29 February, 2020

9 Min Read

National Pharmaceutical Pricing Authority (NPPA)

Syllabus subtopic: Statutory, Regulatory and various Quasi-judicial Bodies.

Prelims and Mains focus: about the decision; about drug prices control order; about NPPA and its functions

News: The National Pharmaceutical Pricing Authority (NPPA) has decided to exempt a new stent made by Meril Life Sciences from price control, several months after a patient activist group raised safety concerns about the product.


  • The decision comes nearly three years after the drug pricing regulator had capped the prices of these products “in public interest”.

  • NPPA, in 2017, had slashed the ceiling prices of stents by up to 85 per cent.

About the decision

  • The authority deliberated upon the matter “at length” and observed that establishing significant therapeutic advantage and increased efficacy “is not a pre-requisite for obtaining exemption under para 32(ii) of DPCO 2013.”

  • Para 32 of the Drugs (Prices Control) Order, 2013 lists out certain conditions a product has to meet to stay out of the provisions of the regulation.

  • This includes new drugs developed through indigenous research and development that are patented under the Indian Patent Act, 1970 and not produced elsewhere as well as new drugs produced in the country by a new process developed indigenously and patented.

Drug Price Control Orders

  • The NPPA regularly publishes lists of medicines and their maximum ceiling prices. The latest DPCO was released in 2013 which has a list of 384 drugs.

  • On 4 December 2017, it was announced that a Multi-disciplinary committee of experts for consultation on matters pertaining to implementation of Drug Price Control Order (DPCO) including technicalities involved in pricing and new launches will be setup and it will have the member secretary of the National Pharmaceutical Pricing authority (NPPA) as its convener.

About NPPA

  • The National Pharmaceutical Pricing Authority (NPPA) is a government regulatory agency that controls the prices of pharmaceutical drugs in India.

  • NPPA was constituted vide Government of India Resolution dated 29th August, 1997 as an attached office of the Department of Pharmaceuticals (DoP), Ministry of Chemicals & Fertilizers as an independent Regulator for pricing of drugs and to ensure availability and accessibility of medicines at affordable prices.


  1. To implement and enforce the provisions of the Drugs (Prices Control) Order in accordance with the powers delegated to it.

  1. To deal with all legal matters arising out of the decisions of the Authority.

  1. To monitor the availability of drugs, identify shortages, if any, and to take remedial steps.

  1. To collect/ maintain data on production, exports and imports, market share of individual companies, profitability of companies etc, for bulk drugs and formulations.

  1. To undertake and/ or sponsor relevant studies in respect of pricing of drugs/ pharmaceuticals.

  1. To recruit/ appoint the officers and other staff members of the Authority, as per rules and procedures laid down by the Government.

  1. To render advice to the Central Government on changes/ revisions in the drug policy.

  1. To render assistance to the Central Government in the parliamentary matters relating to the drug pricing

Source: Indian Express

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GS-II : International Relations
China-Pakistan Economic Corridor (CPEC)

Syllabus subtopic: Effect of Policies and Politics of Developed and Developing Countries on India’s interests

Prelims and Mains focus: about CPEC and India’s concerns; about China’s Belt and Road Initiative

News: In an interesting move, cash-strapped Pakistan has invited the US to join the China-Pakistan Economic Corridor (CPEC), an ambitious infrastructure project looked with suspicion by the Trump administration for being non-transparent.

About CPEC

  • CPEC connecting China’s Xinjiang with Pakistan’s Gwadar port is regarded as the flagship project of the multi-billion dollar Belt and Road Initiative (BRI) which is aimed at furthering China’s global influence with infrastructure projects funded by Chinese investments all over the world.

  • China has committed to invest over USD 60 billion in Pakistan as part of the CPEC under which it planned to build a number of special economic zones.

  • CPEC's potential impact on Pakistan has been compared to that of the Marshall Plan undertaken by the United States in post-war Europe. Pakistani officials predict that CPEC will result in the creation of upwards of 2.3 million jobs between 2015–2030, and add 2 to 2.5 percentage points to the country's annual economic growth.

India’s objections to CPEC

  1. Sovereignty claims: India objects to the CPEC project as upgrade works to the Karakoram Highway are taking place in Gilgit Baltistan in Pakistan-occupied Kashmir; territory that India claims as its own.

  1. Encirclement fears: India has alleged that China and Pakistan intended to develop the corridor not just for its economic benefits, but also is motivated by the "strategic intent of besieging India.”

Source: Indian Express

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GS-III : Economic Issues Budget
Fiscal deficit touches 128.5% of Budget Estimate

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

Prelims and Mains focus: about the govt’s fiscal deficit target; about various terms used in the budget

News: The fiscal deficit touched 128.5 per cent of the whole-year Budget target during the April-January period.


  • The deficit in the year-ago period was 121.5 per cent of the corresponding target.

  • The government had targeted to restrict the fiscal deficit (RE) at Rs 7,66,846 crore for the year ending March 31, 2020.

  • Finance Minister had raised the fiscal deficit target to 3.8 per cent of the GDP, from 3.3 per cent pegged earlier for 2019-20 due to revenue shortage.

Budget related terms you should know

An annual financial statement for the Union of India that contains the government's revenue and expenditure for a given fiscal year, the Union Budget is a massive and complex document.

  1. Gross domestic product (GDP): The added value of output of all productive sectors in the economy as measured by the Central Statistics Office.

  1. Fiscal deficit: Total additional borrowings made by the government every year to bridge the gap between its income and expenditure.

  1. Capital and revenue expenditure: Expenditure that does not create any asset, such as subsidies and interest payments, is revenue expenditure. Spending to create assets such as highways, buildings and dams as well as loans given by the centre to the states come under capital expenditure.

  1. Direct and Indirect Taxes: Direct taxes are the one that fall directly on individuals and corporations. For example, income tax, corporate tax etc. Indirect taxes are imposed on goods and services. They are paid by consumers when they buy goods and services. These include excise duty, customs duty etc.

  1. Revenue Deficit: The difference between revenue expenditure and revenue receipt is known as revenue deficit. It shows the shortfall of government's current receipts over current expenditure.

  1. Tax revenue: The primary source of income for the government. The government funds its expenditure by either directly taxing income of individuals/companies or by taxing goods and services consumed by people (indirect taxes).

  1. Non-tax revenue: Additional sources of revenue for the government other than taxes. This includes revenues from interest receipts, spectrum auction and disinvestment, among other things.

  1. Fiscal policy: It is the government actions with respect to aggregate levels of revenue and spending. Fiscal policy is implemented though the budget and is the primary means by which the government can influence the economy.

  1. Capital Budget: The Capital Budget consists of capital receipts and payments. It includes investments in shares, loans and advances granted by the central Government to State Governments, Government companies, corporations and other parties.

  1. Revenue Budget: The revenue budget consists of revenue receipts of the Government and it expenditure. Revenue receipts are divided into tax and non-tax revenue. Tax revenues constitute taxes like income tax, corporate tax, excise, customs, service and other duties that the Government levies. The non-tax revenue sources include interest on loans, dividend on investments.

  1. Finance Bill: The Bill produced immediately after the presentation of the Union Budget detailing the Imposition, abolition, alteration or regulation of taxes proposed in the Budget.

  1. Vote on Account: The Vote on Account is a grant made in advance by the parliament, in respect of the estimated expenditure for a part of new financial year, pending the completion of procedure relating to the voting on the Demand for Grants and the passing of the Appropriation Act.

  1. Budget Estimates: Amount of money allocated in the Budget to any ministry or scheme for the coming financial year.

  1. Revised Estimates: Revised Estimates are mid-year review of possible expenditure, taking into account the rest of expenditure, New Services and New instrument of Services etc. Revised Estimates are not voted by the Parliament, and hence by itself do not provide any authority for expenditure. Any additional projections made in the Revised Estimates need to be authorized for expenditure through the Parliament's approval or by Re-appropriation order.

  1. Excess Grants: If the total expenditure under a Grant exceeds the provision allowed through its original Grant and Supplementary Grant, then, the excess requires regularization by obtaining the Excess Grant from the Parliament under Article 115 of the Constitution of India. It will have to go though the whole process as in the case of the Annual Budget, i.e. through presentation of Demands for Grants and passing of Appropriation Bills.

  1. Minimum Alternative Tax (MAT): The Minimum Alternative Tax is a minimum tax that a company must pay, even if it is under zero tax limits.

Source: Indian Express

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Delhi water fails to clear ISO norms

Syllabus subtopic: Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.

Prelims and Mains focus: about the contamination in drinking water; about BIS; about ISO standards

News: None of the drinking water samples randomly collected from across Delhi conforms to the ISO standards of purity in one or more requirements, the Bureau of Indian Standards (BIS) informed the Supreme Court.


  • On January 13, the court ordered the pollution control board and the BIS to conduct a random check of water quality in Delhi and submit a report in a month. The BIS report said it drew samples from various locations across Delhi and 20 other State capitals under an integrated scheme.

  • The Delhi government has maintained that potable water in the national capital is safe. The re-inspection has been ordered for further clarity.

About the report and its findings

  • In its report, ‘Report of Testing of Piped Drinking Water Samples Drawn from Delhi’, filed on February 19 in the court, the BIS said it had focused on water supplied by city municipalities, corporations, water boards, local bodies. It said the samples were sent for testing against 47 out of 48 parameters (excluding radiological test). These covered organoleptic and physical test, chemical test, toxic substance, bacteriological, virological and biological test.

  • It was found that all the drinking water samples drawn from Delhi were non-conforming in one or more requirements as per IS 10500:2012 [specification for drinking water], concluded a 64-page report filed by the Department of Laboratory Policy and Planning Department of the BIS.

Reasons for water contamination

  • One of the main reasons for contamination in Delhi was leaking pipes.

  • Coliform contamination occurs when faecal matter gets mixed with treated water supplied to consumers. Ultimately, consumers face dangerous gastrointestinal diseases, like dysentery, as a result of this contamination.

About Bureau of Indian Standards (BIS)

  1. The Bureau of Indian Standards (BIS) is the national Standards Body of India working under the aegis of Ministry of Consumer Affairs, Food & Public Distribution.

  1. It is established by the Bureau of Indian Standards Act, 1986.

  1. The Minister in charge of the Ministry or Department having administrative control of the BIS is the ex-officio President of the BIS.

  1. Composition: As a corporate body, it has 25 members drawn from Central or State Governments, industry, scientific and research institutions, and consumer organisations.

  1. It also works as WTO-TBT (Technical Barriers to Trade Agreement) enquiry point for India.

About International Organization for Standardization (ISO)

  • ISO is an independent, non-governmental international organization with a membership of 164 national standards bodies.

  • Through its members, it brings together experts to share knowledge and develop voluntary, consensus-based, market relevant International Standards that support innovation and provide solutions to global challenges.

  • Its Central Secretariat in Geneva, Switzerland, coordinates the system and runs day-to-day operations, overseen by the Secretary General.

Governance Structure

  • The General Assembly is the overarching organ and ultimate authority of the Organization. It is an annual meeting attended by our members and our Principal Officers.

  • The ISO Council is the core governance body of the Organization and reports to the General Assembly. It meets three times a year.

  • The management of the technical work is taken care of by the Technical Management Board, which reports to Council. This body is also responsible for the technical committees that lead standard development and any strategic advisory boards created on technical matters.

Whar are standards?

  • International Standards make things work. They give world-class specifications for products, services and systems, to ensure quality, safety and efficiency. They are instrumental in facilitating international trade.

  • ISO has published 23056 International Standards and related documents, covering almost every industry, from technology, to food safety, to agriculture and healthcare. ISO International Standards impact everyone, everywhere.

  • Regulators and governments count on ISO standards to help develop better regulation, knowing they have a sound basis thanks to the involvement of globally-established experts.

Source: The Hindu

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