NIOS Environment Complete Compilation

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Developing countries say act now for ambitious climate deal(Environment , GS Paper 3)

Right from the opening plenary of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) on June 1, it is becoming increasingly apparent that pre-2020 ambition is going to be a key focus area in the ongoing negotiations.
In his opening remarks, COP President-Designate Laurent Fabius highlighted four pillars that would underpin success in Paris—a universal, legally-binding agreement; comprehensive and ambitious INDCs; adequate and reliable finance, technology and capacity-building for implementation; and the role and contribution of non-state actors. He also drew attention to the criticality of arriving at a decision on pre-2020 action for adoption in Paris.
Solidarity among developing countries
At a side event, lead negotiators from Africa, China and India reiterated their solidarity in raising the concerns and demands of the developing world.
Seyni Nafo, spokesperson for the African Group, highlighted three priorities of African countries for the current Bonn session.
  • A clearer, streamlined agreement text, which includes all concerns of developing countries, must be achieved.
  • The financial commitment of US$100 billion needs to be mobilised. No developed countries have indicated any support—financial or technical—for post-2020 action in their INDCs till date.
  • Clarity must be achieved on what is going to happen between now and 2020. Developed countries need to implement considerable mitigation actions to make sure the burden of mitigation is not transferred to developing countries post-2020.
Su Wei and Ravi Shankar Prasad, heads of the Chinese and Indian delegations respectively, also reiterated that pre-2020 actions should be the first step towards the Paris agreement.
The lead negotiators also mentioned that for the first time, there were informal discussions among all the developing countries a day before the start of the ADP session. This was an important step for reconciling of priorities and demands of the most vulnerable countries.
The unity of developing countries is very critical, particularly of G77, to ensure that the needs of the most vulnerable communities are heard in the negotiations.
Why is pre-2020 ambition important?
As per the IPCC fifth assessment report, for the world to have a greater than 66 per cent probability of staying below 2°C, we are left with a carbon budget of about 1,000 Gt CO2e. Considering that the total emissions from the world are about 40 Gt of CO2e per year, unless there are substantial mitigation measures in the next 5 to 6 years, the world could exhaust about a quarter of the remaining carbon budget even before the post-2020 climate agreement becomes operational.
The remaining carbon space is essential for sustainable development of developing countries for producing food, building houses and low-carbon infrastructure. Carbon space will be required for the billions in Africa, Asia and Latin America to fight poverty.

Fight against hunger too slow and uneven (Gs Paper 2)

The Millennium Development Goal of halving the proportion of chronically undernourished people in developing countries by 2015 is within reach. But progress must accelerate by the end of this year

Almost 800 million people, or one in nine in the world, continue to suffer from hunger. The number of hungry people has declined globally by more than 167 million over the last decade, and by more than 200 million since 1991; 780 million of the chronically hungry are in developing countries, where their share has declined from 23.4 per cent in 1991 to just under 13.0 per cent at the end of 2014.
Thus, according to the latest State of Food Insecurity in the World (SOFI 2015) report, the Millennium Development Goal (MDG) of halving the proportion of chronically undernourished people in developing countries by 2015 is within reach, but only if progress accelerates sufficiently by the end of this year.
Progress too slow

At the 1996 World Food Summit (WFS), heads of government and the international community committed to reducing the number of hungry people in the world by half. Five years later, the MDGs lowered the level of ambition by seeking to halve the proportion of the chronically undernourished.
By the end of 2014, 72 developing countries had reached the MDG Goal 1 target. Of these, 29 have also achieved the more ambitious WFS goal. However, the number of hungry people in the world has only declined by a fifth from the billion estimated for 1991.
…and uneven

Overall progress has been highly uneven. Some countries and regions have seen only slow progress in reducing hunger, while the number of hungry has even increased in several cases.
In sub-Saharan Africa, more than one in four people remains chronically hungry, while Asia, the world’s most populous continent by far, is also home to over half a billion hungry people. Meanwhile, Latin America, the Caribbean, East and Southeast Asia have significantly reduced both the share and the number of undernourished. Most countries have reached the MDG target. West Asia and Central Africa have seen a rise in the share of the hungry compared to 1991, while progress in sub-Saharan Africa, South Asia and Oceania has not been sufficient to meet the MDG hunger target by 2015.
Lessons from experience

While there is no one-size-fits-all solution for how to improve food security, SOFI 2015 identifies several factors that have played a critical role in achieving the hunger target.
Growth needs to be inclusive to reduce poverty and hunger. Access to food has improved rapidly and significantly in countries that have experienced inclusive economic growth, notably in East and South-East Asia. Better performers in Africa met the MDG hunger target while those that made slow progress did not.
Raising the productivity of family farmers can be an effective way out of poverty and hunger by increasing net incomes and in town investments for further improvements. improved agricultural productivity, especially by small holder family farmers and incomes, leads to poverty and hunger reduction.
Economic growth is usually helpful as it can expand the fiscal revenue base, including to finance social transfers and other assistance programmes. In Latin America and South Asia, social protection has made the difference, especially for the rural poor, who comprise 78 per cent of the poor globally.
The expansion of social protection — cash transfers to vulnerable households, food vouchers, health insurance or school meal programmes — correlates strongly with progress in hunger reduction. Besides the direct impact on relieving hunger and poverty, social protection can enable those with fewer assets to boost their incomes, and invest more, thus enhancing their resilience.
SOFI 2015 estimates that some 150 million people worldwide have escaped extreme poverty thanks to social protection. However, more than two-thirds of the world’s poor still do not have access to regular social support. Transfers help households manage risk and mitigate shocks that would otherwise trap them in poverty and hunger.
With the number of undernourished people remaining “unacceptably high”, the need to strengthen the political commitment to eliminate hunger cannot be overemphasised. The pledges of the Community of Latin America and the Caribbean at its 2013 summit and of the 2014 African Union summit to end hunger in their respective continents by 2025 are very encouraging. In 2015, the governments of the world are expected to strengthen financing for development, commit to the post-2015 Sustainable Development Goals and ensure the needed collective action to address global warming. SOFA 2015 is a timely reminder of the enduring legacy of needless hunger and poverty which we must eliminate by 2030.
(Jomo Kwame Sundaram is the Coordinator for Economic and Social Development at the Food and Agriculture Organization and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.)

GST: Good for business, snag for federalism?(GST , GS Paper 3,Economy ,Tax)

It might be useful to begin by quickly summarising the business case for GST.
The GST is a tax reform that has been on the cards for more than a decade. In principle, it is the same as the Value-added Tax (VAT) — already adopted by all Indian States — but with a wider base. While the VAT — which replaced the sales tax — was imposed only on goods, the GST will be a VAT on goods and services.
In the current tax regime, States tax sale of goods but not services. The Centre taxes manufacturing and services but not wholesale/retail trade. The GST is expected to usher in a uniform tax regime across India through an expansion of the base of each into the other’s territory. This is why a constitutional amendment was necessary — to give concurrent powers to both the States and the Centre to make laws on the taxation of goods as well as services.
Not surprisingly, the economic arguments trotted out in favour of the GST are basically the same as were given two decades ago for the introduction of VAT. These are twofold.
First, the GST, by subsuming an array of indirect taxes under one rubric, will simplify tax administration, improve compliance, and eliminate economic distortions in production, trade, and consumption. Second, by giving credit for taxes paid on inputs at every stage of the supply chain and taxing only the final consumer, it avoids the ‘cascading’ of taxes, thereby cutting production costs, and making exports more competitive. According to the Union Finance Minister Arun Jaitley, thanks to these efficiencies, the GST will add 2 per cent to the national GDP.
Only time will tell whether the GST will have a positive impact on the GDP. But there is one thing the GST will not have a positive impact on: the States’ fiscal, and therefore, political autonomy.
A losing proposition for the States?
Things don’t look all that dire on paper. As per what’s being referred to as the GST Bill – which is actually the Constitution (122 amendment) Bill, 2014 — passed in the Lok Sabha last month, India will have not a single federal GST but a dual GST, levied and managed by different administrations. The Centre will administer the central GST (CGST) and the States, the SGST. The monitoring of compliance will also be done independently at the two levels.
However, as Kavita Rao, professor at the National Institute of Public Finance and Policy (NIPFP) and member of one of the Working Groups constituted on GST by the Empowered Committee of State Finance Ministers, points out, when you move to a GST regime in a federal set-up, some curtailment of the State’s freedom is inevitable. “All goods and services will be divided into certain categories. The rates will be fixed by category, and if I am a state, I cannot shift a commodity from a lower to a higher rate, or put it in the exempt category.”
This is not the only limitation. The rates for both, the CGST and the SGST, will be fixed by the GST Council, whose members will be State finance/revenue ministers and chairman will be the Union finance minister. Once the rates are set by the GST Council, individual States will lose their right to tax whichever commodities they want at the rates they want.
This development needs to be viewed in the context of a steady erosion in the states’ freedom to decide on taxes and tax rates. The economist Prabhat Patnaik points out, “According to the Constitution, the States have complete autonomy over levy of sales taxes, which, on average, accounted for 80 per cent of their revenue. An attempt was made to curtail this autonomy with the introduction of VAT. But it did not totally succeed because the VAT still had four different rates that states could play with. But with the GST, which mandates a uniform rate, even this limited autonomy would be gone.”
In other words, while the loss in revenue of the States may well be compensated by the Centre (as provided for in the GST Bill), how does one make good a State’s loss of the political right to fix its own tax rates?
Ms. Rao believes this is not necessarily a bad thing. “Individual States are always catering to some interest group or another. By placing limits on what they can do, we are effectively empowering them to resist interest group politics, where someone or other is always lobbying for concessions or exemptions.”
But this is a problematic argument. “The underlying assumption here,” says Mr. Patnaik, “is that political representative bodies are irresponsible. So give them less power, less discretion. This is a fundamentally anti-democratic vision of development.”
Moreover, the restrictions imposed by a uniform tax regime could adversely impact States that may be more committed to welfare expenditures. “The AIADMK or the Left Front or Mamata Banerjee may have their own development philosophies,” says Mr. Patnaik. “In order to express these philosophies, you have to be able to control your tax revenue. Why should I give up this right which I already have — and be sitting in some Council where I will be outvoted by other states or the Centre telling me what I can or cannot do?”
Perhaps it is to allay this concern that the draft GST bill speaks of the GST Council fixing not just rates but “rates including floor rates with bands”. A band would, at least on paper, give some room for states to vary their rates depending on their need.
A floor-rate-with-band model (as opposed to a uniform rate) of GST is also what Ms. Rao is rooting for. “To my mind, it is the procedures, definitions, and credit rules that should be uniform for a harmonised tax regime. We should let the States figure out what rates they want.”
However, a GST regime where each State has a different tax rate for different goods and services doesn’t sit well with the industry demand for a single national market with a uniform tax regime. Besides, if rates will be different, the taxes will be dual, and the dual taxes will be administered independently by the States and the Centre, why not just streamline the existing tax architecture instead of erecting a new one?
The social dimension
The answer to this question leads us to the other aspect of the GST, to do with why it started to get widely adopted (as VAT) from the 1970s, paralleling the rise to global dominance of neo-liberal economic thought.
The GST, even in the diluted version proposed in the GST Bill, would still accomplish one thing: widen the tax base and make it identical for both the Centre and the States. That is because, unlike, say, an excise duty (whose base consists of manufacturers) the GST is paid only by the final consumer. The seller of the good or service remits this GST to the State after deducting the taxes already paid by him earlier in the supply chain.
In other words, while the GST, like all indirect taxes, is a tax on consumption, in seeking to institute a uniform rate on all forms of consumption, it tightens the tax net — currently riddled with numerous holes in the form of multiple rates and exemptions and classifications — in addition to widening it.
Many countries that have embraced the GST have also exempted essential commodities from it, or kept lower rates for select goods. But the very logic of GST is such that it works best when the exemptions are zero or minimal. New Zealand comes closest to the GST purist’s dream — with very few exemptions. Once implemented — in however compromised a form — this is the direction GST regimes gravitate toward: fewer exemptions, higher rates. New Zealand introduced GST at 10 per cent — today it is 15 per cent. In the countries where the GST rate was reduced over time, it was made possible by a broadening of the base by minimising exemptions.
This brings us finally to the question that has monopolised the GST debate of late: what should be the taxation rate? The report of the 13th Finance Commission’s Task Force on GST recommended 12 per cent (7 per cent for SGST and 5 per cent for CGST). That was in 2010. In 2014, a panel of State government representatives mooted a revenue-neutral rate or RNR (rate at which tax revenues for states and the Centre will remain the same as before GST) of 27 per cent ( 12.77 per cent and 13.91 for CGST and SGST respectively.
Both these rates might be unrealistic. A 12 per cent GST will most definitely mean substantial revenue losses for states, as the general VAT rate for many states hovers around the 13-14 per cent mark. And from this week, the service tax (levied by the Centre) has gone up from 12.36 per cent to 14 per cent, a move, ironically enough, intended to smoothen the transition to a GST regime.
A GST rate of 27 per cent, on the other hand, would impose an enormous tax burden on the wage-earning classes, and could prove fatal for any elected government. Understandably, Mr. Jaitley has been quick to clarify that the GST rate would be much lower than 27 per cent.
In fact, the ideal way to bring down the GST rate without incurring revenue losses is to widen the base by including as many goods and services under its purview as possible. But this could mean that some essential goods currently taxed at a lower rate could end up being taxed at a higher rate under a GST, but it would hit the lower income groups harder.
This might explain why in some developed countries, including Canada and Australia, the introduction of the GST was opposed fiercely by the local working classes, especially the trade unions. The resistance to it was so strong in Canada that the then Prime Minister Brian Mulroney had to invoke an obsolete, colonial era provision of the Constitution — drawing on special powers of the Queen — to get the law passed in the Senate.
At any rate (pun unintended), the GST can only be implemented, believes Ms. Rao, by “a leap of faith”. She elaborates, “You can’t do a calculation to the last penny and say only at this revenue-neutral rate will I implement GST. It has to be acceptable to the masses, because at the end of the day, it is the average citizen who has to cough up the money.”
The shift towards indirect taxation
Around the world, governments, faced with declining tax revenues, and too fearful that higher corporate taxes will lead to capital flight (or capital slumber), have been turning their attention to indirect taxes, which have a wider base than direct taxes, are more difficult to evade, easier to administer, and not income-dependant beyond a point.
It’s because the poor and the working classes spend a greater proportion of their income on essential consumption compared to the classes that are better off, that indirect taxes are considered regressive compared to direct taxes, which are typically proportional to the ability-to-pay. India isn’t immune to this global shift in favour of indirect taxation, accompanied by lower taxes on capital and reduced social spending.
The National Democratic Alliance government has already ticked two of those boxes. The 2015-16 budget, which fixed a roll-out date for GST (April 1, 2016), also abolished the wealth tax, and announced a lowering of corporate tax rate from 30 per cent to 25 per cent over a four-year period. According to Mr. Patnaik, the same budget also grants direct tax concessions to the tune of Rs. 8,315 crore, while planning to raise Rs. 23,38 crores through indirect taxes.
This is despite that fact that India’s direct taxes contribute only 37.7 per cent of total tax revenue, according to a 2013 study by the Center for Budget and Governance Accountability — which makes India’s taxation regime already more regressive than that of other emerging markets such as South Africa (57.5 per cent from direct taxes) or Indonesia (55.85 per cent). When the third box, the GST, is ticked, it could become even more so.
Keywords: GST, Goods and Services Tax

Under-armed and under prepared (Defense,Essay)

Some would argue that India, a country with such a huge number of the poor, should be spending more on development than on defence. But development cannot exclude security imperatives because India is in one of the most hostile nuclear weapon regions of the world

Last week, the government announced the appointment of S. Christopher as the new head of the Defence Research and Development Organisation (DRDO). His predecessor, missile scientist Avinash Chander, was unceremoniously dumped on January 13 this year, with 16 months still left of his tenure. It took the government over four months to find his replacement. Reportedly, most of the other senior Director Generals of the DRDO are also on extension, unsure of when the axe may fall.
The DRDO was set up in 1958 as the fulcrum of India’s indigenous defence production. However, its performance, or the lack of it, must count as one of the biggest uninvestigated scandals of independent India. Among its notable failures is the production of the Light Combat Aircraft (LCA), which was commissioned over a decade ago but ran years behind schedule with a cost overrun of over Rs.5,000 crore. The aircraft’s Kaveri engine was commissioned over two decades ago; it ran over 15 years behind schedule with similarly high cost overruns. Other projects allocated to the DRDO, such as the Airborne Early Warning and Control (AEW&C) System, the naval version of the LCA, the Long Range Surface to Air Missile (LRSAM), and the Advanced Lightweight Torpedo (ALWT) have all missed deadlines by several years.
Nothing to cheer about

The performance of our public sector units handling defence has been equally scandalous. Hindustan Aeronautics Ltd. (HAL) could not rectify simple design faults in the HPT-32 basic trainer aircraft, forcing the Indian Air Force (IAF) to import propeller driven trainers. The Intermediate Jet Trainer (IJT) prototype is nowhere close to flying, and the Light Combat Helicopter and the multi-purpose civilian aircraft, Saras, have forever been in the pipeline. Our ordnance factories are similarly languishing. The Nalanda ordnance factory, in collaboration with an Israeli company, is reportedly only a fourth complete. The commitment to indigenously supply 1,000 T-90S main battle tanks to the Indian Army could not be met because the project failed. Indian-made 125 mm smooth bore barrels for the T-72 tanks also reportedly failed because the barrels blew up during field trials.
The DRDO had set itself the aim of producing 70 per cent of our defence needs by the year 2005. Today, a decade later, its production is still lackadaisically hovering around 30 per cent — and much of what emerges from its factories is put together with “screwdriver” technology. In 2008, the Rama Rao Committee had recommended that the DRDO should only focus on 8 to 10 critical projects of strategic importance. Such recommendations have been thrown to the winds, and the country’s premier defence production company continues to focus its energies on esoteric products like dental implants and mosquito repellents!
As arms importer

To see a nation with global aspirations blundering so egregiously when it comes to meeting critical defence requirements is nothing short of treason. As a result of our woefully inadequate defence production, India has become the world’s largest importer of arms. In contrast, China, with a much bigger arsenal, has dropped to fourth place because its internal defence production has been efficiently upgraded. Apart from the exorbitant burden arms imports place on our exchequer, an overdependence on imports has grave security implications. In his book on the Kargil war, General V.P. Malik, who was then the Army chief, mentions that two years before the Pakistani invasion, the Army had finalised imports of AN/TPQ-37 Firefinder radars from the United States. “Prices were negotiated and just before purchase, DRDO offered to manufacture them at half the price and within two years. The government shot down the army’s plans to buy those radars. In 1999, during the Kargil war, the radars were desperately needed. Neither had the DRDO manufactured them nor could they be purchased from the US (post the 1998 Pokhran nuclear tests there was an arms embargo). Several lives were lost in Pakistan shelling (as a result).”
A decade and more later, nothing had changed. Another Army chief, General V.K. Singh (who is now a Union Minister of State in the government) was compelled to write in March 2012 a letter directly to the then Prime Minister in which he bluntly stated that the war-waging capability of the Army had been “seriously degraded” because of delays in critical procurements. According to him, reserves of vitally needed anti-tank ammunition had fallen below critical levels because the Israeli firm supplying them had been blacklisted because of alleged kickbacks; artillery equipments were stalled for a similar reason, and emergency replacements sought to be obtained from the U.S. Army were still awaiting approval from the Ministry of Defence’s bureaucracy. At that time, the nation was facing a peculiar double jeopardy: we could not produce what we needed internally, and we could not import — in time and efficiently — what we needed to buy from abroad because of a “morality paralysis” that sought to ban every major foreign supplier on the basis of uninvestigated allegations. Obviously, defence purchases must be corruption-free but, equally, defence ministers must have the guts not only to be concerned about their own personal integrity but also about the crucial security interests of the nation.
Comparison with China

Our lack of offensive and defensive weaponry becomes even more glaring when compared with that of our potential enemies. For instance, China’s arsenal of Intercontinental Ballistic Missiles (ICBM), battle tanks, latest tactical aircraft and armoured infantry fighting vehicles far outnumber ours, as does its border infrastructure. The importance for us to keep this gap within sustainable limits is self-evident, especially since we cannot rule out a war in the future in which China and Pakistan work in tandem. Opponents of adequate investments in armaments argue that a country with such a huge number of the poor should be spending more on development than on defence. It is the old guns versus butter argument. The obvious riposte to this is that India needs to pursue both development and defence efficiently and it cannot be one or the other. A country’s security is imperilled if its economy is suboptimal and the deprivations of the poor are not attended to. Equally, development cannot exclude security imperatives because we are in one of the most hostile nuclear weapon regions of the world. We have 4,057 kilometres of a disputed Line of Actual Control (LAC) with China; a 778-kilometre-long disputed Line of Control (LoC) with Pakistan; a total of 15,106 kilometres of international borders with seven countries, and a 7,516-kilometre long vulnerable coastline. It would be suicidal for any nation to ignore security concerns in such a situation.
The fact of the matter is that we neither pursue development nor security efficiently. China spends more than twice what India does on its armed forces, yet its defence expenditure, as a percentage of its GDP, is lower than that of India (1.3 against 1.89, as per revealed figures). The Chinese economy has grown at a faster pace, and its defence budget, although larger, is more efficiently used. Arms imports have come down dramatically. Russia and Ukraine are the only outside suppliers of China’s weaponry, most of which is now produced at lesser cost at home. If India had pursued its indigenous arms production effectively, we could have had by now one of the world’s largest military-industrial complexes, and could be exporting arms and using that income for development.
Not much impact

The new Bharatiya Janata Party-National Democratic Alliance (BJP-NDA) government came with a muscular resolve to strengthen India’s defence abilities. This resolve was particularly evident in its strident critique of the United Progressive Alliance (UPA) regime. However, for five months after the new government assumed power last year, the country did not even have a full-time Raksha Mantri, with Mr. Arun Jaitley inexplicably holding the dual charge of both finance and defence. The government did announce an increase from 26 per cent to 49 per cent for foreign direct investment (FDI) in the defence production sector but this may not be very attractive to investors who will seek majority control. Moreover, the Defence Technology Commission, set up as a commercial arm of the DRDO to attract investments, is yet to take shape. The “Make in India” slogan for defence production means little unless it is part of a credible policy framework. It is also not known whether the national technology council to be chaired by the Defence Minister with representation by private companies engaged in the production of arms and defence equipment, as was recommended by the Naresh Chandra Task Force, is going to see the light of day. According to estimates, some Rs.30,000 crore is required only to end the perennial shortage of artillery and ammunition. Where is this money to come from if the government’s priorities are to spend double this amount on bullet trains? Important steps also need to be taken to create a more effective procurement policy. The Rafale fighter aircraft deal is, I believe, an outright purchase and does not involve the transfer of technology. And, finally, it is time that specialists from the armed forces have a much greater say in the entire defence production process, but there is no sign that this is happening. The short point is that, whatever the rhetoric, India lacks a strategic mindset to tackle its defence preparedness and this government has been, thus far, not any different, and certainly much too slow in changing past approaches.
(Pavan K. Varma, an author-diplomat, is a member of the Rajya Sabha representing the Janata Dal-United.)
Keywords: DRDO, India’s defence spending

Against the grain(Polity,HInduEditorial,GS Paper 2)

At a time when the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015 is being examined by a joint committee of Parliament, the promulgation — for a third time — of an Ordinance shows scant regard on the part of the Narendra Modi government for democratic norms. Despite public expressions to the contrary by even Mr. Modi, the BJP-led NDA government appears disinclined to concede any ground to the Opposition on its key demands to restore clauses relating to consent and social impact assessment that were integral to the 2013 Act. Not surprisingly, therefore, Opposition MPs on the joint committee are planning to disassociate themselves from it. Sitaram Yechury, CPI(M) general secretary and a member of the committee, has described the re-promulgation of the Ordinance as “absolutely untenable constitutionally in a democracy”. Even as the ruling dispensation shows no sign of relenting, murmurs of unhappiness have come from within the BJP itself, especially from MPs who represent rural constituencies. In fact, at the first meeting of the joint committee some BJP members, worried about the political fallout of the proposed changes, expressed their concern. Even the BJP’s NDA allies, the Shiromani Akali Dal and the Shiv Sena, have raised questions about the wisdom of persisting with such an unpopular move.
Evidently, the Modi government misread the signs: for even senior officials who see merit in the proposed changes (as they feel it would simplify land acquisition and put infrastructure projects on the fast track) say the government should have engaged the Opposition in a discussion before bringing the Bill forward. It should have also, they add, conducted a countrywide exercise of opinion-making before attempting to initiate changes. Now, the Opposition, led by the Congress, has had sufficient time to run its campaign against the government-sponsored changes. Reports from the ground suggest that a substantial swathe of the population believes the government draft goes against the interests of the rural poor and is anti-farmer. Unfortunately for the government, all this has coincided with unseasonal rain that has damaged crops, and a hike in fertilizer prices. Yet, the minimum support price for crops has not been increased commensurately. Taken together, the message is that this is indeed a suit boot ki sarkar — in Congress vice-president Rahul Gandhi’s shorthand — that does not care for the agricultural class; it just wants a land law that would favour the corporate rich. The ruling dispensation’s plan to call a joint session after the current Land Bill is defeated in the Rajya Sabha, flies in the face of pragmatic politics, as it would just give the Opposition even more ammunition. The only explanation is that its numbers in the Lok Sabha have blinded the government to the predominant national mood.
Keywords: re-promulgation of land ordinance, Budget Session of Parliament, Land Acquisition Bill

Beyond the rate cut(RBI,GS Paper 2, )

The 25 basis-point cut announced in the repo rate, the rate at which the Reserve Bank of India lends to banks, was indeed on expected lines, although there might be some disappointment with regard to the quantum of the reduction. Why is the RBI playing so cautious, however? The reasons are not far to seek. The banking sector, which has been struggling to bring down the bad loan load, has shown a certain defiance when it came to passing on rate cuts to borrowers. It took a “no fresh rate cut warning” from Governor Raghuram Rajan to goad them on to cutting lending rates, however reluctantly. With the latest cut, the third this year and announced as part of the policy cycle this time for a change, the RBI appears to have given banks a fresh message. Given the level of bad loans in their books, and also considering the stress on their margins, the banks will now have to do a tough balancing act. The RBI has only limited width to go beyond taking a measured step. The central bank is still unsure if the inflation clouds have disappeared completely. Concerns over the below-normal south-west monsoon predictions, oil prices firming up amid volatility, and the ever-present geopolitical risks, appear to be bothering it. A combination of macro-numbers — such as of falling retail inflation and factory output — and political pressures has put the RBI in a spot. So it has, quite understandably, chosen to tread with caution.

Given the complexities of the Indian economy and its inter-connections with the outside world, a rate reduction by the monetary authority alone will not suffice at the present juncture. Oftentimes the RBI has indicated this in a subtle manner. The latest policy suggests that the fiscal bosses cannot avoid the onus of pushing the economy to a higher growth trajectory without inflationary consequences. “Strong food policy and management will be important to help keep inflation and inflationary expectations contained over the near-term,” the RBI has said. At the same time, it has advocated a ‘step up’ in public investment in several areas that could ‘crowd in’ private investment. To remove supply irritants and aid disinflation, public investment is critical. With stressed assets eating into its vitals, the banking industry is largely reluctant to commit itself to fresh credit exposure. “A targeted infusion of capital into scheduled public sector commercial banks… is also warranted so that adequate credit flows to the productive sectors as investment picks up,” the RBI has stated. It takes two to tango, the central bank appears to suggest. The ball is now in the government’s court.

Education loan default can impact CIBIL score(Banking,Economy , Education)

ccording to CIBIL data, the outstanding education credit, including for study within the country and abroad, stood at Rs. 63,800 crore as on March 31 this year.

Non-repayment of education loan can now affect one’s credit score, a top official of Credit Information Bureau (India) Ltd (CIBIL) has said.
“The education loans have to be paid once one completes his/her course and gains employment. Also, like any other loans and credit cards, education loans are also reported to CIBIL and get reflected in the borrower’s CIBIL Report and impact the CIBIL Trans Union Score,” said CIBIL Senior Vice President Consumer Services and Communications, Harshala Chandorkar.
CIBIL Trans Union Score is a key parameter relied on by banks while processing loan applications.
According to CIBIL data, the outstanding education credit, including for study within the country and abroad, stood at Rs. 63,800 crore as on March 31 this year.
The data released by CIBIL throws significant light on education loan trends in the country.
While the demand for educational loan is need based, the number of new loan accounts opened in calendar year are almost same over the last five years, it said.
Noting that the third and fourth quarters of each calendar year witness a spurt in education loans, the data says about 1,30,000 education loan accounts were opened in the fourth quarter of 2014.
However, the average sanctioned amount continues to grow over time, it added.
“Average sanctioned amount in fourth quarter of 2014 was Rs 6 lakh, while in fourth quarter of 2013 it was about 4.5 lakh. In recent period, loans with amount less than Rs 1 lakh has reduced below 10 per cent of total sanctions while loans with ticket size/amount of more than Rs 5 lakh have gone up to almost 30 per cent of the total sanctions.
“In fourth quarter of 2014, loans of ticket size of more than Rs 5 lakh were around 30 per cent of total sanctions while in fourth quarter of 2012, loans of more than Rs 5 lakh comprised about 22 per cent of total sanctions,” CIBIL said.
It says delinquency on education loans has decreased over the past year.
“Delinquency for 90+ days amount overdue was around 3.50 per cent in fourth quarter of 2013 which has lowered to 2.70 per cent in fourth quarter of 2014,” says the data.
Stating that bad loans from education segment are very high, the Reserve Bank’s Deputy Governor R. Gandhi had asked CIBIL and banks to “counsel” the youth on good credit behaviour during the CIBIL Trans Union Annual Conference in March, CIBIL said in a release.
Keywords: Education loan, CIBIL score, CIBIL Trans Union Score, loan processing

U.S. wins WTO poultry birdflu case against India(WTO,)

The World Trade Organization (WTO) said on Thursday that India broke international trade rules by blocking U.S. poultry and egg imports because of unsubstantiated bird flu fears, confirming a win for the United States in the dispute.
The WTO Appellate Body largely upheld a panel ruling last October that India’s import restrictions were not based on international scientific standards on animal health and were discriminatory.
U.S. officials said the win will help lower trade barriers and open new markets for U.S. farmers.
“I welcome this win, which will help us eliminate unjustified trade barriers so U.S. farmers can sell high quality U.S. agricultural products to customers around the world,” U.S. Trade Representative Michael Froman said in a statement.
The United States brought the case in March 2012. The most recent outbreak of high pathogenic avian flu in the United States was in 2004. Since then India has had over 90 such outbreaks, according to the USTR.
“This is a major win for U.S. agriculture and, in particular, the U.S poultry industry,” U.S. Secretary of Agriculture Tom Vilsack said.

(Reporting by Stephanie Nebehay in Geneva and Krista Hughes in Washington; Editing by Janet Lawrence and W Simon)

Why people die of heat stroke? All you need to know about the illness(Health, IndianExpress, In News)

There was a 61% increase in the number of deaths due to heat stroke across India between 2004 to 2013, according to National Crime Records Bureau (NCRB) data, with indications that these numbers represent a vast under-reporting and often misdiagnosed.
Heat illness may be viewed as a range of ailments related to the body’s inability to cope with heat. It includes minor problems such as heat rash (prickly heat), heat cramps, and heat exhaustion. Heat stroke is the most severe form and is defined as a body temperature higher than 41.1°C (106°F) associated with neurological (brain) dysfunction.
Exertional heat stroke (EHS) generally occurs in young individuals who engage in strenuous physical activity for a prolonged period of time in a hot and sometimes even in a not-so-hot environment. It can start as heat cramps that can be completely disabling and typically occur during or after hard work and are caused by electrolyte deficiencies that result from extended periods of intense sweating. Symptoms include painful spasms of leg, arm or abdominal muscles, heavy sweating and thirst. Drinking plenty of water or electrolyte fluids are the suitable first aid.
EHS happens when the individual’s capacity to dissipate or drive away the heat produced by overactive muscles falls short. The temperature rises to such high that the body becomes a pressure cooker and starts (am tempted to say) cooking our internal organs, inflicting severe tissue damage resulting into multi-organ failure. We frequently read news about young men (and women) collapsing and dying with no apparent reason when made to undergo severe physical excretion for endurance tests during recruitment in the Indian police force or military.
High (body) core temperatures damage the internal organs, especially the brain. The main reason is the fluid loss in the form of sweat, sometimes even ‘one and half’ liter in one hour and three liters in two hours. Along with sweat we also lose electrolytes. Enormous fluid loss can also lead to dangerously low blood volume and lead to dangerously low blood pressure. This can break down the body’s cooling system that demands increased blood flow to the skin to take away the heat from body’s core. Electrolyte imbalance adds insult to injury, causing irregularities in heart function. Most people who are killed by heat stroke die when their heart stops pumping effectively (mostly the cause of death is written as ‘heart failure, or cardiac arrest and that is why heatstroke death numbers seem so low). Even people who survive are likely to have permanent brain damage if their core temperature has been over 40.6°C (105°F) for more than an hour or two.
The risk factors for EHS in such young men and women depend on the number of active sweat-glands, acclimatization, outside temperature, humidity, hydration status and activity-related factors (duration of exercise). Acclimatization means gradual introduction of a sportsperson or a worker to the ‘outdoor’ task.