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Current Affairs - 19 July 2018

General Affairs 

VVIP Vehicles Must Display Registration Numbers, Says Delhi Court
  • Every vehicle, including that of top constitutional authorities, should display the registration number, the Delhi High Court said. The rule, the court said, will apply to the vehicles of the President, the Vice-President, governors and Lieutenant Governors of states and Union territories.
    The order by a bench of acting Chief Justice Gita Mittal and Justice C Hari Shankar came while hearing a public interest litigation (PIL) filed by an NGO, which has sought to enforce display of registration numbers on cars of VVIPs.

    The Road Transport and Highways Ministry, in its affidavit filed before the bench in March, had agreed to display of registration numbers on VVIPs' cars and said that it has asked the authorities concerned to get these vehicles registered.

    The NGO had said that the practice of replacing the registration numbers with the national emblem -- three lion heads adapted from the Lion Capital carved on an Ashokan pillar at Sarnath -- is both arbitrary and symptomatic of the desire to rule rather than to serve.

    The plea said the practice makes the VVIP cars vulnerable and thus the dignitaries become easy targets for terrorists and anyone with malicious intent.

    If a person met with an accident involving such vehicles, he cannot bring any claim against the erring persons due to absence of any identification mark, it added.

Maharashtra Speaker Orders Cop's Suspension For Abusing Chhagan Bhujbal
  • The Maharashtra Assembly Speaker today ordered the suspension of a police officer for allegedly abusing NCP leader and former deputy chief minister Chhagan Bhujbal in his absence.
    The opposition alleged that it was a breach of privilege, as Mr Bhujbal is an MLA, while the ruling ally Shiv Sena demanded action in similar cases where its own MLAs were allegedly ill-treated by government officials.

    Raising the issue, NCP's Jitendra Awhad said that sub-inspector Mahaveer Jadhav of Srigonda police station in Ahmednagar district barged into the house of a local person on June 8, and abused his family. He also abused Mr Bhujbal, though the NCP leader had no connection with the family.

    "I am providing the entire video clip (of the incident)....It is a deliberate attempt to insult the members of the House and a breach of their privilege," Mr Awhad said.

    Mr Bhujbal himself spoke about the incident. "I was abused despite having never visited that village. I do not have any connection with the family and the police official," he told the House.

    Leader of Opposition Radhakrishna Vikhe-Patil (Congress) and NCP leader Ajit Pawar said if no action was taken in this case, it would embolden officials to misbehave with MLAs.

    "We represent and work for people. Yet there are cases when officials ill-treat people's representatives," Mr Vikhe-Patil said.

    Condemning the "ill-treatment" meted out to Mr Bhujbal, the Shiv Sena's chief whip Sunil Prabhu cited two similar cases pertaining to his party's MLAs Nagesh Patil Ashtikar and Rajesh Kshirsagar, and demanded action.

For Better Food Quality, Railways To Set Up New Kitchens, Upgrade Others
  • In order to upgrade the quality of food served on trains, the IRCTC will set up new kitchens and upgrade existing ones, parliament was told on Wednesday.
    "The Indian Railway Catering and Tourism Corporation Limited (IRCTC) has been mandated to carry out the unbundling by creating a distinction primarily between food preparation and food distribution on trains. In order to upgrade quality of food preparation, IRCTC is to set up new kitchens and upgrade existing ones," Minister of State for Railways Rajen Gohain told the Lok Sabha in a written reply.

    He said that the new policy which was floated on February 27 last year mandates the zonal railways to hand over the kitchens managed by them to IRCTC.

    "Food Plaza, fast food units and food court will continue to be managed by IRCTC. At present, IRCTC has taken over almost all units in phased manner," he said.

    He also said that the procedure for allotment of contracts for running various stalls at railway platforms has also been simplified.

    The minister said that the revamping of existing railway catering system by carrying out unbundling under Catering Policy 2017 is aimed at providing quality hygienic food to customers at affordable prices.

    Highlighting the initiatives of the IRCTC to upgrade the mobile catering services in the trains, Mr Gohain said, "The menu of prepaid trains has been revised to upgrade the quality of meal served to the passengers and the meal trays of bio-degradable material with air tight sealed cover for packing of meals from kitchens has been introduced initially in selected Rajdhani and Duronto trains."

    Beside two initiatives, the IRCTC has also launched provision of hand sanitizers in prepaid trains and this is provided to the travelling passengers before service of meal.

    The Minister further said that the IRCTC has deployed supervisors for on-board monitoring of catering services. "The on board monitoring staff have been provided with pre-installed complaint or feedback monitoring application on mobile tablets. Further, CCTV cameras have been installed in base kitchens for real time monitoring," Mr Gohain said.

    "Sixteen base kitchens of the IRCTC have been up-graded with modern equipment. Food safety supervisors have been deployed in IRCTC managed base kitchens for audit of food safety, hygiene and sampling of the cooked food and raw material," he said.

    The Minister further said that the service trolleys have been introduced in Rajdhani and Duronto trains for smooth service and the IRCTC has also introduced the billing through POS machines in selected mobile units to avoid overcharging of meal by service providers.

    "The railways has also introduced ready to eat meals in order to enable the passengers to have variety in meals in the train," he added.

100 Terrorists, 43 Security Personnel Killed In Jammu And Kashmir In 2018
  • Hundred militants and 43 security personnel were killed in Jammu and Kashmir in the first six months of this year, Union Minister Hansraj Gangaram Ahir said today.
    Mr Ahir, the minister of state for home, said 16 civilians were also killed during this period, which saw 256 incidents of violence. He was replying to a written question in Rajya Sabha.

    In 2017, 342 incidents of violence were reported in the state, in which 213 terrorists were gunned down. A total of 80 security personnel and 40 civilians were killed last year, Mr Ahir said.

    As many as 82 security personnel, 15 civilians and 150 terrorists were killed in the state in 2016, which witnessed 322 cases of terrorist violence, he said.

Probe Agency Files Supplementary Charge Sheet In VVIP Chopper Scam Case
  • The Enforcement Directorate has filed a supplementary charge sheet in the AgustaWestland VVIP chopper bribery scam against former Air Force Chief SP Tyagi, his two cousins, lawyer Gautam Khaitan, two Italian middlemen and Finmeccanica.
    The charge sheet was filed before special judge Arvind Kumar and will be taken up for consideration on July 20.

    The charge sheet, filed through special public prosecutor N K Matta, names as accused the Tyagi brothers, including SP Tyagi, Khaitan, Italian middlemen Carlo Gerosa and Guido Haschke, and Finmeccanica, the parent company of AgustaWestland.

    The charge sheet accuses them of money laundering of around 28 million Euro.

    The ED, in its charge sheet, has said that money has been laundered through multiple foreign companies which were used as fronts to park alleged kickbacks.

    The court was hearing a money laundering case connected with the Rs. 3,600-crore VVIP chopper deal.

    On January 1, 2014, India had scrapped the contract with Finmeccanica's British subsidiary AgustaWestland for supplying 12 AW-101 VVIP choppers to the IAF over alleged breach of contractual obligations and charges of kickbacks of Rs. 423 crore paid by it to secure the deal.

Business Affairs

From counting jobs to measuring inflation! India badly needs to solve its statistics problem
  • The prime minister and his council of ministers insist that India does not have a jobs problem. It has a jobs data problem. That is, jobs are being created all right but we are not capturing them in our job surveys because the surveys are not properly designed. Some researchers - specifically Soumya Kanti Ghosh, chief economist of SBI and Pulak Ghosh of IIM, Bangalore - back the government claims. Ghosh and Ghosh used Employee Provident Fund Organisation enrolment data, to which they were given access by Niti Aayog, to conclude that many more jobs were created in the formal sector than originally estimated.

    Other researchers - including Mahesh Vyas of Centre for Monitoring of Indian Economy (CMIE) - are sceptical of those claims. CMIE's own data showed that employment was not going up in the country and the jobs situation was not particularly rosy despite the economy growing at a steady clip.

    Meanwhile, the controversy over India's GDP growth data itself refuses to die down. In 2015, the Central Statistical Organisation (CSO) changed both the base year as well as the methodology for calculating GDP. The first was a routine change that does not raise many eyebrows. It was the latter which created a much heated debate. The new series showed much faster GDP growth than had been captured by the earlier methodology. For 2013-14 for instance, the GDP growth figure as calculated by the new methodology shot up to 6.2 per cent. The older methodology had estimated it to be 4.8 per cent. Manufacturing growth under the new methodology moved up from minus 2 to plus 6 for the same period.

    Savings and investment rates also changed significantly when calculated under the new methodology as did many other numbers such as consumption etc. Because the exact way the new methodology calculated growth was never explained in detail, most economists could not figure out why there would be such sharp divergence between the numbers calculated using the old methodology and the new methodology. Worse, the CSO compounded the problem by not updating the back numbers beyond 2011-12. Even the then Reserve Bank of India (RBI) governor admitted that he did not really understand the new GDP growth numbers. Meanwhile, respected economists and researchers pointed out that a number of statistics captured and put out by the CSO gave only a very partial picture of the economy.

    For example, India was still focused on bringing out the Index of Industrial Production (IIP) data regularly (the IIP had also been updated though) even though services accounted for more than half of India's GDP. And though services were growing much faster than manufacturing and from a bigger base, there was no reliable index to capture service growth on a monthly, quarterly or even half yearly basis.

    The consumer price index (CPI) and the wholesale price index (WPI) suffer from the same problem. Both only capture a slice of consumption and do not adequately capture the services component of consumption and inflation, even though services are the bigger part of the equation. And these are the most common official data sets and indices. There are problems in getting reliable data on everything from government investments, ownership of PSU, public enterprises profits and loss, manufacturing output and a host of other areas.

    India has a huge official data and statistics problem and the problem is only growing bigger by the day. At one point, despite the fact that every economist agreed that our north eastern neighbour China was growing very rapidly, there was much doubt about Chinese official statistics. India now risks falling into the same category because many respected Indian and global economists cannot fully trust the numbers India throws up. If even the Prime Minister of the country admits that the government has no idea of how many jobs it is creating, that points to a serious problem.

    It is not as if the government does not know this. Multiple studies have been commissioned and reports generated on how to improve data collection and analysis by the government. The problem is that the government does not seem particularly keen to sort out the problems or to take any concrete steps to improve the data collection and analysis. Several months after the Chief Statistician retired, the government still has to find and appoint a new one.

    Some of the problems of accurate data collection and analysis can be sorted out if the government actually decides to do something. The Goods and Services Tax (GST) is throwing up enormous quantities of reasonably reliable data - at least better data than was being captured earlier on the business front. Meanwhile, new tools have also been created to deal with big data sets on a real time or near real time basis. Fixing India's data problem is problem easier today than it was even five years ago. The question is does the government want to fix the problem? Or is it content to carry on with doubtful data and unreliable statistics that no one really trusts.

Challenging times ahead for aviation sector as losses rise
  • It's challenging times ahead for the Indian aviation sector. According to ratings agency ICRA, the aggregate loss of the aviation sector is expected to reach Rs 3,600 crore in 2018/19, up from around Rs 2,500 crore in 2017/18. The reasons for the higher losses include higher aviation turbine fuel (ATF) prices, slowdown in capacity addition, and lower yields.

    The report, for instance, says that the market leader IndiGo, which had about 41 per cent share in industry capacity, had slowed down in the adding new capacity in 2017/18. The airline's domestic capacity addition - available seat kilometres (ASKM) - in the last financial year stood at 10.3 per cent, far lower than the 28.1 per cent in 2016/17. IndiGo, over the past one year, has been facing delays in aircraft deliveries, particularly Airbus A320neos, due to technical glitches with engines, and an increased focus on the international operations. The total capacity of Indian carriers stood at 146.8 million in 2017/18.

    ICRA estimates the sector-wide capacity additions of 15-17 per cent in 2018/19. "The key driver for the industry capacity growth continues to be the sizeable order backlog...approximately 1,033 aircraft of various sizes and configurations are on order by Indian airlines," the report says.

    The second biggest area of concern for the sector is elevated ATF prices. The ATF prices have risen from Rs 51,640 per kilolitre (KL) in September to Rs 63,162 per KL in March 2018, a rise of 22.31 per cent in about six months. Overall, the average ATF prices during 2017/18 were higher by 10.4 per cent year-on-year. The jump in ATF prices is impacting the financial performance of the airlines due to their inability to pass on the increased fuel cost to the customers.

    High ATF prices and heightened levels of competition have taken a toll on the yields of the airlines. Yield, in simple terms, denotes the money that airline makes from a paid passenger on each kilometre of travel.

    ICRA, however, says that there are some silver linings as well. The only saving grace for the sector is the robust passenger load factors (PLFs) registered on the back of adequate demand, the report says adding that "the domestic passenger traffic to grow at a healthy pace of about 15 per cent annually... due to conducive factors like relatively low penetration levels, favourable macro-economic environment, support from regulatory environment and development of new airports."

    Almost all domestic carriers have witnessed deterioration in their financial performance in the last financial year. An increased focus on the cost structure, as some pointed out by some airlines in the recent analyst calls, will help curtail the estimated losses.

Commercial vehicle makers in for bumper sale as government increases carrying capacity of trucks
  • In a move that is expected to be beneficial to logistic companies around the country, the government has decided to increase the maximum load-carrying capacity of trucks by 20-25 per cent bringing it at par with international standards.

    The move, the first in over three decades, is likely to result in greater cost efficiencies for logistic companies as they would be able to ferry more goods per trip. At the same time, experts believe it may not have any short or medium term impact on demand for heavy trucks in the country as it is applicable only for new vehicles manufactured after the statutory order has been passed.

    While commercial vehicle manufacturers would now have to re-align their capacities to adapt to the new norms which will have some cost implications, a bigger increase in prices is expected from 2020 onwards when stricter BS-VI emission norms would be implemented across the country. This is expected to lead to freight and logistics companies advancing their purchasing decisions.

    "Globally, higher axle loads are permitted which enables higher efficiencies in the goods transport industry. In India, historically, we had allowed lower axle loads as well as lower vehicle speeds due to the inability of our road and highway infrastructure to support such higher loads or speeds," said Abhay Firodia, president, Society of Indian Automobile Manufacturers. "With the modernization of India's roads and highways, it is natural for government to look at higher load carrying capacities in trucks. We have, in principle, supported an increase in axle loads up to the European levels."

    "Transporters would want to avail benefit from the new norms by bringing forward their replacement demand. In the best years of CV sales, replacement demand has accounted for 60 per cent or more of total volumes," said Hetal Gandhi, director, Crisil Research. "It would also push people to take faster decision on expansion or fresh purchases. We thus believe that commercial vehicle volumes in the higher tonnage segment (MHCVs) could see a further upside than 7-9 per cent growth which was expected earlier. However, long term growth may subside given benefits from higher load capacity. The implementation of norms will also arrest the tonnage shift in the medium and heavy commercial vehicle (MHCV) segment to a certain extent that was based on vehicles economics."

    There are, however, concerns as the dual regulation for loading for trucks that this decision introduces -- older limits for existing and new trucks -- is likely to create confusion and may lead to existing fleet get away with overloading their trucks.

    "The existing vehicles on the road are not certified for safety with the higher axle loads. Hence, this provision should not allow the existing vehicles with higher loads or else it will tantamount to legalising the wrong practice of overloading of the vehicles," Firodia said. "Such overloaded vehicles may or may not be able to meet the mandatory braking & steering performance requirements leading to safety issues on the road."

    "Further, higher loads on vehicles will also require upgraded tyres and new specifications of the axles for which the supply chain also needs to gear up. Finally, there is no date of implementation mentioned in the notification. As BS6 vehicles development is in full swing and many of the OEMs as well as the supply chain would need some time to upgrade product designs and certify these new vehicles, a clear date of implementation of 1st April 2020 aligning with introduction of BS6 vehicles would be more appropriate," he said.

NiMo, Mallya effect! Government wants to catch loan defaulters before they fly out of the country
  • Following the incidents of high-profile loan defaulters escaping out of the country under its watch, the government, it seems, is finally taking note. It has reportedly set up a committee to come up with rules aimed at stopping defaulting promoters from fleeing the country. The move comes after liquor baron Vijay Mallya, PNB scam accused diamantaire Nirav Modi and Mehul Choksi gave a slip to the airport authorities.

    Jatin Mehta, another fugitive diamond trader of Winsome Diamonds and Jewellery Ltd became a national of St Kitts and Nevis after renouncing his Indian citizenship soon after his firm started defaulting on loans taken from banks. Mehta owes close to Rs 7,000 crore to various banks in the country.

    According to a report in The Economic Times, the committee headed by financial services secretary Rajiv Kumar has representation from the Reserve Bank of India (RBI), the ministries of home and external affairs, the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI). The new measures will also include a check on possible dual citizenship.

    The committee will suggest mechanisms and whether changes are required in existing laws. "We will focus on those promoters who have citizenship of any other country and have not declared the same," the finance ministry official told the daily.

    The report added that the government may also seek details of any overseas travel planned by promoters of companies which have defaulted on loan payments. It takes some time before a loan default is classified as NPA and years to uncover a fraud. Taking advantage of this, promoters of such companies flee from the country in advance.

    "We may not necessarily stop them but in cases where there are adverse reports from intelligence agencies or even banks, the government may choose to ask for details of their travel and other such required information," the report quoted an official from the ministry.

    Such promoters will only be barred from traveling or have their passports suspended if there is specific information that they could become fugitives from justice, it added.

    The Centre had earlier asked all public-sector banks to get a certified copy of the passport and other details of borrowers applying for loans of Rs 50 crore or more. The borrowers may include promoters, directors or other authorised signatories of companies.

    In a written reply in the Rajya Sabha, Shiv Pratap Shukla, Minister of State for Finance, said: "With a view to enable banks to inform relevant authorities of passport details, the government has asked the public sector banks to obtain a certified copy of the passport of the promoters/directors of companies availing of loan facilities of Rs 50 crore and above."

    The minister said for existing cases of default, the banks have been advised to get all relevant details, including copies of the passport. In cases where the individual or company representative do not have a passport, a declaration stating the non-availability of the document should suffice.

Modi government may hike minimum price of sugarcane by Rs 20 per quintal
  • The Union Cabinet will consider tomorrow a proposal to increase the minimum price that sugar mills are required to pay to cane growers by Rs 20 to Rs 275 per quintal for the next marketing year starting October, according to sources.

    The Cabinet Committee on Economic Affairs (CCEA) is scheduled to meet tomorrow and is likely to consider a proposal to fix the Fair and Remunerative Price (FRP) of sugarcane for the 2018-19 marketing year, they added.  The government recently announced a sharp increase in the minimum support price (MSP) of kharif (summer-sown) crops including paddy.

    The Commission for Agricultural Costs and Prices (CACP) had recommended Rs 20 per quintal hike in the FRP of sugarcane at Rs 275 per quintal for next season. The FRP, which is the minimum price that sugar mills have to pay to sugarcane farmers, is Rs 255 per quintal for the 2017-18 season.

    The CACP is a statutory body that advises the government on the pricing policy for major farm produce. Usually, the government accepts the CACP recommendations.  At present, the FRP price is linked to a basic recovery rate of 9.5 per cent, subject to a premium of Rs 2.68 per quintal for every 0.1 per cent point increase in recovery rate. Sources said that the basic recovery rate could be increased to 10 per cent.

    The proposed increase is also likely to result in states like Uttar Pradesh that do not follow the centrally-announced FRP raising their own advisory prices. Major sugarcane producing states such as Uttar Pradesh, Punjab and Haryana fix their own sugarcane price called 'state advisory prices' (SAPs), which are usually higher than the Centre's FRP.

    India's sugar production is estimated to rise by 10 per cent to touch a new record of 35.5 million tonnes in the next marketing year, starting October as cane output could rise on normal rains, according to the industry body ISMA.

    Sugar production in India, the world's second-largest producer after Brazil, is estimated to reach a record 32.25 million tonnes in the current 2017-18 marketing year (October-September).

General Awareness

    Committee set up to synergise NCC and NSS
    • Context: Government has decided to set up a committee under the Chairmanship of Shri Anil Swarup to suggest measures to strengthen National Cadet Corps (NCC) and National Service Scheme (NSS).

      The Committee will deal with on issues like expansion, strengthening training infrastructure, rationalizing resources, reducing manpower deficiency affecting NCC and NSS.  The Committee will also submit recommend for building synergies between these two institutions viz. NCC and NSS and further strengthen them for empowering the youth.

      About National Service Scheme (NSS):

      What is it?

      NSS is a Centrally Sector Scheme. The Scheme was launched in the year 1969 with the primary objective of developing the personality and character of the student youth through voluntary community service. The ideological orientation of the NSS is inspired by the ideals of Mahatma Gandhi. Very appropriately, the motto of NSS is “NOT ME, BUT YOU”.

      Programme Structure:

      NSS is being implemented in Senior Secondary Schools, Colleges and Universities. The design of the NSS envisages that each educational institution covered under the Scheme has at least one NSS unit comprising of normally 100 student volunteers, led by a teacher designated as Programme Officer (PO). Each NSS unit adopts a village or slum for taking up its activities.

      Nature of Activities under NSS:

      Briefly, the NSS volunteers work on issues of social relevance, which keep evolving in response to the needs of the community, through regular and special camping activities. Such issues include (i) literacy and education, (ii) health, family welfare and nutrition, (iii) environment conservation, (iv) social service programmes, (v) programmes for empowerment of women, (vi) programmes connected with economic development activities, (vii) rescue and relief during calamities, etc.

      What is National Cadet Corps?

      The National Cadet Corps (NCC) is a youth development movement. It came into existence under the National Cadet Corps Act XXXI of 1948.

      It is a Tri-Services Organization, comprising the Army, Navy and Air Force, engaged in grooming the youth of the country into disciplined and patriotic citizens.
      It has enormous potential for nation building. The NCC provides opportunities to the youth of the country for their all-round development with a sense of Duty, Commitment, Dedication, Discipline and Moral Values so that they become able leaders and useful citizens.
      The NCC provides exposure to the cadets in a wide range of activities., with a distinct emphasis on Social Services, Discipline and Adventure Training. The NCC is open to all regular students of schools and colleges on a voluntary basis. The students have no liability for active military service.

      What’s important?

      For Prelims and Mains: NSS and NCC- features and significance.

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