have improved substantially.
    • Defence sector has been guiding light in the development of relations.
    • From Buyer-Seller relationship, today India and Israel are moving towards Joint production of defense equipment, which dove tails well into India’s ‘Make in India’ initiative and attaining strategic independence in defense equipment.
    • Relations are diversified to also include agriculture, Nano-technology, space research and an understanding on counter-terrorism.
    • These above reasons and huge good will that India generates among Israeli population makes one to call them strategic partners and natural allies.

    Criticisms to deepening ties between India and Israel:

    However, India should continue its Multi-vectored approach towards its diplomacy and build multiple alliances and resist the temptation to call Israel as its natural ally because of the following reasons:

    • Iran, the Israel’s natural enemy is the only possible land route to India to reach the resource rich Central Asia in case the situation in Afghanistan goes against Indian interests.
    • Presence of huge Muslim population in India requires it to maintain good relations with Arab world, which opposes Israel.
    • India needs the help of Saudi Arabia as much as Israel to counter terrorism and also for fulfilling its energy security.
    • Human right violations of Israel in Gaza and west Bank might become a head-ache for India, which is so far a principle supporter of Palestine cause.
    • Our economy is heavily dependent on the oil & petroleum from the Islamic nations of west Asia. Millions of Indians work and send back billions of dollars to India as remittances. We have a lot of goodwill among these Islamic nations generated over the decades, which was visible during Operation Raahat – evacuation of Indians from Yemen. Over emphasis on Indo-Israel relationship may jeopardize relations with other Arab nations.
    • India’s shifting stand in UN on Human Rights violation in Palestine can damage its image as non-aligned country and country who always stood along weak countries for their just demand. If India wants its permanent seat in UNSC, it needs to have consistent stand against human rights violations.

    Conclusion:

    • Given the circumstances India have (surrounding with the hostile neighbours) a reliable defence partner is always in benefit of India which Israel has proved on time to time.
    • However, there are many positive outcomes of deepening ties with Israel, but diplomacy with surrounding nations have to be handled very carefully and with utmost importance as India will need other nations also in order to have strategic cooperation and also to secure its energy security.

    Q.10) What are the merits of the idea of conducting simultaneous elections for state assemblies and Parliament? Are there compelling reasons for India to consider this option? Critically examine.

    Source: http://www.hindustantimes.com/opinion/pm-modi-s-reasoning-for-simultaneous-elections-stands-on-weak-ground/story-4INLqd1yzELHWSHW60WgWK.html

    https://thewire.in/131341/parliament-state-assembly-simultaneous-elections-democracy/

    Recently, the concept of simultaneous election in India has been reinitiated which entails for holding elections for Lok Sabha (Lower House) and State Legislative Assemblies together which was in practice prior to 1967. The idea behind this is to curb policy paralysis, improvement in governance and to more extent limit the exchequers’ burden. The topic is a hot issue for debate and involves various points to discuss.

    Merits for holding Simultaneous Elections:

    It will have similar period for imposition of Model Code of Conduct during which the developmental activities are put on hold and the time afterwards can be used for strengthening governance and also more concentration will bring more stability in governance. This Model Code of Conduct also effects the functioning of bureaucracy, which can also be taken care of.

    Elections in India are thought to be a big-budget exercise. Simultaneous election will limit the Expenditure. This savings can be utilized in other developmental activities.

    Simultaneous Elections will improve law and order problem as frequent elections tend to disrupt the normal public life and affect the functioning of essential services. Frequent elections lead to frequent disruption of road traffic by political rallies and also lead to noise pollution.

    It is evident that crucial manpower is often deployed on election duties for a prolonged period of time. If simultaneous elections are held, then this manpower would be made available for other important tasks. 

    Are there any compelling reasons for India for conducting simultaneous elections?

    No, we don’t see any compelling reasons for conducting simultaneous election in India at present because:-

    India’s elections are neither as expensive as it is thought to be nor does it have to be as disruptive to national governance as it is made out to be.

    Over a five-year cycle, the government incurs a total of Rs 8000 crore for all elections. This works out to roughly Rs 1,500 crore every year or a paltry Rs 20 per voter per year.

    To put this in context, India’s annual GDP is Rs 150 lakh crore. Every single year, India’s public sector companies alone lose 20 times more money than it costs to keep India a vibrant electoral democracy (as more fund for political parties are collected from corporate). This notion that the government can save enormous sums of money to help lift millions out of poverty by holding simultaneous elections is plain outlandish.

    MCC by election commission regulates the party in power and restricts certain capital expenditure projects of an incumbent government once elections are called. Moreover, it is noted here that if MCC is in force in one state, the other states are free to launch developmental activities as we are planning more devolution of funds to the states (14th Finance commission recommendation and also claimed by the NITI Aayog). There is no holding of developmental activities across India with frequent election, then why simultaneous election is being thought.

    However, simultaneous election also involves some challenges:

    If both the elections are held together for instance in 2019, what will happen to the assemblies elected in 2017 and 2018? Will they be dissolved?

    This will take the states power granted under Article 172 (1) of the constitution that allows an elected state government to recommend dissolution of the assembly and call for elections.

    Under a simultaneous elections regime, the state will be beholden to the Union government for elections to its state, which goes against the very grain of political autonomy to states under our federal structure.

    According to Article 85 and Article 174, elections to Lok Sabha and Legislative assemblies have to be held within six months (respectively) of dissolving either of them. So how can it be feasible if elections are held only at fixed durations?

    Now, when the multi party democracy is a reality, it shows the polycentric voter diversity. How can there be simultaneous elections when there are different parties at the Centre, State, and local bodies?

    Conclusion:

    Election brings the governed and the people who govern closer to each other. Hence, any trampling with the process which can possibly clutter the voter’s choice is unwarranted and lead to a deficit of democracy.

    The challenges in the present system are genuine. However, there are other possible solutions which can be tried. As several political thinkers have said, “Indian democracy is a unique case of a successful functional democracy with a vast diversity” .The highlight of this diversity is the choice and opinion. Hence, any amendments to the democracy’s largest festival should not be fraught with damaging the democracy itself.

    Ethics Questions

    Q.11) Secularism and cultural integration are two important values that need to be taught to matriculation level students. What will be best way of teaching these values and what will be its merits?

    At a time, when we notice cases of communal disturbance, it is essential the children from the beginning are inculcated with values of secularism and cultural integration. The best way of teaching them is through inculcating ethics of national integration, involving them in religious matters of various faiths by celebrating festivals. The schools should plan a suitable curriculum, organise debates and symposiums and take students for visits to religious places of different faiths. It is important to teach them against cynicism and self centeredness. If they realize from beginning positive faiths of various communities, they won’t develop hatred against a particular religion.

    The merit lies in fact that the children, in schools are not too much familiar with communal tensions and if they are taught values of secularism and cultural integration at right time, it will be good in the longer run. Having a good set of values will not allow them to get affected by people who try to disintegrate society on thin lines of communalism.

     

    Q.12) X is the Private Secretary to Y who is M.D. of a big private enterprise that manufactures baby food. One day Y calls the chief chemist Z and suggests to dilute some of the most important ingredients which are very important for the children. The purpose of dilution is to earn more money. ‘X’ overhears the entire dialogue between ‘Y’ and ‘Z’. He is in dilemma as what to do under the given situation.

    (a) What are the various options available to ‘X’?

    (b) Suppose ‘X’ comes to you with all his options, what suggestion you would give him along with justifications.

     

    Y has wrong intentions of adding the ingredients to the baby food. He merely wants to earn more money and for doing so, he is ready to compromise with health of children. The various options before X are-

    • He can request MD and tell him it is unethical and can harm children. The company may lose its credibility if the news comes in public.
    • He can ask chemist not to dilute the ingredients and try to convince him that it is wrong. The chemist may however go to the MD and tell about him.
    • He can inform the Independent Director (representing the interest of consumer) directly or through some member. It is possible that the board after coming to know about the situation will look into the matter.

    There are various options available to X. Disclosing the matter might pose a threat to his job. However, if he keeps mute on the issue, it is liable to bring bad name to the enterprise.

    • He should first try to convince his boss that it is unethical to carry such wrong practice just to earn more money.
    • He can go to the chemist and seek his cooperation in ensuring that the important ingredients in the food are not diluted.
    • Even it the above options do not bring fruitful results, the last resort should be to have enough sacrifice capacity for the good of the children even if it involves quitting job. Just to save his job, he should not compromise with the life of the children otherwise he would also be equally responsible for supporting the MD in his wrong deeds.

  • [Answers + Video Explainers] 27 Aug 2017 | Target Mains | 1st Weekly Test

    Video Explainers:

    https://www.youtube.com/watch?v=yNtb_vIq3FA

     

    Q.1) Supreme court recently ruled that privacy was part of the fundamental right to life and personal liberty guaranteed to all citizens under Article 21 of the Constitution. Critically examine the significance of this Judgement and its consequences on various contemporary bills, statues and laws.

    Source: http://timesofindia.indiatimes.com/india/what-happens-to-aadhaar-section-377/articleshow/60217328.cms

    http://www.ndtv.com/india-news/privacy-verdict-to-have-some-bearing-in-beef-ban-matters-supreme-court-1742200

    https://www.thequint.com/india/2017/08/25/key-points-of-right-to-privacy-judgment

    A nine-judge Constitution Bench of the Supreme Court ruled that right to privacy is “intrinsic to life and liberty” and is inherently protected under  Article 21 enshrined under Part III of the Indian Constitution overruling its own eight-judge Bench and six-judge Bench judgments of M.P. Sharma and Kharak Singh cases delivered earlier.

    Significance of the landmark Judgment:

    • An ordinary man not just a citizen, but anyone, whether an Indian national or not, can move the constitutional courts of the land under Articles 32 and 226, respectively, to get justice in case of violation of fundamental right.
    • The court emphasized upon personal, informational and digital privacy. It cleared the air on the amorphous nature the concept of privacy.
    • The judgment of the SC by overruling it earlier verdict shows evolution of our judiciary with changing time.
    • It will directly impact food choices, beef bans and any such restrictions that is intrinsic to choice and privacy
    • The nine-judge Bench’s judgment gains international significance as privacy enjoys a robust legal framework internationally, though India has remained circumspect.

    Bearing over Statutes/Bills/Laws:

    • The landmark judgment declaring right to privacy a fundamental right would have bearing in matters relating to “Cattle and Livestock Sale Rules” that bans beef sale and restricts food choice that may be struck down.
    • The judgment will have a crucial bearing on the government’s Aadhaar scheme that collects personal details, biometrics to identify beneficiaries for accessing social benefits and government welfare scheme.
    • The court has observed that one’s sexual orientation is undoubtedly an attribute of privacy. It reopens the debate and rights of LGBT communities may finally get recognized by SC through striking down of IPC Section 377.
    • This calls for robust Data security, protection and regulatory mechanism for important data of the citizens collected by both private and public authorities. The IT Act 2000 also will have restructuring to incorporate changing dynamics of data sharing.
    • The Human DNA profiling with the dangers of data leakage and misuse will have implications due to this judgment.
    • Right to terminate life under euthanasia can have negative fallout along with rise of suicides and abortion if recognized as arbitrary private decisions.
    • Other negative consequences could include “Aadhaar” covering 99% population, if struck down, could cost exchequer heavily and the striking down of Aadhaar Act on grounds of privacy violations could curtail DBT, welfare scheme benefits.

    By declaring right to privacy as a new freedom and clear fundamental right it has opened up plethora of hopes and aspirations of Indian citizens as a whole and protects them from arbitrary intrusions of their personal space. While it has negative fallouts, rationally demarcated restrictions on this freedom and a properly regulated robust data protection law to support the judgment is the need of the hour.

    Q.2) It is commented by many experts that India’s efforts to become NSG member is a futile exercise. Do you agree with this view? Critically comment.

    Source: http://timesofindia.indiatimes.com/india/How-exactly-India-will-benefit-from-being-a-member-of-Nuclear-Suppliers-Group-6-examples/articleshow/52699296.cms

    http://www.thehindubusinessline.com/opinion/why-indias-nsg-entry-is-no-big-deal/article8737568.ece

    http://www.orfonline.org/research/india-can-do-without-nsg-membership-says-expert/

    Hints:

    Introduction:

    Nuclear Supplier Group (NSG) is a 48 member multi-lateral grouping, deals with the control of nuclear materials and technology, founded in response to India’s nuclear test in the year 1974.

    The group has a set guidelines pertaining to items that are especially designed for nuclear use and the export of dual-use items (materials and technologies) which are considered as a guarantee for the country to procure and supply nuclear materials and technology. India thinks joining the group will pave its way for supplying some of its technologies and other nuclear items to other countries.

    However, some expert thinks that joining NSG will be a futile exercise as India has already being recognized by some of powerful countries like US, Japan and Australia etc. as a peaceful user of nuclear items and can deal with the technologies and other items without any hassle and obstacles.

    Why it seems to be a futile exercise?

    Critics argue that as India had already got a clean NSG waiver in 2008; all these efforts to gain entry into the club will be a futile as it would not make any material difference because No foreign nuclear reactor supplier is waiting for India to get a NSG membership. However, non NSG somewhere obstructs India from openly dealing with other nations and also keeps away from making rules.

    China’s backing to Pakistan for NSG membership similar to India gaining its membership will be a serious concern for many as Pakistan’s terrible proliferation record which many nations fear.

    In fact, a long list of deal-breaker challenges hamper progress of foreign companies selling their hi-tech reactors — nuclear liability issue, Japan’s distaste for nuclear (both GE and Westinghouse are today Japanese-owned), local opposition and pricing. ‘NSG membership’ has never shown up in the list.

    Energy from India-built nuclear plants is much cheaper. For GE-Hitachi and Westinghouse-Toshiba, the liability issue is a big risk, and if they factor the risk in costs, their energy will also be pricey.

    However,

    • NSG membership is an assertion of right and joining it mean participating in the rules making of NSG. This will give India a chance to expose Pakistan’s terrible proliferation record and may block Pakistan forever. However, this will mount tension between India and Pakistan or India and China for Nuclear access.
    • The 2008 waiver with USA made India eligible to receive advanced nuclear technologies that could be used to enrich uranium and/or reprocess plutonium. This has helped India a lot. However, such access is restricted to American technologies. Membership to the NSG will essentially increase India’s access to state-of-the-art technology from the other 47 members of the Group, as well.
    • NSG membership also means India can begin to commercially produce nuclear power equipment, which it can then even sell to other countries. With access to state-of-the-art nuclear technologies, it can maximize its production benefits. However, the other nuclear haves nations are already in engagement with such countries and will prove less fruitful for India.
    • Access to technology and being allowed to produce nuclear equipment will give a boost to the Make in India programme announced by our PM. That will boost economic growth in India, create more jobs and even lead to a whole new IT-industry segment that India can leverage.
    • Most of the energy is generated from Coal which is unclean due to CO2 emissions. NSG membership can help India in shifting to clean Nuclear Energy and will also help India in its commitment to climate change.
    • On grant of membership, India will have a say in the group’s decisions. India could also play a more pro active and constructive role in blocking illegal nuclear trades between China, Pakistan, North Korea etc.

    Conclusion:

    However, India must further build on the theme that dwell on India’s “strong record” in dealing with the challenges of arms proliferation and its contribution to global non-proliferation and nuclear security efforts.

    India must demonstrate its readiness and resolute to achieve global nuclear non-proliferation goals and show a certain degree of transparency with its strategic weapons programmes, to bolster the case for its full membership in the multilateral non-proliferation groupings.

    Q.3) It is commented that end of Triple Talaq is a gateway to Uniform Civil Code? In the light of the above statement, discuss the need for Uniform Civil Code and impediments in its implementation?

    Source: http://www.livemint.com/Opinion/YJFZYlzt2IN3lkOlljLjfO/Why-India-needs-a-uniform-civil-code.html

    http://www.thehindu.com/todays-paper/tp-opinion/Now-is-not-the-moment/article14486438.ece

    The recent hearing of Supreme Court declaring the discriminatory practice of instant Triple Talaq as unconstitutional, a clear message that personal law can no longer be privileged over fundamental rights is established. The main ground on which the practice has been struck down is that this form of Talaq is arbitrary in the sense that the marital tie can be broken capriciously and whimsically by a Muslim man without any attempt at reconciliation so as to save it. This important judgment with its positive spillovers of gender justice provides a clear gateway to reinvigorating the debate of UCC and its implementation in near future.

    In fact, the Uniform Civil Code(UCC) envisages uniformity in personal laws cutting across all religions, caste and creed pertaining to personal laws like polygamy, triple Talaq, Nikah Halala in case of Muslims; dowry, property rights and bigamy in case of Hindus; and divorce and property rights among Christians.

    Need for Uniform Civil Code:

    • First, a secular republic needs a common law for all citizens rather than differentiated rules based on religious practices.
    • It will promote national integration and uniformity in laws across gender, caste and religions.
    • It will fall along constitutional principles (DPSP, Article 44) towards achieving gender justice and equality, as envisaged by our constitution makers.
    • There is a second reason why a uniform civil code is needed: gender justice. The rights of women are usually limited under religious law, be it Hindu or Muslim. The practice of triple talaq is a classic example.
    • It will uphold human rights and provide a common legal procedure on violation.

    Impediments to its implementation:

    • There is no one personal law which is complete and just in itself.  The apprehension that concepts alien to its socio-religious practices will march one after another if change in legislation is permitted in one field.
    • Opposition from orthodox sections of various religions could lead to protests, separatist tendencies on grounds of alleged state interference in personal and religious space.
    • Inordinate delays due to much litigation in court challenging UCC, may prolong its implementation.
    • The diversity of our country and its multitude of customs and usages present a hindrance and a single framework accommodating all will not be an easy solution.
    • Many experts believe it directly conflicts with the Right to religious freedom guaranteed in the constitution under Article 25 and 26 for pursuing various aspects of the religion.
    • There is no concrete draft of how an ideal UCC should be that assuages the fears of other religious minority groups.

    Way forward:

    • The government will have to work hard to build trust, but more importantly, make common cause with social reformers rather than religious conservatives, an obvious political challenge in assuaging fears.
    • The Government in coordination with all stakeholders must take up reforms in each personal law through independent initiatives, and bring separate aspects such as marriage, adoption, succession and maintenance into a uniform civil code in stages.
    • The civil law in Goa—derived from the Portuguese Civil Procedure Code of 1939—could be a useful starting point for a national debate.

    The underlying principle should be that constitutional law will override religious law in a secular republic. The dynamics of social transformation through the instrument of law from diverse civil code to uniformity shall be gradual. The government should draft a uniform civil code with widespread multi stakeholder discussions and a comprehensive review of several other laws in the context of gender justice. That is important in the context of the above judgment.

    Q.4) Given the fact that PDS system is highly prone to leakages and corruption, many experts have suggested that it should be replaced by Direct Benefit Transfer system. Do you support this view? Critically discuss.

    Source: http://www.moneycontrol.com/news/business/economy/modi-government-in-favour-of-scrapping-pds-2341155.html

    http://www.dailyo.in/politics/narendra-modi-public-distribution-system-pds-poverty-hunger-food/story/1/18778.html

    http://www.livemint.com/Opinion/hnytasM4zVTEWmQnt1fc1N/Replacing-food-with-cash.html

    The government is likely to scrap public distribution scheme (PDS) system and transfer money directly to the accounts of poor beneficiaries after getting encouraging results from Haryana and Puducherry. This move has been supported as well as criticized by many economists.
    Arguments in favour of substituting PDS grain transfers with cash

    1. PDS prone to corruption and leakage: Proponents of substituting PDS grain transfers with cash argue that PDS is an inefficient mode of transfer of subsidies, prone to enormous leakages into the black market, and high waste in costs of transferring subsidies in the form of food transfers. They argue that replacing food with direct cash transfers would greatly reduce corruption and leakages.
    2. Better targeting: It would enable the poor to access goods currently denied them by a PDS beset by corruption.
    3. More choice for Consumers: It would enable people to buy better quality food of their choice from the open market and not be restricted to items sold in the PDS, which are often inferior in quality and limited in range.
    4. Will Reduce Wastage: Providing subsidies directly to the poor, it is further argued, would both bypass brokers as well as reduce the waste and holding costs of storing grains in government silos. The amount of grain actually required for India’s buffer stock needs could be held in better-quality warehouses, eliminating waste and rotting.
    5. Will reduce fiscal deficit: Cash transfers would help reduce fiscal deficit by curbing expenditures earmarked for the PDS that are siphoned off through corruption, as well as avoiding substantially higher costs of transferring food rather than cash.

    Arguments against

    1. Not leakage proof: It is problematic to assume that cash transfers would in themselves bring about drastic reductions in corruption and leakages in welfare programmes, as there is nothing intrinsic to cash transfers which renders them less vulnerable to leakages. Irregularities are empirically found to be high in existing cash transfer programmes. Cash transfers of old-age pensions are at least as notorious for corruption and leakages as the PDS.
    2. PDS performing better: Studies confirm that many states have been able to reform PDS and significantly reduce leakages, as much as some states have reformed pension transfers. Clearly, the difference between the corruption or probity of delivery of welfare programmes is not dependent on whether cash or food is delivered, but on political and administrative will and capacities, and public vigilance and organization.
    3. Misuse of Cash: It is also possible for people to spend cash transfers not on more nutritious food, as proponents suggest, but instead on non-food items, which would decrease the amount of household money left for buying food. There are significant gendered differences of choice here. Research confirms that culturally decisions relating to cash in households tend to be made by men, who may or may not spend the money on food. Decisions relating to food are made by women in almost all cultures, and therefore food rather than cash in a household is more likely to end up as food in a child’s stomach.
    4. Weak Banking Infrastructure: There are also worries about how genuinely inclusive of people in remote rural regions is India’s banking system. Fair price shops exist in three of every four villages, and are therefore generally accessible. According to one survey, average distance to the nearest bank branch is between 6.5km to 10km. Distances would be much longer in remote regions, entailing high additional costs of transport and time.
    5. A shield against Inflation: Another advantage of PDS over cash transfers from the perspective of the poor is that PDS supplies rations at a constant price, irrespective of the fluctuations in market prices. This therefore provides a shield against inflation, a benefit that cash transfers cannot match.
    6. Ensures stable income for Farmer’s: it is a mistake to view PDS only as a means to transfer subsidies to poor households. PDS costs need to be measured against its other goals as well. PDS requires the government to procure food from farmers. The government builds up stocks of grains which are also useful for price stabilization. Indeed, the guarantee of minimum support price purchase by the government for wheat and rice is the most important instrument for the protection of farmers’ income in India, and this would become unfeasible if the government could not offload a lot of this grain back through the PDS.
    7. Cash transfer leading to exclusion: In areas where pilot programme has been launched There were issues in transfers, as results show as high as 50 per cent of those entitled did not receive the full or part cash transfer, especially due to issues in linking of bank accounts with Aadhaar and ration cards.

    Way Forward:

    Certainly, DBT is a novel idea and it could certainly reduce leakages and corruption of PDS system has proven its record in LPG case where Government saved rs 14000 crore due to better targeting and elimination of ghost beneficiaries
    However, DBT in food subsidy is an idea which has many flaws as mentioned above. PDS system itself is flawed and it needs to be eliminated.
    Therefore, instead of cash transfer Government should give food coupons as this will solve the problem of misuse of cash for buying non-food things and it will also give poor people choice to buy food from the retailer of their choice. Food coupon amount should be periodically revised so that it takes into account the current inflation. Thus what we require is a system which is somewhere in between the present inefficient PDS system and the proposed DBT system.

    Q.5) To solve the Twin Balance problem, Economic Survey has suggested setting up of a Centralised Public Sector Asset Rehabilitation Agency. Critical discuss whether setting up of an agency like PARA will be feasible?

    Source: http://www.hindustantimes.com/business-news/bad-bank-a-bad-idea-five-reasons-why-india-needs-a-durable-solution-on-npas/story-nQOH8umjCcxLJvkWo2jPyN.html

    http://www.thehindu.com/opinion/op-ed/Why-a-%E2%80%98bad-bank%E2%80%99-is-tricky/article15477841.ece

    http://www.thehindubusinessline.com/opinion/government-must-shoulder-burden-of-debt-haircut/article9543261.ece

    Introduction:

    Due to ever increasing twin balance sheet problem and the rising difficulty to tackle it by any other means, the Government has proposed an another reform as a last resort i.e. Public Sector Asset Rehabilitation Agency (PARA) for the rehabilitation of the Public Sector Banks and Companies who are facing such crisis.

    It is to be a centralized approach where the Agency will take charge of the assets of the worst affected Public Sector Undertakings and try to reduce their debt to a large extent.

    Criticisms:

    Under this approach, the Public Assets Rehabilitation Agency will purchase the loans of the over-indebted infrastructure and steel firms. Then it will try to work out using several methodologies, one of them being the professional assessment of value-maximizing strategy to come to a conclusion as to how these debts can be paid and written off.

    This requires a huge amount of investment in the projects which can be done only through fulfillment of capital requirements by the government. However, given the circumstances, Capital Markets, Corporations, and other private investors will not be agreeing to invest.

    Many critics argue that PARA in reality does not provide any new means to solve this problem. It actually suffers from certain major loopholes which cannot be ignored:

    Problem of disposal: It has somehow been ignored that the PARA will face the same problem as that of banks in disposing of these debts. Although it may be having some methodologies to do it, it requires huge finance to do this. There is not even much market for stressed assets owing to the reason as many sectors are currently plagued with overcapacity. So, it cannot really resort to selling these assets to a large extent.

    Operational discrepancies: Many critics have pointed out that PARA proposes a very unclear method. The methods proposed are only a slight variation of the old ones like the ARC. They failed because of these mechanisms. So adopting them again can lead to a continuation of the problem.

    One size fit all policy not feasible: In India, the issue of NPAs and corporate bankruptcy differ from bank to bank and corporation to corporation and hence, a one size fit all policy will not be feasible from overcoming such problems. Also, it will require the agreements from banks and corporation to shed their bad loans which draws certain percentage of it to the PARA.

    However, setting up of PARA like institution has certain advantages also:

    By taking away bank’s debt, it releases the bank of a huge amount of its financial burden. It has two major benefits:

    Reduction in burden on banks: By taking away these bad debts, the PARA shoulders the responsibility of all the debts. This reduces the burden on the banks to find ways to get back their bad debts. The PARA particularly concentrating on this task can do it more effectively than these banks. Thus, banks can think of utilizing their human resources in focusing on other important activities than debt restructuring.

    Restoring financial health: By buying these debts, it recapitalizes the bank. Once this is done, banks with greater capital can now focus on making new loans.

    Concentration on one Agency: Since the bad debts are all now concentrated in one agency, it is easier to find a true estimate and address it step by step.

    Conclusion:

    However, with various discrepancies this new institution seems to provide a new ray of hope to overcome from NPAs like situation and somewhat liberate to the corporation also. Till now it has been proved that the earlier such methods did not bring fruitful result, and hope that the new agency may liberate from such problems so it’s worth to have the experience of this also.

    Since, the coin has both side, concerning both the aspects, we should try to minimize the negative aspects and focus more on its benefits and positive sides which will bear the fruitful result.

    Hence, we should give PARA a chance to come into operation and at least start its task so that the ongoing problems can be assessed in a better way and some other way out could be thought.

    Q.6) Ultimately it is the rural agrarian crisis which is motivating dominant landed castes in most parts of India to agitate for reservation. Do you agree with the statement? Critically discuss.

    Source: http://www.livemint.com/Opinion/YQuLPRFm4JqsXXwixvA1ZJ/A-year-of-discontent-for-the-middle-castes.html

    http://www.business-standard.com/article/economy-policy/what-is-causing-distress-among-erstwhile-dominant-castes-115103101210_1.html

    The year 2016 witnessed agitation for reservation by many castes like Jats, Kapus, Patidars and Marathas. All these communities are dominant castes. The concept of Dominant caste was given by M.N Srinivas who held that a caste is dominant when it is numerically higher than the other castes. And it has significant control over land.

    To some extent it is correct to say that rural Agrarian crisis is motivating Dominant Landed castes in most parts of India to agitate for Reservation There is tremendous amount of Farmer distress in Countryside in last few years due to agrarian crisis. Since most of these communities are landed agrarian caste, they are facing the brunt of agriculture slowdown. Rise in farm input costs, stable food prices in the last two decades, despite some episodes of price explosion Has led to dip in there farm income The average size of landholding at the national level has come down from 2.28 hectares in 1970-71 to 1.16 ha in 2010-11,which is making agriculture unviable. The process of marginalization of farm holdings might have contributed to the recent demand of Marathas and Patidars (also known as Patels) to be included in the other backward classes (OBC) category so that they could shift away from agriculture. Another source of rural distress in Maharashtra and Uttar Pradesh, in particular, has been the crisis in sugar and most of sugar farmers are either JATS or Marathas.

    However it is not just Agrarian crisis which is motivating these communities to ask for reservation there are other factors also which are motivating them to agitate for Reservation these include

    • Crippled urban economy-India’s growth in last 2 decades is led by increase in productivity and therefore number of jobs created in the private sector is much less, which means that dominant caste who are turning away from agriculture has very less opportunities to get job in private sector and thus only option left for them is government jobs, however there general status is making the competition tough for them, Therefore they are asking for reservation.
    • Resentment against other OBC communities-Most of the other middle caste like Kunbi,Yadav,Gujjar,Reddy”s,and saini are in OBC category.The social,economic and political disparity between these groups and JATS,Patidars and Maratha and Kunbi has significantly decreased in last few decades. Due to reservation the representation of the above mentioned caste in government jobs has increased significantly in last few years in comparison to the dominant caste, which has made this dominant caste envy of these other OBC community and therefore motivated them to demand for reservation. It can also be said that the demands are a result of resentment among the dominant castes against the hitherto backward classes which witnessed growth due to reservation provision and consequently threatened the former’s dominant status.
    • Political support-Most of this dominant caste are electorally and politically very powerful in that state, and they get support from opposition parties for vote bank politics. This political support and there strong position makes it difficult for the state government to ignore their demands, which has motivated them to ask for quota since it is very likely that there demand are accepted as happened in the recent Jat agitation.

    Thus a combination of factors are motivating the dominant castes to demand for Reservation.

    Q.7) Mental health in India remains shrouded in stigma, which stifles conversation and a much-needed public dialogue and exploration into the mental well being of a rapidly growing population. In the light of above statement, critically discuss the significance of the recently passed Mental Health Care Bill 2016.

    Source: http://www.firstpost.com/india/mental-healthcare-bill-despite-the-positive-reform-a-lot-more-needs-to-be-done-for-the-mentally-ill-3373156.html

    http://economictimes.indiatimes.com/industry/healthcare/biotech/healthcare/world-mental-health-day-why-mental-illness-still-remains-shrouded-in-stigma/articleshow/54757107.cms

    http://www.thehindubusinessline.com/opinion/finally-a-progressive-mental-healthcare-bill/article9638031.ece

    According to estimate in India at least 5% of the population lives with a mental illness, which translates to over 50 million people. Nearly half of those with severe mental disease aren’t treated and of those with less severe versions, nearly 9 in 10 go uncared .
    Stigma attached to mental ailments is the main reason why the society is struggling to address the problem .According to a survey done by the Live Love Laugh Foundation (TLLLF) Bangalore 80 per cent people felt it was stigma that prevented them from seeking treatment. 85 per cent thought mental illness was made worse by stigma. Even in metro cities, less than half of the people affected by psychiatric disorders receive adequate treatment. Mental illness in India continues to be shrouded in an air of secrecy and guilt.”

    Recent passing of Mental Healthcare bill could be a possible solution to above problems as it has provisions like:

    1. The Bill states that every person would have the right to specify how he would like to be treated for mental illness in the event of a mental health situation. An individual will also specify who will be the person responsible for taking decisions with regard to the treatment, his admission into a hospital. Thus it provides autonomy and empowerment to the Patient to take their own decisions.
    2. It permits involuntary hospitalization only in exceptional circumstances.
    3.  It mandates a range of services and bans the use of electro-convulsive therapy without anesthesia and prohibits its use in minors. Thus the Bill attempts to protect human rights of the mentally ill.
    4. In a much-needed change, the bill has adopted a medicalised approach to attempted suicide, treating it as the outcome of severe stress. The bill rightly blocks the application of the Indian Penal Code section that criminalizes it. A duty is also cast on the authorities to care for and rehabilitate such individuals.
    5. It puts the onus of responsibility on the state for training mental health professionals and providing access to public healthcare
    6.  It requires insurance companies to provide health cover for people with mental illness and this will significantly reduce the cost of treatment for the Mental patients. This will also motivate more mental health patients to seek treatment
    7. It tries to provide checks and balances to ensure the dignity of the mentally ill.

    But there are a few issues which also needs to be addressed –

    1. Social determinants of mental health e.g. poverty and social exclusion are ignored in the bill.
    2. Role of family in treatment is not addressed in this bill
    3.  With health budget going down and budget for mental health treatment just 1% of the total health budget, implementation of provisions of the bill in the right spirit will be a challenge for State Government.
    4. It does not acknowledge the roles of counselors who are equally important as psychiatrists .Role of counselors needs to be enhanced if stigma associated with Mental healthcare needs to be taken care of.

    Conclusion:

    Though it is a step in the right direction but certain issues in the bill needs to be addressed. Reliable and free professional counselling must be widely offered. For too long, mental health treatment in India has existed with the colonial legacy of large asylums and degrading confinement. Many who are held in such places have nowhere else to go, as families facing stigma have abandoned them. These issues needs to be addressed by the bill only than it could be said that this Legislation will end the stigma  associated with mental illness.

    Q.8) Despite the runaway success of the healthcare schemes and availability of Anti-Retroviral Therapy in government hospitals, social discrimination against HIV-positive people in India is pervasive. How will the proposed HIV and AIDS (prevention and control) Bill 2014 deal with this problem?

    Source: http://www.thehindu.com/opinion/editorial/on-hiv-aids-bill-legally-enabling/article18082488.ece

    http://www.thehindu.com/news/national/what-you-need-to-know-about-the-hivaids-prevention-bill-and-its-provisions/article17904463.ece

    The stigma of having HIV or AIDS in India remains intense, despite having the worlds third-largest population of people with either. Some places even simply turn away people with HIV or AIDS.

    How will HIV bill end the social Discrimination faced by the AIDS patients

    1. This law makes all sort of discrimination criminal, it also eases the process by which people living with HIV or AIDS get access to treatment. Even if it cannot do away with the stigma itself, the law offers a clear legal recourse and should loom large as a threat for insurers and hospitals that don’t recognise the evils of turning down or discriminating against people with HIV or AIDS.
    2. Under the bill, it is a legally punishable offence to deny a person living with HIV/AIDS insurance on the ground of the disease that lowers the immunity. In such a case, the insurer will have to part with a fine of Rs 10000
    3. It also guarantees protection against discrimination in the field of education, employment, access to housing and healthcare.
    4. It prohibits all acts of discrimination against HIV-positive people, or those living with such people. It also lists various grounds on which discrimination against HIV positive persons and those living with them is prohibited.
    5. The bill ensures that an HIV person below the age of 18 years has the right to reside in a shared household and enjoy the facilities of the household.
    6. The most crucial step is that it recognizes the right of a person to keep his health status confidential.
    7. According to the Bill, each state will appoint an ombudsman to inquire into complaints related to the violation of the act and the provision of health care services. Also, cases relating to HIV positive persons shall be disposed of by the court on a priority basis.

    However, it is only half the battle won. The various issues unaddressed are –

    1. It does not guarantee ART treatment as the legal right of the patient implying that a person who is denied treatment cannot drag the Government to the court. It essentially dilutes an important part of the bill
    2. Insurance industry is allowed to use actuarial calculations for charging HIV infected people , which might make it non affordable. Proper capping of the actuarial pricing is much needed and is to be monitored by the Ombudsman.

    Way Forward

    Proper capping of the actuarial pricing is much needed and it needs to be monitored by the Ombudsman. The amendment to the bill is progressive on various fronts and the government’s effort must be appreciated. At the same time, the biggest fallacy plaguing PLHIV is the parochial mindset of our society.. The Government must undertake a nationwide sensitization program . The bill addresses many of the concerns of the HIV infected people and ensures their rights, however the real success depends on the implementation.

    Q.9) It has been commented by many experts that management of the government’s debt by the RBI leads to a conflict with its role as monetary authority working to contain inflation and ensure financial stability. In the light of the above statement discuss how setting up of an Independent Public Debt Management Agency would improve the situation. Also discuss the challenges PDMA will face in its working.

    Source: http://arthapedia.in/index.php?title=Public_Debt_Management_Agency_(PDMA)

    • Public Debt Management Agency (PDMA) is a specialized independent agency that manages the internal and external liabilities of the Central Government in a holistic manner and advises on such matters in return for a fee.
    • In other words, PDMA is the Investment Banker or Merchant Banker to the Government. PDMA manages the issue, reissue and trading of Government securities, manages and advises the Central Government on its contingent liabilities and undertakes cash management for the central government including issuing and redeeming of short term securities and advising on its cash management.

    Why there is need for PDMA?

    • Fragmented jurisdiction in public debt management: Currently the central Bank or RBI manages the market borrowing programmes of Central and State Governments. On the other hand, external debt was managed directly by the Central Government. Establishing a debt management office would consolidate all debt management functions in a single agency and bring in holistic management of the internal and external liabilities.
    • It is considered as an internationally accepted best practice that debt management should be disaggregated from monetary policy, and taken out of the realm of the central bank. Most advanced economies have dedicated debt management offices. Several emerging economies, including Brazil, Argentina, Colombia, and South Africa, have restructured debt management in recent years and created an independent agency for the same.

    The sources of these conflict of interest in RBI managing the Government debt, as listed out in the 2008 report of the Government are as under:

    • There is a severe conflict of interest between setting the short term interest rate (i.e. the task of monetary policy) and selling bonds for the government. If the Central Bank tries to be an effective debt manager, it would lean towards selling bonds at high prices, i.e. keeping interest rates low. This leads to an inflationary bias in monetary policy.
    • Where the Central Bank also regulates banks, as in India, there is a further conflict of interest. If the Central Bank tries to do a good job of discharging its responsibility of selling bonds, it has an incentive to mandate that banks hold a large amount of government paper. This bias leads to flawed banking regulation and supervision, so as to induce banks to buy government bonds, particularly long-dated government bonds. Having a pool of captive buyers undermines the growth of a deep, liquid market in government securities, with vibrant trading and speculative price discovery. This, in turn, hampers the development of the corporate bond market – the absence of a benchmark sovereign yield curve makes it difficult to price corporate bonds.
    • If the Central Bank administers the operating systems for the government securities markets, as the RBI currently does, this creates another conflict, where the owner/ administrator of these systems is also a participant in the market.

    Challenges/issues related to PDMA

    • The size and dynamics of government market borrowing has a much wider influence on interest rate movements and systemic liquidity. An autonomous PDMA, driven by specific objectives exclusively focusing on debt management alone, may not be able to manage this complex task involving various trade-offs. It may even be compelled to issue more short term debts and enlarge the space for foreign investors making economy more vulnerable to the risk of capital flight.
    • It may not be true that what has been practiced in some other countries would come true for India. The institutional arrangements for debt management must take into view the country specific context and requirements. The experience of debt management offices in the Euro area (especially Greece, Portugal and Ireland) has been less than satisfactory and has resulted in creating financial instability in the entire Euro Zone.
    • This agency should be independent. Proposed agency is under the supervision of central government.
    • State debts are managed by RBI. PDMA under central government have implication for federal structure of India.

    10) Despite government initiatives like Make in India, Skill India and FDI liberalization why is Industrial Growth not showing any signs of recovery. What steps should be taken by Government to improve this situation?

    Source: http://www.livemint.com/Opinion/ky2TV2vS2grHtjQXz2IIXN/Indias-manufacturing-opportunity.html

    http://www.livemint.com/Opinion/mQqYAAL52lvVUqdIkeLTON/Shaping-the-future-of-manufacturing-in-India.html

    http://www.dnaindia.com/money/report-why-are-private-sector-companies-not-investing-2231479

    Even though Government has taken several steps in Recent Years Like Make in India, passing of Bankruptcy law, Labor law reforms, FDI liberalization to ease the Process of Doing Business in India and give a boost to Industrial Sector still the recent data shows that The IIP has fallen to a 10-year-low in the first five months of the current fiscal from April to August. It is a negative 0.27 per cent, the lowest since 2007-8. This is even lower than the level reached during the Lehman crisis of 2009.

    Reasons behind this trend

    1. Demand is not in a comfortable trajectory: Demand is the major factor to attract the industrial investment and for the growth of the industrial sector at the faster rate. Private final consumption is growing at 7%-8%. This is not lucrative for the Indian economy because we have lot of potential to grow faster.
    2. Over-leveraged Private Sector in India: Thus they do not have resources to initiate new investment.
    3. Industries are still not phasing out capacity shortage which is why they are still not investing. Capacity utilization is not as expected.
    4. The continuing slump in global demand .
    5. Slow growth in Agriculture which Converts into  lack of demand for industrial Goods.
    6. Depreciation of Chinese Yuan is making Indian

    Ethics Questions

    Q.11) You are a district level officer, in charge of Civil Supplies. You are to ensure proper functioning of Public Distribution System (PDS) through which essential commodities like wheat, Rice, Sugar, Kerosene are distributed at a subsidized rate. Every shop has vigilance committee comprising of ration card holders, but still there are confirmed reports of black marketing of essential commodities. Field level supply officials are in collusion with shopkeepers and it is alleged that they get a monthly cut as illegal money. You want to improve the supply system. 

    (a) What are the various options before you?

    (b) Examine the merits and demerits of each option and choose the option which you would adopt, giving reasons.

    The various leakages in the public distribution system (PDS) through collusion between distributors and through black marketing pose a serious condition. In the above case, the various options before the district level officer are-

    1. Officials from one sectors be deputed to other sectors and be asked to make surprise checks.
    2. It is important to carefully assess the stage at which leakage is occurring. This is possible through GPS tracking of the system. GPS signals on the top of vehicles intended to carry the good grains and other essential items will help to track the leakage at correct stage. However, it requires technological investment to make the whole system function properly and also it should be done only on pilot bases.
    3. A roster of vigilance committee be made and rotated every three months.
    4. The appropriate option to ensure that there is a reduction in the leakages, direct transfer of subsidy in the account of the beneficiaries can be the choice. But, it requires opening up of bank accounts of all beneficiaries and is a cumbersome procedure. But once in functioning properly, it will be effective in the longer run.

    Thus, the best course of option is to carry out the investigation so that the guilty can be punished, it is essential to carry out GPS tracking of the vehicles and the direct transfer of money in the bank accounts of the beneficiaries will reduce the corruption and make the system effective.

    Q.12 What are the seven principles of public life? Why they have become so relevant in present situation?         (150 words) (10 Marks)

     There are various integral principles of public life which help a civil servant to perform his duties efficiently and effectively. In this regard, seven principles of public life were recommended by a committee headed by Lord Nolan during prime minister ship of John Major in 1994. They are

    (1) Selflessness – Public Servants should perform their actions only in public interest and not in their own, family, friend, interest.

    (2) Integrity – Holders of public office should not place themselves under any financial or other obligation that may come in their performance of duty.

    (3) Objectivity – Decisions should go strictly on merit in accordance with facts, rules, procedures etc.

    (4) Accountability – Holders of public offices are accountable for their actions and decisions to set out institutions and should be prepared for scrutiny.

    (5) Openness – They should be as open as possible for their decisions and actions. Every decision should be based on reason.

    (6) Honesty – Public Servants should be honest and they should declare any private interest relating to their public duty.

    (7) Leadership – They should promote and support these principle by setting examples and through leadership traits.

    These principles have become very significant in view of erosion of standards in public life. Today, the values have declined in governance, as a result, the effect is corruption and poor governance. It is important to imbibe these principles in the life of a public servant. They need to be imbibed with values such as honesty, integrity, selflessness and accountability.

  • Part 3 | Important Cash Crops and Plantation Crops in India

    A) Important Cash Crops

    Under cash crops, those commercial crops are included which are produced by farmers mainly to earn money. The cash crop is often not consumed by the farmer himself. Some important cash crops have been discussedbelow in detail:

    1. Sugarcane

    • Geographical Conditions of Growth:
      • It is a tropical as well as sub-tropical crop.
        • Sugarcane in North India is of the sub-tropical variety and has low sugar content. Also sugar factories have to remain shut in winter seasons in North India. Also, sugarcane juice begins to dry up because of the long dry season in north India.
        • Sugarcane in South India is of the tropical variety and high sugar content and high yield.
      • It grows well in hot and humid climate with a temperature of 21°C to 27°C and an annual rainfall of 75-100cm.
      • Medium and heavy soils where irrigation facilities are available are ideal for its cultivation.
      • It can be grown on a variety of soils and needs manual labour from the time of sowing to harvesting.
      • It is a long maturing crop planted between February and April. Harvesting begins in October and November.
      • It is a soil-exhausting crop and thus needs regular application of manure or fertilisers.
    • Important Producing Areas:
      • India is considered the original homeland of sugarcane and has the largest area under sugarcane in the world.
      • India is the second largest producer of sugarcane only after Brazil.
      • The major sugarcane producing states are Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Bihar, Punjab and Haryana.

    2. Cotton

    • India is believed to be the original home of the cotton plant.
    • It is also one of the most important industrial crops of India.
    • Geographical Conditions of Growth:
      • Cotton grows well in the drier parts of the black cotton soil of the Deccan plateau. It can also be grown on alluvial and red soils.
      • It requires high temperature (20-35°C), light rainfall (50 to 80cm) or irrigation, 210 frost free days and bright sunshine for its growth. Clear sky during the picking season is ideal.
      • It is a Kharif crop and requires 6-8 months to mature.
    • Important Producing Areas:
      • India is the fourth largest producer of cotton in the world. China, USA and Pakistan grow more cotton than India.
      • Cotton is cultivated in about 45% of the total sown area in the country.
      • The major cotton producing states are Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Andhra Pradesh, Tamil Nadu, Punjab, Haryana and Uttar Pradesh.
    • Important Varieties: India produces both short staple (Indian) cotton and long staple (American) cotton. American Cotton is called ‘Narma’ in the north-western part of the country.

    3. Jute

    • It is also known as the golden fibre and is India’s major cash crop.
    • Jute fibre is obtained from the inner bark of the jute plant.
    • It is used in making gunny bags, mats, ropes, yarn, carpets and other artefacts. Jute cultivation in India has recently suffered due to reduced demand as a result of increasing competition with artificial fibre and packaging material.
    • Geographical Conditions of Growth:
      • It is a soil-exhausting crop like sugarcane and lowers soil fertility rapidly. It thus grows well on the well drained fertile soils in the flood plains where the soils are renewed every year.
      • High temperatures (24°C to 35°C), heavy rain (125 – 200cm) and low plain land are favourable conditions for the cultivation of jute.
    • Important Producing Areas:
      • West Bengal (largest producer in India), Bihar, Assam, Orissa and Meghalaya.
      • India is the largest producer of jute in the world.
    • Important Varieties: Mesta

    4. Tobacco

    • Tobacco was brought to India by the Portuguese.
    • Uses: Its leaves are used in making cigarettes, cigar, beedi etc. Its stem is used as potash fertilizer and its powder as an insecticide.
    • Geographical Conditions of Growth:
      • It requires temperatures of 15°C to 40°C and rainfall of about 50cm or irrigation facilities. More than 100cm of annual rainfall and frost is harmful for the crop.
      • Fertile soils with good drainage are ideal as it is an exhaustive crop
    • Important Producing Areas:
      • Gujarat, Andhra Pradesh, Karnataka, Tamil Nadu and Bihar.
      • More than 1/3rd tobacco of the country is produced by Andhra Pradesh alone.
    • Important Varieties: Nicotina Tabacum and Nicotina Rustics. Virginia tobacco used for making cigarettes and Dale Crest varieties are grown in Andhra Pradesh.

    5. Oilseeds

    • Main oilseeds produced in India include groundnut, mustard, coconut, sesasmum (til), soyabean, castor seeds, linseed, and sunflower.
    • Uses – Most of these are edible and used as cooking mediums. Some of these are also used as a raw material in the production of soaps, ointments and cosmetics.
    • Geographical Conditions of Growth:
      • Most oilseeds are grown as dry crops or in association with other crops e.g. mustard is grown with wheat.
    • Important Producing Areas:
      • India is the largest producer of oilseeds in the world. About 20% of the world’s oilseed producing area is in India.
      • Different oilseeds are grown covering approximately 14% of the total cropped area of the country.
      • Major oilseed producing areas are the plateau of Malwa, Marathwara, Gujarat, dry areas of Rajasthan, Telangana and Rayalseema regions of Andhra Pradesh.
      • Madhya Pradesh ranks first (31%) in the total oilseeds production and is followed by Rajasthan and Gujarat.
      • The smaller oilseeds are grown mainly in the north (Gujarat, MP, Rajasthan, Punjab and Haryana) and the larger seeds in the south mainly Kerala, Tamil Nadu, Andhra Pradesh and Karnataka. A list of particular oilseeds and their producing states:
        • Coconuts – The southern coastal region in the states of Kerala, Tamil Nadu and Andhra Pradesh.
        • Castor seed – Gujarat
        • Linseed – Chhattisgarh
        • Soya beans – Madhya Pradesh
        • Mustard and rapeseeds – Rajasthan
        • Sunflower – Karnataka, Maharashtra and Andhra Pradesh

    B. Important Plantation Crops

    1. Tea

    • It is an important beverage crop introduced in India initially by the British.
    • Geographical Conditions of Growth and Production:
      • The tea plant grows well in tropical humid and subtropical humid climates endowed with deep and fertile well-drained soils, rich in humus and organic matter.
      • 150cm summer rain and 21°C to 27°C daily temperature are needed for its cultivation.
      • Tea bushes require warm and frost-free climate all through the year.
      • Frequent showers evenly distributed over the year ensure continuous growth of the tender leaves.
      • Tea is often cultivated on the hill slopes so that there is no waterlogging in its roots.
      • Its leaves are to be plucked several times in a year, so availability of abundant and cheap labour is essential for its cultivation.
    • Important Producing Areas:
      • Assam, hills of Darjeeling and Jalpaiguri districts, West Bengal, Tamil Nadu and Kerala. Apart from these, Himachal Pradesh, Uttaranchal, Meghalaya, Andhra Pradesh and Tripura are also tea producing states in the country.
      • India is the leading producer as well as exporter of tea in the world. 28% tea of the world is produced here.

    2. Coffee

    • Geographical Conditions of Growth:
      • Coffee is a tropical plantation crop.
      • 16° – 28°C temperature, 150-250cm rainfall and well-drained slopes are essential for its growth.
      • It grows on hilly slopes at the height of 900-1800m.
      • Low temperature, frost, dry weather for a long time and harsh sunshine are harmful for its plants.
      • Coffee plants grow better in the laterite soils of Karnataka in India.
    • Important Producing Areas:
      • India contributes about 4% of the world’s total coffee production. It ranks 6th in the world in coffee production.
      • The coffee plant was grown for the first time on the Baba Budan Hills (Karnataka) in India.
      • At present, more than half of the total coffee production in India is produced by Karnataka alone, followed by Kerala and Tamil Nadu.
    • Important Varieties: The Arabica variety initially brought from Yemen is produced in the country.