Newspaper notes for UPSC 27-06-18

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After aid for defence buys, India gifts plane to Seychelles

India gifted a Dornier maritime patrol aircraft to Seychelles, which will increase the island nation’s surveillance capabilities.
Earlier, Prime Minister announced a $100 million credit for Seychelles to buy military hardware from India. But confusion continues over the cooperation in the development of Assumption Island.
The Do-228 aircraft, built by the Hindustan Aeronautics Limited (HAL), was formally handed over by External Affairs Minister to Seychelles President.

Elephantine threat

Assam considering sedation, relocation of aggressive animals.
Assam wildlife officials are keen on replicating their Uttarakhand counterparts’ jumbo-relocation experiment for reducing man-elephant conflicts in western Assam.
Two herds of aggressive elephants and a lone rogue may be sedated for a sobering effect and relocated.
About half of 58 elephant corridors in the northeast, comprising 35% of the country’s, are in Assam.
Human habitations and barriers such as electric fences and trenches have blocked some of these corridors that once enabled movement of the two herds comprising 40-50 elephants between Assam’s Goalpara district and Garo Hills of Meghalaya. With nowhere to go, the elephants have virtually been confined within a small area that forest officials likened to a stadium without any exit.

NGOs on ED watchlist for funding Naxals

Expanding its investigations from the Bihar-Jharkhand region to Chhattisgarh, the Enforcement Directorate has zeroed in on some non-government organisations (NGOs) that are suspected to have funded Naxal operatives in the State.
The agency is preparing a list of such NGOs to examine their financial dealings, as they are already on the radar of security and police agencies.
The ED has also identified some prominent industrial houses that paid ‘protection’ money to the banned outfit.
The agency has found that they extorted money and laundered the funds, acquiring movable and immovable assets.Properties worth crores have been attached under the Prevention of Money Laundering Act over the past few months.

Directorate of Enforcement

is a specialized financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India, which enforces the following laws: –
Foreign Exchange Management Act,1999 (FEMA) – A Civil Law, with officers empowered to conduct investigations into suspected contraventions of the Foreign Exchange Laws and Regulations, adjudicate, contraventions, and impose penalties on those adjudged to have contravened the law.
Prevention of Money Laundering Act, 2002 (PMLA) – A Criminal Law, with the officers empowered to conduct investigations to trace assets derived out of the proceeds of crime, to provisionally attach/ confiscate the same, and to arrest and prosecute the offenders found to be involved in Money Laundering.

Tainted by uranium

Reports of widespread uranium contamination in groundwater across India demand an urgent response.
A study, published in Environmental Science and Technology Letters , has found over 30 micrograms per litre (mcg/l) of the heavy metal in parts of northwestern, southern and southeastern India.
Drinking such water can damage one’s kidneys, and the World Health Organization prescribes 30 mcg/l as an upper limit.
The residents of the regions surveyed were using the contaminated wells as their main source of drinking water.
These findings highlight a major gap in India’s water-quality monitoring. As the Bureau of Indian Standards does not specify a norm for uranium level, water is not tested regularly for it.
A 2015 Bangalore study, for example, found uranium levels of over 2000 mcg/l in the southern part of the city. Other studies found levels of over 500 mcg/l in Andhra Pradesh and Telangana.
The health effects of drinking uranium-tainted water merit special attention. A few small animal and human studies have found that the heavy metal damages the kidneys. The studies indicate that this is a chemical effect, rather than a radiological one, even though uranium is radioactive.
Critical area of research is the mechanism by which uranium enters groundwater. The Environmental Science paper identified two types of terrains with heavy contamination. In Rajasthan and other northwestern regions, uranium occurs mostly in alluvial aquifers; while in southern regions such as Telangana, crystalline rocks such as granite seem to be the source.
When groundwater is over-extracted from such soils, the researchers suggest, the uranium is exposed to air, triggering its release.

Transplanting best practices

Heart transplantation has always been in the public eye right from the time Christiaan Barnard performed the first successful human heart transplant in 1967, in Cape Town, Africa.
The debate around it is vital because it is a marker of the fault lines in transplantation policy in India that need immediate correction.
Tamil Nadu’s deceased donor programme is one of the best in the country and that public credibility is key to its continuing success. But it is also important to address certain key drivers behind foreigners getting cardiac transplants.

Shift from Public to Private institutions:

It may be pertinent to note that one of the first cardiac transplants in the world was attempted back in 1968 at Mumbai’s King Edward Memorial Hospital by P.K. Sen (the world’s fifth and sixth heart transplants). What is relevant to the debate is that Dr. Sen’s transplants as well as India’s first successful cardiac transplant in 1994 (by P. Venugopal at the All India Institute of Medical Sciences, Delhi) were performed in public institutions.
Along the way, organ transplantation in India largely became a private sector activity. Hence while the act of donation is a public act and the organs a public good, from that point onwards whatever happens is largely under the private sector.
Hospitals that invest large sums in transplantation programmes which include huge payouts to surgeons look for returns.
Unlike the liver and kidneys, a heart transplant cannot be performed with a living donor. Incidentally, around 20% of living donor liver transplants performed in some of the large centres in India are also on foreigners.

Financial angle :

As these are largely performed in corporate hospitals, the costs in India are well beyond a large majority of the local population. This is where foreigner nationals who are often able to pay such sums fit in.
Cardiovascular practice in India is largely dominated by bypass and stenting for ischemic heart disease partly because this is a cash cow.
While India has enthusiastically embraced the idea of a liberalised economy and immediately applied it to health care, many countries have insulated their health-care systems from the ravages of the market. This too is at the heart of this matter.

Measures:

We will have to demonstrate that organs will go to those who need them the most rather than to those who can pay for them. This will mean considering hard policy changes that include strengthening the capacity of the public sector, subsidising transplantation and perhaps enabling affirmative action in the allocation process in favour of public hospitals.
As Tamil Nadu has led the way in deceased donation and also has a good record of public medicine, it could lead the way here. One of the secrets behind Europe’s high donation rates is public trust in their respective nationalised health schemes.

Saving Delhi’s trees

Background: Over the last few days, Delhi residents have been protesting against the government’s approval for felling over 14,000 trees in south Delhi. Faced with severe criticism, the National Buildings Construction Corporation, tasked with redeveloping half a dozen south Delhi colonies, on Monday assured the Delhi High Court that no trees would be cut for the project till July 4, which is temporary relief.
Many of the trees proposed to be felled are mature, local, fruit-bearing ones that provide clean air, shade and water recharge to humans and are homes to many birds. These areas of Delhi have served as the “lungs” of the city. However, the project reports overlook these qualities.
Following the orders of the National Green Tribunal in September 2017 in a case challenging these projects, at least five of the seven projects received environment clearances between November and June.
Lobbying: Large constructions have been difficult to manage in India. The sector has systematically lobbied to be excluded from the environmental norms of the country and has been successful in carving out special privileges for itself in the environment clearance process.
Laws and rules: From 2006, most construction projects have been approved based on an application form instead of detailed assessment reports.
In 2016, projects with areas of less than 20,000 sq m were permitted to proceed as long as they submitted a self-declaration ensuring adherence to environmental norms. As a result of these privileges, construction projects contribute significantly to urban air and noise pollution and high water consumption in cities. Compensatory afforestation taken up in lieu of trees felled by projects is a failure due to poor survival rates of saplings and no monitoring. Yet all regulatory bodies treat large constructions with kid gloves.
The Minister for Urban Development has stated that this public campaign is “misinformed”. But that is far from the truth. In a literate, urban society that has high access to the Internet, the lack of official information on urban development and its impacts can only be understood as an indirect form of public silencing.
The residents are now appealing to the government to embrace inclusive ways of redesigning the city. The governments could join hands by committing to review these projects.

When India and U.S. hold their first 2+2 Dialogue involving the External Affairs and Defence Ministers and their counterparts, one of the key issues would be questions regarding the recent Russia-related sanctions that have now come up as a key impediment for India’s defence modernisation.
A MEA statement said the two sides will “share perspectives on strengthening their strategic and security ties and exchange views on a range of bilateral, regional and global issues of mutual interest.
The impact of CAATSA (Countering America’s Adversaries Through Sanctions Act) is still being assessed in the military circles even as policy moves from the U.S. have not been reassuring.

COMCASA: Why US, India can’t connect

Communications Compatibility and Security Agreement COMCASA is meant to provide a legal framework for the transfer of communication security equipment from the US to India that would facilitate “interoperability” between their forces — and potentially with other militaries that use US-origin systems for secured data links.
The general agreement signed by the US is called the Communication and Information on Security Memorandum of Agreement (CISMOA) but the name was changed to COMCASA to reflect its India-specific nature.
It is part of a set of three military agreements that the US considers “foundational” for a functional military relationship. In August 2016, India had signed the Logistics Exchange Memorandum of Agreement (LEMOA), which allows the military of each country to replenish from the other’s bases. Negotiations on the third agreement, Basic Exchange and Cooperation Agreement for Geo-spatial Cooperation (BECA), have not yet begun.
US officials contend that COMCASA will facilitate the use of high-end secured communication equipment to be installed on military platforms being sold to India, and fully exploit their potential. India’s armed forces, they argue, are currently dependent on less secure, commercially available communication systems on high-end American platforms like C-130Js and the P8I maritime surveillance aircraft.
These platforms are, therefore, unable to share data in real time with other friendly militaries using American platforms, besides creating problems of interoperability during training exercises and humanitarian assistance and disaster relief operations.
The US granted India the status of Major Defence Partner in the final days of the Obama administration to facilitate transfer of high-end defence technology. Signing the foundational agreements would underline that status, beside making the transfer of American defence technology possible to India.
There is also a fear that a lot of Russian-origin and indigenous Indian military platforms may not be compatible with COMCASA.

India most unsafe for women: poll

India has been ranked as the most dangerous country out of the world’s 10 worst countries for women, behind Afghanistan, Pakistan and Somalia, according to a poll conducted by the Thomson Reuters Foundation.
The same poll conducted in 2011 had placed India at the fourth place. The findings are based on perceptions of experts on women’s issues.
The world’s second most populous nation, with 1.3 billion people, ranked as the most dangerous on three of the topic questions — the risk of sexual violence and harassment against women, the danger women face from cultural, tribal and traditional practices, and the country where women are most in danger of human trafficking including forced labour, sex slavery and domestic servitude.
The question on cultural practices targeting women included offences such as infanticide, acid attacks, female genital mutilation, child marriage, forced marriage, physical abuse or mutilation as a form of punishment.
The other category in which India ranked the worst was sexual violence which comprised rape as a weapon of war, domestic rape, rape by a stranger, lack of access to justice in rape cases, sexual harassment and coercion into sex as a form of corruption.
Govt response : A source in the Ministry of Women and Child Development said the survey was not based on scientific findings.

Reviving economy faces risks

The Reserve Bank of India has observed that the 7.7% GDP growth in the last quarter indicates the economy is well on the recovery track.
At the same time, the conditions that had resulted in fiscal consolidation, moderation in inflation and a benign current account, are changing.
Specifically, it warned that the progress achieved on fiscal consolidation could face challenges unless there was buoyancy in tax receipts and restraint on expenditure.
The widening current account deficit — the shortfall widened in 2017-18 on the back of a wider trade deficit — was also a challenge as it impacted exporters’.
Externally, tightening liquidity conditions in developed markets were impacting emerging market currencies, bonds and capital flows. Firming commodity prices, evolving geopolitical developments and rising protectionist sentiments pose added risks.

Modi urges AIIB to boost lending 10-fold to $40 bn

Prime Minister urged the Asian Infrastructure Investment Bank (AIIB) to boost lending tenfold to $40 billion by 2020, and to $100 billion by 2025, in order to speed up infrastructure financing across the region.
Addressing the third annual meeting of the China-backed multilateral lender, PM sought to woo investors by highlighting India’s economic progress and policy environment.
The AIIB started operations in January 2016 and has so far approved 25 projects in a dozen countries with a total financing of more than $4 billion, which PM described as a ‘good beginning.’

SEBI set to open commodities to MFs

The Securities and Exchange Board of India (SEBI) is gearing up to usher the next set of reforms in the commodity market by allowing mutual funds (MFs) to participate in the segment while also actively considering allowing derivatives on commodity indices.
The proposal for allowing mutual funds and portfolio management services (PMS) in the commodity derivatives segment is awaiting final approval by SEBI
The Commodity Derivatives Advisory Committee, which met recently, deliberated upon the issue of physical settlement in commodity derivatives and formed a subgroup to look into this specific matter.
Physical settlement refers to the system where the contract on the day of expiry is settled through the delivery of the underlying commodity instead of the current practice of cash. This assumes significance as currently only about 1-2% of the total turnover of certain commodities is settled by way of physical delivery.
The regulator, however, will have to first frame the warehousing guidelines for non-agriculture commodities before going ahead with physical settlement. In September 2016, SEBI introduced warehousing norms for agri-commodities to ensure that exchanges do not face any default risk while the settlement and delivery of the commodity is assured.
Equity exchanges BSE and NSE, which plan to start commodity trading from October, have asked SEBI to allow co-location in the commodity derivatives segment as well.
A co-location facility is a data centre with racks for computer servers, which helps in execution of high-frequency trades. Globally, prominent commodity bourses like the Chicago Mercantile Exchange, the Liffe and the Tokyo Commodity Exchange provide this facility.The main objective is to reduce latency in connections with the trading system, especially for electronic trading facilities like direct market access and algorithmic trading. High-frequency trading through co-location is catching on in India. NSE was the first exchange to offer this to its members in August 2009, while BSE started it early 2018.

Belize’s reef may be out of risk

The Mesoamerican Reef, an underwater wonder world whose survival was considered to be at risk for years, may now be removed from UNESCO’s list of threatened World Heritage Sites, thanks to bold steps to save it by activists and the Belizean government.
Second in size only to the Great Barrier Reef in Australia, the Caribbean reef was named to the prestigious World Heritage List in 1996, but placed on endangered status in 2009 because of Belize’s plans to allow oil exploration nearby.
The warning also encompassed the mangroves that help protect the reef and serve as a breeding ground for many of the hundreds of fish species that inhabit the area. That spurred activists into action. They organised an informal referendum in 2012, in which 96% of Belizeans voted against offshore oil exploration, choosing the reef over the potential economic gains for the country.
Stretching from the tip of Mexico’s Yucatan peninsula all the way to Guatemala and Honduras, the reef includes 380 km in the waters off Belize, the portion covered by World Heritage status.

When an insurer buys a bank

Reports of state-owned LIC planning to buy the government’s holding in the troubled IDBI Bank to become a majority shareholder have triggered a debate around whether LIC should be using policyholders’ money to buy a controlling stake in a troubled bank.
LIC’s bid to acquire controlling stake in the bank may give it an entry into the banking space, while allowing the government to raise around Rs 10,000 crore — thereby helping it meet the disinvestment target for the year.
The proposal involves LIC raising its stake in IDBI Bank to 51% from the around 11% that it had at the end of March.
LIC has presented to the government a number of synergies and mutual benefits. While IDBI will get the requisite capital, LIC will get a controlling stake in a bank, and is learnt to be preparing to bring in a professional management to run it.
Can LIC enter a new business to begin with? The Corporation has argued that the Life Insurance Corporation Act, 1956 permits it to enter an unrelated business that it is capable of running — and it can, therefore, pick up a controlling stake in a bank. It can “carry on any other business which may seen to the Corporation to be capable of being conveniently carried on in connection with its business and calculated directly or indirectly to render profitable the business of the corporation”.
Will it require changes in regulations as well?
The existing rules of the Insurance Regulatory and Development Authority of India (IRDAI), the autonomous, statutory regulator of the Indian insurance and re-insurance industry, do not permit LIC to raise its shareholding in a single listed entity beyond 15%.
Since LIC already holds 10.82% stake in IDBI Bank (as on March 31), it would require exemption from the IRDAI to pick up a majority stake in the bank. The insurance regulator has laid down this condition to ensure that the Corporation does not put policyholders’ money at risk, and has a diversified portfolio.
why does the government want to cut its stake in IDBI Bank?
IDBI Bank is the worst performing state-owned lender in terms of Non-Performing Assets (NPAs). IDBI Bank’s Gross NPAs rose to 27.95% — which means that out of every Rs 100 loaned by the bank, Rs 28 turned into NPAs. Unlike in the other public sector banks, the government can pare its stake in IDBI Bank to below 50%, because this bank is not governed by the Bank Nationalisation Act, 1969.
Any other risks? some experts argue that buying a controlling stake in a beleaguered state-owned bank may not be a prudent decision. It could put the Corporation at risk, since it would be required to pump in capital in the bank year after year. LIC is already a large investor in public sector banks and holds a more-than-9% stake in 16 out of India’s 21 public sector banks.

Emperor’s new clothes

The ongoing Aadhaar imbroglio is symptomatic of not only the rot within India’s welfarism but also its systemic entropy. We will find inherent inconsistencies in welfarism as it is practised in India. Right from the beginning, policy and decision makers of independent India have ignored a fundamental reality: that the welfare state is, first and foremost, a state.
They have spent most of their energy and resources on introducing and expanding welfarist measures rather than, what was and is urgently needed, strengthening the institutions of the state – even for the success of welfarism.
Colonial setup and reasons: For the British had framed laws and formulated policies to largely further their own ends.
- They set up institutions to perpetuate the Empire;
- they promoted the extortionist land revenue system to bolster the exchequer;
- they framed economic policy that bolstered the manufacturers of Manchester and Lancashire rather than those of Kanpur and Bombay;
- they created an administration to suppress and repress the natives rather than ‘organise liberty with order’;
- they established the police that had least regard for human rights; in almost everything they did, the interests of mother country preceded those of the colony.
Independent India: Not much has been done to alter that situation by way of state capacity augmentation. On top of that, the Indian state took upon itself a variety of responsibilities: becoming the prime mover of development, overseeing infrastructure projects, setting up dams and public sector undertakings, regulating (usually heavily) the economy, taking care of health and education, trying to achieve a socialistic pattern of society, in short doing everything under the sun.
Statism: with mounting inefficiencies, ineptitude and corruption in government functioning. This is the statism of a weak state, but it is still statism.
Our leaders love it; in their scheme of things, the cure for statism is not small government or less statism; the solution is more or, at best, a different kind of statism. For instance, when public distribution system (PDS) proved less than effective, a targeted public distribution system (TDPS) was devised.
How did it go? In the foreword of its performance evaluation report, erstwhile Planning Commission deputy chair Montek Singh Ahluwalia wrote in April 2005: “About 58% of the subsidised food grains issued from the central pool do not reach the below poverty line families because of identification errors, non-transparent operation and unethical practices in the implementation of TPDS. The cost of handling of food grains by public agencies is also very high.” Ten years later, the Comptroller & Auditor General’s report said, “After a lapse of two years from the stipulated date of completion, most of the states were yet to computerise their TPDS operations.”
Politicians: So, our political masters stayed focussed on making the state largesse more targeted.
Aadhaar was conceptualised, but it has also run into all manner of trouble – linking Aadhaar to ration cards, privacy matters, data theft, even alleged starvation deaths, litigations. But the government is still adamant regarding the implementation of Aadhaar. Everybody knew that inadequate state capacity plagued PDS, but little was done to address the real issue; instead something new, TPDS, was tried.Similarly, the implementation of Rashtriya Swasthya Bima Yojana has proved to be less than satisfactory, but the government aims at an even more ambitious National Health Protection Scheme.
Limits to state capacity: More than stubbornness, this is dogmatism:The premise in this case is that a welfare state can be built regardless of state capacity. It is putting the cart before the horse, but they are convinced that this will work. Which means that the state can take limitless burden without improvement in its institutions, without administrative reforms.
Administrative Reforms is the need of the hour: There was something called the Second Administrative Reforms Commission,It prepared as many as 15 reports, the last of which came out in April 2009. Nobody has heard about administrative reforms – or, for that matter, movement on police and judicial reforms – since then.
Smoke and mirrors: It says something about the obtuseness of our politicians that neither the government nor the opposition is bothered about administrative, judicial and police reforms; they are happy with cows, name changing, symbolism and other emotive issues. The engine bequeathed by the Raj was rickety; instead of repairing it, politicians have burdened it with a myriad of welfare measures.

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