Daily Current Affairs 5th July,2018

 Daily Current Affairs, 5th July 2018

Paper 2:

Topic: Separation of powers between various organs dispute redressal mechanisms and institutions.


Delhi Vs Centre: SC observations


Context: The Supreme Court recently held that the Lt Governor of Delhi has no independent power to take decisions and is bound by the elected government’s advice. The ruling also lays down for the first time clear guidelines for the LG’s conduct, and delineates the powers of the two branches of the executive in Delhi, which does not have the status of a full state yet elects its own MLAs and government.



The judgment came on appeals filed by the NCT government against an August 4, 2016, verdict of the Delhi High Court, which had declared that the L-G has “complete control of all matters regarding the National Capital Territory of Delhi, and nothing will happen without the concurrence of the L-G.”


Supreme Court’s observations:

Role of LG:

  • The L-G is bound by the aid and advice of the Council of Ministers. In case of difference of opinion, the L-G should straightaway refer the dispute to the President for a final decision.
  • The Lieutenant-Governor should act as a “facilitator” for good governancein the national capital and not as an “obstructionist”.
  • The Lieutenant-Governor’s authority, saying he cannot exercise his discretion in “each and every matter” of daily governance. His discretionary powers are in fact limited to only matters in the State List — public order, police and land— over which the legislative power of the Delhi Legislative Assembly stand excluded under Article 239AA.
  • The NCT government need only to inform the L-G of its “well-deliberated” decisions. The government need not obtain his “concurrence” on every issue of day-to-day governance.
  • The elected government could make policies on laws enacted by its own Assembly. The executive power of the NCT government was co-extensive with its legislative powers.


Why Delhi cannot be a full- fledged state?

The Supreme Court followed the 1987 Balakrishnan report to conclude that Delhi is not a State. Balakrishnan report had envisaged that Delhi could not have a situation in which the national capital had “two governments run by different political parties. Such conflicts may, at times, prejudice the national interest.”

Delhi as the national capital belongs to the nation as a whole. if Delhi becomes a full-fledged State, there would be a constitutional division of sovereign, legislative and executive powers between the Union and the State of Delhi. Parliament would have limited legislative access and that too only in special and emergency situations. The Union would be unable to discharge its “special responsibilities in relation to the national capital as well as to the nation itself”.


Way ahead:

L-G’s role is not that of a Constitutional figurehead, though the ultimate responsibility for good administration of Delhi is vested in the President acting through the Administrator. However, the Administrator has to take a somewhat more active part in the administration than the Governor of a State.

Hence, differences of opinion would arise between the L-G and the elected government. The report had recommended that the “best way” of doing this is to let the L-G refer such differences of opinion to the President for a final decision.


What’s important?

  • For Prelims: Role of LG, Article 239AA.
  • For Mains: Dispute between LG and Delhi government.


Topic: Statutory, regulatory and various quasi-judicial bodies.


Higher Education Financing Agency (HEFA)

Context: The cabinet has approved the proposal for expanding the scope of Higher Education Financing Agency (HEFA) by enhancing its capital base to Rs. 10,000 crore and tasking it to mobilise Rs. 1,00,000 crore for Revitalizing Infrastructure and Systems in Education (RISE) by 2022.



  • This would enable addressing the needs of all educational institutions with differing financial capacity in an inclusive manner.
  • This would enable HEFA to leverage additional resources from the market to supplement equity, to be deployed to fund the requirements of institutions.


What is RISE scheme all about?

  • Under RISE, all centrally-funded institutes (CFIs), including central universities, IITs, IIMs, NITs and IISERs, can borrow from a Rs 1,00,000 crore corpus over the next four years to expand and build new infrastructure. The initiative aims to step up investments in research and related infrastructure in premier educational institutions, including health institutions.
  • Higher Education Financing Agency (HEFA) would be suitably structured for funding this initiative. The manner in which investment in institutions is provided is likely to be the same as is practised in HEFA, but there may be different windows for different institutions.


About HEFA:

What is it? The Union Cabinet had approved HEFA in September 2016 as a Special Purpose Vehicle with a public sector bank (Canara Bank). It would be jointly funded by the promoter/bank and the MHRD with an authorised capital of ₹2,000 crore. The government equity would be ₹1,000 crore.

Functions: HEFA will leverage the equity to raise up to ₹20,000 crore for the funding of world-class infrastructure at the IITs, IIMs, the National Institutes of Technology (NITs) and such other institutions. The agency will also mobilise Corporate Social Responsibility (CSR) funds from public sector units (PSUs) and corporates. These would be released as grants to eligible institutions for promoting research and innovation.

Significance of HEFA: Funding from HEFA is expected to boost infrastructure, especially state-of-the-art laboratories, in key institutions such as the Indian Institutes of Technology (IITs), the Indian Institutes of Management (IIMs), and the Indian Institutes of Information Technology (IIITs).


What’s important?

  • For Prelims: RISE scheme, HEFA.
  • For Mains: Need for funding in the education sector.


Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.


DNA Technology (Use and Application) Regulation Bill, 2018

Context: Cabinet approves DNA Technology (Use and Application) Regulation Bill, 2018.


Need for the legislation and its significance:

The utility of DNA based technologies for solving crimes, and to identify missing persons, is well recognized across the world. Therefore, the new bill aims to expand the application of DNA-based forensic technologies to support and strengthen the justice delivery system of the country.


Highlights of the Bill:

  • As per the Bill, national and regional DNA data bankswill be set up for maintaining a national database for identification of victims, suspects in cases, undertrials, missing persons and unidentified human remains.
  • According to it, those leaking the DNA profile information to people or entities who are not entitled to have it, will be punished with a jail term of up to three years and a fine of up to Rs. 1 lakh. Similar, punishment has also been provided for those who seek the information on DNA profiles illegally.
  • As per the bill, all DNA data, including DNA profiles, DNA samples and records, will only be used for identification of the person and not for “any other purpose”.
  • The bill’s provisions will enable the cross-matchingbetween persons who have been reported missing on the one hand and unidentified dead bodies found in various parts of the country on the other, and also for establishing the identity of victims in mass disasters.


Benefits of the Bill:

  • By providing for the mandatory accreditation and regulation of DNA laboratories, the Bill seeks to ensure that with the proposed expanded use of this technology in the country.
  • There is also the assurance that the DNA test results are reliable and the data remain protected from misuse or abuse in terms of the privacy rights of our citizens.
  • It has provisions that will enable the cross-matching between persons who have been reported missing on the one hand and unidentified dead bodies found in various parts of the country on the other, and also for establishing the identity of victims in mass disasters.


DNA technology- significance and concerns:

  • DNA analysis is an extremely useful and accurate technology in ascertaining the identity of a person from his/her DNA sample, or establishing biological relationships between individuals.
  • A hair sample, or even bloodstains from clothes, from a scene of crime, for example, can be matched with that of a suspect, and it can, in most cases, be conclusively established whether the DNA in the sample belongs to the suspected individual. As a result, DNA technology is being increasingly relied upon in investigations of crime, identification of unidentified bodies, or in determining parentage.
  • But information from DNA samples can reveal not just how a person looks, or what their eye colour or skin colour is, but also more intrusive information like their allergies, or susceptibility to diseases. As a result, there is a greater risk of information from DNA analysis getting misused.


Way ahead:

It is expected that the expanded use of DNA technology would result not only in speedier justice delivery but also in increased conviction rates, which at present is only around 30% (NCRB Statistics for 2016).


What’s important?

  • For Prelims: DNA Bill- highlights, difference between DNA and RNA.
  • For Mains: DNA profiling- uses, challenges and concerns.


Topic: e-governance- applications, models, successes, limitations, and potential.


Common Services Centers (CSCs)


Context: CSC SPV, a Special Purpose Vehicle under the Ministry of Electronics & IT, has entered into agreement with HDFC Bank to enable its three lakh Village Level Entrepreneurs (VLEs) managing the Common Services centres operate as Banking Correspondents of HDFC Bank.

  • Under the agreement, VLEs of CSC will work as Banking Correspondent of HDFC Bank and support the Government initiative to promote financial inclusion and make banking services more accessible in rural areas.



  • This agreement is expected to be a game changer as it would significantly contribute to Government’s objectives of enabling Direct Benefit Transfer (DBT) of various schemes.
  • Women, senior citizens and persons with disability will especially get benefitted through this initiative.
  • This will facilitate withdrawal and deposit of government entitlements such as payments under MGNREGA as well as various social welfare schemes like widow pension, handicapped and old age pension, etc.


What are CSCs?

Common Services Centers (CSCs) are a strategic cornerstone of the Digital India programme. They are the access points for delivery of various electronic services to villages in India, thereby contributing to a digitally and financially inclusive society.


CSCs enable the three vision areas of the Digital India programme:

  • Digital infrastructure as a core utility to every citizen.
  • Governance and services on demand.
  • Digital empowerment of citizens.


Significance of CSCs:

CSCs are more than service delivery points in rural India. They are positioned as change agents, promoting rural entrepreneurship and building rural capacities and livelihoods. They are enablers of community participation and collective action for engendering social change through a bottom-up approach with key focus on the rural citizen.


Key facts:

  • The CSC project, which forms a strategic component of the National eGovernance Plan was approved by the Government in May 2006, as part of its commitment in the National Common Minimum Programme to introduce e-governance on a massive scale.
  • It is also one of the approved projects under the Integrated Mission Mode Projects of the National eGovernance Plan.


What’s important?

  • For Prelims: CSCs, NEP, SIDBI.
  • For Mains: CSCs and their significance, VLEs and their role in rural economy.


Paper 3:

Topic: minimum support prices.


Minimum Support Prices (MSPs)


Context: Giving a major boost for the farmers’ income, the Cabinet Committee on Economic Affairs has approved the increase in the Minimum Support Prices (MSPs) for all kharif crops for 2018-19 Season.


What is it?

  • In theory, an MSP is the minimum price set by the Government at which farmers can expect to sell their produce for the season. When market prices fall below the announced MSPs, procurement agencies step in to procure the crop and ‘support’ the prices.


Who announces?

The Cabinet Committee of Economic Affairs announces MSP for various crops at the beginning of each sowing season based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The CACP takes into account demand and supply, the cost of production and price trends in the market among other things when fixing MSPs.


Why is it important?

Price volatility makes life difficult for farmers. Though prices of agri commodities may soar while in short supply, during years of bumper production, prices of the very same commodities plummet. MSPs ensure that farmers get a minimum price for their produce in adverse markets. MSPs have also been used as a tool by the Government to incentivise farmers to grow crops that are in short supply.


Way ahead:

Trends in MSP impact the availability of key food crops and food inflation. MSP is also good tool to ensure that farmers produce what is most lucrative for them, given consumer demand.

However, in recent years, there have been large-scale imports of pulses and oil seeds into India with high costs adding to Consumer Price inflation. Unless the Centre increases State procurement of these crops, the bias towards rice, wheat and sugarcane (where minimum prices are fixed by States) may continue. Pulses are a cheap source of protein for the masses.


What’s important?

  • For Prelims: MSP- crops covered, how is it decided.
  • For Mains: MSP- need, significance, concerns and rectifying measures.


Topic: Inclusive growth and issues arising from it.


Recapitalization of RRBs


Context: Cabinet approves extension of Scheme of Recapitalization of Regional Rural Banks upto 2019-20.



This will enable the RRBs to maintain the minimum prescribed Capital to Risk Weighted Assets Ratio (CRAR) of 9%. A strong capital structure and minimum required level of CRAR will ensure financial stability of RRBs which will enable them to play a greater role in financial inclusion and meeting the credit requirements of rural areas.


About RRBs:

  • RRBs are jointly owned by Government of India, the concerned State Government and Sponsor Bankswith the issued capital shared in the proportion of 50%, 15% and 35% respectively.
  • RRBs were set up with the objective to provide credit and other facilities, especially to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs in rural areas for development of agriculture, trade, commerce, industry and other productive activities.


Facts for Prelims:

A Regional Rural Banks Ordinance was promulgated in September 1975, which was replaced by the Regional Rural Banks Act 1976.


What’s important?

  • For Prelims: RRBs.
  • For Mains: RRBs- need, significance and the need for recapitalization.


Topic: IP related issues.


World Intellectual Property Organization (WIPO) treaties


Context: Cabinet approves accession to WIPO Copyright Treaty, 1996 and WIPO Performance and Phonograms Treaty, 1996. The treaties extend coverage of copyright to the internet and digital environment.


Meeting the demand of the copyright industries, the treaties will help India:

  • To enable creative right-holders enjoy the fruit of their labour, through international copyright system that can be used to secure a return on the investment made in producing and distributing creative works;
  • To facilitate international protection of domestic rights holder by providing them level-playing field in other countries as India already extends protection to foreign works through the International Copyright order and these treaties will enable Indian right holders to get reciprocal protection abroad;
  • To instil confidence and distribute creative works in digital environment with return on investment; and
  • To spur business growth and contribute to the development of a vibrant creative economy and cultural landscape.


WIPO Copyright Treaty:

It came in force on March 6, 2002 and has been adopted by 96 contracting parties till date and is A Special agreement under Berne Convention (for protection of literary and artistic works). It has provisions to extend the protection of copyrights contained therein to the digital environment. Further it recognises the rights specific to digital environment, of making work available, to address “on-demand” and other interactive modes of access.


WIPO Performances and Phonograms Treaty:

  • It came in force on May 20, 2002 and has 96 contracting parties as its members. WPPT deals with rights of two kinds of beneficiaries, particularly in digital environment – (i) Performers (actors, singers, musicians etc.) (ii) Producers of Phonograms (Sound recordings). The treaty empowers right owners in theit negotiations with new digital platforms and distributors. It recognizes moral rights of the performers for the first time & provides exclusive economic rights to them.
  • Both the treaties provide framework for creators and right owners to use technical tools to protect their works and safeguard information about their use i.e. Protection of Technological Protection Measures (TPMs) and Rights Management Information (RMI).


About WIPO:

  • The World Intellectual Property Organization (WIPO) is one of the 17 specialized agencies of the United Nations.
  • It was created in 1967 “to encourage creative activity, to promote the protection of intellectual property throughout the world.”
  • It has currently 188 member states, administers 26 international treaties, and is headquartered in Geneva, Switzerland.
  • Non-members are the states of Marshall Islands, Federated States of Micronesia, Nauru, Palau, Solomon Islands, South Sudan and Timor-Leste. Palestine has observer status.
  • India is a member of WIPO and party to several treaties administered by WIPO.


What’s important?

  • For Prelims: WIPO and its treaties.
  • For Mains: National Intellectual Property Rights (IPR) Policy ad its significance for India.


Facts for Prelims:

Agartala Airport renamed:

Context: Cabinet approves renaming of Agartala Airport, Tripura as Maharaja Bir Bikram Manikya Kishore Airport, Agartala.

Background: Maharaja Bir Bikram Manikya Kishore, who ascended the throne of the erstwhile Tripura Princely State in 1923, was an enlightened and benevolent ruler. Agartala Airport was constructed in 1942 on the land donated by Maharaja Bir Bikram Manikya Kishore.


‘Khan Prahari’:

What is it? It is a Mobile Application ‘Khan Prahari’ developed by CMPDI, Ranchi a Subsidiary of CIL and Bhaskarcharya Institute of Space Application and Geo-informatics (BISAG).

Khan Prahari is a tool for reporting any activity taking place related to illegal coal mining like rat hole mining, pilferage etc. One can upload geo-tagged photographs of the incident along with textual information directly to the system.


 India needs both price and income support for farmers


Since the Union Budget 2018-19, there has been a great deal of discussion in the public domain regarding the health of the rural sector. There is a need to believe that the rural sector needs some policy intervention, be it price support or income support.

As a case in point, the agriculture gross domestic product (GDP) deflator has declined from 9.9% in FY13 to merely 1.1% in FY18. Such a decline also coincides with the inflation-targeting regime introduced by the Reserve Bank of India (RBI) from FY13.

Three prominent ways to alleviate distress in Agriculture sector:

Given that prices in the Agriculture sector are at significantly low levels, there are three ways in which we can alleviate this, at least in the short term.

  • The first is to provide better price for all rabi and kharif cropsby fixing the minimum support price (MSP) at 1.5 times the cost of production or else Income supportive to the famers at initial cropping stage only.
  • The second is to develop an institutional mechanismto compensate the price difference where the market price is less than MSP, such as the Bhavantar Bhugtan Yojana (BBY) adopted in Madhya Pradesh.
  • The third is to provide agriculture investment supportin the form of cash, as is being currently done in

Let us analyse the pros and cons of all three schemes and suggest what could be done as a quick-fix solution to address the distress without impacting fiscal health and inflation much in the short term.


Scheme 1: Fixing MSP at 1.5x cost of production

In the Union budget, the government has announced that for FY19, MSP for the majority of kharif crops and rabi crops that are left out will be fixed at 1.5 times the cost of production. Estimates show it is based on A2+FL (actual paid out cost plus imputed value of family labour).

With the government due to announce MSP for kharif crops in FY19, we estimated what could be the projected MSP for 13 major kharif crops, based on their projected A2+FL cost for FY19 (taken at the maximum growth during FY17-FY18 for any crop), and then applying 1.5 times on it.

The projected MSP for FY19 shows that the maximum increase in prices will be on niger-seed (73%) followed by ragi (58%) and jowar (42%).

Our estimate suggests that this increment in MSP by 1.5 times in kharif crops and remaining rabi crops could impact consumer price index (CPI) inflation by 71 basis points (bps).

For two major crops, wheat and rice, for which the majority of the procurement is done by the government, the increase in MSP will have less impact on inflation.

If the government settles on 1.5x C2 (comprehensive cost including imputed rent and interest on owned land and capital) cost, the inflationary impact could be significantly large, which could even breach the RBI’s CPI target (5%).


Scheme 2: Price compensation scheme (PCS) at all-India level:

Given that MSP is only limited to certain crops, the government has also announced that it will develop an institutional mechanism in line with BBY, which has already been implemented in Madhya Pradesh (MP) for eight kharif crops in FY18.

Bhavantar Bhugtan Yojana (BBY) has attracted a lot of criticism, although we believe most of it was unwarranted.

  • One, the BBY scheme in MP could benefit only 23% of production,casting doubt on how it will benefit the majority of farmers if it is scaled up at an all-India level.
  • Second, the financial costs of ramping upBBY at the national level were estimated to be at staggering levels ranging from Rs56,518 crore to Rs1.13 trillion to Rs1.69 trillion annually.
  • Third, there is a manipulation by traders and lower level mandiofficials to depress both prices and inflate production figure.
  • For example, in the case of gram, prices also declined in Maharashtra, Rajasthan and Uttar Pradesh (UP). Hence, it is difficult to establish direct causationbetween corrupt practices/dealers at the mandi level and decline in prices of crops.
  • Other possible reasons for such price decline could be over-productionduring the post-harvest period and increase in exports due to lower global commodity prices.
  • One of the positives under BBY is the price support to farmers. For instance, in November 2017, the total arrival of soybean at MPmandis increased by 150% but the price declined by only 10%.


Scheme 3: Agriculture investment support scheme

  • The Telangana governmenthas already implemented this scheme (the Rythu Bandhu scheme) to support farmers’ investment for two crops a year.
  • The government is providing 83 million farmers Rs4,000 per acre per seasonto support farm investment twice a year, for the rabi and kharif  It has made an allocation of Rs12,000 crore for the scheme in the 2018-19 state budget.
  • Gulati et al have estimated that the cost of this scheme would be 97 trillionif the government implemented it at an all-India level, assuming a payout of Rs10,000 per hectare per year.
  • The other drawbacks of the scheme are that it ignores tenant farmers—and as the incentive is based on land ownership, implementation could raise the land price for both cultivated and uncultivated land.
  • Further, Gulati et al have suggested removing paddy and wheatfrom the investment support scheme and dealing with them under the procurement scheme, which will reduce the cost significantly.
  • But there is a chance that by doing so, the farmer may opt for crop diversificationby allocating more area to cash crops.


The alternative

Based on the analysis of all the three schemes, a proposal of a hybrid of two schemes viz. 1.5 times MSP and PCS. For cereals (wheat, paddy, ragi, maize, bajra) largely procured by both Central and state governments, we should continue to procure at MSP that is 1.5 times cost of production, as the impact on inflation and the fiscal situation will be minimal.

Additionally, crops like groundnut, sesamum, niger-seed and soyabean should also be covered under the 1.5 times MSP scheme, as they are procured to a limited extent (less than 10% of total production, which varies from state to state).

For pulses, (arhar, moong, urad, masur and gram) and sunflower seed, we propose that PCS be implemented,as adoption under this scheme will have very little impact on inflation and fiscal cost will be Rs13,110 crore. The agriculture investment support scheme, though very easy to implement and without leakages, should be avoided given that it would be a huge fiscal burden.



The recent initiatives taken by the Government are definitely steps taken in the right direction.

Recent developments further underscore the fact that India urgently needs to diversify its cropping pattern– this will help conserve moisture and thus help in judicious usage of resources.

Such an effort would involve the collective participation of various stakeholders, including the wider farming community, pressure groups, private sector, banking sector, and both the central and state governments.

The agreements signed between India and Israel further underscore the fact how water management, and judicious usage of limited resources is vital for a thriving agricultural sector.


Way forward:

Policy focus should be rather on investment — in efficient water management and irrigation, plant breeding and genetics, crop husbandry, market linkages and in breaking the middleman’s hold over the farm-to-consumer value chain, replacing it with farmer-led enterprises, whether cooperatives or producer companies, that allow farmers to capture a share of the value added to their produce along its journey to the factory or home.

We reiterate that the long-term solution to farmer distress would be improving the supply chain, establishing agro-processing zones and creating a better agri-logistic platform.  

Efforts described above can further the objective of the Government of doubling farmer’s income by the year 2022.


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