[Editorial # 74] For a green economy that is also just: The Hindu

[Following editorial has been published in The Hindu on 29th February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

India’s solar power programme has come under intense scrutiny by global political and business leaders, especially given its aggressive intent and extensive trade opportunities. The programme, a part of the National Solar Mission, envisages an addition of 100,000 megawatts of solar power capacity by 2022. This initiative is also seen as a critical sub-component of the global effort to limit the extent of climate change. The recent ruling by the World Trade Organisation (WTO) against India must be read against this background. The WTO has ruled that the domestic content requirement (DCR) imposed by New Delhi on the production of solar cells and modules under the National Solar Mission violates global trade rules. According to the dispute settlement panel of the WTO, “These are inconsistent with both Article III:4 of the GATT [General Agreement on Tariffs and Trade] 1994 and Article 2.1 of the TRIMS [Trade-Related Investment Measures].’’ It has gone on to say that the DCR measures “do accord less favourable treatment’’ within the meaning of the provision under Article III:4 of the GATT 1994. The WTO ruling comes three years after the U.S. raised a dispute against India, and following the inability of the two countries to agree on the changes suggested by New Delhi to its solar programme. India is convinced that the DCR is a mechanism to facilitate sustainable development. It has even indicated that it is willing to apply the DCR only for buying solar panels used for government sector consumption, and has assured the U.S. that power generated from such subsidised panels will not be sold for commercial use. Coming as it does in the midst of a presidential election year, the WTO order in this instance is a significant victory for the U.S. Hailing the ruling, President Barack Obama said: “The U.S. can’t have other countries engaged in practices that disadvantage American workers and American businesses.’’ Given the potential for positive social and economic outcomes from the ambitious solar power programme, India will be compelled, as some other countries have done, to contest the WTO ruling before the appellate body.

The WTO ruling also comes soon after the Paris climate change agreement, and is bound to open up a wider debate across nations over whether initiatives such as the solar mission, with its social relevance and significant implications for a green economy, must be viewed only from the prism of a pure business opportunity. Given India’s size and also the need to provide meaningful job opportunities for millions of people, it is imprudent to conceive of a framework that either disadvantages or discourages domestic endeavour. The fight against climate change is not an exclusive cause; it has to move in tandem with the provision of jobs and the creation of an environment that facilitates a green economy. The onus for this lies not just on the developing countries. It is time the big economies realised their responsibility in building a greener world.

Questions:

1. How is Solar Power converted into electricity?

2. What are various advantages and disadvantages of Solar Power?

3. What is the total solar power potential of India? What is the share of installed solar power capacity to total installed capacity of renewable power sources in India? Which states in India have built solar power capacities? 

4. What is National Solar Mission? What are its salient features?

5. What is WTO? Who heads it? What is its role?

6. What is GATT? 

7. What is meant by Domestic Content Requirement? What is the dispute between India and USA with regards to solar panels?

8. What are the features of Paris Climate Change Agreement?

9. How are green initiatives coming in conflict with the rules and philosophy of WTO? 

[Editorial # 73] Restoring goodwill with Kathmandu : The Hindu

[Following editorial has been published in The Hindu on 25th February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

Nepal Prime Minister K.P. Oli’s just-concluded six-day visit to India has come at an important juncture. The visit came after months of turmoil in the Madhes, or plains, region of Nepal following protests demanding a more federal framework in the new Constitution. India had tacitly backed the agitations, which resulted in a virtual blockade and a shortage of essential supplies in Nepal. After a prolonged period of vacillation, Mr. Oli committed to amendments in the Constitution that would satisfy some of the demands made by the Madhesis. This yielded an easing of the blockade after the protestors called off their stir. The net result of the Indian hand in the unrest, and of New Delhi’s perceived partisanship, had been a resurgence of jingoism in Kathmandu. It was also damaging for India, as the stand-off drained the goodwill gained from its commitment to supporting Nepal’s reconstruction after the devastating earthquake in 2015. The two countries clearly needed to recalibrate their positions, and this is a good start. Nepal has to maintain cordial relations with India; its economic dependence, especially as a landlocked state, is well understood and was, in fact, reinforced during the economic blockade. India too needs a friendly Nepal, whose geopolitical importance due to the open border between the two countries cannot be overstated. It is also in India’s interest that there be political stability in Nepal, to prevent the spillover effect any turmoil can have for the bordering States of Bihar and Uttar Pradesh and to secure the republican consensus needed to pull millions of Nepalis out of poverty.

'To that extent, Prime Minister Oli’s visit has helped reset some priorities. The emphasis by both sides was on taking forward the reconstruction assistance that India has promised. A memorandum of understanding in this regard was signed. Other MoUs covered economic aid for road projects, enhancing power transmission, and easing travel and transit of goods. As regards the question of the Constitution, the Indian government had not budged much from its earlier position on the need for a consensus through dialogue with the dissenting Madhesis to take their concerns on federalism on board. But Prime Minister Narendra Modi did acknowledge that the conclusion of the Constitution-writing process is an “important achievement”. The onus is now on Mr. Oli, his Cabinet and his party, the Communist Party of Nepal (Unified Marxist-Leninist). They could still project the halt in the economic embargo and return to normalcy in the Madhes as a sign of victory and resist any further concessions towards a truly federal Nepal. But that would only amount to further brinkmanship, which could prove detrimental again in the longer run. New Delhi too should dwell on the lessons from the recent deterioration in ties and on the need for a calibrated position that supports inclusive democracy in Nepal yet does not amount to interference. Mr. Oli’s visit has demonstrated the importance of high-level ownership of bilateral engagement to return relations to a mutually beneficial equilibrium.

Questions:

1. What has been the history of India-Nepal relations? 

2. Which all Indian states share a boundary with Nepal? How long is Indo-Nepal Border? How can one go to Nepal from India?

3. What is meant by an open border? Under which treaty did India and Nepal accept to open the borders for smooth passage of people and goods? What are the other features of that treaty?

4. What is the current constitutional crisis in Nepal?

5. Who are Madhes people? What are their demands?

6. Why should India be bothered about the crisis going on in Nepal?

7. How is Nepal's development on India's cooperation and support?

8. What is an MoU? How is it different from agreement?

9. Nepal could be a significant partner to India in her endeavours to establish peace, security and prosperity in South Asia region. Comment (200 words)

[Editorial # 72] Keeping it parliamentary : The Hindu

[Following editorial has been published in The Hindu on 24th February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

Parliament’s Budget session opened on Tuesday against a turbulent backdrop of unrest on university campuses, the Jat agitation in Haryana, an agrarian crisis, terrorist strikes and attacks on freedoms. In a bid, therefore, to blunt an anticipated attack by the Opposition, the Modi government has adopted a strategy to confront its critics directly by making the JNU “sedition” controversy the centrepiece of this session. MPs from the Bharatiya Janata Party, rather than those from the Opposition, have already given notice for a discussion on the subject ahead of the presentation of the Union Budget. By presenting itself as the flag-bearer of nationalism, the BJP believes it will be able to seize the advantage from the Opposition while detracting attention from economic and governance issues. Already, the BJP and the Sangh Parivar are building public opinion for the “nationalist” cause through various programmes, including vigilante activity by RSS sympathisers. In presenting the majority community as being under siege, the BJP and the Parivar have shifted the discourse to anxiety about the country being threatened by “anti-national” elements.

President Pranab Mukherjee’s customary address to Parliament has, in fact, set the tone. It ended with a reference to Subhas Chandra Bose, one of the many heroes of the freedom struggle whom the BJP has appropriated as an icon, and quoted him as saying, “Nationalism is inspired by the highest ideals of the human race.” The President also impressed on MPs that the “democratic temper calls for debate and discussion, and not disruption or obstruction”. For his part, Prime Minister Narendra Modi expressed the hope that Parliament would be utilised for “constructive debates”. The opening days of the Budget session traditionally leave little space for the Opposition. The sittings in the session’s first half, in any case, will be dominated by the President’s Address and the debate on it, the introduction of and discussion on the Union and Railway budgets and private members’ business. The government has also prioritised the passage of the Enemy Property (Amendment & Validation) Bill to replace an ordinance, and the Election Laws (Amendment) Bill that provides for delimitation of constituencies in West Bengal following the exchange of territories with Bangladesh. By proposing a discussion on Rohith Vemula and the JNU crisis, the BJP has further eroded space for the Opposition to seize the initiative. With elections to five Assemblies expected to be notified soon, the debate will obviously be framed in a surcharged context and political parties will be especially keen to play to the gallery. Indeed, given that the BJP-led National Democratic Alliance is not bound by lack of numbers in the Rajya Sabha in getting money bills passed, the government may be tempted to resist the parliamentary etiquette of letting the Opposition shape the session. This would be a mistake. The government has not yet completed its second year in office, but Parliament is already stuck in deadlock. Unyielding postures during this session on either side could stall all forward movement.

Questions:

1. How many sessions does the Parliament have? What is the basis of only those many number of sessions? Why can't they have more or less number of sessions?

2. What do the Parliamentarians do between two sessions?

3. What are different types of Parliamentary Sessions? How many sessions does the British Parliament have? Does the US Congress also function in sessions? 

4. What is RSS? When, why and by whom was it established?

5. What are the various activities during the first half of the Budget Session of the Parliament? What are the activities in the second half? What happens between the two halves?

6. Why is Railways Budget presented separately from the Union Budget? Do you think its necessary?

7. What is an ordinance? How and when is it promulgated?

8. What is meant by delimitation of constituencies? 

9. Which five states are going to have their assembly elections soon? Who is responsible for notifying and conducting the assembly elections?

10. What is a money bill? How is it different from an ordinary bill?

11. “Democratic temper calls for debate and discussion, and not disruption or obstruction”. Explain (200 words)

[Editorial # 71] Pro-manufacturing laws need of the hour : Business Standard

[Following editorial has been published in Business Standard on 21st February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

The 'Make in India' Week in Mumbai, which ended last Thursday, served as a welcome platform for states to make their cases for being business-friendly destinations to investors. Seventeen states had pavilions at the exposition centre in the Bandra-Kurla Complex, and several had special seminars. Chief ministers of states including Gujarat, Odisha, Haryana, Andhra Pradesh, Chhattisgarh and Jharkhand were present. It is unfortunate perhaps that most of the chief ministers from states not ruled by parties in the National Democratic Alliance did not turn up - the leaders of Tamil Nadu, Uttar Pradesh and Karnataka, all large states seeking investment, were not present. However, most states that were present did indeed make many ambitious announcements - there was news of several new collaborations and plans for manufacturing projects. This spurt of activity should certainly help in reviving a sector that had slowed considerably. The states subsequently issued statements adding up the notional value of promised investments. The total investment promised, if these promises are taken seriously, would amount to Rs 15.2 lakh crore, with the host state of Maharashtra accounting for Rs 8 lakh crore out of that. However, the proportion of such promises that fructify depends crucially on whether investors believe that a genuinely business-friendly environment has been created. In the past, only a small fraction of such memoranda of understanding has turned into actual investments. Indeed, as this newspaper has reported, even as the number of industrial investment proposals made in 2015 went up by eight per cent over that in 2014, the value of such investment proposals has declined by 23 per cent in the same period.

It is unfortunate, therefore, that in spite of assurances given to investors at the 'Make in India' Week that a stable business-friendly environment has indeed been created, the tax office chose the precise time of this important exposition to send a threatening notice to Vodafone about a tax demand that is currently in arbitration. This action, coming as it did at a time when senior leaders of the government were assuring investors that "tax terrorism" was a thing of the past, should serve to remind all concerned that no amount of assurances can take away the need for genuine and deep-seated reforms to institutions and governance. The overall impact of the 'Make in India' Week will be positive going forward if it also provides a similar energy to the governments deregulation and reform efforts. Both states and Centre need to do more in this respect.

There is an entire gamut of manufacturing-friendly policies that states and Centre need to work on. The Centre has unfortunately put labour market reforms on the back burner, although some states have been freed to move forward. However, a patchwork of state-level laws is not the same for manufacturers as simplified national regulations. Other factor markets too need to be reformed. Land availability is in many places a genuine problem. The Centre has abandoned its amendment to the land acquisition law that was meant to make acquisition for public purpose easier. However, it should at least work - as should states - towards a functional free market for land perhaps through relaxations in land leasing laws. The focus on infrastructure is welcome, but should be accompanied by deregulation that allows infrastructure to be properly used. New highways are not that useful if outdated laws keep trucks waiting at inter-state border; new ports will not help if turnaround times remain slow thanks to excessive red tape. And, finally, as the Vodafone issue shows, reform of the tax department and making it less arbitrary and confrontational is long overdue.

Question:

1. Which are the top 5 and bottom 5 states in terms of their State GDPs? Do you see a pattern in  the regional disparities if any?

2. What is understood by the phrase "tax terrorism"? What is the Vodafone case all about?

3. What is the share of manufacturing sector in India's GDP? How does it fare vis a vis other major developing and developed economies?

4. What are the factors for a relatively lesser contribution of manufacturing sector in India's GDP?

5. It is said that unlike other economies which saw a transition from agriculture-based to industry-based and finally to service-based economy, India jumped to service sector-based economy directly form agriculture based one. Do you agree? Justify.

6. What are the various reforms which the government must initiate in order to make programs like Make in India successful?

7. It was observed that during the Make in India week, those states did not send their representatives which are being governed by political parties having different colours than that of the central government. Do you think this partisan behaviour impacts the growth and development of the people? Explain with a few examples.

[Editorial # 70] Unreasonable demands

[Following editorial has been published in The Hindu on 22nd February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

The recurrence of violent protests led by relatively well-off communities demanding reservation, be it Patidars in Gujarat last year or Jats in Haryana this year, is perplexing. The Jats are a relatively prosperous land-owning community in Haryana and are regarded as being high on the “social ladder” in the region. Their political and social might is even more evident in the influence they wield in rural areas and in the leadership of the dominant political parties in the State. The National Commission for Backward Classes had in the past come out with specific reasons against the inclusion of the Jats in Haryana in the Other Backward Classes (OBCs) list. This was overruled by the Congress-led United Progressive Alliance government at the Centre through a notification in March 2014, promising a special quota for Jats over and beyond the 27 per cent reservation for OBCs in jobs and higher education. It was left to the Supreme Court in March 2015 to reiterate the reality and to quash the decision of the UPA to include Jats in nine States among OBCs, stating that “caste” alone could not be the criterion for determining socio-economic backwardness. Clearly, even if the demands do not make any constitutional or legal sense, the bipartisan consensus over extending reservations has emboldened protestors among the Jat community. After all, the Bharatiya Janata Party in power too had voiced support for the implementation of the March 2014 notification.

Yet, the demands for reservations from these powerful communities is also a consequence of the success of the system of reservations that formed the most significant component of the Mandal Commission recommendations, implemented for the past 25 years, apart from the 65 years of reservations for Dalits and Adivasis. The larger goal went beyond the uplift of the underprivileged and the historically backward; the purpose was to reduce the gap between the “upper” and the “lower” strata in the social hierarchy. That communities which have identified themselves with the upper strata of society also seek “backward” status suggests that through public sector representation and expansion in access to higher education the “economic gap” has been narrowed, or is at least seen to be narrowing. Specifically in the case of Jats, despite higher economic and social standing, there has been a reduction in landholding owing to distribution over generations and a squeezing of rural incomes due to the persisting sluggishness in the agrarian economy. It is a combination of these structural issues over time, besides the relative success of the reservation programme, that has fuelled the unreasonable demands made by Jats. In the case of the more prosperous and diverse Patidars in Gujarat, the demands for reservation were a thin pretext to do away with the system of reservation itself. The agitations, in a way, point to the need to review the list of castes counted as OBCs and to deepen the definition of creamy layer. An opportunity for this was provided through the Socio-Economic and Caste Census, but it was missed.

Questions:

What is meant by affirmative action? Why is it required? Which countries have adopted the mechanism of affirmative action?

What are the criteria for reservations in India? Where all is the facility of reservation available in India?

What does the constitution of India say about reservations?

What is National Commission of Backward Classes? What is its composition? What are its roles?

When was Mandal Commission constituted?What were its recommendations? When and by whom were those recommendations implemented?

Mention a few recent movements demanding reservations? What are the reasons behind such demands?

What is understood by Creamy Layer? What has been the stand of the Supreme Court on the issue of Creamy Layer? Why has this been not extended to SCs and STs?

Why is the editor considering the demands of Jats for reservations as unreasonable?

Who are Jats? In which region of India do they have a concentrated population?

What is Socio-Economic and Caste Census? When was it done? What were its findings?

[Editorial # 69] Farm solutions : The Indian Express

[Following editorial has been published in The Indian Express on 20th February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

Farm distress resulting from back-to-back monsoon failures and falling price realisations in most crops has arguably posed the biggest challenge, economically and politically, for the BJP-led Centre. It has prompted initiatives that may not have received official priority in the normal course — which is always the case with agriculture. On Thursday, Prime Minister Narendra Modi unveiled the operational guidelines for a new crop insurance scheme, the Pradhan Mantri Fasal Bima Yojana (PMFBY), at a farmers’ rally in Madhya Pradesh. He also announced the creation of a National Agriculture Market (NAM), a digital platform for farmers to sell their produce to buyers anywhere in India, from April 14. Whatever may be the political calculations behind their launch and timing, both are potentially game-changing.

Currently, insurance penetration extends to hardly a fifth of the country’s cropped area. This is only to be expected when policy claims cannot cover even half of the value of produce in the event of crop failure. The PMFBY not only keeps the premiums low at 1.5-2 per cent for seasonal and 5 per cent for annual horticultural crops, but also removes any artificial capping of the sums insured that result in low claims being paid to farmers. That makes it more attractive for farmers to take insurance protection. True, such low premiums and allowing farmers to claim the full value of a crop linked to its normal threshold yields and MSP could entail additional fiscal costs. But subsidy on crop insurance is any day preferable to that on electricity, water or fertiliser. The former encourages farmers to invest in productivity improvements and new technologies; the latter promotes inefficient resource use. Also, with more farmers joining in, the actuarial premiums would come down through increased spreading of risks, thereby helping to contain the government’s subsidy burden.

Equally welcome is the move to expand the farmer’s universe of buyers beyond traders/ commission agents licensed to operate in the designated mandis of his area. Giving farmers the choice to accept the bids of local traders or those of online buyers can lead to higher price realisations, just as a robust crop insurance system is the best way to deal with weather and disease risks that are intrinsic to agriculture. India’s farmers need more such long-term solutions, as opposed to populist loan waivers and distortionary subsidies.

Questions:

1. What factors are responsible for generation of monsoon winds? Is India the only country to receive monsoon? If yes then why does this phenomenon not occur anywhere else? If yes then where else on the globe does monsoon exist?

2. What is meant by crop insurance? What are various crop insurance schemes available in India? 

What is the penetration of crop insurance in India?

3. Highlight the features of Pradhan Mantri Fasal Bima Yojana (PMFBY)? 

4. What is meant by National Agricultural Market? How is it different from APMC Mandis?

5. What are the risks faced by farmers against which insurance is required?

6. What is horticulture? Mention the names of horticultural crops produced in India? What is the share of horticulture in Indian agricultural?

7. What is MSP? What is the purpose behind MSP mechanism ? Which agency/authority decided MSP?

8. What are various types of subsidies being offered to farmers today? How much subsidy does Indian government provide for various such subsidies?

9. How is farm insurance a better tool of for improving farm productivity vis a vis farm subsidies?

10. Why are subsidies being called distortionary? 

[Editorial # 68] No small gain : The Indian Express

[Following editorial has been published in The Indian Express on 18th February 2016. Read through it and try to answer the questions that follow. Please do not copy and paste answers. The objective of this exercise is to get you in the groove of answer-writing. Try to write in your own words. Don't hesitate to write in a bulleted-format, if you are uncomfortable in writing in paragraph form.]

The finance ministry’s decision to cut the short-term small savings rates signals an intent to reform by the government on the eve of the budget session. On Tuesday, the ministry cut the interest rate paid on post office savings of one, two and three-year terms, Kisan Vikas Patra (KVP) as well as five-year recurring deposits, by 25 basis points. The ministry has also announced that the rates on such small savings schemes would, henceforth, be revised every quarter. Interest paid on small savings instruments, fixed arbitrarily by the government, has been higher than the interest rates prevailing in the markets. This has been cited as one of the key reasons for poor monetary policy transmission in the economy. Banks were unwilling to cut the interest rates they paid on deposits, and in turn, the rates they charged on loans, even when the Reserve Bank cut interest rates repeatedly. Since the start of 2015, the RBI has cut interest rates by 125 basis points, yet the effective reduction passed on by the banks was just about 60 basis points.

The key benefit from the move would be the improvement of investor sentiment and activity through better policy transmission. The persistently high lending rates have been a dampener for an investment-starved economy. There is a flip side too: Small savers will not get as good a return. However, it is expected that the overall gains to the economy from lower interest rates will outweigh the benefits to small savings deposit holders. Actually, that is the reason why this policy move has always been difficult to undertake. It also explains why the government did not reduce interest rates across all small savings instruments.

To be sure, the government left unchanged the interest rate paid on the long-term small savings instruments, such as the public provident fund (PPF), the national saving certificate or the new Sukanya Samriddhi Account Scheme (SSAS), which are politically more sensitive. At present, there’s a significant gap between the rates paid on these — ranging from 8.7 per cent for the PPF and 9.2 per cent for the SSAS — and the 7.8 per cent yields on 10-year government bonds, a proxy for market rates. In fact, the Employees’ Provident Fund rate has been increased by 0.05 per cent. The non-inclusion of these schemes will certainly hold back transmission. Yet, the government has started the process of aligning the interest rates in the market, which is crucial to reviving investment.

http://indianexpress.com/article/opinion/editorials/kvp-finance-ministry-small-savings-no-small-gain/#sthash.XjzEyj0b.dpuf

Questions:

1. Explain the following terms:

• Budget Session
• Post Office Savings
• Recurring Deposits
• Kisan Vikas Patra
• Monetary Policy
• Basis Points
• Public Provident Fund
• Sukanya Samriddhi Account Scheme (SSAS)
• Government Bonds
• Employees’ Provident Fund 

2. What is meant by short-term small savings rate? Who regulates it?

3. How is short-term small savings rate impacting the interest rates on loans offered by the Commercial Banks?

4. What is the role of Reserve Bank of India? How and why does it control the interest rates offered by Commercial Banks?

5. What would be the advantages and disadvantages of reducing the short-term small savings rate?

6. Why was the government reluctant to reduce the short-term small savings rate? How has it managed to take care of the anticipated opposition from the general public?

7. What is understood by Monetary Policy Transmission? Why does the editor think that the government has been unable in achieving an effective monetary policy transmission so far?