IASbaba's Daily Current Affairs Analysis

IAS UPSC Prelims and Mains Exam – 06th February 2019

(PRELIMS + MAINS FOCUS)

Bullet train gets green light via flamingo haven, national park

Part of: GS Prelims and Mains III – Environment and Biodiversity; Conservation of animals; Protected Areas

In news:

Environment Minister Harsh Vardhan-led panel gave nod to the Mumbai-Ahmedabad high-speed train corridor.
The corridor is said to encroach some of the forest land of Thane Creek Flamingo Wildlife Sanctuary and the Sanjay Gandhi National Park, home to leopards, in Mumbai.
The first lot of bullet trains are expected to ply on six high-speed corridors by 2022-23—Delhi-Mumbai; Mumbai-Chennai; Delhi-Kolkata; Delhi-Nagpur; Mumbai-Ahmedabad; and Mumbai-Nagpur.

Daily Current Affairs IAS UPSC Prelims and Mains Exam

PM-JAY app and National Health Authority

In news:

Union Health Minister recently launched PM-JAY app and also inaugurated the newly-constituted National Health Authority (NHA) which aims to effectively implement PM-JAY.
The app has been introduced within just four months since the launch of the scheme and is aimed at helping users get easy access to information on the scheme, check eligibility, find hospitals nearby and get assisted help.
The National Health Authority with a stronger mandate would be able to prevent, detect and control frauds, abuse and redress grievances, thus resulting in the reduction of leakages.
The National Health Authority would be chaired by Union Health Minister and have representation from the Government and domain experts.

About PM-JAY

Pradhan Mantri Jan Arogya Abhiyaan, also known as Ayushman Bharat is the world’s largest health scheme which will serve a population that equals 27-28 European countries.
The beneficiaries are almost equal to the population of Canada, Mexico and US put together.
The scheme aims to provide cashless treatment to beneficiaries identified through the Central Socio-Economic Caste Census.
The scheme covers 1,350 medical conditions ranging from caesarean section to coronary stenting and joint replacement.
It is a government-sponsored health insurance scheme.
It will provide free treatment for up to Rs.5 lakh a family a year in any government or empanelled private hospitals all over India.

Do you know?

PMJAY has completed 100 days.
The project is billed as the world’s largest state-funded health scheme.
The medical journal, Lancet, has praised the prime minister for prioritising universal healthcare through the PMJAY.

PMJAY is one step towards Universal Health coverage. PMJAY has created an excellent opportunity for the country to improve its health care. It is critical for reducing the disease burden of the country.

India spends just 1.4% of GDP on healthcare which is less than even some developing countries. It should increase the funding and involve the private sector effectively.

(MAINS FOCUS)

NATIONAL

TOPIC: General studies 2

Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.

Separation of powers between various organs dispute redressal mechanisms and institutions.

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

Institutional Decay and Role of Institution in Democracy

Context:

We recently read about unreleased National Sample Survey Office (NSSO) report which revealed that India’s unemployment rate touched a 45-year high of 6.1% (especially after demonetization).
Despite getting all required clearances, the government chose not to publicly release the NSSO report.
This suppression of data/information has created massive controversy and resignation of two members of the National Statistical Commission, a statutory body which releases the NSSO reports.

By suppressing its own data on current employment, or rather job loss, the current Government has, thereby, compromised the autonomy and the standing of the National Statistical Commission.

Institutional decay

Under the current NDA’s rule, an unprecedented and dire situation has arisen, as key institutions – pillars of the republic – have squirmed under the overbearing pressure of interference.
Although institutions have always had to negotiate with political rulers, and there have been periods in India’s past when things came to a flash point, but never before has such a sweeping discontent been visible to the people.
It poses a danger for the country’s democracy if institutions like the Supreme Court, RBI, Election Commission, CBI, CIC etc. are pressurised to function for political ends.

Such sordid story of institutional decay in India is not confined to current ruling government but even the previous governments undermined key institutions.

The internal Emergency imposed on the country from 1975 to 1977 initiated the process.

The then government tried to tame bureaucrats as well as the highest court in the land.
Postings and appointments were manipulated to suit the ruling dispensation.

However, the current government has earned the dubious distinction of sabotaging the autonomy of several political institutions in rapid succession.

Why institutional decay needs to be checked?

Institutional decay affects ordinary citizens in disastrous ways.
Arbitrary expansion and unlawful exercise of power by democratically elected government violates constitutional rights to freedom, equality and justice.

Therefore, there is a need to limit the power of government.

Role of institutions

Institutions, as the embodiment of formal and informal rules, assure citizens that the government exercises power according to some norms that enable as well as regulate state capacity.
Institutions embody ‘strong evaluations’. Institutions, which stand independently of us, give us standards that allow us to evaluate what is right and wrong, better and worse, and higher and lower.
It provides us a position to judge whether the power exercised by political parties is fair or unfair.
Rules make our worlds predictable. We know what the boundaries of the freedom of expression are, we know that if the police arrests us tomorrow, we have the right to appoint a lawyer and appeal to the judiciary.
Without institutions and rules our life would be chancy, unpredictable and fickle.
We would inhabit a space empty of certainties, expectations, aspirations and evaluations.

Conclusion:

In a democracy, individuals are governed by institutions, and not by men. If we do not live in an institutional universe, we will be at the mercy of capricious individuals.

The present government has tampered with institutions by appointing its own people to positions of authority, and by using the Enforcement Directorate, Income Tax authorities, the Central Bureau of Investigation and the police as bulldozers to flatten out any site of opposition.

In civil society, human rights organisations have been pulverised by blockage of funds, raids and arrests without proper evidence.

All this testifies the government’s subversion of the rule of law. Such development contravenes the spirit of the freedom struggle.

Connecting the dots:

In a democracy, individuals are governed by institutions, and not by men. Elucidate.
Essay: In a democracy, individuals are governed by institutions, and not by men.

ECONOMY

TOPIC: General studies 3

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

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

Timely review: On Angel Tax

Context:

We read that Centre has decided to set up a five-member working committee to look into the angel tax issue and come up with guidelines soon. (05 Feb 2019 DNA – Centre may relax angel tax norms for start-ups)
Therefore, start-ups which were troubled by the so-called angel tax may soon receive some concession from the government.

About Angel Tax

Angel tax is a term used to refer to the income tax payable on capital raised by unlisted companies via issue of shares where the share price is seen in excess of the fair market value of the shares sold.
The excess realisation is treated as income and taxed accordingly.
The tax was introduced in the 2012 Union Budget by then finance minister Pranab Mukherjee to arrest laundering of funds.
It has come to be called angel tax since it largely impacts angel investments in startups.

Issue with Angel Tax

Start-up owners have complained that income tax officials have asked many start-ups to cough up money when they try to attract capital into their entities by issuing new shares.
However, IT department fears that start-ups may be used as convenient tools to launder illegally acquired money, so a tax on investments beyond a certain threshold is necessary to deter such shady operations.
But while the intent of such an angel tax may be justifiable, the arbitrary nature of it means the cost of unintended consequences could be larger than the supposed benefits.
Investors, foreign or domestic, may become wary of investing in new ideas when they are taxed while risking money on untested ventures.

Do you know?

In trying to curb money-laundering, Section 56(2)(viib) of the Indian Income Tax Act, 1961 gives income tax officials a free hand to harass even genuine start-ups looking to raise investments for their growth.
Under the Act, the IT department is free to arbitrarily decide the fair value of a company’s share and tax start-ups if the price at which their new shares are sold to investors is higher than the fair value of these shares.

In crux, the broad-brush tax on all investments means an unnecessary cost is imposed on the wider start-up community simply because of the lack of better means at the government’s disposal to tackle black money.

Therefore, the government has set up a committee to raise the threshold beyond which new investments into start-ups will be taxed.

The committee is expected to recommend provisions that make life easier to a certain extent for angel investors and start-ups.

It’s high time to review the above provisions, make necessary changes and provide impetus to the start-ups. After all, some of today’s start-ups will be billion-dollar companies tomorrow. Therefore, they deserve a soft touch in their initial years.

Connecting the dots:

What is Angel Tax? Do you think Angel tax is an impediment to entrepreneurship and start-ups? Discuss.

(TEST YOUR KNOWLEDGE)

Model questions: (You can now post your answers in comment section)

Note:

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Q.1) Sanjay Gandhi National Park is located in –

Rajasthan
Jammu and Kashmir
Maharashtra
Madhya Pradesh

Q.2) Which term refers to a specialized firm that finances young, start-up companies?

Venture Capital Firm
Finance Company
Small-Business Finance Company
Capital-Creation Company

Q.3) Consider the following

Angel investors invest their own money into businesses, but venture capitalists invest money contributed by several investors.
Angel investors are found in virtually all industries, and they have diversified portfolios. Venture capitalists are involved in limited industries (mostly technology and infrastructure), and they have limited portfolios.

Select the correct statement/s

1 only
2 only
Both
None

Q.4) Consider the following statements with reference to angel investors in India

Only an individual can qualify as an angel investor in India, contrary to global experience where even a body corporate can become an angel investor.
For the capital invested, they must be provided preferential shares by the company.
They are focused on helping the business succeed, rather than reaping a huge profit from their investment.

Which of the statements given above is/are correct?