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IASbaba’s Daily Current Affairs [Prelims + Mains Focus] – 6th February 2018

  • IASbaba
  • February 6, 2018
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IASbaba's Daily Current Affairs Analysis
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IASbaba’s Daily Current Affairs (Prelims + Mains Focus)- 6th February 2018

Archives


(PRELIMS+MAINS FOCUS)


SC on Honor Killing 

Part of: Mains GS Paper I- Social Issues

Pic credit: http://www.thehindu.com/todays-paper/article22663517.ece/alternates/FREE_660/05inthkabKDR-GAE3CE7IU1jpgjpg

Key pointers:

  • Parents, society and khaps have no right to harass them: SC
  • Two adults are free to marry and “no third party” has a right to harass or cause harm to them, said Chief Justice of India Dipak Misra, speaking against honour killings.
  • A three-judge Bench upheld the fundamental right of two people who wish to marry and live peacefully.
  • SC: No one has any individual, group or collective right to harass a couple.

Article link: Click here


Agni-I ballistic missile

Part of: Mains GS Paper III- Developments in Science & Technology

Key pointers:

  • India recently flight-tested the indigenously developed Agni-I ballistic missile that can carry a nuclear payload as part of a user trial by the Army from a test range off the Odisha coast.
  • It has a specialised navigation system, which ensures it reaches the target with a high degree of accuracy and precision
  • 18th version of Agni-I. The missile was inducted into service in 2004.
  • The surface-to-surface, single stage missile, powered by solid propellants, was launched as part of a regular training exercise by the armed forces.
  • The missile has a specialised navigation system, which ensures it reaches the target with a high degree of accuracy and precision.
  • The 15-metre-long Agni-I, weighing 12 tonnes, can carry payloads up to 1,000 kg.

Article link: Click here


SEBI gets more power

Part of: Mains GS Paper III- Indian Economy, Regulatory Bodies

Key pointers:

  • As part of the proposed amendments in the Finance Bill 2018, the government has given more power to the Securities and Exchange Board of India (SEBI) to impose monetary penalties on important market intermediaries such as stock exchanges and clearing corporations.
  • SEBI can also against newer categories of participants likes investment advisers, research analysts, real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).
  • The proposed amendments to the SEBI Act and the Securities Contracts (Regulation) Act now allow the capital markets regulator to impose a monetary penalty of at least ₹5 crore on stock exchanges, clearing corporations and depositories for non-compliance with regulatory norms.
  • The amendments also allow SEBI to act against entities that furnish false or incomplete information to the regulator. Earlier, it could act only if the entity did not furnish any information.
  • The whole-time members of SEBI have also been given additional powers to act against wrongdoers.

Article link: Click here


(MAINS FOCUS)


HEALTH

TOPIC: General Studies 2:

  • Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.
  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  • Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes.

The National Health Protection Scheme: An analysis

Background:

The National Health Protection Scheme has promised to cover 10 crore families involving 50 crore family members with health insurance cover of Rs. 5 lakh for secondary and tertiary hospitalisation.

How will it work financially?

The NHPS is not a classic insurance programme, since the government pays most of the money on behalf of the poor, unlike private insurance where an individual or an employer pays the premium.
The scheme operates around the insurance principle of ‘risk pooling’.
When a large number of people subscribe to an insurance scheme, only a small fraction of them will be hospitalised in any given year.
In a tax funded system or a large insurance programme, there is a large risk pool wherein the healthy cross-subsidise the sick at any given time. The NHPS will be financially viable, despite a high coverage offered to the few who fall sick in any year, because the rest in the large pool do not need it that year.

Apart from budgetary allocation, it will draw additional resources from the Health and Education Cess and also depend on funding from States to boost the Central allocation.

Comparison with RSBY:

The scheme will provide cost coverage, up to ₹5 lakh annually, to a poor family for hospitalisation in an empanelled public or private hospital.

  • The precursor of the National Health Protection Scheme (NHPS), the Rashtriya Swasthya Bima Yojana (RSBY), provided limited coverage of only ₹30,000, usually for secondary care.
    Though it improved access to health care, it did not reduce out-of-pocket expenditure (OOPE), catastrophic health expenditure or health payment-induced poverty.
    The NHPS addresses those concerns by sharply raising the coverage cap.
  • It shares with the RSBY the weakness of not covering outpatient care which accounts for the largest fraction of OOPE.
    The NHPS too remains disconnected from primary care.

Financing challenges

The Budget has made this positive announcement and added that resources will be provided for the same. At the financing level, this will require some innovative methods.

The average cost for covering a family of five persons where the oldest person is less than 30 years old for Rs. 5 lakh, yields an average of Rs. 11,000-13,000 per annum. Multiplying this by 10 crore families, the outlay would be Rs 1.1-1.3 lakh crore per annum. The amount is a recurring one, and has to be paid every year by the government.

  • A way out is for the States to contribute a fixed proportion. However, this would be difficult as almost all States are facing a stiff fiscal position with limited funds for executing their capex projects.
  • The government can subsidise the scheme and make the families pay a part of the premium. But these families do not have the wherewithal to make such payments given their very low levels of income, which barely provides them with one full meal a day!
  • The NHPS needs a buy-in from the States, which have to contribute 40% of the funding. Even with the low cost coverage of the RSBY, several States opted out. Some decided to fund their own State-specific health insurance programmes, with distinctive political branding.

Implementation challenge:

  • Enrolling such people is always difficult.
    Just like the farm insurance scheme which promises a lot but covers very few farmers, access to this grandiose scheme would be limited as most would be excluded.Aadhaar and Direct Benefit Transfer are definitely structures created to ensure better delivery but they have to be made accessible to all deserving people.
  • There could be resistance from private hospitals. The insured poor would prefer to go these hospitals as they get better treatment from the best doctors.
    Hospitals normally do not encourage such transactions as there are delays in receipt of payments from when dealing with the insurance companies.
    Given the magnitude, insurance companies would not make money on these policies when pooled. It would be impossible to settle claims leading to non-viability of the business.

Way ahead:

  • In a federal polity with multiple political parties sharing governance, an all-India alignment around the NHPS requires a high level of cooperative federalism, both to make the scheme viable and to ensure portability of coverage as people cross State borders.
  • The NHPS will pay for the hospitalisation costs of its beneficiaries through ‘strategic purchasing’ from public and private hospitals. This calls for a well-defined list of conditions that will be covered, adoption of standard clinical guidelines for diagnostic tests and treatments suitable for different disorders, setting and monitoring of cost and quality standards, and measuring health outcomes and cost-effectiveness.
    Both Central and State health agencies or their intermediaries will have to develop the capacity for competent purchasing of services from a diverse group of providers.
    Otherwise, hospitals may undertake unnecessary tests and treatments to tap the generous coverage.

Conclusion:

Conceptually, the programme is compelling, but it would be hasty to rush into it, given the complexities involved. Thus it is required that the implementation challemges and funding issues are sorted before the programme comes into effect.

Connecting the dots:

  • Discuss the provisions of National Health Protection Scheme. Also analyze implementation and financial challenges associated with the programmer.

ECONOMY

TOPIC:

General Studies 3:

  • Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

General Studies 2:

  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

India’s poor performance in enforcing contracts

Introduction:

India has shown dismal performance in one key component in the Ease of doing business indices- “enforcing contracts”.
In the World Bank report which covers 190 economies, evaluating them on 10 specific parameters required for doing business, India’s ranking in the ‘enforcement of contract’ component is 164.
The report says that it takes an average of 1,445 days (or nearly four years) to enforce a contract in India.
The cost to a litigant to recover amounts legitimately due to him is 31% of the value of the claim. This is a shocking state of affairs.

Distance-To-Frontier score:

It measures the distance of a particular country’s economy from the “frontier” which represents the best performance.
Simply put, the “frontier”, measuring 100, is the ideal situation and a DTF ranking indicates how far a country is from that ideal.
Though India’s DTF score was 56.05 in 2017 and is projected to improve to 60.76 in 2018 in the overall ease of business rankings, unfortunately, in ‘enforcing contracts’ our score was a dismal 38.90 in 2017, projected to improve feebly to 40.76 in 2018.

Background:

A nation’s ranking in the “ease of doing business” index is based on the average of 10 sub-indices which are: starting a business; dealing with construction permits; getting electricity connections; registering property; getting credit; protecting minority investors; paying taxes; trading across borders; enforcing contracts; and resolving insolvency.
The sub-indices about “enforcing contracts” is directly dependent on a country’s ability to provide an effective dispute resolution system.

Legislation:

Parliament has passed the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act.
The purpose behind the Act is to provide a forum with upgraded infrastructure to resolve a certain class of disputes, classified as “commercial disputes” in the Act, in a time-bound and effective manner.

Provisions under the Act:

  • The legislation also requires establishment of appropriate infrastructure and manpower training on a constant basis.
  • In identifying disputes above a specified value to qualify as commercial disputes, it has ensured that these courts are not cluttered up with small claims.
  • The Act essentially paves the way for the setting up of commercial courts at the district level and a commercial division in High Courts that have original jurisdiction along with a commercial appellate division in the High Courts to hear appeals arising under the Act.
  • By mandating that High Courts must show levels of disposal of such claims on their website, the Act also ensures transparency.

However, for this statutory scheme to work, many players must play their respective parts.

Poor enforcement of the legislation:

  • The Act contemplates the “appointment” of commercial court judges in districts.
    Issue- In most States the government has merely vested the presiding district judge with powers to act as a commercial court.
    Given that the workload of principal district judges is already quite staggering, vesting them with the powers of commercial courts in districts goes against the intent and purpose of the Act.
  • Whenever presiding officers are appointed to commercial courts, it must be ensured that they have experience in dealing with commercial disputes, as Section 3 of the Act ordains.
    Issue: In most cases the incumbent is a district judge without any experience.
  • In terms of Section 19 of the Act, the respective State governments must, in consultation with the High Courts, establish necessary infrastructural facilities to run these courts.
  • In terms of Section 20 , the State government is to establish facilities providing for the training of judges who may be appointed to these courts.
  • In terms of Section 17, statistical data regarding the functioning of these courts are to be displayed on the website of the respective High Courts.

Conclusion:

Without institutionalising above mentioned improvements, it will be difficult commercial courts businesslike and our ranking in “enforcing contracts” any better.

Connecting the dots:

  • India has performed poorly in one of the sub-indices under Ease of doing business rankings- “Enforcing contracts”. Discuss the reason behind. Also suggest measures to solve the issue.
  • India has performed poorly in one of the sub-indices under Ease of doing business rankings- “Enforcing contracts”. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act if implemented effectively can help improve the rankings. Analyze.

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