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THE GIST of Editorial for UPSC Exams : 06 JULY 2019 (Imagery addiction (Live Mint))

Imagery addiction (Live Mint)

Mains Paper 3: Science and Tech
Prelims level: Not Much
Mains level: Effects of the social media applications

Context

  • Is human communication going back to the age of hieroglyphs?
  • The outrage online on Wednesday over an image-loading crash suffered by Facebook and its other apps, WhatsApp and Instagram, would suggest so.

Effects of this addiction

  • Text messages had no problem being exchanged.
  • Neither did those reductionist little emojis.
  • WhatsApp was first littered with a hollow-eyed emoji modelled on Edvard Munch’s Scream, and then by teary laughter after Facebook took to Twitter, of all things, to issue an apology. Image files simply refused to load.
  • By the time the glitch was fixed, the internet had revealed a global addiction to pictorial expression.
  • Few seemed able to get by without the aid of some imagery in one form or another. Does this reflect a regression to olden days?
  • Or the need for a global digita franca?

Conclusion

  • Human language evolved from the grunts and groans of survival, the kind that accompany joint action taken against predators or in favour of the species’ perpetuation. Drawings came next.
  • Today, the stuff of pharaonic glory has more or less taken over our handsets.
  • Scream in emojic horror, if you must, but don’t forget to squeeze out those watery guffaws.

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THE GIST of Editorial for UPSC Exams : 05 JULY 2019 (The behavioural trend artificial intelligence will spawn (Live Mint))

The behavioural trend artificial intelligence will spawn (Live Mint)

Mains Paper 3: Science and Tech
Prelims level: Artificial intelligence
Mains level: Behavioural trend artificial intelligence

Context

  • There have been many discussions about job loses the advent of Artificial Intelligence (AI) could cause.
  • The last time the world faced this level of anxiety about job losses, was during the industrial revolution.
  • During the industrial revolution too many manual, repetitive jobs were lost to the machines.
  • There is no doubt that the advantages that AI bring to the table far out weighs its negatives. So any luddite style attempts to stop this forward march of AI is not desirable.

Historical background

  • Every societal trend like AI tend to create equally strong counter trends.
  • To understand the possible counter trends that could happen to the inevitable forward march of AI, it might be worthwhile to study the societal trends that happened as a counter to the industrial revolution.
  • Industrial revolution coincided with the advent of enlightenment age in Europe.
  • With the publication of Principia Mathematica by Issac Newton, Kepler explaining the movements of the planets, Galileo placing the sun at the centre of the universe and discovering calculus, it was believed that scientific methods could explain even the deepest truths in the universe.
  • Industrial revolution portrayed a world that was certain, rational and governed by reason. One started to realize that beyond the apparent sense of progress one was achieving with the industrial revolution, there were too many irrational, emotional aspects at play.

Current Scenario

  • Today’s scenario is quite similar to that during the industrial revolution.
  • The confidence in the efficiency of machines during the industrial revolution has now been replaced by the strong belief by the AI industry in the absoluteness of data and in the faith of algorithms and technology to make sense out of that data. Reason still rules.
  • The data is the most honest record of the past behavior of humans.
  • With increasing computational powers and improved technology AI will be able to better explain what humans have been doing.
  • But to explain why someone did what they did and to understand how their existing behaviour can be changed, the rational world of data has limitations.
  • This is the opportunity for new societal trends to emerge.

Emergence of the Neuroscience

  • Today, the field of Neuroscience has moved far ahead.
  • Neuroscience has discovered that more than 99.99% of human behaviour occurs at a non-conscious level and that the non-conscious brain is ten times faster than the conscious brain.
  • While at any point of time, the conscious brain can focus only on one task, the non-conscious can easily manage multiple tasks.
  • This means that the facet of human behaviour that the rational world has been focusing on, the conscious mind, is a very small, not so efficient dimension of human behaviour.

Understand non-conscious brain

  • It is not be easy to understand the working of the non-conscious brain. One’s consciousness has no understanding of what is happening in one’s own unconscious.
  • There is very little observable data on the happenings of the non-conscious brain. We need to develop new qualitative measures to decipher the workings of the non-conscious brain.
  • Marrying this qualitative information with the existing quantitative data about humans will be one of the interesting challenges for tomorrow.
  • The increased focus on the non-conscious processes will bring in more challenges for the corporates.
  • It was easy for corporates to monitor and manage the conscious processes of their employees.
  • But brain studies show non-conscious works best when one is sleeping or while one is relaxing. May be having a drink in a beach.

Conclusion

  • Neuroscience will remind us that all the great scientific discoveries, all great works of art and literature, all innovations that humans have witnessed so far have emanated out of the non-conscious processes of the human brain.
  • All these paradigms shifts have happened when there was very little understanding of the workings of the non-conscious.
  • It will be good if there is greater focus on the non-conscious processes of the brain as a counter trend to the emergence of AI.
  • Because more focus on the non-conscious processes will surely lead to even more innovations in the world.

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THE GIST of Editorial for UPSC Exams : 05 JULY 2019 (No home even a decade after the war (The Hindu))

No home even a decade after the war (The Hindu)

Mains Paper 2: International Relations
Prelims level: Not Much
Mains level: Refugees problem and their settlement

Context

  • A recent order of the Madurai Bench of the Madras High Court directed 65 refugees from Sri Lanka to apply for Indian citizenship.
  • This has again brought into focus the need for the two countries to resolve the long-pending refugee problem.

About the current refugee presence

  • The Sri Lankan refugee problem concerns the future of about 95,000 refugees in Tamil Nadu who fled Sri Lanka between 1983 and 2012, during the civil war.
  • Of them, around 60,000 are housed in 107 State government-run camps with substantial financial assistance from the Centre.
  • The rest are called non-camp refugees who live on their own, but are required to report to the local officials at periodical intervals.
  • Notably, Tamil Nadu provides accommodation to the largest number of refugees among States.

What is the recent case about?

  • The case before the Madurai Bench of the Madras High Court concerned 65 “stateless persons.”
  • They arrived in Tamil Nadu in 1983-85 period following the anti-Tamil pogrom (organized massacre of a particular ethnic group) of July 1983 in Sri Lanka.
  • They were mostly put up at a refugee camp in Tiruchi.
  • Their ancestors were indentured labourers who were taken to Sri Lanka during the British Raj to work in tea plantations.
  • Their main demand now is that they should be regarded on a par with repatriates covered under the bilateral agreements of 1964 and 1974.
  • They did not want to be mixed up with the Tamil refugees from the Northern and Eastern Provinces of Sri Lanka.

The Centre’s stance

  • The Union and State governments labeled these refugees as “illegal migrants” as they had entered India without valid documents.
  • The Centre maintains that the petitioners could not demand citizenship as a right even if they fulfilled the eligibility criteria.
  • The authorities, however, assured the refugees in the early 1990s that they would not be forcibly deported.

What is the recent order?

  • The Madurai bench of the Madras High Court agreed that granting citizenship was within the “exclusive executive domain” of the Centre.
  • However, it asked the petitioners to apply for Indian citizenship.
  • This is considered a moral victory for the petitioners as the judiciary has agreed, in principle, with their contention.

What is the significance?

  • 10 years have lapsed since the end of the civil war in Sri Lanka.
  • But, the absence of a policy along with other factors has resulted in the slow pace of voluntary repatriation of refugees from Sri Lanka.
  • Now, the court ruling has created an opportunity for the Centre to resolve the Sri Lankan refugee problem once and for all.
  • The problem is not just about granting or refusing citizenship but also about the absence of a comprehensive migration or refugee policy in India.
  • Notably, there are over 2.25 lakh refugees in India, including around 1.08 lakh Tibetans and 18,000 Rohingya.
  • Citizenship Bill - The case of the refugees from Sri Lanka is unique vis-a-vis other South Asian countries.
  • These refugees are excluded from the ambit of a Bill recently tabled in Parliament to amend the Citizenship Act of 1955.
  • Only non-Muslims from Bangladesh, Pakistan and Afghanistan were covered in the Bill.
  • The Citizenship Amendment Bill lapsed, but the government is firm that it will enact it.

What are the difficulties faced by refugees?

  • Estimated, 60% of the people in the Sri Lankan refugee camp, including 90% of the minors, were born in Tamil Nadu.
  • There are a number of opportunities here for young refugees to pursue higher studies, barring medicine.
  • However, qualified persons have not been able to get regular employment, as major companies are reluctant to hire refugees.
  • To seek employment in other countries, these refugees require Sri Lankan passports, which they can secure only in that country.
  • This process being difficult, some refugees have attempted to leave Tamil Nadu illegally. Such attempts have invariably failed.
  • The crisis of identity is another intimidating problem faced by any refugee.
  • In this case, questions such as ‘Whether they belong to India or Sri Lanka?’, ‘If the country where they were born, raised, educated and married is not theirs, then where is home?’ remain.

Why do refugees prefer going back?

  • Nearly, 28,500 refugees, all living in camps, are “stateless persons” and entitled to get Sri Lankan citizenship.
  • The Easter Sunday blasts temporarily halted the incremental repatriation, which resumed recently.
  • Not every refugee living in Tamil Nadu is keen on acquiring Indian citizenship, as many wish to go back.
  • Some have decided to go back, even though the Sri Lankan economy, the livelihood opportunities and access to quality education remain weak there.
  • An encouraging factor, however, is that the North, especially Jaffna, and hill country areas dominated by the Tamils are relatively safe.
  • There are also political compulsions for the refugees to return.
  • The prolonged civil war has had adverse demographic impact on the Tamils in Sri Lanka.
  • This has a direct bearing on the numerical strength of elected representatives of Tamils in Sri Lanka’s Parliament (follows proportional representation system).

Way forward

  • The Tamil National Alliance in Sri Lanka and the Indian government should discuss the refugee problem.
  • Sri Lanka has said that it favours the return of the refugees; this intent has to be followed up with action.
  • The authorities in the Tamil Provinces in Sri Lanka should ensure that there are no illegal occupants of lands belonging to the refugees.
  • The governments of the two countries should plan ways of speeding up voluntary repatriation of Tamil refugees, along with a package of assistance.

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THE GIST of Editorial for UPSC Exams : 05 JULY 2019 (Challenges in the PM-KISAN Scheme (The Hindu))

Challenges in the PM-KISAN Scheme (The Hindu)

Mains Paper 3: Economy
Prelims level: PM Kisan
Mains level: Challenges in the PM-KISAN Scheme

Context

  • PM-KISAN scheme’s support has not reached farmers in most of the country’s regions.

About PM-KISAN

  • PM-Kisan Samman Nidhi Scheme aims to supplement the financial needs of the farmers in procuring various inputs to ensure proper crop health and appropriate yields, commensurate with the anticipated farm income.
  • The scheme’s original objective, to “supplement financial needs” of the country’s Small and Marginal Farmers (SMFs) and to “augment” farm incomes, has now been broadened to include all categories of agricultural landowners.
  • The revised Scheme is expected to cover around 2 crore more farmers, increasing the coverage of PM-KISAN to around 14.5 crore beneficiaries, with an estimated expenditure by Central Government of Rs. 87,217.50 crores for year 2019-20.
  • Earlier, under the scheme, financial benefit has been provided to all Small and Marginal landholder farmer families with total cultivable holding upto 2 hectares with a benefit of Rs.6000 per annum per family payable in three equal installments, every four months.
  • Now the cash transfer is not linked to the size of the farmer’s land, unlike Telangana’s Rythu Bandhu scheme, under which farmers receive ₹8,000 per annum for every acre owned.
  • Though what the programme offers is meagre, it promises some relief to poor farmers by partially supplementing their input costs or consumption needs.

Key practical issues with the scheme

  • Though the first quarterly installment, for the December 2018-March 2019 period, was to be provided in the last financial year, the benefits of PM-KISAN have not reached farmers in most parts of the country.
  • With kharif cultivation activity under way already, the scheme’s potential to deliver is contingent on its immediate implementation.
  • There are 125 million farming households owning small and marginal holdings of land in the country, who constitute the scheme’s original intended beneficiaries.
  • However, at present, the list of beneficiaries includes only 32% (40.27 million) of these households.
  • Further, a majority of the intended beneficiary households are yet to receive even their first installment of ₹2,000. Only 27% (33.99 million) received the first installment, and only 24% (29.76 million) received the second.
  • In budgetary terms, only 17% of the estimated ₹75,000 crore expenditure has been spent.

Structural Issues

  • PM-KISAN offers ₹6,000 a year per household in three instalments. Broadly speaking, this amounts to only about a tenth of the production cost per hectare or consumption expenditure for a poor household.
  • While landless tenants have been left out in both the schemes (PM KISAN, Rythu Bandhu) the link with land size makes the support provided by the Telangana scheme more substantial.
  • Moreover, implementation in certain States has been prioritized.
  • U.P., for instance, accounts for one-third of total beneficiary households 33% (11.16 million) in the first installment and 36% (10.84 million) in the second.
  • About half of the State’s SMF households have been covered, a total of 17 States have received a negligible share of the first installment, accounting for less than 9%.
  • If the budgetary allocations shift decisively in favor of cash transfers, they will be a cause for great concern.
  • Further, the scheme recognizes only landowners as farmers, Tenants who constitute 13.7% of farm households and incur the additional input cost of land rent, don’t stand to gain anything if no part of the cultivated land is owned.

Measures needed

  • For the scheme to be effective, PM-KISAN needs to be uniformly implemented across regions.
  • Cash transfers will cease to be effective if the state withdraws from its other long-term budgetary commitments in agricultural markets and areas of infrastructure such as irrigation.
  • Subsidies for inputs, extension services, and procurement assurances provide a semblance of stability to agricultural production.
  • Food security through the National Food Security Act is also closely linked to government interventions in grain markets.
  • There is a strong case to include landless tenants and other poor families to the scheme.
  • PM-KISAN can be formulated in the sidelines of Odisha’s Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme, which includes even poor rural households that do not own land.

Conclusion

  • Moreover, though the scheme is conceptualized to supplement agricultural inputs, it ceases to be so without the necessary link with scale of production (farm size) built into it.
  • It becomes, in effect, an income supplement to landowning households.
  • Thus if income support is indeed the objective, the most deserving need to be given precedence.

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THE GIST of Editorial for UPSC Exams : 05 JULY 2019 (Expanding India’s share in global space economy (The Hindu))

Expanding India’s share in global space economy (The Hindu)

Mains Paper 3: Science and Tech
Prelims level: Indian Space Research Organisation
Mains level: Various achievements done by Indian Space Research Organisation

Context

  • From a modest beginning in the 1960s, India’s space programme has grown steadily, achieving significant milestones.
  • These include fabrication of satellites, space-launch vehicles, and a range of associated capabilities.
  • The Indian Space Research Organisation (ISRO)’s annual budget has crossed ₹10,000 crore ($1.45 billion), growing steadily from ₹6,000 crore five years ago.

Demand for space-based services

  • However, demand for space-based services in India is far greater than what ISRO can supply.
  • Private sector investment is critical, for which a suitable policy environment needs to be created.
  • There is growing realisation that national legislation is needed to ensure overall growth of the space sector.
  • The draft Space Activities Bill introduced in 2017 has lapsed and the government now has an opportunity to give priority to a new Bill that can be welcomed by the private sector, both the larger players and the start-ups alike.

ISRO’s thrust areas

  • Since its establishment in 1969, ISRO has been guided by a set of mission and vision statements covering both the societal objectives and the thrust areas.

Satellite communication

  • The first area was of satellite communication, with INSAT and GSAT as the backbones, to address the national needs for telecommunication, broadcasting and broadband infrastructure.
  • Gradually, bigger satellites have been built carrying a larger array of transponders.
  • About 200 transponders on Indian satellites provide services linked to areas like telecommunication, telemedicine, television, broadband, radio, disaster management and search and rescue services.

Focus on earth observation

  • Area of focus was earth observation and using space-based imagery for a slew of national demands, ranging from weather forecasting, disaster management and national resource mapping and planning.
  • These resources cover agriculture and watershed, land resource, and forestry managements.
  • With higher resolution and precise positioning, Geographical Information Systems’ applications today cover all aspects of rural and urban development and planning.
  • Beginning with the Indian Remote Sensing (IRS) series in the 1980s, today the RISAT, Cartosat and Resourcesat series provide wide-field and multi-spectral high resolution data for land, ocean and atmospheric observations.

Satellite-aided navigation

  • Another yhe more recent focus area is satellite-aided navigation.
  • The GPS-aided GEO augmented navigation (GAGAN), a joint project between ISRO and Airports Authority of India, augmented the GPS coverage of the region, improving the accuracy and integrity, primarily for civil aviation applications and better air traffic management over Indian airspace.
  • This was followed up with the Indian Regional Navigation Satellite System (IRNSS), a system based on seven satellites in geostationary and geosynchronous orbits.
  • It provides accurate positioning service, covering a region extending to 1,500 km beyond Indian borders, with an accuracy greater than 20 metres; higher accuracy positioning is available to the security agencies for their use.
  • In 2016, the system was renamed NavIC (Navigation with Indian Constellation).
  • With growing confidence, ISRO has also started to undertake more ambitious space science and exploration missions.
  • The most notable of these have been the Chandrayaan and the Mangalyaan missions, with a manned space mission, Gaganyaan, planned for its first test flight in 2021. These missions are not just for technology demonstration but also for expanding the frontiers of knowledge in space sciences.
  • None of this would have been possible without mastering the launch-vehicle technology.

Recent developments

  • Beginning with the Satellite Launch Vehicle (SLV) and the Augmented Satellite Launch Vehicle (ASLV), ISRO has developed and refined the Polar Satellite Launch Vehicle (PSLV) as its workhorse for placing satellites in low earth and sun synchronous orbits.
  • With 46 successful missions, the PSLV has an enviable record.
  • The Geosynchronous Satellite Launch Vehicle (GSLV) programme is still developing with its MkIII variant, having undertaken three missions, and is capable of carrying a 3.5 MT payload into a geostationary orbit.
  • Compare this to the French Ariane 5, which has undertaken more than 100 launch missions and carries a 5 MT payload, with an Ariane 6 in the pipeline for 2020.

Building a strong association with the PSUs

  • Over the years, ISRO built a strong association with the industry, particularly with Public Sector Undertakings (PSUs) like Hindustan Aeronautics Limited, Mishra Dhatu Nigam Limited and Bharat Electronics Limited and large private sector entities like Larsen and Toubro, Godrej and Walchandnagar Industries.
  • However, most of the private sector players are Tier-2/Tier-3 vendors, providing components and services.
  • The Assembly, Integration and Testing (AIT) role is restricted to ISRO, which set up Antrix, a private limited company, in 1992 as its commercial arm to market its products and services and interface with the private sector in transfer of technology partnerships.

Emergence of AI

  • Developments in Artificial Intelligence (AI) and big data analytics has led to the emergence of ‘New Space’ — a disruptive dynamic based on using end-to-end efficiency concepts.
  • A parallel is how the independent app developers, given access to the Android and Apple platforms, revolutionised smartphone usage.
  • New Space entrepreneurship has emerged in India with about two dozen start-ups who are not enamoured of the traditional vendor/supplier model but see value in exploring end-to-end services in the Business-to

Business and Business-to-Consumer segments.

  • However, these start-ups have yet to take off in the absence of regulatory clarity.

‘New Space’ start-ups

  • The New Space start-ups discern a synergy with government’s flagship programmes like Digital India, Start-Up India, Skill India and schemes like Smart Cities Mission.
  • They see a role as a data-app builder between the data seller (ISRO/Antrix) and the end user, taking advantage of the talent pool, innovation competence and technology know-how.
  • They need an enabling ecosystem, a culture of accelerators, incubators, Venture Capitalists and mentors that exists in cities like Bengaluru which is where most New Space start-ups have mushroomed.
  • Equally, clear rules and regulations are essential. ISRO can learn from its 1997 SatCom policy which neither attracted any FDI in the sector nor a single licensee.
  • A similar situation exists with the Remote Sensing Data Policy of 2001, amended in 2011, which too has failed to attract a single application.
  • The 2017 draft Bill raised more questions because it sought to retain the dominant role of ISRO/Antrix as operator, licensor, rule-maker and service provider.

Small satellite revolution

  • Globally, 17,000 small satellites are expected to be launched between now and 2030. ISRO is developing a small satellite launch vehicle (SSLV) expected to be ready in 2019.
  • It is a prime candidate, along with the proven PSLV, to be farmed out to the private sector. This requires giving it responsibility for AIT activities.

Conclusion

  • ISRO launched the idea of Village Resource Centres to work in collaboration with local panchayats and NGOs but only 460 pilots have begun.
  • Expanding this for rural areas is a formidable challenge but has the potential to transform rural India if properly conceived as a part of the India Stack and the Jan Dhan Yojana.
  • With the Ministry of Defence now setting up a Defence Space Agency and a Defence Space Research Organisation, ISRO should actively embrace an exclusively civilian identity.
  • A new Space law for India should aim at facilitating growing India’s share of global space economy to 10% within a decade which requires a new kind of partnership between ISRO, the established private sector and the New Space entrepreneurs.

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THE GIST of Editorial for UPSC Exams : 05 JULY 2019 (Blue-sky visions: on Economic Survey 2018-19 (The Hindu))

Blue-sky visions: on Economic Survey 2018-19 (The Hindu)

Mains Paper 3: Economy
Prelims level: Chief Economic Adviser
Mains level: Reflections of the Economic Survey for 2018-19

Context

  • The Economic Survey for 2018-19 reflects the views of its principal author, Chief Economic Adviser (CEA) Krishnamurthy Subramanian.
  • And the CEA has made bold to use the new government’s first economic assessment-cum-agenda setting exercise to posit a range of ideas that he attributes to blue sky thinking.

Goal driven economic strategy

  • The broad goal is to help drive economic strategy to achieve sustained real GDP growth of 8% so as to enable fulfilment of the government’s grand vision of making India a $5 trillion economy by 2025.
  • For that, the first task is to take stock of the economy’s current state.
  • The CEA is cautiously confident that the slump in investment, which he rightly identifies as the key driver of growth, jobs and demand, has bottomed out.
  • Setting the huge electoral mandate for the government as an enabler that would “push the animal spirits of the economy”, the survey projects real GDP growth to rebound to 7% in 2019-20.
  • The CEA doesn’t shy away from flagging ‘consumption’ as being crucial in determining the growth trajectory in the current fiscal year, and in pointing out its vulnerability to the health of the monsoon-dependent rural economy.
  • With rainfall as on July 3 about 28% less than average and large parts of southern and western India in the grip of a crippling drought, clearly the circumspection appears well warranted.

Fiscal challenges

  • On the fiscal front, the survey is even less optimistic.
  • It lists several challenges to achieving the fiscal deficit target of 3% of GDP by March 2021:
  • The “apprehensions of slowing of growth” and the implications for revenue collections;
  • The shortfall in GST collections and the imperative that it places on revenue buoyancy this year; the hunt for resources to fund the expanded PM-KISAN scheme, Ayushmaan Bharat and other government initiatives; and the impact on oil purchase prices due to the U.S. sanctions on import of crude from Iran.

Way forward

  • It is, however, on the policy prescriptions front that the CEA comes into his own. Central to the recommendations is the focus on triggering a self-sustaining “virtuous cycle” of savings, investment and exports.
  • To achieve which, he suggests, presenting data as a ‘public good’, ensuring policy consistency and reducing the cost of capital.
  • Micro, small and medium enterprises must be nourished, especially firms that are most likely to boost both job creation and productivity, and labour laws made flexible.
  • Ultimately, it is the implementation that may well decide how “blue sky” these ideas are.

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THE GIST of Editorial for UPSC Exams : 04 JULY 2019 (Government needs to assist the telecom sector to facilitate a smooth transition to 5G (Live Mint))

Government needs to assist the telecom sector to facilitate a smooth transition to 5G (Live Mint)

Mains Paper 3 : Economy
Prelims level : 5G
Mains level : Smooth transition process of telecom sector

Context

  • The government, as reported, is considering a ₹74,000 crore bailout plan for the bleeding state-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL), which operates across India, and Mahanagar Telecom Nigam Ltd (MTNL), which runs telephone services in Mumbai and Delhi.
  • The proposed bailout package includes a handsome exit package for employees, including a good golden handshake scheme.
  • Also, the plan earmarks sums for the acquisition of airwave spectrum and capital allocation.
  • In all, the government expects these companies to shape up rather than ship out.
  • For observers keen on a sell-off of these state-owned utilities, this is a disappointment.
  • The package money, they argue, would be better spent elsewhere even as these two are placed in private hands.

Reason behind retaining public ownership

  • There is good reason to retain public ownership of the two, however. Unlike a market that has no entry barriers, telecom is a licensed category for the simple reason that it depends critically on airwave spectrum, a scarce resource that needs allotment by the government. oo many. So the number of players needs to be limited. By virtue of this, however, such a market is also vulnerable to cartelization. Sure, several private operators are currently reeling under mounting losses, growing debt
  • Anything scarce that is shared cannot be shared by tpiles and heavy government levies.

Conclusion

  • Also, low service charges and freebies suggest that competition in this market is remarkably fierce, if anything.
  • But look ahead: Stiff rivalry amidst a sea of red ink could result in consolidation, if not a shake-out of weaker players, and this would set the stage for a winner-takes-all scenario.
  • New operators could always be allowed in, yes.
  • But such markets have a special need for a state-owned operator, one that’s answerable to Parliament, to which customers can turn. State presence alone could keep private dominance in check.

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THE GIST of Editorial for UPSC Exams : 04 JULY 2019 (Explained: The Baloch Liberation Army (The Hindu))

Explained: The Baloch Liberation Army (The Hindu)

Mains Paper 2 : International Relations
Prelims level : Baloch Liberation Army
Mains level : India and Its Neighborhood - Relations

Context

  • The U.S. on July 2 designated the Baloch Liberation Army (BLA) as a terror organisation.
  • The BLA, the armed wing of the Baloch movement, has carried out several violent attacks in Pakistan.
  • It has about 6,000 cadres spread across the Balochistan Province and in the bordering areas of Afghanistan.

The Baloch Freedom Movement

  • The BLA is an armed separatist group that targets security forces and civilians, mainly in ethnic Baloch areas of Pakistan against the state atrocity.
  • In the seven decades of the Baloch movement, the BLA has survived the longest.
  • It is borne out of the tradition of armed militants who were earlier indirectly supported by the Marri, Bugti, Mengal and other clans or sardars.
  • The Baloch movement was influenced by the Soviet Union and radical Marxist ideology in the past and some of their leaders were trained by Moscow.
  • The BLA continues to draw from the same revolutionary spirit but has added that to the younger generation of fighters.

Why is ban imposed?

  • The BLA has often been accused of launching attacks on Pakistan’s military targets and on Chinese-built infrastructure.
  • The China-Pakistan Economic Corridor (CPEC) is also passing through Balochistan.
  • In 2017, a group of labourers were targeted by Baloch militants. The attack that led to at least 15 deaths was widely condemned as it targeted labourers.

The ideology

  • BLA rebels claim that Pakistan has been exploiting the resources of the Province without giving the due share to the locals and the indigenous Baloch tribes.
  • In recent years, the BLA has emerged as a movement with a network of supporters in both urban and rural areas of Balochistan, and has created a space for itself away from the traditional hold of the sardars of tribes.
  • BLA rebels have claimed that they are aiming for both freedom from Pakistan and internal reform of the Baloch society.
  • They are opposed to the traditional sardar or Kawailey system at home.

Reason behind popularity

  • As a result of its non-traditional approach, BLA has become more popular among young and educated Balochis.
  • The Free Balochistan Movement and the Baloch Republican Party are led by scions of the Marri and Bugti clans.
  • Both the Marris and the Bugtis have suffered in the hands of the Pakistan military but do not espouse a direct military confrontation with the Pakistani state.
  • Observers say that the BLA has jolted not just the grip of Pakistan over Balochistan but also undermined the hold of the traditional tribal chiefs over the Baloch society.

What are India’s ties with Baloch rebels?

  • It is established that BLA commanders, in the past, had sought medical treatment in India’s hospitals, often under disguise or with fake identity.
  • In one such case, a militant commander in charge of Khuzdar city was based in Delhi for at least six months in 2017 when he underwent extensive treatment for kidney-related ailments.
  • Pakistan has blamed India for supporting the Baloch rebels as many secessionist leaders in exile are trying to seek political asylum in India.
  • It is known that the Baloch sardars like the late Akbar Bugti and Ghaus Bukhsh Bizenjo maintained warm personal ties with various Indian political figures.
  • However, visits by militants are often under assumed identities unlike those by prominent well known leaders.

Way forward

  • Pakistan is expected to make it difficult for commanders and module chiefs of the BLA to travel in the region.
  • The fighters are also likely to find fund-raising more difficult.
  • Baloch rebels, however, have indicated that they are planning to intensify the struggle against Pakistan as they remain “the most popular” militant organisation in Balochistan despite Pakistan military’s crackdown.

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THE GIST of Editorial for UPSC Exams : 04 JULY 2019 (Quality of FPI inflows is improving (The Hindu))

Quality of FPI inflows is improving (The Hindu)

Mains Paper 3 : Economy
Prelims level : Double tax avoidance agreement
Mains level : Quality of FPI inflows is improving India’s foreign investment

Context

  • While foreign investment flows do tend to be less stable as these are influenced by global liquidity drivers, the quality of these flows is undergoing a positive change.
  • Studying the FPI flows into the Indian equity market since February, when the pre-Budget rally began, it can be seen that more money has been received from foreign investors with a longer investment horizon, belonging to the less risky categories.
  • Also, fund flows from low-tax jurisdictions have been receding.
  • The inference is that the regulatory tightening over the last few years has helped sanitise this channel considerably.

FPIs to the fore

  • As a wave of optimism gripped equity market since February this year, in anticipation of the return of the Modi government, FPIs have been in the forefront, driving the rally. Assets of FPIs increased by ₹3,19,766 crore between February and May 2019.
  • Mutual fund assets increased by a far lower ₹1,24,856 crore in this period.
  • With FPIs fuelling the rally, the liquidity cycle seems to have come a full circle. We seem to have gone back to a period when foreign investors wield a greater influence on stock prices when compared to domestic investors.
  • But unlike earlier, we have less to fear about the market getting destabilised by these foreign fund flows now.
  • If we dissect the increase in FPI assets between February and May, the largest increase in assets has been recorded by foreign mutual funds, whose assets have increased by ₹1,56,657 crore in the four-month period. Similarly, pension funds, who invest for the long haul, also registered an increase of ₹25,859 crore.
  • These are long-term investors. It also needs to be noted that investors from the US account for the largest share 35.7 per cent of the total FPI AUC, currently.
  • Share of investors from Mauritius is now down to 14 per cent from 26 per cent in 2012.
  • Falling share of investors from Mauritius is good news for the exchequer as it means that tax evasion using offshore low tax jurisdictions and double tax avoidance treaties is on the wane.

Regulatory tightening

  • This cleansing is mainly due to the efforts of the market regulator, SEBI. Share of the opaque participatory notes has declined from more than 50 per cent of FPI assets to 2.4 per cent due to higher disclosure requirements and clamp-down on opaque structures.
  • Tax evasion and money laundering through brass plate companies set up in offshore financial centres has also been addressed with the tweaking of the DTAA (double tax avoidance agreement) with Mauritius and Singapore in 2017.
  • Capital gains recorded on shares purchased after April 1, 2017, by investors from these countries have become subject to tax from FY18.

Implementing General Anti Avoidance Rules

  • However, a 50 per cent concession on the tax rate was given on gains made from April 1, 2017 to March 31, 2019, if the investors show that they have a substantial presence in the country of origin.
  • From April 1, 2019, these investors will be taxed at the full domestic capital gains tax rate. Investors who were using the Mauritius route to treaty-shop might have begun routing their investments through other channels with the benefit getting phased out.
  • The General Anti Avoidance Rules (GAAR), that became effective from April 2017, is another reason why dubious inflows posing as FPI flows might have reduced.
  • Tax benefit that arises from innovative tax arrangements can be closely scrutinised and questioned by the taxman now.

What does it mean

  • The large inflows into mutual funds since 2015 had led to the expectation that domestic mutual funds will be able to support the equity market even when foreign flows turn adverse.
  • But with flows into MFs turning more muted and sensitive to fund performance over the last year, the market will once more turn to FPIs for liquidity support.
  • While the foreign flows in 2019 were driven by domestic factors, it needs to be noted that these flows are largely a function of global liquidity availability, which in turn depends on global central bank policies.
  • The Federal Reserve halting its rate hikes has once again given a fillip to dollar carry trade that initially fuelled the global equity market rally since 2009.
  • But if central banks move towards a tightening stance again, these flows will be affected.
  • Intensification of trade war, geo-political tensions, and so on, can also throw a spanner in the works.
  • On the positive side, India’s demographic advantage and faster growth numbers will continue to be a draw for investors from developed countries, ensuring inflows over the long-term.

Conclusion

THE GIST of Editorial for UPSC Exams : 04 JULY 2019 (Not a bloodless option for India (The Hindu))

Not a bloodless option for India (The Hindu)

Mains Paper 2 : International Relations
Prelims level : U.S.-Iran tensions
Mains level : The fulfillment of the criterion of pre-emption would allow India to argue and justify the operation on international forums.

Context

  • Amidst U.S.-Iran tensions, an American drone was shot down by Iran’s Islamic Revolutionary Guard Corps in June.
  • President Donald Trump delivered a customary response on Twitter stating that Iran had made a “very big mistake”.
  • A military strike was planned, and even authorised, but later called off by Mr. Trump who apparently favours bloodless wars.

The implicit criteria

  • India’s response against Pakistan, especially on the past two occasions, a few implicit criteria relating to the handling of the aftermath of an operation can be deduced.
  • It is necessary to meet, or foresee the meeting of, these criteria before any operation is incorporated into India’s arsenal of retaliatory options.
  • It is pertinent to note that these criteria are not in the context of the operational requirements of the Indian armed forces.
  • The criteria are: pre-emption, non-military nature, and deterrence.

Pre-emption

  • The fulfillment of the criterion of pre-emption would allow India to argue and justify the operation on international forums. It feasibly falls under the exception of Article 2(4) of the UN Charter through the passage of self defence.

Non-military nature criteria

  • In such instances, the operational aim has never been to target the Pakistani people or even the Pakistani military. Accordingly, it is imperative for any operation to be able to claim that it is non-military in nature.

Deterrence Criteria

  • The operation should be of such an impact that it creates deterrence, that is, it fulfils the purpose of imposing substantial damage on the enemy, which invariably leads to deterrence.

Aimed at the establishment

  • The conduct of U.S. cybercommand was aimed at the Iranian establishment, specifically targeting its military installations.
  • If India conducts a cyberstrike against Pakistan’s military command or systems, it will be termed as one against Pakistan and not the terrorists.
  • The non-military nature and pre-emption of the operation will be viewed through the perspective of attacking Pakistani military and Pakistan in essence, rendering them as futile, for example in terms of diplomatic parleys.
  • Further, a cyberstrike against Pakistan will call for counter-cyberstrikes. Instead of the intended deterrence, it will likely lead to an escalation.
  • In such a situation, all or at least most of the criteria will not be met. Hence, a cyberattack is not a feasible retaliatory option for India at present.

Way forward

  • It is, however, noteworthy that the dependency of terrorist groups on computers, networks and the Internet has increased. Various, if not all, terrorist groups use the Internet for propaganda.
  • This can certainly be curtailed by any necessary cyberoperation. Most importantly, such an operation should not be a ‘retaliatory operation’ but a ‘regular operation’.

Conclusion

  • A cyberattack can certainly be an option when the situation changes, and India decides to act against providers of safe haven to terrorists.
  • In such instances, the Pakistani establishment might be targeted beyond diplomatic pressures. The ability of the Indian armed forces to conduct such cyberstrikes is not completely known, and rightly so, given that disclosure of such details would take away the element of surprise.

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THE GIST of Editorial for UPSC Exams : 04 JULY 2019 (Teachers and quotas (The Hindu))

Teachers and quotas (The Hindu)

Mains Paper 2 : Health and Education
Prelims level : Not much
Mains level : The Central Educational Institutions (Reservation in Teachers’ Cadre) Bill, 2019

Context

  • Legislation to overcome the effects of court verdicts is not always a good idea. However, sometimes an exception ought to be made in the larger public interest.
  • One such law is the Centre’s Bill to ensure that reservation for scheduled castes, tribes and other backward classes in appointments to central educational institutions is preserved.

About the bill

  • The Central Educational Institutions (Reservation in Teachers’ Cadre) Bill, 2019, passed by the Lok Sabha, replaces an ordinance promulgated in March.
  • Its main object is to restore the system of treating an institution or a university as a single unit to apply the reservation roster, and thus help fill 7,000 teaching vacancies.
  • It seeks to get around a 2017 judgment of the Allahabad High Court striking down University Grants Commission regulations that treated the institution as the unit for determining the roster, and directing that each department be the relevant unit.
  • The reservation should be department-wise, and not institution-wise, the court ruled.
  • The Supreme Court rejected the Centre’s appeal against the order.
  • But the narrower basis for applying quotas would mean fewer aspirants from OBC and SC/ST sections would be recruited as assistant professors.
  • In the interest of social justice, it had to restore the system of having a wider pool of posts in which the quotas of 27% for OBC, 15% for SC and 7.5% ST could be effectively applied.

Benefits of the bill

  • The Bill provides welcome relief for aspirants from the disadvantaged sections of society.
  • It is not that the court was manifestly wrong in applying the roster based on a smaller unit, that is, a department in a university or institution.
  • The High Court noted that having the whole institution as a unit would result in some departments having only reservation beneficiaries and others only those from the open category. But the counterpoint is equally valid.
  • Having the department as the unit would mean smaller faculties would not have any reservation.
  • It needs 14 posts to accommodate SC and ST candidates, as their turn would come only at the seventh and 14th vacancy.
  • There may be no vacancies in many departments for many years, with none from the reserved categories for decades. On the other hand, taking the institution as the unit would give more opportunities for these sections.

Conclusion

  • According to the UGC’s annual report for 2017-18, nearly two-thirds of assistant professors in Central universities are from the general category.
  • Their representation would go up further, as the present Bill also applies the 10% quota for the economically weak among those outside the reservation loop.
  • Applying the court’s department-wise roster norm would have deepened the sense of deprivation of the backward classes and SC/ST communities.

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THE GIST of Editorial for UPSC Exams : 03 JULY 2019 (India and Iran developments (The Hindu))

India and Iran developments (The Hindu)

Mains Paper 2: International Relations
Prelims level: Gulf Crisis
Mains level: India should not be a mute spectator to building crisis in gulf and take measures to protect its interest

Context

  • Iranian Foreign Minister Javad Zarif was in New Delhi this week as part of a regional outreach that includes Russia, China, Turkmenistan and Iraq amid rising tensions in West Asia.
  • The U.S. has followed withdrawal of its sanctions-waiver for Iranian oil with a series of actions that it claims are in response to the perceived threat from Iran.

Hostile measures

  • It has recalled all non-emergency diplomatic staff based in neighbouring Iraq; sent an aircraft carrier, the USS Abraham Lincoln, missile defence hardware and B-52 bombers to the Gulf; imposed fresh sanctions on various Iranian entities; and slapped a terror designation for the Islamic Revolutionary Guard Corps.
  • Iran has matched some of the rhetoric with threats that it would close off the Strait of Hormuz to trade and treat the U.S. carrier as a legitimate “target” if it came anywhere close to Iranian waters.
  • Making matters worse, it is clear that the U.S. aims to pin on the Iranian government and military forces blame for attacks on two Saudi Arabian oil tankers over the weekend.
  • U.S. National Security Adviser John Bolton’s remark that “any attack on United States interests or those of [its] allies will be met with unrelenting force” gives the impression that the ground is being prepared by the U.S., aided by Saudi Arabia and Israel, for an escalation.

From India’s response

  • Given the signs of a gathering storm, India must consider not only its own interests in terms of its ties with Iran and with the U.S. and its allies, but also its position as a regional power.
  • The External Affairs Ministry comment that the government would take a decision on Iranian oil imports after the elections appeared to be an attempt to buy time.
  • The truth is that Indian oil importers have already stopped placing orders for Iranian oil in compliance with the U.S. diktat on “zeroing out” imports.
  • India had been importing about 10% of its oil requirements from Iran, and the losses in terms of finding alternative suppliers in the face of rising oil prices are piling up.
  • News reports also indicate that despite a U.S. waiver on the Chabahar port, banks in India and Afghanistan that planned to finance trade through the port are now being restricted by U.S. sanctions.

Conclusion

  • Instead of being a mute spectator to the crisis that is building for India’s energy bill as well as for regional stability, New Delhi must take the challenge head-on.
  • One immediate priority is to work more closely with European countries in ensuring that Iran does not feel compelled to walk out of the nuclear deal, and to jointly build a sanctions-immune financial infrastructure to facilitate Iranian trade.
  • It is necessary that the countries affected in the region meet urgently, as well as unitedly express concerns over a possible U.S.-Iran clash.

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THE GIST of Editorial for UPSC Exams : 03 JULY 2019 (It’s time we paid attention to women (Indian Express))

It’s time we paid attention to women (Indian Express)

Mains Paper 1: Society
Prelims level: Centre for Monitoring Indian Economy
Mains level: Women empowerment and Gender equality

Context

  • India’s well-known biological imbalance one of the world’s worst sex ratios it boasts a top 20 ranking (19th out of 149 countries) in terms of political empowerment of women, according to the World Economic Forum.
  • This is translating into outcomes at the polling booths.
  • The turnout of women has been rising faster than that of men, even in the traditionally backward states; and if recent trends persist, women will outnumber men in the 2019 elections.

The silent revolution

  • The silent revolution is happening on the digital front.
  • The past two years have been dramatic in terms of increased access to the internet across the country.
  • Some of the most significant beneficiaries of this surge are women.
  • More than 40 per cent of Indian women are now aware of the mobile internet, according to the GSMA.
  • In isolation, this might seem like a glass half empty given the 60 per cent still excluded, but this is already more than double the proportion of women aware of the mobile internet from just a year before.
  • The proportion of women who might have independent sources of information and, unfortunately, misinformation has jumped.

CMIE data highlights on women empowerment

  • According to the Centre for Monitoring Indian Economy (CMIE), a large percentage of all the jobs lost last year were held by women.
  • Out of the 11 million jobs lost in 2018, women accounted for 8.8 million.
  • This only serves to exacerbate an already severe economic imbalance across gender lines. Indian women receive 34 per cent less wages than men for equivalent work, spend around five hours a day on unpaid care work compared to a mere half an hour for men and are primarily engaged in low-paying, informal sector work.
  • Putting these three developments together, rising female political engagement, surging female access to information, true or false, and worsening economic opportunities for women sounds like a recipe for a revolution and quite possibly not a silent one.
  • In the global context, India’s long-standing gender gap is already a disgrace. The country remains a perpetual bottom hugger of international league tables when it comes to metrics on the status of women.

Consider this sampling of India’s rankings:

  • 147th out of 149 countries on health and survival of women and 142nd out of 149 in terms of economic participation of women, according to the WEF’s gender gap index; 163rd out of 181 countries in female labour force participation.
  • According to the World Bank; 149th out of 193 by percentage of women representatives in parliament, notably behind Bangladesh, Pakistan, and, yes, even Saudi Arabia, according to the Inter-Parliamentary Union;
  • The most dangerous country to be a woman, according to the Thomson-Reuters Foundation, worse than Afghanistan, the DRC, Syria or Yemen.

Needs to change

  • First, look past the reductive and politically expedient ways to frame women’s needs; think beyond toilets, talaq and cooking gas.
  • Women need equal access to opportunities to gain a measure of economic independence, without which it is hard to imagine independence on other fronts.
  • The barriers are inter-connected, and not just societal mores but those related to poor education and healthcare access as well.
  • The solutions have to be systemic. Higher paid jobs, for example, call for schooling, but 23 million girls drop out of school each year because the families fall on hard times or because of inadequate sanitation or proper menstrual hygiene capabilities in schools. The opportunity crisis is tied to wider crises.
  • India’s water problem imposes a heavier burden on women with consequences for their access to opportunities.
  • A rural woman might walk 5-20 km a day to fetch water. Carrying water across long distances is stressful on the body and managing households with little water is stressful on the mind.
  • With this kind of a burden, it is hard to imagine acquiring skills, remaining healthy and getting into productive employment.

Promoting women centric initiatives

  • There are several women-oriented government initiatives with good intentions, such as Beti Bachao Beti Padhao; however, their track record has been long on publicity and short on results. Consider the Nirbhaya Fund set up in 2013, to support projects aimed at the safety of women.
  • Till the end of 2018, only 42 per cent of that money has been used and a modest Rs 450 crore was allocated for the Herculean task of making eight of India’s largest cities safer for women.
  • The patchwork approach must go. Leadership at the Centre and the states needs to develop a less patronising attitude and a genuine commitment to effect change.
  • More women ought to be politically elevated to run in the next election.
  • A ministry with real clout ought to own the problem of ensuring gender inclusion. Yes, there is a ministry already. But why is it called the Ministry of Women and Child Development? Tying women’s development with child development itself is a vestige of a patriarchal mindset that must go.
  • Closing the gender gap offers a big political return on investment. India could add over 18 per cent to its GDP by 2025, by giving equal opportunities to women, according to those clever fellows at McKinsey.

Conclusion

THE GIST of Editorial for UPSC Exams : 03 JULY 2019 (PFRDA must insist on pension funds (Indian Express))

PFRDA must insist on pension funds (Indian Express)

Mains Paper 2: Governance
Prelims level: PFRDA
Mains level: Welfare schemes

Context

  • Mutual funds’ open-ended nature, daily NAV disclosures and significant institutional participation has made sure that their doubtful credit calls cannot escape public scrutiny.
  • SEBI has tweaked its regulatory framework for debt mutual funds to ensure prompt disclosure of losses, mark-to-market valuation and a side-pocketing mechanism to ensure that investor interests aren’t compromised when credit calls go awry.
  • But there seems to be no such standard operating procedure in place for pension funds, who are significant players in the corporate bond market and manage retirement savings of retail investors.

Indian pension fund regulating framework

  • Indian pension fund regulators have traditionally seen no reason to ready their regulatory framework to deal with default events, because these funds are bound by mandate to be quite conservative with their corporate bond exposures.
  • PFRDA’s investment guidelines, for instance, specify that the NPS money can only be deployed in government securities or corporate bonds rated AA and above by at least two credit rating agencies.
  • But then, a string of recent defaults by AAA or AA-rated entities including IL&FS have shown that high investment-grade credit ratings, in the Indian context, are no guarantee that a corporate borrower will not renege on payments.
  • Rating agencies can effect multi-notch downgrades at whim and once defaults or downgrades transpire, market liquidity for such corporate bonds completely dries up.
  • Given that the brewing NBFC crisis may unleash more credit events, it is now imperative for PFRDA to rethink its valuation and risk management framework for NPS exposures in corporate bonds.
  • There is even a case for barring such exposures in the Atal Pension Yojana, meant for low-income earners.
  • The regulator must bear in mind that the NPS, unlike debt mutual funds, offers a very low management fee to AMCs, locks in investors and attracts very little public scrutiny.

Way forward

  • Therefore, there need to be clearer deterrents to NPS managers taking on undue credit risks and delaying mark-downs of downgraded bonds.
  • NPS investors still can’t exit based on such disclosures, but they can certainly switch assets or managers to reduce risk.
  • There has also been a clamour for Indian pension funds to increase their allocations to lower-rated bonds to aid in the development of the bond market.
  • But experience so far suggests that relying on third party credit ratings to take such calls is fraught with risk.
  • PFRDA should insist on pension fund managers beefing up their in-house credit assessment teams and risk controls, before considering changes in its investment norms.

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THE GIST of Editorial for UPSC Exams : 03 JULY 2019 (SEBI’s ‘capital’ punishment to NSE (Indian Express))

SEBI’s ‘capital’ punishment to NSE (Indian Express)

Mains Paper 3: Economy
Prelims level: SEBI
Mains level: SEBI's imposition of fine on NSE

Context

  • The Securities and Exchange Board of India (SEBI) last week ordered the National Stock Exchange of India (NSE) to pay a fine of about ₹1,000 crore within 45 days for its supervisory laxity that led to some of its broker-clients gaining preferential access to certain market data.

Major highlights of the order

  • Two former NSE chiefs have been ordered to pay back a part of their past salaries as punishment for their failure to ensure that the exchange was fully compliant with all provisions of the norms governing securities exchanges.
  • In its order, SEBI noted that the NSE’s use of the tick-by-tick server protocol had allowed certain high-frequency trading firms using the exchange’s secondary server to receive important market data before other market participants, who were thus put at a disadvantage.
  • While it has not yet been proven decisively that the firms with preferential access to data from the exchange managed to profit from such data, the episode raised serious questions about market fairness.
  • SEBI ruled that it did not find sufficient evidence to conclude that the NSE committed a fraudulent act, but was unequivocal in ruling that the Exchange had failed to exercise the necessary due diligence to ensure that it served as a fair marketplace.
  • The fact that the NSE had opted to switch to a new data transmission system, which relays data to all market participants at the same time, prior to a whistle-blower’s complaint in 2015 may have worked in the NSE’s favour.

Implications of this verdict

  • Despite the sizeable fine that it imposes on the NSE, the SEBI verdict must surely come as a relief to the erring stock exchange for at least two reasons.
  • First, the fact that it has not been found to have intentionally favoured certain market players over others should help it retain investor confidence.
  • Also, the exchange, which had been barred from proceeding with its initial public offering during the pendency of the SEBI probe, will now finally be able to tap the capital markets to fund its growth, after a six-month moratorium.
  • While there is bound to be debate about the magnitude of the fine, overall the financial penalty is a welcome regulatory action.
  • Millions of investors choose to do their trading on market platforms like the NSE every year in the belief that the marketplace offers an equitable environment to carry out their trades.

Conclusion

THE GIST of Editorial for UPSC Exams : 02 JULY 2019 (Karnataka’s way (Indian Express))

Karnataka’s way (Indian Express)

Mains Paper 3: Economy
Prelims level : Digital land ownership
Mains level : Farm loan waviers system and process in Karnataka

Context

  • The Karnataka government has released nearly Rs 8,357 crore as waiver amount to 20.40 lakh farmers against overdue crop loans of up to Rs 2 lakh till December 31, 2017.
  • It expects to complete this scheme, covering some 41 lakh farmers, by the end of this fiscal.
  • Karnataka is one of the few states with fully digitised records of land ownership, rights, tenancy and crop information.

Background

  • Most states undertaking loan waivers have done so based on the lists given by banks.
  • In many cases, the same farmer would have taken loans from multiple banks, thereby benefitting from waivers against all these accounts, even if the outstanding dues added up to beyond the announced limit.
  • In Karnataka, however, the state government could match the data from banks with the land survey, Aadhaar and ration card numbers.
  • It led to savings in double payments to around 5 lakh farmers and the waiver was limited to Rs 2 lakh per family against all their crop loan accounts.

Digital land ownership

  • The Karnataka scheme reveals the promise held out by direct benefit transfers (DBT) — how they can be made in a practically foolproof manner to every farmer based on their Aadhaar-seeded bank accounts as well as digitised land ownership details.
  • The next logical step should be to eliminate all farm subsidies and convert these into targeted DBTs or income support programmes.
  • Ramesh Chand, Member of the NITI Aayog, has favoured such a transition that is justifiable from both an efficiency and equity standpoint.
  • The Centre could take the lead here. Currently, its annual subsidy on food, fertiliser, crop loans and insurance premium, without accounting for rollovers and late payments, is over Rs 2,91,000 crore.
  • In addition, state governments dole out subsidies through free/cheap farm power and water that would total another Rs 1,50,000 crore or so.

Conclusion

  • Implementation of loan waiver in state points to possibility and promise of direct benefit transfer in helping farmers.
  • The Union Budget can make a beginning by announcing a three-year phase-out plan for all fertiliser subsidies and capping yearly foodgrain procurement for the PDS to 50 million tonnes.
  • The savings can be used to provide a flat Rs 5,000 per hectare to all farmers.
  • A single DBT scheme, with income support under PM-Kisan, will serve India’s farmers better than iniquitous and market-distorting subsidies.

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THE GIST of Editorial for UPSC Exams : 02 JULY 2019 (New IT dynamics (The Hindu))

New IT dynamics (The Hindu)

Mains Paper 2: International Relations
Prelims level : H-1B
Mains level : Indian Diaspora

Context

  • The sharp rise in wage costs for Indian IT companies due to an increase in overseas hiring, augurs well for the sector which has been trying to find a way around tightening H-1B visa rules.
  • Though the rise in staff costs may look to be a cause of concern in the short term, it could be a blessing in disguise in the long run.
  • Staff costs for large Indian IT services companies have gone up by 15-20 per cent in FY 19 as they hired engineers in countries wherever their clients are located.
  • This is being done, especially in the US where tougher immigration laws and tightening visa rules have become a predictable feature of Donald Trump’s Presidency.

Background

  • Over the last four years, there have been several tweaking of H-1B visa rules making it harder for Indian techies to land their dream job.
  • This emanates from a belief held by the Trump administration that companies are bringing in cheap labour to replace American workers through the H-1B route.
  • The US issued 10 per cent fewer H-1B visas between October 2017 and September 2018.
  • To fill the gap, IT companies have started hiring locally.

Cost effectiveness in India

  • Competition from global IT giants such as Accenture, and a workforce dominated by legacy engineers trained in old technology platforms is holding back Indian IT services firms from making big inroads into winning new-age technology projects.
  • In the traditional IT services space, India’s cost competitiveness, which is approximately 3-4 times cheaper than the US, had been the mainstay in the global sourcing market.
  • For far too long, some IT services companies have relied on shipping low-cost skilled labour to countries such as the US to drive higher margins.

New visa rule effect

  • Tougher visa rules are forcing many large Indian IT services firms to change their business model and ramp up onshore hiring.
  • To cope up with related higher costs, the IT companies are now beginning to move up the value chain in search of higher margins.
  • The earlier business model had led to a situation where Indian IT firms had become the global experts in executing low-value projects.Now they are switching over to new transformational platforms like robotics, artificial intelligence and automation.
  • Indian engineers are also gaining from this shift as companies are investing in reskilling existing workforce to match the requirements of the new technology platforms, helping them to find more meaningful projects in Mumbai instead of implementing an enterprise resource planning software for a client in Chicago.

Way forward

  • Transformational business is seeing double digit percentage revenue growth.
  • This switch is great news for the Indian IT industry.
  • Globally, these new technologies are enabling tectonic shifts in systems and processes that require very different capabilities compared to implementing an enterprise resource planning software.
  • Hiring locally also makes the Indian IT companies more nimble in responding to these opportunities.
  • IT services companies should force a faster transformation in their delivery models to compensate for the increasing wage costs.

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THE GIST of Editorial for UPSC Exams : 02 JULY 2019 (Lessons from Bhutan (The Hindu))

Lessons from Bhutan (The Hindu)

Mains Paper 2: Health and Education
Prelims level : PISA assessment
Mains level : Adopting education policy like Bhutan and its aftermath effect

Context

  • Bhutan’s teachers, doctors and other medical staff will earn more than civil servants of corresponding grades, if a policy recently announced by the country’s government is implemented.
  • The new salary scales will benefit about 13,000 teachers and doctors.
  • This is a novel move. No other country has accorded teachers and doctors such pride of place in its government service, both in terms of remuneration and symbolism.

Inspired or fanciful?

  • The policy’s tonal reference is to be found in Bhutan’s 12th Five Year Plan (2018-23), published by its Gross National Happiness Commission, the country’s highest policy-making body.
  • The commission’s strategy to achieve desired national outcomes through education opens with the notation, “making teaching a profession of choice”.
  • The proposal then is evidently at the core of a larger governmental strategy to achieve the country’s human developmental objectives.
  • The decision also comes in the wake of high levels of teacher attrition, especially the best.
  • The government has formulated the policy as a styptic to stop the serious haemorrhage.

PISA assessment

  • The Organisation for Economic Co-operation and Development’s Programme for International Student Assessment (PISA) is a worldwide study that measures and compares student ability in reading, mathematics, science and global competence, with financial literacy an option.
  • Accordingly, it ranks educational systems of countries. An independent study led by the economist, Peter Dolton, has demonstrated a distinct correlation between student outcomes in a country, as measured by PISA scores, and the status that its teachers enjoy.
  • The initiative’s latest report, Global Teacher Status Index 2018, based on its own surveys across 35 countries, goes on to make a strong case for high wages to improve teacher status.
  • Policies act as levers that governments use to achieve desired results in focus areas.
  • The results of Bhutan’s policy, if implemented, will take a few years to emerge for critical evaluation. It is, however, based on credible research.

The fiscal implications

  • Bhutan already spends about 7.5% of its GDP on education.
  • The fiscal implications of the new salary structure are unclear now. Generally, teachers constitute a considerable portion of government employees.
  • Therefore, governments looking to emulate Bhutan’s lead will inevitably be asked questions about the financial viability of such a momentous administrative decision.
  • The Minister concerned in Tamil Nadu, on educational indices, turned down demands of striking teachers for better pension explaining that wages, pensions, administrative costs and interest repayments already amounted to 71% of the State’s expenditure.

Can India afford a similar policy?

  • India currently spends about 3% of its GDP on education, accounting for about 10% of the Centre’s and States’ budgetary expenses.
  • Salaries constitute a large portion of this expenditure.
  • The NITI Aayog in its report last year recommended that India raise this to 6% of GDP by 2022. Paying teachers (and doctors) significantly higher salaries may seem like a tall order, but the Central and State governments could consider rationalising both teacher recruitment and allocation of funds to existing programmes.
  • Some programmes may have outlived their purpose, while others could be pared down or better directed. In fact, improving accountability in the system could free up huge savings.
  • A World Bank study found that teacher absenteeism in India was nearly 24%, which costs the country about $1.5 billion annually.
  • Absenteeism could be the result of many factors, including teachers taking up a second job or farming to boost incomes, providing parental or nursing care in the absence of support systems, or lacking motivation.
  • The incentive of an enviable income which is girded with unsparing accountability could mitigate many ills that plague the system, free fiscal space and help meet important national developmental objectives.

Education system in Delhi

  • Piloting a policy of such consequence may also be easier in a smaller State, say Delhi.
  • Education is a key focus area for the Delhi government; the State invests 26% of its annual budget in the sector (much more than the national average).
  • The administration has also worked on improving teacher motivation as a strategy for better educational outcomes. The base has been set.
  • The political leadership in the State, which is unafraid of the bold and big in the social sector, could build on this.
  • Moreover, since the State is highly urban and well-connected, it would be easier to enforce accountability measures, which must underpin so heavy an expenditure.

Way forward

  • Ultimately, no investment that enables an educated, healthy, responsible and happy community can be deemed too high by any society.
  • The short-term GDP-minded would do well to consider these words in OECD’s ‘Education at a Glance 2018’ report: The quality of education can be a strong predictor of a country’s economic prosperity.
  • Shortfalls in academic achievement are extremely costly, as governments must then find ways to compensate for them, and ensure the social and economic welfare of all.
  • Governments intent on improving the quality of education they offer must step out of incrementalism in policy-making.
  • Improving teacher status by offering top notch salaries to attract the best to the profession could be that revolutionary policy-step forward, which Bhutan has shown a willingness to take.

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THE GIST of Editorial for UPSC Exams : 02 JULY 2019 (Miles to go: self-care medical interventions (The Hindu))

Miles to go: self-care medical interventions (The Hindu)

Mains Paper 2: Health
Prelims level : Self-care medical interventions
Mains level : Measures needed to improve Self-care medical system

Context

  • Self-care, which mostly happens outside the formal health system, is nothing new.
  • What has changed is the deluge of new diagnostics, devices and drugs that are transforming the way common people access care, when and where they need them.
  • With the ability to prevent disease, maintain health and cope with illness and disability with or without reliance on health-care workers, self-care interventions are gaining more importance.

Healthcare problems in India

  • Millions of people, including in India, face the twin problems of acute shortage of healthcare workers and lack of access to essential health services.
  • According to the World Health Organization, which has released self-help guidelines for sexual and reproductive health, over 400 million across the world already lack access to essential health services and there will be a shortage of about 13 million health-care workers by 2035.

About Self-help system

  • Self-help would mean different things for people living in very diverse conditions.
  • While it would mean convenience, privacy and ease for people belonging to the upper strata who have easy access to healthcare facilities anytime, for those living in conditions of vulnerability and lack access to health care, self-help becomes the primary, timely and reliable form of care.
  • The WHO recognises self-care interventions as a means to expand access to health services. Soon, the WHO would expand the guidelines to include other self-care interventions, including for prevention and treatment of non-communicable diseases.

Measures needed to improve healthcare

  • India has some distance to go before making self-care interventions for sexual and reproductive health freely available to women.
  • Home-based pregnancy testing is the most commonly used self-help diagnostics in this area in India. Interventions include self-managed abortions using approved drugs morning-after pills taken soon after unprotected sex, and mifepristone and misoprostol taken a few weeks into pregnancy that can be had without the supervision of a healthcare provider.
  • While the morning-after pills are available over the counter, mifepristone and misoprostol are scheduled drugs and need a prescription from a medical practitioner, thus defeating the very purpose of the drugs.
  • The next commonly consumed drug to prevent illness and disease is the pre-exposure prophylaxis (PrEP) for HIV prevention. India is yet to come up with guidelines for PrEP use and include it in the national HIV prevention programme.

Conclusion

  • Despite the WHO approving the HIV self-test to improve access to HIV diagnosis in 2016, the Pune-based National AIDS Research Institute is still in the process of validating it for HIV screening.
  • One of the reasons why people shy away from getting tested for HIV is stigma and discrimination.
  • The home-based testing provides privacy. India has in principle agreed that rapid HIV testing helps to get more people diagnosed and opt for treatment, reducing transmission rates.

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THE GIST of Editorial for UPSC Exams : 02 JULY 2019 (Imitation registry: on Nagaland NRC (The Hindu))

Imitation registry: on Nagaland NRC (The Hindu)

Mains Paper 2: Polity
Prelims level : Nagaland NRC
Mains level : Citizenship status across Nagaland

Context

  • Nagaland is following on the footsteps of its western neighbour, Assam, in the task of setting up a Register of Indigenous Inhabitants of Nagaland (RIIN).
  • Nagaland claims to have watched the process unfold in Assam, followed it closely, and it will now complete the task of identifying and registering indigenous inhabitants in less than five months, by December 10, 2019.

Lesson from Assam

  • This is more or less the kind of time-line that was followed by Assam, which is yet to publish its final NRC a year after the process began. In two months from July 10, Nagaland hopes to have a list of indigenous inhabitants, after which it will be published and time given till October 10 to file claims and objections, before finalisation.
  • It sounds simple, and Nagaland is considerably less populated than Assam.
  • But the Assam experience shows that in the complex demographies of the Northeastern States, it may not turn out that way.
  • As many as 40 lakh people were left out of the NRC listing in Assam, which seemed aimed to filter out ‘illegal immigrants’. Indeed, in Nagaland, various local attempts have been made to determine non-locals, non-tribals and non-Nagas, and identify what some people refer to as the ‘Illegal Bangladeshi Immigrant’.
  • Two years ago, a town not farther than 15 km from Dimapur, the largest city and the commercial capital of the State, passed a resolution to place curbs on IBIs and devised ways to prevent them from integrating, living or trading in the town.
  • When such is the situation on the ground, in an already volatile region where the Armed Forces (Special Powers) Act is routinely extended, it is best that Nagaland proceeds with caution in this enterprise.
  • The RIIN should not ultimately become a vehicle to make outsiders of insiders.

Suggested measures

  • The Assam experiment has no clear end-point. Bangladesh has repeatedly suggested that the process going on in Assam is “an internal matter” of India, implying that there is no deportation possibility here.
  • Other than deepening the existing fault-lines in its own State and rendering the situation even more volatile, it is unclear what the Nagaland government hopes to achieve through the exercise. What happens to the people who are in the end found to be on the wrong side of the Nagland list?
  • The right to appeal and a humane hearing should be in-built in this exercise.

Conclusion

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