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01 February, 2020

17 Min Read

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Paper Topics Subject
GS-II Global Health Emergency Miscellaneous
MEA revamp
Appointments in minority-run institutions
GS-III Economic Survey on India's economic growth Economic Issues
Economic Survey on entrepreneurship Economic Issues
Economic Survey on Privatisation Economic Issues
GS-II : Miscellaneous
Global Health Emergency

Syllabus subtopic: Issues Relating to Development and Management of Social Sector/Services relating to Health, Education, Human Resources.

 

Prelims and Mains focus: about the coronavirus outbreak and its effect on the world; reasons for WHO declaring it a global health emergency

 

News: The death toll in China from the new coronavirus reached 213, with overall cases worldwide rising rapidly in an outbreak that the World Health Organization (WHO) declared a global health emergency.

 

Reason for the declaration

The WHO was declaring a global health emergency because it was concerned about the virus spreading to countries that did not have the resources to deal with it.

 

Measures to be taken after declaration

  • The WHO move will trigger tighter containment and information-sharing guidelines to all countries.

 

  • The impact of the virus on the rest of China and on the world would have been less if the containment measures had been implemented sooner.

 

International Health Regulations (2005) Procedures concerning public health emergencies of international concern (PHEIC)

  • PHEIC procedures

Some serious public health events that endanger international public health may be determined under the Regulations to be public health emergencies of international concern (PHEIC). The term Public Health Emergency of International Concern is defined in the IHR (2005) as “an extraordinary event which is determined, as provided in these Regulations:

  1. to constitute a public health risk to other States through the international spread of disease; and
  2. to potentially require a coordinated international response”.

This definition implies a situation that: is serious, unusual or unexpected; carries implications for public health beyond the affected State’s national border; and may require immediate international action.

 

  • The responsibility of determining whether an event is within this category lies with the WHO Director-General and requires the convening of a committee of experts – the IHR Emergency Committee. This committee advises the Director General on the recommended measures to be promulgated on an emergency basis, known as temporary recommendations. Temporary recommendations include health measures to be implemented by the State Party experiencing the PHEIC, or by other States Parties, to prevent or reduce the international spread of disease and avoid unnecessary interference with international traffic.

 

  • The Emergency Committee also gives advice on the determination of the event as a PHEIC in circumstances where there is inconsistency in the assessment of the event between the Director-General and the affected country/countries. The Emergency Committee continues to provide advice to the Director-General throughout the duration of the PHEIC, including any necessary changes to the recommended measures and on the determination of PHEIC termination. WHO maintains an IHR roster of experts and the members of an IHR Emergency Committee are selected from this roster and/or WHO expert advisory panels and committees. At least one member of the Emergency Committee should be an expert nominated by a State Party within whose territory the event arises.
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GS-II :
MEA revamp

Syllabus subtopic: Ministries and Departments of the Government; Pressure Groups and Formal/Informal Associations and their Role in the Polity.

 

Prelims and Mains focus: about the restructuring in the ministry and its advantages

 

News: The Ministry of External Affairs (MEA) has undertaken a major overhaul of departments and reporting structure that will effectively empower seven different Additional Secretaries and re-organise their tasks along themes like culture, trade and development, and consolidated geographical divisions for better coordination.

 

About the restructuring

  • The restructuring was done in consultation with External Affairs Minister, who as a former foreign secretary (2015-2018) managed the Ministry himself, and authored the plans.

 

  • The silos that will be managed by the Additional Secretaries will range from cultural power, economic and trade coordination, all international organisations and summits including UN, G-20, BRICS etc. and all development partnerships.

 

  • Departments merged: All of Europe,all of Africa and West Asia and all of the Indian Ocean and Indo-Pacific region has been merged.

 

  • At the secretary level there are now four officers apart from the Foreign Secretary, with the Secretary, (Consular, Passport, Visa and Overseas Indian Affairs) Division who will also oversee officials on the Gulf and West Asia/North Africa (WANA) divisions.

 

  • The additional charge indicates the importance of the Indian diaspora in the Gulf and WANA regions where about eight million Indian expatriates live, about a quarter of the world total, that account for more than 60% of the inbound remittances.

 

  • Another change is the decision to move the “External Publicity” (XP) the media and public relations division to work under Secretary (West).

 

  • The Foreign Secretary  also reshuffled a number of joint secretary level postings, including in Public Policy and Research, which also entails planning the MEA’s flagship Raisina Dialogue conference in January.

 

Reason for the move and its advantages

  • Secretary-level officials are “overburdened and overworked” with day-to-day duties, and lack much-needed time to strategise.

 

  • In the new structure, additional secretaries will be empowered to look at more long-term solutions rather than only “firefighting”, and will travel and give political direction to their assigned portfolios.

 

  • The new Director General for the Indian Council for Cultural Relations (ICCR), will consolidate the government’s push to promote its cultural, heritage, history, tourism objectives and showcase the diaspora, with the ICCR being rebranded as the government’s “soft power” vehicle.
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GS-II :
Appointments in minority-run institutions

Syllabus subtopic: Indian Constitution—Historical Underpinnings, Evolution, Features, Amendments, Significant Provisions and Basic Structure.

 

Prelims and Mains focus: about the various judgements of the SC related to minority institutions; Cultural and Educational Rights

 

News: The Supreme Court on Friday issued notice on a plea for a re-examination of its January 6, 2020 judgment declaring that the State is well within its rights to regulate the appointment of teachers to minority-run institutions in “national interest.”

 

Background

  • The SC bench was hearing the plea of the Managing Committee, Contai High Madrasah, which said the judgment “dismantles” the law laid down by an 11-judge Bench of the Supreme Court in the T.M.A. Pai case of 2002.

 

  • The managing committee said that the two-judge Bench has even contradicted a Supreme Court judgment as recent as September 25, 2019 (Chandana Das (Malakar) versus State of West Bengal) which upheld the rights of the minority communities to establish and run their own institutions without government interference in day-to-day affairs of management like the appointment of teachers.

 

What was the SC judgement in T.M.A Pai case of 2002?

  • The 2002 judgment had held that minorities have a fundamental right under Article 30 of the Constitution to administer their institutions and appoint teachers.

 

  • The petitioner said the Constitution Bench in the T.M.A Pai case was clear that “regulatory measures of control should be very minimal” and “in matters of day-to-day management like appointment of staff, teaching and non-teaching, and administrative control over them, the management should have the freedom and there should not be any external controlling agency.”

 

What was SC’s January 6, 2020 judgement about?

  • The January 6 judgment by a two-judge Bench had given the State an absolute right to impose regulations on minority established and administered institutions in the appointment of teachers, saying the step was necessary to achieve excellence in education in these institutions.

 

  • The petition said the judgment segregates a particular community from the privilege of protection under Article 30. The January 6 judgment was based on a petition challenging the validity of the West Bengal Madrasah Service Commission Act of 2008. The State Act mandated that the process of appointment of teachers in aided madrasahs, recognised as minority institutions, would be done by a Commission. The decision of the Commission would be binding. Justice Mishra’s Bench had upheld the 2008 Act.

 

 

Cultural and Educational Rights (Article 29-30)

  • Article - 29 : Protection of interests of minorities –

(1) Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same.

(2) No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.

 

  • Article – 30 : Right of minorities to establish and administer educational institutions –

(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.

(1A) In making any law providing for the compulsory acquisition of any property of an educational institution established and administered by a minority, referred to in clause (1), the State shall ensure that the amount fixed by or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause.

 

(2) The state shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language

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GS-III : Economic Issues
Economic Survey on India's economic growth

Syllabus subtopic: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

 

Prelims and Mains focus: about the suggestions and observations made in the survey related to India’s economic growth

 

News: The Economic Survey, authored by the Chief Economic Adviser (CEA), said that the government must use its strong mandate to deliver expeditiously on reforms which will enable the economy to strongly rebound in 2020-21.

 

Background

  • Earlier this month, the International Monetary Fund projected India’s growth to accelerate to 5.8% in 2020-21 from the estimated 4.8% in the preceding year, after sharply paring its earlier projections “owing to stress in the non-bank financial sector and weak rural income growth".

 

  • The Economic Survey said its own projection is fraught with downside risks such as continued global trade tensions, worsening US-Iran geopolitical situation, increase in short-term interest rates in advanced economies, slow progress in implementation of the insolvency and bankruptcy code, and stagnation in gross domestic savings rate.

 

  • The overarching theme of the survey this year is wealth creation and the policy choices that enable this.

 

 

Observations made in the survey

  • China’s remarkable export performance vis-à-vis India is driven primarily by deliberate specialization at large scale in labour-intensive activities, especially ‘network products’, where production occurs across global value chains operated by multinational corporations.

 

  • The government intervention hurts more than it helps in the efficient functioning of markets. Giving the example of the pharmaceutical industry, the survey said government interventions often lead to unintended consequences such as price increases, when compared to markets that are unregulated.

 

  • The survey said the economy is set to revive in the second half of 2019-20 mainly on account of ten positive factors. It listed them as:
  1. picking up of Nifty (National Stock Exchange’s Nifty index) for the first time this year,
  2. an upbeat secondary market,
  3. higher foreign direct investment inflows,
  4. build-up of demand pressure,
  5. positive outlook for rural consumption,
  6. rebound of industrial activity,
  7. steady improvement in manufacturing,
  8. growth in merchandize exports,
  9. higher build-up of foreign exchange reserves, and
  10. positive growth rate of GST revenue collection.
  11. growth in merchandize exports,
  12. higher build-up of foreign exchange reserves, and
  13. positive growth rate of GST revenue collection.

 

Suggestions given in the Survey

  • Reducing spending on subsidies, especially on food, to create fiscal space for additional spending in areas such as infrastructure development.

 

  • Reforms in land and labour markets may further reduce business costs. As the proportion of small and marginal holdings is significantly large, land reform measures like freeing up land markets can help farmers in improving their income.

 

  • Upside risks, such as bottoming out of global trade, a turnaround in housing, favourable global sentiment toward India, and better implementation of the goods and services tax, are expected to boost economic growth.

 

  • It proposed a new programme, Assemble in India", to be integrated with “Make In India" and focusing on labour-intensive exports that could potentially create 40 million well-paid jobs by 2025 and 80 million by 2030.

 

  • India’s aspiration to become a $5-trillion economy, depends critically on strengthening the invisible hand of markets together with the hand of trust that can support markets. The invisible hand needs to be strengthened by promoting pro-business policies to
  1. provide equal opportunities for new entrants, enable fair competition and ease doing business,
  2. eliminate policies that undermine markets through government intervention even where it is not necessary,
  3. enable trade for job creation, and
  4. efficiently scale up the banking sector to be proportionate to the size of the Indian economy.

 

Way ahead

The survey’s projected FY21 growth of 6-6.5% may prove to be optimistic unless backed by a strong fiscal stimulus in the budget and the meeting of investment targets specified in the National Infrastructure Pipeline, both by the central and state governments.

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GS-III : Economic Issues
Economic Survey on entrepreneurship

Syllabus subtopic: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

 

Prelims and Mains focus: about the remarks made in the survey regarding entrepreneurship

 

News: The Economic Survey said that India currently ranks third globally in the number of new firms created with about 1.24 lakh new entities coming up in 2018.

 

Entrepreneurship scenario in India

  • As per the Survey, new firm creation had gone up dramatically since 2014.

 

  • While the number of new firms in the formal sector grew at a cumulative annual growth rate of 3.8% from 2006 to 2014, the growth rate from 2014 to 2018 had been 12.2%. As a result, from about 70,000 new firms created in 2014, the number has grown by about 80% to about 1,24,000 new firms in 2018.

 

  • However, on a per-capita basis, India had low rates of entrepreneurship in the formal economy. Between the 10-year period from 2006 to 2016, the mean number of new firms registered per year per 1,000 workers was 0.10. In contrast, the mean entrepreneurial intensity for the U.K. and the U.S. was 12.22 and 12.12, respectively.

 

  • The Survey also pointed out that in contrast to the other countries, a large number of India’s enterprises operate in the informal economy which was not captured in the data.

 

  • The data showed that new firm creation in services sector (at around 85,000) was significantly higher than that in manufacturing (a little less that 15,000), infrastructure (about 5,000) or agriculture (less than 5,000).

 

  • The entrepreneurship at the bottom of the administrative pyramid — a district — had a significant impact on wealth creation at the grassroots level. “... a 10% increase in registration of new firms in a district yields a 1.8% increase in GDDP (gross district domestic product). Thus, entrepreneurship at the bottom of the administrative pyramid — a district — has a significant impact on wealth creation at the grassroots level.

 

  • Enhancing ease of doing business and implementing flexible labour laws in job-creating sectors, such as manufacturing, can create the maximum number of jobs in districts and thereby, in the States.

 

  • Literacy, education and physical infrastructure are the other policy levers that district and State administrations must focus upon to foster entrepreneurship and thereby, job creation and wealth creation.
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GS-III : Economic Issues
Economic Survey on Privatisation

Syllabus subtopic: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

 

Prelims and Mains focus: about the suggestions/observations made in the survey regarding disinvestment of CPSEs

 

News: The Economic Survey has aggressively pitched for divestment in public sector undertakings (PSUs)

 

Observations and suggestions made in the survey

  • The government can transfer its stake in listed CPSEs to a separate corporate entity. This entity would be managed by an independent board and would be mandated to divest the government stake in these CPSEs over a period of time.

 

  • This will lend professionalism and autonomy to the disinvestment programme which, in turn, would improve the economic performance of the CPSEs.

 

  • The survey analysed the data of 11 PSUs that had been divested from 1999-2000 and 2003-04 and compared the data with their peers in the same industry.

 

  • Analysis shows that these privatised CPSEs, on an average, performed better post-privatisation than their peers in terms of their net worth, net profit, return on assets (ROA), return on equity (RoE), gross revenue, net profit margin, sales growth and gross profit per employee.

 

  • More importantly, the ROA and net profit margin turned around from negative to positive, surpassing that of peer firms, which indicates that privatised CPSEs have been able to generate more wealth from the same resources.The analysis clearly affirms privatisation unlocks the potential of CPSEs to create wealth.

 

  • Interestingly, according to the government document, the recent approval of strategic disinvestment in Bharat Petroleum Corporation Limited (BPCL) led to an increase in value of shareholders’ equity of BPCL by ?33,000 crore compared to its peer Hindustan Petroleum Corporation Limited.

 

  • Aggressive disinvestment, preferably through the route of strategic sale, should be utilised to bring in higher profitability, promote efficiency, increase competitiveness and to promote professionalism in management in CPSEs.

 

  • The focus of the strategic disinvestment needs to be to exit from non-strategic business and directed towards optimising economic potential of these CPSEs, it added, highlighting there were about 264 CPSEs under 38 Ministries or departments.
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