IASbaba’s Daily Current Affairs (Prelims + Mains
Focus)- 14th September 2018
Government announces measures to stabilize rupee
Part of: Prelims and GS III- Indian Economy
The Government announced a series of measures to boost market confidence, curb the widening current account deficit which touched 2.4% of gross domestic product and stabilize the rupee.
- To attract more Foreign Portfolio Investors (FPI) into the corporate debt market, the government has said it will review a couple of restrictions on their investments.
- So, the condition that FPIs’ investment in a single corporate entity cannot exceed 20% of its corporate bond portfolio will be reviewed.
- The condition that FPIs cannot invest more than 50% of an issue of corporate bonds will also be reviewed
- The government will review the mandatory hedging condition for infrastructure loans borrowed under the external commercial borrowing (ECB) route.
- Presently there is no compulsion on borrowers to hedge these loans.
- Manufacturing companies borrowing up to $50 million through ECBs will be able to do so only for a one-year term as against the three-year term allowed earlier.
- Masala bonds will be exempted from withholding tax this financial year and Indian banks will be allowed to become market makers in masala bonds including by underwriting.
- Masala bonds are rupee-denominated instruments issued abroad by Indian borrowers.
- The advantage of these bonds is that any depreciation in the rupee will not affect the borrower.
- The government will take necessary steps to cut down non-essential imports and increase export.
SC questions ‘leprosy-free’ tag for India
Part of: Prelims and mains GS II- Health services and issues
Supreme court questioned the leprosy free tag and said the country was declared leprosy-free on December 31, 2005, the reality is “entirely different” in reference with reports of the National Leprosy Eradication Programme (NLEP) which said only 543 districts of the total 642 districts in the country had achieved the World Health Organisation-required prevalence rate of less than one case of leprosy for 10,000 persons.
The underestimation of cases of leprosy and the declaration of elimination of leprosy has resulted in the integration of leprosy in general health services thereby leading to diversion of funds which would have otherwise been dedicated to eliminating leprosy,
- Patients and their families continue to suffer from leprosy and its stigma.
- They are denied their fundamental right to food.
- They are not issued BPL (Below Poverty Line) cards to claim the benefit of various welfare schemes such as the Antyodaya Anna Yojana (AAY).
- They are deprived of housing, basic civic amenities, adequate sanitary facilities and rehabilitation programmes.
Constitutional Principles Violated
- Majority of the populace afflicted with leprosy live as a marginalised section in society, deprived of even basic human rights.
- This manifestly results in violation of the fundamental right to equality under Article 14 and right to live with dignity under article 21.
Human Development Index (HDI)
Part of: Prelims and mains GS II & III- Social development and Economic development
HDI was released by the United Nations Development Programme with the findings indicating a glaring inequality in the country though “millions have been lifted out of poverty”.
- The HDI is the composite measure of every country’s attainment in three basic dimensions:
- Standard Of Living measured by the gross national income (GNI) per capita
- Health measured by the life expectancy at birth
- Education levels calculated by mean years of education among the adult population and the expected years of schooling for children.
Stats with reference to India
- India ranks a low 130 out of 189 countries
- The UNDP report stated that with an HDI value of 0.64 compared to 2017’s 0.636, India is categorised as a medium human development and that its rank rose one spot compared to the 2017 HDI.
- According to the 2018 findings, between 1990 and 2017, India’s HDI value increased from 0.427 to 0.640, an almost 50 per cent increase, which is an indicator that millions have been lifted out of poverty.
- At the same time, in what signals the glaring inequality in the country, the HDI value declines by more than a fourth when adjusted for inequality.
- The value of India’s Inequality-adjusted HDI (IHDI) falls to 0.468, a 26.8 per cent decrease, far worse than the global average decrease in the global HDI value due to inequality at 20 per cent.
Do you know?
- In reference to Women Empowerment
- The report notes that in India women hold only 11.6 per cent of parliamentary seats
- Only 39 per cent of adult women have reached at least a secondary level of education as compared to 64 per cent men.
- India’s worst performance on the gender scale is with regards to its female participation in the labour market which is 27.2 per cent compared to 78.8 per cent for men even as globally 49 per cent women are part of the labour force as compared to 75 per cent men.
- India performs better than its neighbours Bangladesh and Pakistan, ranking 127 out 160 countries on the Gender Inequality Index
- Norway at 0.95 has been ranked the highest on the HDI scale
- Followed by Switzerland, Australia, Ireland and Germany
- Niger is the bottom at 0.35.
- Central African Republic, South Sudan, Chad and Burundi have the lowest scores
- The greatest increase in HDI rank over the last five years is by Ireland
- This is followed by Turkey
- The worst decline was seen in conflict-hit countries of Syria, Libya, and Yemen.
Person in News: Justice Ranjan Gogoi is next CJI of India
- As the 46th Chief Justice of India, Justice Gogoi will have a tenure of about 13 months, till November 17, 2019.
- Justice Ranjan Gogoi is the first person from the Northeast to claim a top position in the Supreme Court.
- The President of India has appointed Justice Ranjan Gogoi (the most senior judge in the Supreme Court) as the next Chief Justice of India.
TOPIC: General Studies 2
- Issues relating to development and management of Social Sector/Services relating to Education, Human Resources
- Government schemes and Policies
An education that is in sync
- Higher education in India has grown exponentially in recent years.
- A survey by the All India Survey on Higher Education published in July this year shows that the gross enrolment ratio (GER) was 25.8% in 2017-18, up from 10% in 2004-05.
What is GER?
GER is the ratio (expressed as percentage), of the total enrolment within a country in a specific level of education, regardless of age, to the population in the official age group corresponding to this level of education.
GER and issues of higher education India
- For higher education, the survey calculates the ratio for the age group 18 to 23 years.
- Internationally, the age group 18 to 22 is also used. For India, the Survey gives the corresponding figure as 30%.
- The GER for higher education in India is still less than what it is in developed countries, the growth rate is still quite impressive.
- The next step is to ensure that the outcome of academic programmes by higher education institutes (HEIs) is acceptable.
- The debate in the media on higher education is often focussed on issues related to governance and autonomy.
- There needs to be a debate on other important issues, including the content of higher education in HEIs.
Radhakrishnan Commission Report (RCR) (1948-49)
- Just after Independence, a commission comprising educationists from India, the U.K. and the U.S., and chaired by Dr. S. Radhakrishnan, was formed “to report on Indian University Education and suggest improvements and extensions that may be desirable to suit present and future requirements of the country”.
- The RCR recommended a well-balanced education with ‘general’, ‘liberal’ and ‘occupational’ components.
- Without all-round general (including liberal) education, one could not be expected to play roles expected of a citizen outside one’s immediate professional sphere.
- It advocated that general and specialised education should proceed together.
- The study of languages should be given equal importance as one communicated to the outside world only through the medium of language. Therefore, a lack of communication skills could be a handicap.
- The RCR drew inspiration from the emphasis on general education in universities in the U.S.
- It cited a lecture by Einstein (1931) where he said: “The development of general ability for independent thinking and judgement should always be placed foremost, not the acquisition of special knowledge…”
The American parallel
- The National Academies Press (NAP) of the U.S. which represents the national academies of sciences, engineering and medicine published the report, “The Integration of the Humanities and Arts with Sciences, Engineering, and Medicine in Higher Education: Branches from the Same Tree”.
- According to the NAP’s report, the purpose of higher education is to prepare graduates for work and life, as well as active and engaged citizenship.
- This can be achieved only through the acquisition of knowledge, skills and competencies related to the profession they chose to specialise in and also written and oral communication skills, ability to work as a team, ethical decision making, critical thinking, and ability to apply knowledge in real world settings.
Significance of RCR and NAP
- Philosophical deliberations in the RCR report that are related to the content of higher education are still relevant today.
- Both the RCR and NAP reports attach the importance to the integration of Sciences, Technology, Engineering, Mathematics and Medicine and humanities in university teaching.
- The RCR, in turn, talked about including general education as an essential element. But the NAP report goes much beyond what the RCR states and advocates integrating the teaching of humanities in STEM.
Why inter-disciplinary approach is needed?
- Problems in a real-life setting are interdisciplinary and require an appreciation of related fields.
- The NAP report acknowledges that disciplinary specialisation has resulted in many developments but also points out that emerging problems are multi-disciplinary.
- This can be seen in examples: rising demand for energy, and continuing advances in technology. The use of energy on a large scale and the continued availability of energy in an environmental-friendly manner are challenges which cannot be addressed by narrow specialists.
- There are technical advances every day, influencing everyday life in diverse ways. This is also leading to concerns about privacy, technology-driven social and workforce changes, and the evolving need for individuals to retrain themselves to remain in employment.
- In such a scenario, it is important that professionals study the impact of innovations on society in a holistic manner.
Scene in India
- Higher Education Institutions are far from integrated. As far as the inclusion of elements of general education in the curriculum for undergraduates is concerned, the situation is mixed.
- Several engineering, and science education and research institutes have embedded general education programmes at the undergraduate level. Such programmes are missing in most university-affiliated science colleges.
- Rather, there are institutions that cater to a single stream which precludes the possibility of even an informal interaction between students and faculty with different specialisations.
- The concept of general education and specialised education proceeding together needs to be widely adopted in India.
- The focus of undergraduate education should be on classical disciplines, with enough credits for general education. Focus on specialisation can wait until the post graduate level.
- In 1959, C.P. Snow spoke about “The Two Cultures”. It is time to bridge the divide between the two cultures in the education system and evolve a third culture where the two sides understand and appreciate each other.
Connecting the dots
- The quality of higher education in India requires major improvement to make it internationally competitive. Do you think that the entry of foreign educational institutions would help improve the quality of technical and higher education in the country? Discuss. (UPSC mains 2015)
TOPIC: General Studies 3
- Indian Economy, inflation, taxation
Paying at the pump: On the causes and consequences of soaring fuel prices
From last six months, petrol and diesel prices continuing to rise. There are many causes of it, some local and other global.
Why are petrol and diesel prices continuing to rise?
- In June 2017, India’s state-run oil marketing companies switched to a dynamic pricing approach to set pump prices of petrol and diesel on a daily basis.
- The move was aimed at helping ensure a market-driven approach to fuel pricing by enabling oil firms to factor in day-to-day fluctuations in crude oil prices as well as movements in the exchange rate of the U.S. dollar to the rupee.
- As a result, with both crude oil and the dollar becoming significantly dearer over the last six months, petrol and diesel prices have remained on a steady upward trajectory countrywide.
- According to the Indian Oil Corporation (IOC), petrol hit a record high of Rs. 88.26 per litre on September 11 in Mumbai, where fuel prices are the highest among India’s four major metros. At that level, the cost of petrol to consumers had climbed 8.4% in this fiscal year.
- Besides the cost of crude oil and the exchange rate, the incidence of Excise Duty (levied by the Centre) and VAT (charged by the respective States), along with a nominal dealer commission that the oil companies pay to fuel pump owners, ends up approximately doubling the final price consumers pay.
- To illustrate: a consumer in Delhi paid Rs. 79.15 for a litre of petrol that was delivered to the dealers in the city at a cost of Rs. 39.21.
What are the major consequences of this trend in fuel prices?
- Diesel is used to transport goods and commuters and therefore has a direct pass-through impact on retail inflation.
- When consumers end up facing higher fuel bills for using their petrol-powered two-wheelers or cars, and are also unsure of how the overall increase in the cost of living is going to impact their monthly budgets, they are likely to curtail non-essential consumption expenditure.
- Thus, even as inflation accelerates, consumer spending, a key driver of economic growth, could start to soften.
What can the government do to ease the situation?
- Given the extent to which Central and State taxes inflate the final fuel prices paid by consumers; the governments have the option of trimming excise duty and VAT. This would entail foregoing some revenue in the short-term.
- In the longer term, policymakers must look at more enduring structural solutions including ways to reduce the dependence on crude oil imports.
Connecting the dots:
- Consumer goods prices and in general inflation are affected by highly volatile fuel prices. Do you think, bringing down fuel imports will stabilize prices in general? Elaborate alternatives to fuel imports.
(TEST YOUR KNOWLEDGE)
Model questions: (You can now post your answers in comment section)
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Q.1) Decline in interest rates:
- Will lead to large outflow of foreign portfolio investment
- Will lead to large inflow of foreign portfolio investment
- Will not affect foreign portfolio investment
- May affect or not affect portfolio investment
Q.2) ‘Hot Money’ refers to
- Foreign Portfolio Investment
- Reserves with the RBI
- Net GDR receipts
- Net Foreign Direct Investment
Q.3) In the context of India, Foreign Portfolio Investment (FPI) relates to –
- Investment by non-residents in Indian securities
- Takeover of domestic companies by foreign companies
- Private remittances to foreign companies
- Institution established or incorporated outside India which proposes to make investments in Indian securities
Q.4) Consider the following statements with reference to the Masala Bonds
- These can be issued outside India as well as within India.
- These are rupee denominated bonds.
- Both banks and corporate entities can issue these bonds.
Which of the statements given above are correct?
- 1 and 2
- 1 and 3
- 2 and 3
- 1, 2 and 3
When it isn’t right to forget
A higher policy burden
No right of way for the majority
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