IASbaba’s Daily Current Affairs – 27th October, 2016

IASbaba's Daily Current Affairs Analysis, IASbaba's Daily Current Affairs Oct 2016, National, UPSC

IASbaba’s Daily Current Affairs – 27th October, 2016

NATIONAL

TOPIC: General Studies 2

Issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.

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

Reviving decentralisation in Indian planning

For long, the Planning Commission, which was formed by an Executive order (thus could be easily abolished), formulated five year plans for India. It was considered virtually an executive arm of the Union government.
In contrast to it, a District Planning Committee (DPC) stood neglected for which there is provision in Constitution of India under art 243ZD.
DPC, a constitutional institution is mandated ‘to prepare a draft development plan for the district as a whole’ with a focus on resource endowments, environmental conservation, infrastructural development and spatial planning.
Today, the rapid urbanisation has made difficult to make a sharp rural/urban differentiation at the district level and integrated planning has become a sine qua non (essential condition).
The constitutional goal to create ‘institutions of self-government’ at the local level is tasked to ‘plan for development economic and social justice’.
However, the operationalization and effectiveness of these constitutional goal depends on meaningful response of the Centre and the State governments to the institutional architecture implied in the 73rd and 74^th
Thus, India needs multi-level development and planning so as to cater to its diverse population.

Reviving the committees

In most States, there does not exist decentralised governance with DPCs acting as the functional hub.
The Devolution Report 2015 (Ministry of Panchayati Raj) says that several States have not constituted DPCs and thus there is no scope of preparing an integrated district plan.
Although 12 States have reported that they had formulated integrated district development plans but most of them may not stand professional scrutiny and citizens’ approval.
Now with the arrival of NITI Ayog, it has to be seen if it will try to revive District Planning Committees and institutionalise the preparation of district development plans.
NITI Ayog has outlined its functional responsibilities where it proposed ‘to develop mechanisms to formulate credible plans at the village level and aggregate these progressively at higher levels of government’.
This is possible only through a critical review of the functioning of the institutions of decentralised governance in every State.
The sixth report (2007) of the Second Administrative Reform Commission (ARC) outlines in great detail ways to make the DPC a viable component in the process of decentralised planning. But, as the planning environment reveals- no one bothered to take care of this ARC recommendation.
No Union ministry has made any scientific scrutiny nor reported to the nation about what happened to the constitutional mandate of decentralised planning and local democracy during the last 22 years.

Reviving federalism

Most of the SDGs and the 169 targets related to them are best implemented only as part of decentralised governance.
Also, Local governments (LGs) have a key role in delivering several public goods and social justice.
The nodal agency for UN sustainable development goals (SDGs) in India is NITI Ayog. So, here the NITI Ayog may examine the possibilities of giving a new lease of life to local governments.
India is a federation with extreme diversity in resource endowments, poverty incidence, development attainments and potential for growth and its regional disparities are widening.
Thus, there is a need for social intervention else the economy which is committed to market-mediated growth can only accentuate divergence. This can become possible with decentralised planning.
The Centre and the finance commission are expected to play a key role in ensuring spatial equity in Indian federation.
But these institutions have failed in their responsibilities which is revealed in a recent study that covered 19 major States involving 96% of the population. Using criteria relating to infrastructure, social services, fiscal performance, justice etc., it was demonstrated that regional disparities have widened between 2001 and 2012.
The prime rationale of cooperative federalism is to ensure spatial equity. Every citizen, irrespective of choice of residence, should have minimum public good and quality of life.
Local government and decentralised planning are the avowed Indian mechanisms and strategy to ensure this.
For a federal polity that is strongly committed to market-mediated resource allocation and economic growth, the architecture of a viable local governance is to be accepted as part of its national aspirations.
Being indifferent to local governments on the grounds of inexperience or inefficiency is a way of ensuring centralisation which is certainly not the road to transforming the nation.

Conclusion

Successful model

There have been success stories too in local development planning. An Integrated District Development Plan was prepared at the initiative of the District Planning Committee of Kollam district during the eleventh Five Year Plan.
Over a period of four years, a district plan methodology was evolved that integrated the rural and urban space through a long process of consultation, debate and discussion with sectoral departments, along with elected representatives at various tiers of local government.
Major development choices were made through consensus which ensured the feasibility of implementation.

Time to realign to realities

India is extremely diverse and thus every district has to formulate its model of district development outlining its short-, medium- and long-term perspectives.
In 2008, Planning Commission noted on Kollam initiative that the project gave decision-makers in local governments, the District Planning Committee and other stake-holders the opportunity to consider and take decisions in the emerging area of spatial planning and the methodologies developed by it, can be up-scaled to other districts.
Towards Holistic Panchayat Raj report (2013) leveraged panchayats for efficient delivery of public goods and services and even it endorsed the replicability and relevance of the Kollam model.
Now the NITI Ayog has to take note of the situation confronting Indian planning and uphold the constitutional obligation by promoting decentralised planning.

Connecting the dots:

What do you understand by decentralised planning? Critically analyse its need in developing the planning structure in India.

ECONOMY

TOPIC: General Studies 3

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

India and Ease of Doing Business

What is Ease of Doing Business?

The World Bank ranks economies on the Ease of Doing Business Index on the basis of regulatory environment within a country. Whether the same is conducive for starting and operating a local firm or not. The following are the parameters used by the World Bank to rank the countries:

Starting a business
Dealing with construction permits
Getting electricity
Registering property
Getting credit
Protecting investors
Paying taxes
Trading across borders
Enforcing contracts
Resolving insolvency

India’s growth story

The Doing Business Report 2017, which ranks as New Zealand as Number 1, ranks India 130 among 190 countries, just one rank higher than last year. This is a matter of concern since it shows the worrisome pace of the economic reforms in India. Even the one rank improvement is because India had been downgraded in the 2016 edition to 131 from 130 earlier. India does not feature on the top 10 improvers list as well, which includes Pakistan as well.

DNA 27oct

Picture Credit: http://img.etimg.com/photo/55059057/.jpg

The present government had set a target for India to enter the top 50 in ease of doing business ranking in three years after breaking into top 100 this year. However, certain areas of concern which still continue to exist and keep pulling India down the ladder are:

Retrospective taxation
Simpler land acquisition norms
Status quo in ranks in parameters of starting a business and registering property
Delays in litigations in matters of payment of bonus and mining royalties
Lack of labour law reform

The bright spots

The World Bank has identified certain areas where India has shown satisfactory performance. The identified areas are as highlighted below:

Simplifying tax payments
E-biz portal
Simplifying trade procedures and contract enforcement
Ease in getting an electricity connection, where India has jumped 26 spots and obtained a rank of 26
Electronic system for paying Employee State Insurance Contributions, electronic filing of integrated customs declarations
Legislative overhauls by way of Goods and Service Tax (GST), Insolvency and Bankruptcy Code and Companies (Amendment) Act are other ways to move up the ladder.
Special mechanisms for resolving commercial disputes.

Way Forward

India hopes that various reforms being implemented will bear fruits in years to come and also feels that some of the reforms have not been considered in the report, of which some were not implemented before the cut off date. Apart from waiting for World Bank to be considerate towards these concerns, for India to shine brighter on this global platform a few additional steps need to be taken as well.

Put in place a single window mechanism for registering companies
Building a unified database of security interests over movable assets
Improving customs clearances
Upgrading the rules for registering property and digitizing records
Promote role modelling by promoting steps taken by states such as Tamil Nadu and Gujarat who have shown exemplary performance in promoting investor friendly environment.
Efficiency in the functioning of bureaucracy and judiciary

Connecting the dots

India has set itself an over ambitious target of entering the top 50 in The World Bank Ease of Doing Business Rankings by 2017. Comment.
What do you understand by Ease of Doing Business? Examine the reasons for a negligible rise in India’s ranking in The World Bank Doing Business Report 2017 in spite of numerous steps being taken in the recent past.