Daily PT Capsule Apr 29 – May 2

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Daily PT Capsule UPSC Civil Services
Daily PT Capsule UPSC Civil Services

Here is the digest of important newspaper articles from April 29 to May 2 and quiz!

New Quota for upper castes in Gujarat

In a move to placate the Patidar agitation, Gujarat government is planning to introduce a 10% quota for those earning Rs. 6 lakh a year or less among the upper castes. A special ordinance has been promulgated for the same. The quota thus specifies reservation based on economic backwardness.

The existing 49% reservation for SC, ST and OBC will remain as it is. With the addition of 10% quota the total quota will be at 59%.

Analysis

Can the decision stand judicial scrutiny? – In Indira Sawhney vs Union of India Supreme court said that the reservations kept both under Article 16(1) and 16(4) together should not exceed 50 per cent of the appointments in a grade, cadre or service in any particular year. It is only for extra-ordinary reasons that this percentage may be exceeded. However, every excess over 50 per cent will have to be justified on valid grounds which grounds will have to be specifically made out.

Is economic backwardness enough? – The backward class of citizens referred to in Article 16(4) is the socially backward class of citizens whose educational and economic backwardness is on account of their social backwardness. A caste by itself may constitute a class. However, in order to constitute a backward class the caste concerned must be socially backward and its educational and economic backwardness must be on account of its social backwardness.The economic criterion by itself cannot identify a class as backward unless the economic backwardness of the class is on account of its social backwardness.

How can Tamil  Nadu have 69% reservation? – The Tamil Nadu government justified in the Supreme Court the law providing for 69 per cent quota in employment and educational institutions in the State contending that backward classes constituted 87 per cent of the population.

While insisting for 50 per cent reservation in ‘Indra Sawhney’ case the Supreme Court has given some lenience to the States to meet the extraordinary circumstance prevailing in certain parts of the country. The Tamil Nadu government enacted the 69 per cent law taking into consideration the peculiar situation in the State.

Source: TheHindu, LegalService

 

Growth without jobs

India’s employment growth is beginning to show signs of a slowdown even as official data showed a pick up in GDP growth, according to a study by Care Ratings.

Employment growth in the sample slowed to 0.3%, the slowest in four years, an analysis of the annual reports of the companies surveyed in the sample by the ratings agency showed.

Manufacturing accounted for more than 40 per cent of the jobs, the highest share in employment, followed by banking (23.0 per cent) and IT (18.4 per cent). Therefore it is clear that manufacturing would be the way forward to add more jobs to the economy.

The study on trends in employment in the last four years is based on employment numbers provided by companies in their balance sheets. It does not include the impact of outsourcing. One reason the study gives for job creation not showing on the books of companies is the possibility of more jobs getting outsourced—in which case it would be accounted for elsewhere in the suppliers’ registers. Jobs that were performed by employees such as security, administrative functions and back office, are increasingly being outsourced in many companies.

However, the findings of the latest quarterly survey by the Labour Bureau in the Ministry of Labour and Employment do not support this argument. The survey released last month shows a decline of 21,000 in contractual jobs during January-September 2015, against an increase of 1.20 lakh in the corresponding period of 2014.

Analysis

What is employment elasticity? – Employment elasticity is a measure of the percentage change in employment associated with a 1 percentage point change in economic growth. The employment elasticity indicates the ability of an economy to generate employment opportunities for its population as per cent of its growth (development) process.

The Planning Commission data says that employment elasticity has come down “from 0.44 in the first half of the decade 1999–2000 to 2004–05, to as low as 0.01 during the second half of the decade 2004–05 to 2009–10. During the period, there has been a reduction in the number of workers employed in agriculture, which is a good thing. But the employment elasticity in the manufacturing sector too was negative, at -0.31 compared with 0.76 in the first half of the decade. There was a reduction in the number of people employed in manufacturing during the second half, particularly in the industrialized states of Maharashtra and Tamil Nadu.

Where did people find employment then? – The total net increase in employment between 2004-05 and 2009-10 was 2.72 million. But the increase in informal employment during the period was 4.62 million. That means not only were the new jobs all created in the informal sector, but there was some shrinkage in formal sector employment as well, with jobs shifting to the informal sector. Indeed, in the decade 1999-2000 to 2009-10, formal sector jobs shrunk by two million and the entire job growth was in the informal sector. Nearly 93% of the workforce in 2009–10 was in informal employment, compared with 91% in 1999–2000. Not only are jobs hard to get, their quality too has worsened.

Many of the new jobs in the informal sector were in the construction industry. Between 2004-05 and 2009-10, there was a reduction of 14 million jobs in agriculture and five million in manufacturing. Most of the persons displaced found jobs in construction, where employment went up by 18 million. And since most of the construction industry is in the informal sector, the trend explains the growing share of informal employment.

Source: TheHindu, LiveMint

 

No visa for Chinese dissidents

Two more Chinese activists, Ray Wong, and Lu Jinghua, had been denied visa, preventing them from attending an anti-Beijing event at Dharamsala. New Delhi had cancelled the visa of prominent Uighur-Chinese dissident Dolkun Isa, who was also to attend the event.

Officials at the Ministry of External Affairs said that the reason was illegible documents and there was inconsistency with the purpose of visit.

Officials said the cancellations were made after the MHA introduced new checks to plug loopholes in the electronic visa system.

Earlier, the e-visa system would only scan the internal “blacklist” leaving out Interpol data which would create considerable confusion in issuance of visas in sensitive cases.

But the new move would streamline the e-visa system through an integration of the domestic blacklist with Interpol data, which will ensure more vigorous checks.

Analysis

Who are the Uighur Chinese dissidents? – The largest of China’s administrative regions, Xinjiang borders eight countries – Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India – and until recently its population was mostly Uighur.

Most Uighurs are Muslim and Islam is an important part of their life and identity. Their language is related to Turkish, and they regard themselves as culturally and ethnically close to Central Asian nations.

The region’s economy has largely revolved around agriculture and trade, with towns such as Kashgar thriving as hubs along the famous Silk Road.

But development has brought new residents. In the 2000 census, Han Chinese made up 40% of the population, as well as large numbers of troops stationed in the region and unknown numbers of unregistered migrants.

The region has had intermittent autonomy and occasional independence, but what is now known as Xinjiang came under Chinese rule in the 18th Century.

An East Turkestan state was briefly declared in 1949, but independence was short-lived – later that year Xinjiang officially became part of Communist China.

In the 1990s, open support for separatist groups increased after the collapse of the Soviet Union and the emergence of independent Muslim states in Central Asia.
Recently there were incidents of knife attacks that were traced back to dissidents from the  region.

Xinjiang

Source: TheHindu, BBC

 

Reforms needed for boosting textile exports

According to World Bank India needs to soon carry out reforms including reducing tariffs, easing labour norms and promoting foreign investment, to cash in on the opportunity to be an apparel manufacturing and exporting major as China slowly relinquishes its lead position owing to factors such as wage increases.

As per the report titled  ‘Stitches to Riches? Apparel Employment, Trade, and Economic Development in South Asia India should look at ways to help its apparel sector connect to global value chains (where production processes are situated in different countries) and consider joining mega free trade agreements such as the Trans-Pacific Partnership to get preferential access to huge and lucrative markets such as the U.S.

The apparel sector of China — which holds the largest share of global apparel trade at 41 per cent (as against India’s share of just 3.5 per cent) — is likely to be hit by factors such as higher wages and the production shift to higher value-added industries like electronics. This is encouraging investors to seek out apparel firms in countries like Cambodia and Vietnam, the Bank said. It added that the potential decrease in Chinese apparel exports presents a huge opportunity for South Asian nations. The World Bank estimated that even a 10 per cent increase in Chinese apparel prices could create at least 1.2 million new jobs in the Indian apparel industry.

Though India is gaining market share, Southeast Asian countries (Cambodia, Indonesia, and Vietnam) are outperforming all South Asian countries in overall apparel export performance, product diversity, and other non-cost related factors, according to the report. India’s annual apparel exports stood at about $12 billion as against China’s $145 billion.

Analysis

How can India improve its textile sector? – As per the Economic Survey  the productivity could be substantially improved by reallocating capital from less-productive to more-productive firms. Formal sector apparel firms are about 15 times more productive than their informal sector counterparts.

Spatial mismatch between firms and workers might explain why formal sector apparel firms might find it difficult to expand. Living costs are high in cities, rendering cost-sensitive, labour intensive manufacturing uncompetitive. High transport costs and weak connectivity between metros and suburban areas preclude the possibility of living outside the city and commuting to work.

The “relocation” model to smaller cities addresses this concern by offering precisely the kind of suitable jobs—located in small cities, utilising women’s comparative advantage in garments, flexible working hours and childcare on site—that women in rapidly urbanising areas are looking for but often do not have. Thus the “relocation” model could be termed a win-win-win: commercially advantageous for the manufacturer, bringing women into the labour market, and boosting growth.

India should consider reforms including reduce tariffs and import barriers to ease access to manmade fibres such as more transparency for duty drawback schemes and bonded warehouses, and removing anti-dumping duties on manmade fibres, India could also lower excise taxes or provide other incentives to develop a domestic manmade fibre industry, it added. The import duty on manmade fibres is currently at around 10 per cent, while in competing countries such as Sri Lanka the duty is nil.

Source: TheHindu,  Economic Survey

 

ISRO app to protect heritage from real estate

Architects and real estate developers who plan to construct buildings close to national monuments can soon download a new mobile app named Smarac Citizen, which will grant them construction permits within a few minutes.

Based on a proposal from the National Monuments Authority (NMA), the app has been developed by the Indian Space Research Organisation (ISRO), containing the maps of 3,686 Centrally-protected monuments across the country.

Earlier, the NMA had to send teams to the areas close to historic monuments, where developers sought construction permits.

The teams had to ensure that permits were granted only to projects beyond 300 metres from the outer boundary of a monument.

Analysis

What is the National Monuments Authority(NMA)? – National Monuments Authority (NMA), Ministry of Culture is responsible for the protection and preservation of monuments and sites through management of the prohibited and regulated area around the centrally protected monuments. The National Monuments Authority is established under Ancient Monuments and Archaeological Sites & Remains (Validation and Amendment) Act 2010.

Source: TheHindu

 

Publishing tax data after 15 years

India has resumed publishing its income tax data which was suspended in 2000 owing to staffing and technical issues. The decision comes three months after French economist Thomas Piketty remarked in a lecture at the Jawaharlal Nehru University (JNU) that India could be vastly under-estimating inequality levels in the country in the absence of this data. India had first started publishing its income tax statistics in 1961.

It can be seen as a step towards transparency and informed policy making.

Analysis

What does the tax data indicate? – In India only 2.9 crore Indians filed personal income tax returns for the assessment year 2012-13 — that is less than 4 per cent of the 760 million adults enumerated in the 2011 Census. More than half these 2.9 crore individuals paid no tax at all.

Just one per cent of individuals, who declared their income in assessment year 2012-13, accounted for almost 20 per cent of the taxable income, according to government data on income tax. Among corporates, however, this imbalance is starker, with a little more than 5 per cent of the companies accounting for a whopping 94 per cent of the taxable income.

Source: TheHindu

 

India-Papua New Guinea sign MOUs

During the visit of President Pranab Mukherjee to Papua New Guinea MOUs were signed for greater economic co-operation. Indian companies are looking at projects coming up in Papua New Guinea after natural gas was discovered in the country’ s Southern Highland Province. Gas discoveries elsewhere in the country have evoked interest among Indian companies that believe they could participate in associated projects as well as in some gas blocks.

India agreed to provide a line of credit of $100 million to Papua New Guinea for infrastructure projects and signed a pact to set up a ‘Centre of Excellence’ in information technology. Papua New Guinea reiterated its support for India’s claim for permanent membership in the UN Security Council and agreed to expedite a proposed Bilateral Investment Promotion and Protection Agreement (IPPA) to facilitate investments. It announced visa-on-arrival facility for Indian tourists.

Apart from MoUs on extending a line of credit and information technology, other agreements related to cooperation on agricultural research and health were also signed.

Source: TheHindu

 

Forest fires in Uttarakhand

Uttarakhand has been witnessing massive fires in some of its forests in Garhwal and Kumaon. Over 6,000 personnel from various state and central agencies are working to put out the raging forest fire in Uttarakhand.

Analysis

What are the causes of forest fires? – As per the Forest Survey of India data, almost 50% of India’s forest areas are fire prone. Reports have estimated that about 6.17% of Indian forests are subjected to severe fire damage annually.

According to Ravi Chopra, an environmentalist and a former member of the National Ganga River Basin Authority (NGRBA), high temperatures with no atmospheric moisture were the major reason for this year’s fires.

Some experts suggest poor rainfall, El Nino and climate warming as causes, while some others have indicated man made reasons behind it. From a wildfire perspective, interactions between El Nino and climate warming can create new extremes in fire behaviour that are driven both by rainfall deficits and extreme temperatures.

What are the effects of these fires? – India has very poor data regarding forest fire and damages caused by them. Losses like carbon sequential capability, soil moisture and nutrient losses due to forest fire are very difficult to be ascertained but are of utmost importance for environmental conservation. It also contributes to global warming. There has been loss to lives, livestock and agriculture.

Source: Livemint

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