unacademy 21 June 2018 The Hindu Daily News & Editorial Analysis The Hindu(Completely) Indian Express(Very Imp pieces) Delivered by : Sumant Kumar B.Tech in Computer Science & Engg, NIT Allahabad * Have written UPSC Main Exam in 2016 and 2017 with Physics Optional
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Monetary Transmission Monetary transmission has been a hot-button issue in recent times. O Industrialists have been asking the government to ensure it. The government has been chiding banks for the lack of it. And the Reserve Bank of India had said that quick monetary transmission was the pre-condition for further rate cuts What is it? Monetary transmission is the pass-through of the RBI's rate actions to the economy at large As you know, the RBl's most important task is to keep tabs on inflation by adjusting money supply. O It also monitors the exchange rate o To control all this, the RBI uses many monetary tools. o The repo rate, reverse repo rate and cash reserve requirement are being the key instruments. o Repo rate This is the rate at which the RBI lends short-term funds to banks to manage their day-to-day operations. o When the RBI wants to stimulate growth, it cuts the repo rate to reduce the cost of borrowings. Banks get money at a cheaper rate. If this is passed on to borrowers, then monetary transmission is said to have happened smoothly
Why is it important? D In reality, monetary transmission has not been so smooth. O Banks have almost always been tardy in passing on the benefit of rate cuts to borrowers. To understand why, you need to know how banks price loans. o Banks decide their lending rates based on something called a base rate, which is calculated through an RBl-mandated formula which factors in their cost of funds, administrative costs and profitability o This base rate is the bare minimum rate at which a bank can lend. o Going by the method of computing base rate, it would be logical to assume that when the RBI cuts repo rates, this should lower cost of funds for banks and hence mean lower lending rates But thanks to the bizarre workings of the base rate system, it doesn't happen that way The repo rate, banks protest, may be a signalling rate, but it has no direct link to their actual cost of funds. o This is because they source only a minuscule portion of their funds from the RBI repo window. So every time the RBl cuts its policy repo rate, banks say, their costs are not really coming down. It is only when they cut deposit rates that you can hope for cheaper lending rates.
Why should I care? ODid you blame the government or the RBI for not doing anything about runaway inflation a couple of years ago? OAre you worried that the economy is not heading anywhere now? OWell, then you should worry about monetary transmission. Apart from making the RBI policy ineffectual, the lack of monetary transmission also reduces the predictability in the movement of interest rates. Olf the central bank is signalling lower rates but banks aren't acting to reduce their lending rates, you are left guessing every time the RBl makes its move. OWorried about the lack of monetary transmission, the RBI has been quite critical of banks not slashing their lending rates in its latest policy. It has asked banks to review their formulae for calculating base rates. It has also opened a new term repo window to ensure that banks get to borrow at close to market rates.
[The Hindu Edi] Transmission troubles The RBI continues to remain unable to influence the effective lending rates in the economy. O In February, in its latest statement of intent to resolve poor monetary transmission, the RBI said it would instruct banks to switch base rate customers to the marginal cost of funds-based lending rate (MCLR) system from April 1, 2018. place since 2010. methodology of determining benchmark rates by linking the Base Rate to the MCLR," it O In April 2016, it had introduced the MCLR regime, scrapping the base rate regime, in o "Since MCLR is more sensitive to policy rate signals, it has been decided to harmonise the had said. Currently, under the base rate system, the lending rate at State Bank of India is 8.7% significant difference in borrowing costs, especially for smaller firms and retail consumers O This was supposed to push banks to lower lending rates. o The one-year MCLR rate is just 8.25%. This difference of 45 basis points could make a relying on equated monthly instalments. o In the RBI's assessment, a large proportion of outstanding loans and advances continues to be linked to the base rate system. This perhaps triggered the February statement.
Yetha an undertand the bankot relncuning tecardlevels af non aerformins asat the RBl is yet to operationalise that intent. One can understand the banks' reluctance to switch to the lower MCLR-based rates, given the multiple pressures they face, including record levels of non-performing assets and losses, and significant treasury losses. The RBI, which has often faced flak for poor monetary transmission, shouldn't be swayed by these concerns. An RBI study estimates that public sector banks could take a 40,000-crore hit on revenue if they allow all base rate borrowers to switch to the MCLR rate. OThe RBl, which has just allowed banks to spread the booking of losses on the treasury front over four quarters after talking tough about such rollovers - may not want to hurt them more. But this creates an unfair situation as new borrowers get MCLR rates while the older ones continue on the higher base rate system While a base rate customer can shift to the MCLR regime only by paying a fee, this outcome is not too different from the previous attempt by the RBl eight years ago to influence transmission by shifting to base rates from what was called a Benchmark Prime Lending Rate regime. There was no sunset clause included then. For troubled banks, this is an asset- liability mismatch issue. Given the need to revive the economy through consumption and fresh investment, this impasse needs to be broken.
The Hindu Ed2] Trauma at the border As part of its "zero-tolerance" approach to dealing with undocumented migrants, the Donald Trump administration in the U.S. has been separating parents and children within migrating families, leading to outrage over the burgeoning number of minors lodged in foster care. OReports suggest that between October 2017 and May 2018 at least 1,995 children were separated from their parents, with a significant majority of the instances between April 18 and May 31. In recent weeks, disturbing images and videos have emerged of screaming toddlers in the custody of Customs and Border Protection personnel, or in what appear to be chain-link cages in facilities holding older children, as well as one disturbing audio allegedly of wailing children at one such unit. O Democrats and Republicans alike have expressed deep concern about the ethics of using children, facing trauma from separation from their parents, to discourage further undocumented border crossings OMr. Trump, however, has refused to accept sole responsibility for the family separations Instead, he took to Twitter to blame his Democratic opponents for not working with Republicans to pass new immigration legislation to mitigate the border crisis.
His response begs two questions. OFirst, why, when both Houses of the U.S. Congress are under Republican control, is Baba Trump unable to garner the numbers to pass legislation to end family separations? OThe answer is that poignantly tragic though the fate of these broken families may be, the issue as such has failed to garner even as much bipartisan momentum on Capitol Hill as Mr. Trump's rescinding of the Obama-era immigration order on Deferred Actions for Childhood Arrivals OThe second question is whether the policy of separating migrant families is new, or if there was indeed "bad legislation passed by the Democrats" that supports this action, as Mr. Trump claims. OThe answer is that both are true.
[IE Ed2] American nightmare For those looking for a silver lining in the Donald Trump Administration's move to separate immigrant children from their parents, place them in camps and, in some cases, even cage them, there is some hope. The implementation of the US government's "zero tolerance" policy towards illegal immigrants has left a trail of suffering whose repercussions will go far beyond the immediate political crisis The US owes its predominant economic and cultural position, in large measure, to the fact that it is an open society. D From its inception, it has been a nation of immigrants, each wave adding to the country's diversity, and its people's collective capability. O That, like all modern nation-states, America needs to police its borders to some degree is understandable. But the complete lack of empathy with which Trump is going about it is shameful. [IE Ed3] David over Goliath In this World Cup, the traditional powers are being forced to prove themselves all over again.
TH Art1] Neither new nor undesirable The move by the Department of Personnel and Training (DoPT) towards lateral entry in government service Olt has invited applications from "talented and motivated Indian nationals willing to contribute towards nation building" to be appointed as joint secretaries in 10 Departments/ Ministries at the Centre. Since the problem that the new policy seeks to fix remains vague, we cannot hope for whatever improvements promised. Othe lateral entry policy goes counter in spirit to the governance philosophy enunciated by the Constituent Assembly, insofar as it concerns the candidates from private sector, consultancy firms, international/ multinational organisations (MNCs) Traditionally, the services of outside experts were availed through consultative processes, a practice quite widespread with the erstwhile Planning Commission and to some extent with its new avatar, the NITI Aayog. Olt is not clear why the government determined that the practice was not effective.
Why and wherefore The lateral entry decision is based on the assumption that since our civil servants, especially those of the Indian Administrative Service (IAS),are generalists and hence ill-suited to deal with policy implications of new technologies and new modes of thinking, the country is in dire need of domain experts Nobody questioned the assumption so far as the government invoked it sparingly and also it is prima facie valid. ace ald toat hoo th auestion wihat OThe policy's aim "also to augment manpower" can only mean that the lateral entry will be as wide as regular recruitment and used as regularly. In doing so the government is turning an exception into a rule but the whole enterprise also begs the question: what does all this mean? Neither the DoPT nor Ministries concerned cared to define 'domain expertise For example, most of the 10 posts open for lateral entry are pretty generalist. A joint secretary in agriculture? And a candidate is merely directed to the website of agriculture ministry. OHas the need for domain expertise in plant breeding been felt so as to look for another M.S. Swaminathan? Is there a need for a plant pathologist? A marketing expert? Or is the nation destined to have joint secretaries in all branches of a given Ministry? Therefore, we must recognise that domain expertise is salient only in a very narrow context.
The new system is open to three groups 1) officers of State governments; 2) employees of public sector undertakings and assorted research bodies; and 3) individuals in the private sector, MNCs, etc. Among the three groups, any metric of accountability, bureaucratic neutrality and fidelity to due process gets progressively worse from group 1 to 3. The nation cannot escape the havoc likely to be wreaked by a large number of private sector experts becoming joint secretaries on three-to-five year contracts. Whatever training or orientation that these new entrants will undergo cannot match 15-20 years of acculturation/on-job training that regular officers receive before they become joint secretaries. Unless the government is mindful of the dangers, lateral entry can result in large swathes of higher bureaucracy being consumed by the 'nation-building' zeal at the cost of accountability.
four aspects that are now integral to his process and which require locally available materials: Oseeds treated with cow dung and urine; Osoil rejuvenated with cow dung, cow urine and other local materials to increase microbes; Ocover crops, straw and other organic matter to retain soil moisture and build humus; and soil aeration for favourable soil conditions. These methods are combined with natural insect management methods when required. In ZBNF, yields of various cash and food crops have been found to be significantly higher when compared with chemical farming. OFor example, yields from ZBNF plots in the (kharif) 2017 pilot phase were found on average to be 11% higher for cotton than in non-ZBNF plots. The yield for Guli ragi (ZBNF) was 40% higher than non-ZBNF. Input costs are near zero as no fertilizers and pesticides are used. Profits in most areas under ZBNF were from higher yield and lower inputs. Model ZBNF farms were able to withstand drought and flooding, which are big concerns with regard to climate change
SPANNINGJUST 11.6 sqkm, a small island Why Assumption Island imp for India? in the Indian Ocean has gained new atten Anaval base there would help India secure tion with Seychelles saying that India's its merchant ships, be a resource for other plans to build a military base "will not shipping nations, and help combat China's move forward", as reported in The Sunday increasing clout in the Indian Ocean. Express. Assumption Island, a single coral India unveiled its plans for a base in island, belongs to the Outer Islands District 2015, during a trip by PM Narendra Modi, of Seychelles. With only a small village on butitfaced resistance from the opposition the sheltered western side and a 1,210-m there as well as citizens. Concerns ranged concrete airfield running from there to the from environmental ones to fears of con- southeastern coast, the island's fewinhab- flict between nuclear powers India and itants, mostly farmers and fishermen, have China. Seychelles signed an amendment t go to Victoria (the capital) for govern- pact with India lastJanuary, with safe- ment services. The island's location is ideal guards banning India from using nuclear for monitoring the Mozambique Channel, weapons on the base or using it in war, but which sees significantinternational trade. the protests continued
TH Art3] Beating plastic pollution We celebrated 'World Environment Day' (June 5) with a critical theme: beat plastic pollution, Since India was the global host of this year's event, and also one of the victims of plastic pollution, we should view this danger seriously. The Theme: The theme urges governments, industries, communities and individuals to come together and explore sustainable alternatives. O It also urges this target group to reduce the production and excessive use of single-use plastics, which are polluting our environment and threatening human health Plastic: O Plastics are organic polymers of high molecular mass and often contain other substances. Due to their low cost, ease of manufacture, versatility, non-corrosiveness and imperviousness O Plastic was invented in New York in 1907 by Leo Baekeland. They are usually synthetic, mainly derived from petrochemicals. to water, plastics are used for multiple purposes at different scales. Further, many chemists, including Nobel laureate Hermann Staudinger (father of polymer chemistry) and Herman Mark (father of polymer physics), have contributed to the materials science of plastics. However, these scientists could not have anticipated such an exponential growth of plastic production.
Critical impact O Plastic has become an indispensable material in modern society. About 50% of our plastic use is single use (disposable) and it constitutes 10% of the total waste generated 0 Ganga seetri ut ente thisis ereof hehighest Researchers exploring the Arctic have found very high levels of microplastics trapped in the ice trapped inthe ice elean Hen per yeaf Plastic disposed of on land degrades slowly and its chemicals leach into the surroundings Drinking water samples analysed from 14 countries, including India, revealed that 83% have micro-plastics concentrations. According to a United Nations Environment Programme report, the overall annual natural capital cost of plastic use in the consumer goods sector is $75 billion.
TH FAQ] Right on Kashmir's rights? What prompted this human rights report? OThe first ever report by the Office of the UN High Commissioner for Human Rights (OHCHR) on Jammu and Kashmir, including Pakistan- occupied Kashmir, published last week, has been in production since 2016. DA new wave of violence had then hit the Kashmir Valley, when protests sparked by the killing of Hizbul Mujahideen militant Burhan Wani were met with force by security personnel; about 51 protesters and civilians were killed in the months that followed, while more than 9,000 were injured by pellets and bullets. Consequently, the OHCRC asked India and Pakistan to allow its teams access to the State, a request that was refused.
Why is this report controversial to India? O Apart from being irked by the report's criticism of India's handling of the protests, alleged extra-judicial killings and hard tactics, the Ministry of External Affairs is also upset by the terms used to describe militants O For example, Hizbul Mujahideen, which is regarded as a terrorist organisation by India, was described in the report as an "armed group". o Wani, regarded as a terrorist by Indian security forces, was described as the o India in its official statement said the report "undermines the UN-led consensus o Finally, it makes specific recommendations aimed at India, including removing the "leader" of the organisation on zero tolerance to terrorism" Armed Forces (Special Powers) Act from areas and instituting inquiries into alleged human rights violations. What was the methodology used? In the absence of direct interviews, the OHCHR used "remote monitoring" from local sources to write the report.
[IE Ed1] Trilateral terms Delhi's knee-jerk reaction could be explained by its intense suspicion about "third party mediation" between India and Pakistan. O It's a pity that the government was quick to dismiss the call from the Chinese ambassador to India, Luo Zhaohui, for a trilateral dialogue between Delhi, Islamabad and Beijing OBetween China's vague proposal and Delhi's definitive rejection, there might be interesting political space that is worth exploring in the not too distant future O What is important is not the shape of the negotiating table, but what is on it. Sceptics in the South Block say Luo's enthusiasm to advance the engagement of India with new ideas has not always been backed by Beijing. o Recall last year that Luo had suggested that Beijing could rename the China-Pakistan Economic Corridor to overcome Delhi's objections to President Xi Jinping's Belt and Road Initiative. O That Beijing did not publicly back the idea does not necessarily mean it had nothing to do with it Confident powers often instruct their ambassadors to fly kites, deliberately, to test the reactions of the intended audience. Delhi has suggested Luo's views on the trilateral dialogue may be "personal" But ambassadors don't usually express their personal views in public. The fact is that Beijing has made no secret of its interest in promoting good relations between India and Pakistan, under the Shanghai Cooperation Organisation banner, which now has embraced the South Asian siblings as full members. - " -
[IndianExpress Art] The state is taking healthcare The government has carried out several reforms in healthcare. It assigns the highest priority to people's health and is also alive to the country's obligation under the Sustainable Development Goals (SDGs). A series of steps have been taken under the leadership of Prime Minister Narendra Modi to reform the country's healthcare. These include the formulation of the National Health Policy, 2017, financial aid to expecting mothers and The Avushman Bharat (AB) Scheme is the most significant of these O enforcing a ceiling on the prices of cardiac stents and knee implants, D a renewed focus on nutrition. programmes.
Under the aegis of AB, the National Health Protection Mission (NHPM) is envisaged as a game-changer for India's healthcare system. Olt will add weight to the government's healthcare reforms and help it fulfill the country's SDG commitments. AB-NHPM intends to cover more than 50 crore people, which includes hospitalisation expenses for nearly 1,350 conditions over 23 clinical specialties. OThe beneficiaries are entitled to a premium of up to Rs 5 lakh per annum in any empaneled hospital OThey need not pay for pre- or post-hospitalisation expenses. India bears a triple burden of disease: 1.It has an unfinished agenda of eradicating communicable diseases, 2.it is battling a growing number of non-communicable diseases and 3.road accidents lead to large number of deaths and grievous injuries every year.
Non-communicable diseases and traffic deaths alone cost the country 6.5 per cent of The inability to afford treatment is the leading cause for people not seeking medical OCurrently, out-of-pocket expenditure constitutes 62 per cent of the healthcare its GDP a huge cost indeed. care. spending of families in the country most times, they have to dig into their savings or even take loans. OCatastrophic expenditure (when a household spends more than 40 per cent of its income on health) is a major cause of impoverishment in India and every year, this pushes around 63 million people below the poverty line OYoung lives are often lost for the want of treatment to easily curable conditions. OIn such cases, the suffering continues years after the loss. OThe treatment of severe health conditions can wreak havoc on families but even common diseases like dengue, malaria or broken bones can result in a financial shock to many households.
On an average, an Indian family spends Rs 22,000 a year on hospitalisation in a private hospital But in case of expensive treatments for diseases such as cancer, heart ailments and organ failures, most families have to borrow money. A benefit cover of Rs 5 lakh per annum, ensures that even these conditions are covered As AB-NHPM shall take care of the affordability of healthcare, the demand for such care is expected to go up The country's healthcare infrastructure is limited and is skewed towards the urban areas DAB-NHPM will procure secondary and tertiary care services from both the private and public sectors. D The role of the private sector is critical because of its size and widespread presence OAt present, 70 per cent of illness episodes are treated in private institutions. The sector can attempt to capture the opportunity in un-served rural areas. This will improve the accessibility of healthcare services for the country's rural population overcharge behave like a monopsony and as a result, control the prices and quality of healthcare. OThe hospitals shall be paid at a pre-agreed rate, leaving them no scope to raise prices or O Together with state schemes, AB-NHPM will cover a large chunk of the population. It will
Way forward AB-NHPM has evolved a structure that accommodates the unique features of state schemes while also providing flexibility to states to exercise their choice on the mode of implementation. Olt will merge the existing schemes into one large pool, remove inefficiencies and bring in economies of scale. The states must own the scheme while the Centre is committed to offer all possible help to overcome challenges. Olt has already signed MoUs with 20 states/UTs for implementation of AB- NHPM. These MoUs provide the basis for launch of the scheme in the states/UTs and also detail the roles and responsibilities of the two stakeholders. OThe government is earnestly fulfilling its health-related commitments.
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