Current Affairs 17th April 2019
Current Affairs and Editorial Discussions
Current Affairs 17th April 2019
Airtime during elections
Why in news?
The Election Commission has pulled up Doordarshan for giving twice as much airtime to the ruling BJP as it has given to the most important opposition party, the Congress. The portion of the CPM is much worse: It has been allocated only a tenth of the Congress’s airtime and a twentieth that of the BJP.
What’s wrong with it?
The broadcaster has argued that that it is a reflection of ground realities — the BJP controls more governments and has more legislators across the country — but that cuts no ice. At this time, when voters are exercising their choice, candidates should be given equal opportunity, irrespective of their parties’ legislative strength. Otherwise, the national public broadcaster, funded by the taxpayer and autonomous under the Prasar Bharati Act, would be seen as a captive channel of the ruling party, as it was in Indira Gandhi’s time.
How do other countries handle this?
In the US, an equal time rule for political candidates was spelled out in the Radio Act of 1927 and the Communications Act of 1934, on account of the fear that in its absence, television networks would be able to sway elections simply by blanking out one side. The Federal Communications Commission (FCC) also imposed a fairness doctrine from 1949 to 2011, which did not apply to candidates but to issues, and ensured that all sides of a debate were equitably represented on air. However, this was withdrawn as an impractical principle, since one side of a debate is sometimes patently absurd. In 2014, the BBC Trust in the UK pulled up its journalists for skewing coverage of science issues by, for instance, giving climate change deniers equal representation in debates. But in political matters, it has supported equal opportunity. In 2003, BBC staff were required to reflect “significant opposition to the conflict” (in short, protesters) in coverage of the invasion of Iraq, and “allow the arguments to be heard and tested”.
Why Doordarshan and no other channels?
Doordarshan is publicly funded and is insulated from government interference by law. If the apportioning of its airtime is seen to favour the ruling party, it is failing in its duty as a public broadcaster. Prasar Bharati CEO Shashi Shekhar Vempati has spoken of the pressures of competing with commercial channels. The argument is irrelevant, since the primary responsibility of a public broadcaster is not to compete for eyeballs, but to present news and opinions in a balanced manner so that intelligent viewers can make up their own minds.
Source: Indian Express
Notre Dame Fire
What is Notre Dame?
Notre Dame is a religious landmark, and a national, cultural, historical emblem of France.
The cathedral whose construction began in 1160 and which was consecrated nearly two centuries later in 1345, is arguably the greatest symbol of Paris, visited by 13 million people annually — nearly double the 7 million who visit Eiffel Tower.
The beloved landmark has been an inalienable part of the cultural history of France, inspiring the paintings of Marc Chagall, and immortalized in Victor Hugo’s The Hunchback of Notre Dame.
It is the seat of the Archbishop of Paris; where England’s Henry VI became, in 1431, the King of France; where Napoleon has crowned Emperor in 1804; where Joan of Arc was beatified in 1909. The great masterpiece of French Gothic architecture has survived, albeit not unscarred, the French Revolution, the Paris Commune of 1871, the two World Wars.
What cannot be recovered?
Enough detailed information is available for France’s highly developed restoration industry to produce a technically precise reconstruction. But it will never be the same cathedral again. Most of the chestnut and oak beams in the roof were originals from 800-900 years ago, from trees cut around 1160, when they were perhaps 300-400 years old. Such massive trees, and so much wood, is simply not available any longer. Also, the stone will be cut by machines rather than by hand.
What has been recovered?
Notre Dame’s most treasured relic, a band of rushes supposedly from the original crown of thorns placed on Jesus’s head during his crucifixion (above); the 13th-century Tunic of Saint Louis; at least one of the cathedral’s immense stained glass windows.
Source: Indian Express
WTO meet
Why in news?
Amid global trade war, India will hold an informal ministerial meeting of the World Trade Organization (WTO) for a second time in just over a year, starting May 13.
What is the purpose?
The two-day mini-ministerial is aimed at reaffirming commitment to preserving a rule-based, multilateral trading system and will likely discuss key issues such as reforms at the Organization, special and differential treatment to developing countries, e-commerce and certain other topics relating to the Doha agenda.
Why is this a critical time?
The move comes at a critical time when growing unilateral protectionist policies by the United States and some others, and a trade war involving the world’s top two economies have put to test the multilateral trading system represented by WTO.
Citing soaring commercial tensions and tariffs, WTO this month trimmed its global trade growth projection for 2019 to the lowest level in three years. World merchandise trade growth will ease to 2.6 percent this year and 3 percent next year, after recording a 3 percent rise in 2018, the WTO had said.
Separately, the International Monetary Fund (IMF), too, lowered its 2019 trade growth forecast last week by a sharp 60 basis points to 3.4 percent, as against the actual rise of 3.8 percent in 2018, citing the impact of the US-China trade war.
How is protectionism shaping?
The US has already slapped a tariff on its imports of steel and aluminium and hinted at more such protectionist steps. Washington is negotiating a trade deal with China and has announced its withdrawal of export incentives on Indian exports worth an annual $5.6 billion (Generalised system of preferences).
Recently, it sought a review of the “developing country” status at the WTO, claiming several members — including China and India — that moved up fast on economic and social ladders since the formation of the multilateral body in 1995 were still enjoying special and preferential trade treatments by “self-designating” themselves as developing nations.
In a separate paper presented at WTO, India, China and some others, however, have rebutted the US claims, asserting that in various key indicators — ranging from per capita income and human development indices to agriculture — the gap between them and the rich nations is too stark to miss.
Source: Indian Express
Indian Navy-Vietnam Peoples’ Navy Bilateral Exercise (IN – VPN BILAT EX)
In the backdrop of the growing maritime engagement between India and Vietnam, the Indian Navy undertook the second edition of the bilateral maritime exercise between Indian Navy and Vietnam Peoples’ Navy at/ off Cam Ranh Bay, Vietnam from 13 to 16 Apr 19.
The Indian Navy and the Vietnam Peoples’ Navy have traditionally shared good relations. Conduct of the bilateral exercise on an annual basis would give a further fillip to the existing strong bilateral relation between the two countries, which since Sep 16 have been elevated to the level of ‘Comprehensive Strategic Partnership’ after the visit of the Hon’ble PM to Vietnam. The Navy to Navy cooperation involves a Composite Training Programme in the fields of Submarine, Aviation and Dockyard training. The two countries have also signed an agreement to exchange White Shipping Information and have a running ‘Information Sharing’ programme.
Source: PIB
भारतीयनौसेना-वियतनाम पीपुल्स नौसेना द्विपक्षीय अभ्यास (आईएन- वी पी एन बी आई एल ए टी ई एक्स)
भारत और वियतनाम के बीच बढ़ते समुद्री जुड़ाव की पृष्ठभूमि में, भारतीय नौसेना ने 13 से 16 अप्रैल, 2019 को कैमरण खाड़ी, वियतनाम में भारतीय नौसेना और वियतनाम पीपुल्स नेवी के बीच द्विपक्षीय समुद्री अभ्यास का दूसरा संस्करण शुरू किया।
भारतीय नौसेना और वियतनाम पीपुल्स नेवी ने पारंपरिक रूप से अच्छे संबंधों को साझा किया है।वार्षिक आधार पर द्विपक्षीय अभ्यास आयोजित करने से दोनों देशों के मौजूदा मजबूत द्विपक्षीय संबंधों को और अधिक बढ़ावा मिलेगा, जो माननीय प्रधानमंत्री की वियतनाम यात्रा के बाद 16 सितंबर से 'व्यापकरणनीतिक साझेदारी' के स्तर तक बढ़ा दिया गया है।नौसेना से नौसेना सहयोग में पनडुब्बी, विमान और डॉकयार्ड प्रशिक्षण के क्षेत्र में एक समग्र प्रशिक्षण कार्यक्रम शामिल है।दोनों देशों ने व्हाइट शिपिंग सूचनाओं के आदान-प्रदान के लिए एक समझौते पर हस्ताक्षर किए हैं और एक ‘सूचना साझाकरण’कार्यक्रम चलाया है।
Source: PIB
Exercise SEA VIGIL
The maiden national level Coastal Defence Exercise SEA VIGIL was conducted by Indian Navy from 22-23 Jan 19. The exercise witnessed the simultaneous activation of the coastal security apparatus across the country involving maritime stakeholders at the Centre and all the 13 Coastal States and Union Territories.
National Committee for Strengthening Maritime and Coastal Security (NCSMCS)
The National Committee for Strengthening Maritime and Coastal Security (NCSMCS) is a national-level forum and an apex review mechanism for maritime and coastal security, in which all concerned ministries and government agencies are represented.
Source: PIB
अभ्यास सी विजिल
भारतीय नौसेना द्वारा 22-23 जनवरी 2019 को पहली राष्ट्रीय स्तर की तटीय रक्षा अभ्यास सी विजिल का संचालन किया गया।इस अभ्यास में देश भर में केंद्र और सभी 13 तटीय राज्यों और केंद्र शासित प्रदेशों से संबंधित समुद्री हितधारकों को शामिल करने वाले तटीय सुरक्षा तंत्र की सक्रियता देखी गई।
Source: PIB
Effect of GST on leather footwear industry
What is the issue?
With GST, all shoes costing up to Rs 1,000 attract 5 percent tax, while it is 18 percent for others. On paper, it looks fine. But there is currently also a 12 percent GST on leather and 18 percent on sole and solution. The big shoemakers can, then, fully set off the 18 percent tax on their product against these duties, which small manufacturers cannot.
How has China softened the blow?
Five years ago, mostly pure animal leather was used. Now they practically switched to synthetic leather from China, which is far cheaper. Pure leather from cow, goat or sheep hides costs upwards of Rs 5 per decimetre. Fine cow leather was available at Rs 5-6/decimetre five years back. But today it is Rs 15-20 and even more for leather used in Lee Cooper, Reebok, Nike, Hush Puppies or Woodland shoes. Roughly 20-25 decimetres are required for a shoe pair, taking the leather cost alone to Rs 300 plus.
On the other hand, imported faux leather — basically polyurethane foam-coated fabric — comes for Rs 150-900 per meter and six shoe pairs can be made with one meter. Taking Rs 600/meter for good quality material, the synthetic leather cost works out to Rs 100 per shoe pair. It is this leather that has helped survive both GST and reduced availability, along with the higher cost of pure leather after this government’s crackdown on cattle slaughter and closure of tanneries.
According to estimates 90 per cent of shoe-making in Agra for the domestic market is at present based on synthetic and 10 per cent on pure leather; it was the reverse 10 years ago. Pure leather shoes are made primarily for export. Synthetic leather has more uniform finish (sans any stretch marks, scars or veins). The shoes need no polishing and you just have to wipe with a cloth. While it isn’t as durable as natural leather, nobody really wears the same shoes for more than 2-3 years these days.
The effects of this have percolated down to workers as well. Every shoe involves 4-5 people. The total labour cost per pair is Rs 40-45, which is divided into different jobs: leather cutting (Rs 5), stitching (Rs 20), bottom making (Rs 10), sole fixing (Rs 5) and finishing (Rs 3). Normally, workers used to get work for at least 10 months of the year. But after GST, the owners have stopped getting regular orders and workers are sitting idle most of the time.
Source: Indian Express
Editorial
Fiscal and monetary policies for growth
Growth expectations for the current year have already fallen from 7.4 per cent and are likely to slip further. (RBI reducing it to 7.2% from 7.4%, IMF to 7.3%).
Why is this slowdown baffling?
Unlike in the 2011 to 2014 period, there are no smoking guns:
- There is no crisis with the currency that warrants a sharp slowdown in domestic demand
- no freeze in decision-making driven by successive corruption scandals
- No uncoordinated over-investment in sectors like power generation that created significant overcapacity.
What is the probable reason?
A major cause very likely is shortage of money. For the last few years, retailers and distributors have continued to complain of there not being enough money to get the markets to function smoothly:
How can there be a shortage of money?
When the RBI is printing so much that currency in circulation is 17 per cent higher than at the same time last year? That is a fair question.
The answer lies in understanding the different measures of money. Currency in circulation is about Rs 21 trillion currently, but the money that much of the formal economy uses for transactions, and see as bank deposits, is around Rs 154 trillion. This is called M3. The system that converts base money (M0: This is mainly currency in circulation) to M3 is currently not functioning: This is the financial system. When banks give new loans, they “create” money. When the financial system is not functioning effectively, this process of money creation slows down, and the ratio of M3 to M0 (also called the money multiplier) falls.
For a few years, non-banking finance companies (NBFCs) stepped in to support aggregate credit growth, but starting late last year, as they got pulled into a funding crunch, and eschewed growth to ensure survival, system-wide credit growth has slowed sharply.
What are the fiscal policy and monetary policy challenges?
A second challenge is in better coordination of fiscal and monetary policies, starting with improved communication. Currently, government bond yields, which form the benchmark for the interest rates on a lot of debt in India, are significantly higher than the rates set by the Monetary Policy Committee (MPC). This gap, called the term premium, has come down from a recent peak, but is still among the highest recorded this decade.
Two major reasons come to mind:
- First, the market’s fear of fiscal slippage. India’s general government (that is, central plus state) fiscal deficits are among the highest in the world, but compared to India’s own history, the targets for this year are the third lowest ever. There has been some concern on excessive borrowing by public sector enterprises, but at least till two years back, for which comprehensive data is available, aggregate public sector savings were still positive. Further, forward-looking analysis of fiscal trends must incorporate the fiscal space that opens up with the pay commission now behind us. In the fifth and sixth pay commissions, the increase in the combined salary and pension bill of central and state governments was two to two-and-a-half percent of GDP: On both occasions the fiscal deficit had shot up. The seventh pay commission is now over, and the aggregate deficit is still unchanged. Till the eighth pay commission in 2026, as salaries and pensions rise slower than nominal GDP growth, significant fiscal space would open up.
- The second reason is a reported drop in the households’ financial savings to GDP ratio in 2017 to 9.4 per cent: The argument being that there aren’t enough savings available for both the government and the private sector to be funded adequately. However, a deeper dig into the estimation of financial savings shows possible under-estimation, primarily with respect to mutual fund inflows (these have been very strong, but not visible in the savings data as reported), and small savings schemes which have now crossed one per cent of the GDP. Even assuming that there are no errors, the reported ratio has jumped to 11.1 per cent in 2018, and we estimate may have improved further to 11.3 per cent in 2019, a nine-year high.
Due to confusion on both these issues, even as the governments have tried to rein in spending to control the fiscal deficit, the easing this should have caused on the monetary side has not occurred. The constraints in the financial system have further worsened the monetary tightness. As growth continues to slow and inflation stays below the target, interest rates may keep falling, but likely not fast enough to revive growth quickly.
What are the other reasons?
Several other challenges are well-flagged and often discussed:
- A weak and ailing real-estate market,
- problems in agriculture,
- worrying levels of external dependence in India’s energy ecosystem,
- crumbling municipal infrastructure,
- stagnating capital flows
Source: Indian Express