IASbaba’s Daily Current Affairs – 26 June, 2015

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IASbaba’s Daily Current Affairs – 26^th  June, 2015

NATIONAL

Don’t take away our autonomy: IIMs

Recently government has introduced a draft on Institutes of Management Bill, 2015.  IIM Bill 2015 has been put under discussion and is going to take the shape of IIM Act 2015 after nod from Parliament.

What is the bone of contention?

• Clause 35 and 36 that rob the board of governors of its powers
• Board of governors will need ministry approval before passing any regulation
• Changes in fees, remuneration, infrastructure, scholarships, etc, will need ministry approval
• A visitor as a de facto head of the institute to be appointed through the ministry
• Appointments of chairpersons and directors will need ministry nod
• Converting Diploma into Degree

Points against the Bill

• Public educational institutes as compared to private (autonomous) institutions like IIT’s and IIM’s have performed badly and stand nowhere in global parameters and standards. Whereas IIT’s and IIM’s are the only institutions which have created a mark at global level. Diluting their autonomy will be detrimental to their management system creating continuous tussle between government and institution
• The Bill seeks to dilute the powers of Board of governors and seeking approvals for financial, regulatory and academic issues. This may suppress the talented workforce in the management board as evident from enough interference from government domain.
• Indian Institute of Management has placed India at world level through its quality even without government interference. The dilution of powers will stagnate their growth.
• It is the step towards centralization of power that is not good for growing institutions.

Points in favour of the Bill

• In 50 years of establishment, Indian institutes have not fared well at global level. They are even far from their Asian counterparts such as China and others. Governmental regulation will address the inefficient management system through constant check and financial help.
• For a country which has had a history of management education of over six decades, it is unfortunate that no Indian business school is anywhere near the top 10 global institutions measured by various rankings. The China Europe International Business School or CEIBS, set up 20 years ago in China, beat the 53-year old Indian Institute of Ahmedabad (IIM-A) by a long margin to feature at the 11th place in the Financial Times’ Global MBA Ranking 2015.
• The regulatory measures of government include fee structure that is a real challenge for medium class students. The fees of these institutes are not something a middle class can manage. With the autonomy they will seldom ease it for the larger good of younger generation aspiring to be graduated from these institutions.
• Indian institutes have performed badly in Research domain at global level. One important reason is scarcity of funds and infrastructure. With governmental regulation and proper funding, the prospects of growth in research and development will be more.

IASbaba’s view

• As far as the draft bill is concerned, everything seems okay except the length and breadth of the word ‘Regulation’. Government’s bill mentioned about regulation multiple times but it’s not explicitly elaborated. The opposition should be explained about the extent of regulation clearly.
• With the past performances of public institutions and their impact on global level, it is less of an argument to say if government’s regulation will bring Indian Management institutions to the top. Ongoing tussle and opposition without proper deliberation will only bring non-uniformity over the issue. There is need to discuss the most contentious issues considering the views of Management Institutions. It is for simple reason that they are the one who will run the institutions with their sheer hard work and quality.
• Government should not control the decision making process to a greater extent. It will give way to constant tussle and consequently affect the academic processes.
• Arguments in favour of more funding stands poor because government has not done well enough as evident from reduction in budget allocation for educational institutions.

Connecting the dots:

• UPSC in 2014 had asked a question on Autonomy of IIT’s and other institutions. Prepare this issue from various dimensions.
• Do you think the proposed bill if enacted will improve the performances of Indian Management Institutes? Explain
• Regulatory measures of Government should be limited and should not interfere with the decision making process of Private Institutions? Prepare both pros and cons

Three mega urban schemes launched: Primacy to people’s vision

• With the objective of urban transformation, the Prime Minister has launched 3 Mega Urban schemes viz., Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Housing for All to enable better living and drive economic growth.
• Under AMRUT, 500 cities are targeted for development. The Smart Cities scheme will target development of 100 cities over five years and Housing for All envisages construction of two crore houses in urban areas in seven years.

Two systemic changes in the flagship programs:

• With the vision of ‘people-centric’ urban development, for the first time residents will be given the mandate to formulate a development vision for their cities.
• States have been given more powers to decide how urban areas should emerge and be given liberty and flexibility in formulation, approval and execution of projects.

Atal Mission for Rejuvenation and Urban Transformation (AMRUT)

• Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which ‘replaces’ the Jawaharlal Nehru National Urban Renewal Mission, will give the States and the Union Territories the liberty and flexibility in formulation, approval and execution of projects.
• AMRUT adopts a project approach to ensure basic infrastructure services relating to water supply, sewerage, storm water drains, transport and development of green spaces and parks with special provision for meeting the needs of children.
• Implementation of this mission will be linked to promotion of urban reforms such as e-governance, constitution of professional municipal cadre, devolving funds and functions to urban local bodies, review of building bye-laws, improvement in assessment and collection of municipal taxes, credit rating of urban local bodies, energy and water audit and citizen-centric urban planning in cities other than the 100 smart cities.
• Under this project, 10% of the budget allocation will be given to states/union territories as incentive based on achievement of reforms during the previous year.

Smart city

• The 100 smart cities mission intends to promote adoption of smart solutions for efficient use of available assets, resources and infrastructure with the objective of enhancing the quality of urban life and providing a clean and sustainable environment.
• Under the Smart Cities Mission selected through a ‘City Challenge Competition’ would get central assistance of Rs 100 crore per year for five years.
• Each state will shortlist a certain number of smart city aspirants and they will prepare smart city proposals for further evaluation for extending central support,
• Under this mission, special emphasis will be given to participation of citizens in prioritizing and planning urban interventions.
• This will be implemented through an ‘area based’ approach consisting of retrofitting, redevelopment, pan-city initiatives and development of new cities.
• Under retrofitting, deficiencies in an identified area will be addressed through necessary interventions. Pan-city components could be interventions like Intelligent Transport Solutions that benefits all residents by reducing the commuting time.
• Smart city aspirants will be selected through a process of competition and with effective citizen participation ending the ‘top down’ approach and leading to ‘people centric’ urban development.

Housing for All

Components of the program

• Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource;
• Promotion of affordable housing for weaker section through credit linked subsidy;
• Affordable housing in partnership with Public & Private sectors
• Subsidy for beneficiary-led individual house construction or enhancement.

Mandatory Reforms

The Mission prescribes certain mandatory reforms for easing up the urban land market for housing, to make adequate urban land available for affordable housing.
• Women’s empowerment has been made a component of the ‘Housing for All’ scheme that envisages houses for all by 2022. Ownership of houses will be in the name of women or jointly with the husband.
• The average Rs. 1-lakh grant for a house to be provided by the Centre can be used by the States for slum redevelopment projects to make them viable.

Courtesy – PIB, Economic Times

Connecting the dots:

• In the process of rapid expansion of urbanisation in India, what are the challenges and opportunities?
• Governance issues related to infrastructure, finance, slums, migration in Urban areas.
• Though urban development programmes launched by the Government of India, in the recent decade are of best of intentions what are the issues in achieving the targets? Is the problem at the plan formulation stage or implementing stage or top-down approach followed by the govt?

 INTERNATIONAL

China, India fast-track BCIM economic corridor project

• The talks between BCIM countries have been going from a long time since 1999 track II dialogue in Kunmiang. There had been a realization that improving trade is a matter of more and better connectivity. Since this issue is also liked with N-eastern Indian development; and relations with neighboring countries, it is an important issue.
• Recently China and India are adding fresh momentum to the establishment of the Bangladesh-China-India-Myanmar (BCIM) economic corridor, which is expected to develop gradually before more ambitious goals are achieved.

What is BCIM Corridor?

• The BCIM Economic Corridor is a modern version of the Silk Road.
• It is planned to run from China’s Kunming province to Kolkata in India, and link Mandalay in Myanmar and Dhaka and Chittagong in Bangladesh through a network of roads, railways, waterways, and airways under a proper regulatory framework

The initiative seeks to:

• Improve connectivity and infrastructure – power projects, telecommunications etc.
• Energy resources, agriculture, and trade and investment.

Benefits to India and BCIM as a whole

• Together, the BCIM countries account for 9 per cent of the global landmass and 40 per cent of the global population.
• Special emphasis in BCIM is on inter-regional road network as roads are the cheapest route of trade. This will lower transportation costs between India and China by 30 per cent and escalate already growing Sino–Indian trade through the BCIM Corridor.
• The BCIM Corridor will allow all four countries to exploit existing complementarities in trade — in terms of both sectors and products. Myanmar is a primary goods exporter and has abundant cheap labour. India has positioned itself as a leading services exporter. China is the largest manufacturing exporter in the world; and Bangladesh, like many other South Asian countries, engages in both services export and low-end manufactured goods.
• To address energy security, BCIM sub-regional cooperation can capitalise on hydrocarbons in Bangladesh, hydro-electric and mineral resources in Northeast India, natural gas reserves in Myanmar, and coal reserves in East Indian states like Odisha, Chhattisgarh and Jharkhand and China’s Yunnan province.
•  India’s engagement with Myanmar will contribute to India’s energy security as India is currently heavily dependent on Gulf oil imports.
• These initiatives will also lead to economic development of the NE region of India with special emphasis on infrastructure creation and people-to-people contacts.

• Corridor will provide access to sea for north-eastern States- From the West Bengal capital, the corridor will head towards Benapole, a border crossing town in Bangladesh. After passing through Dhaka and Sylhet, it will re-enter the Indian territory near Silchar in Assam. The rest of the passage will be connected with Imphal and then pass through the India-built Tamu-Kalewa friendship road in Myanmar.

Connecting the dots:

• ‘North Eastern States are crucial for any international engagements from South Asian Nations’. NE States needs to be developed before any developmental activity is thought of? Relate it with infrastructural requirements and development of NE.
• What are the hurdles in the efficient completion of BCIM project?
• Don’t you think it is the policy of China to get access to NE States of India with alluring projects like BCIM? Relate BCIM with Silk Road Strategy of China

ECONOMICS

Banks allowed to borrow from global institutions

• With the objective of making the funding process easier, Reserve Bank of India (RBI) has allowed banks to borrow from global multilateral financial institutions for general banking business. They can do so without seeking the central bank’s approval.
• However such borrowings should not be for capital augmentation and would be subject to the applicable prudential norms.
• With a view to providing greater flexibility in seeking access to overseas funds, it has now been decided to permit AD Category-I banks to borrow from international/multilateral financial institutions without approaching Reserve Bank for a case-by-case approval.
• Such institutions include international/multilateral financial institutions of which Government of India is a shareholding member or which have been established by more than one government or have shareholding by more than one government and other international organisations