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The Railway Budget 2016-17

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Kudos to our Railway Minister, Suresh Prabhu, for stressing on the need for constant innovation by reimagining the conventional ways of solving things and thus, devising a budget having customer-centric approach.

Theme of the Railway Budget 2016-2017

Promising a new horizon on 2 fronts,

  • Overcoming challenges by 3Rs- Reorganzing, Restructruing and Rejuvenating Indian Railways: ‘Chalo, Milkar Kuch Naya karen’.
  • Introducing 3 pillars of strategy– New Revenues (Nav Arjan), New Norms (Nav Manak) and New Structures (Nav Sanrachna)

Here are some of the highlights of the 2nd Budget, devised by Prabhu:

  1. No hike in passenger fares and freight rates:

Passenger and freight fares have remained unchanged, unlike last year when the freight rates were tweaked to mop-up an additional amount of Rs. 4000 crore. The Indian Railways will increase revenue through other non-fare sources such as commercially exploiting vacant lands, liberalizing current parcel policies, and focusing on better manufacturing practices and increasing productivity.

  1. Passenger amenities and facilities: 
  • Four new superfast trains have been introduced- Humsafar (Fully air-conditioned 3AC service with an optional service for meals), Tejas (Bullet train having speeds upto 130km per hour and providing quality onboard services such as local cuisine, entertainment and Wi-Fi), Uday (Double-decker trains running overnight across the busiest routes in the country), and Antyodaya (Focuses on transporting the common men without burning a hole in their pockets)
  • Sarathi Seva, first introduced in Konkan Railways for helping the old as well as disabled passengers requiring assistance at the stations, will be extended to more stations.
  • Lower berth quota for senior citizens to be increased by 50%.
  • E-Catering services to be managed in a phased manner. In addition, the services will be extended to 408 A class and A1 stations. Local cuisine of individual choice will be made available to passengers.
  • Requests for cleaning of coach ‘Clean my coach’ to be processed through SMS.
  • FM Radio Stations to be invited for providing train borne entertainment via PA systems.
  • Installation of 2,500 water vending machines at stations and higher number of mobile charging points in general class coaches of rail.
  • Under Swacch Bharat, 17000 bio-toilets and additional toilets will be provided at 475 stations before the close of this financial year, and target of 30,000 bio-toilets has been set for next financial year.
  • Aastha circuit trains will be introduced for connecting important pilgrim centres.
  1. E-Ticketing Convenience: 
  • E-ticketing system’s capacity has been enhanced from 2,000 tickets per minute to 7,200 tickets per minute and will be able to support 1.20 lakh concurrent users as compared to only 40,000 users earlier.
  • Cancellation of PRS tickets facility to be made available on 139 helpline number.
  • Bar-coded tickets and scanners to be introduced on pilot basis to tackle menace of ticketless travel.
  1. Expansion of Railway Network: 
  • Dedicated Freight Corridor project, being the largest infrastructure project ever in the country, is gaining momentum.
  • Railway connectivity projects to ports of Dighi, Jaigarh, Paradip and Rewas are under implementation. This port connectivity would boost the country’s imports and exports.
  • Broad Gauge Lumding-Silchar section in Assam has been opened up, thus connecting Barak Valley with rest of country.
  • States in North-East India, such as Mizoram and Manipur, will be connected through Broad Gauge soon.
  • Outlay for electrification of Railways have been increased to 1600kms this year and 2000 kms being proposed for the next year.
  1. Improvement of Corporate Governance: 
  • Plan to set up Railway Planning & Investment Organization for drafting the medium term (5 years) and long term (10 years) corporate plans, on the basis of which, projects that fulfill the corporate goals will be identified.
  • Independence of Rail Development Authority to ensure fair pricing of services, protect customer interests, promote competition and determine standards of efficiency.
  • Railway Board has been proposed to be reorganized.
  • 100% transparency will be ensured in the operations of the Indian Railways.
  • National Academy of Indian Railways at Vadodara, identified as the first institution to be upgraded to a Rail University.
  • Energy audits to be undertaken to try reducing the consumption of energy in non-traction areas by 10% to 15%

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NCW to urge women to come forward

The National Commission for Women has urged victims of rape to come forward in the event of Jat quota stir in Murthal, Haryana.

NCW member Rekha Sharma said the possibility of the incident having taken place could not be ruled out. The NCW has so far been able to contact eight families whose cars were burnt down or damaged. Of these, two families had women members. But all of them have denied they were sexually assaulted or that they saw anyone being raped.

A woman from Murthal has come forward on Sunday 28 Feb alleging rape during the  protests.

Analysis

What is the National Commission For Women? – The National Commission for Women was set up as statutory body in January 1992 under the National Commission for Women Act, 1990 to review the Constitutional and Legal safeguards for women,     recommend remedial legislative measures, facilitate redressal of grievances and advise the Government on all policy matters     affecting women.

The objective of the NCW is to represent the rights of women in India and to provide a voice for their issues and concerns. The subjects of their campaigns have included dowry, politics, religion, equal representation for women in jobs, and the exploitation of women for labour. They have also discussed police abuses against women.

What is its composition? – A Chairperson, committed to the cause of women, to be nominated by the Central Government. Five Members to be nominated by the Central Government from amongst persons of ability, integrity and standing who have had experience in law or legislation, trade unionism, management of an industry potential of women, women’s voluntary organisations ( including women activist ), administration, economic development, health, education or social welfare.

What is its mandate? – The mandate of the commission is wide consisting of Investigation and examination of all matters relating to the safeguards provided for women under the Constitution and other laws. It presents the Central Government, annually and at such other times as the Commission may deem fit, reports upon the working of those safeguards.

Source: TheHindu, NCW

 

e-Tourist visas for 37 more countries   

Electronic tourist visas (e-TVs) will be extended to citizens of 37 more countries from Friday, taking the total number to 150.  TVoA (tourist visa on arrival), enabled by electronic travel authorisation, popularly known as the e-tourist visa scheme, was launched on November 27, 2014. Since then, more than 7.5 lakh such visas have been issued. At present, on an average, 3,500 e-TVs are granted daily.

Analysis

What is e-Visa? – Eligible citizens traveling for leisure/tourism purposes have the option to apply for an Indian visa online, and have their visa granted electronically. The applicant has to provide all information online and he/she will receive the authorisation to travel by e-mail within 72 hours. When the Indian government implemented this new electronic process, they called it Electronic Travel Authority (ETA), and because the visa sticker was placed inside the traveler’s passport at the airport upon arrival to India, the application form also referred to this process as ‘Visa on Arrival’.

The nomenclature of the ‘ETA’ scheme in India was misleading. There were several instances of tourists flying into India, only to be asked by the immigration authorities for their e-visa. Of late, the home ministry had even directed the authorities to grant visas to such tourists on the spot and save them unnecessary inconvenience.

So the official name for this process has changed to ‘e-Tourist Visa (eTV).’ The online process has not changed, and the traveler’s biometric information will still be taken at the airport and the visa stamped inside the passport upon arrival in India.

Source: TheHindu, Simply Decoded

Space Law in the offing

In a talk with A.S. Kiran Kumar, who has completed a year as Secretary, Department of Space and Chairman of Indian Space Research Organisation,  there has been news about a Space Law in the offing. Discussions were held with academicians and legal experts in January 2015.

It should be approved for circulation among a large number of departments — the Ministries of Home Affairs, External Affairs [Defence, Finance, Law,] etc. Some more insight should come in from there. Something concrete should come out by next year. A Space Act will be finally brought out through Parliament.

Analysis

What is the need for a space law?  – India is progressively looking forward to privatise and commercialise space assets, expand and develop capability in space exploration and scientific discovery, commercialise its competence to build satellites and offer launch service from its launch vehicles. The pace at which India is developing and expanding in the space and space related matters it can be argued that a national space law should be legislated with the principle of creating clear and transparent regulatory guidelines for domestic industry with the intention of accelerating investment and to make certain the growth and advancement in this capital intensive – high return strategic sector.

What are the International Laws on space? – In the year 1959, the United Nations created the United Nations Committee on the Peaceful Uses of Outer Space (UNCOPUOS). The UNCOPUOS in turn created two subcommittees, the Scientific and Technical sub-committee and Legal sub-committee. It can be said that the UNCOPUS has been a primary forum for discussion and negotiation of international agreements on outer space.

There were five international treaties which have been negotiated and drafted in the UNCOPUOS.

1) The Outer Space Treaty

2) The Rescue Agreement

3) The Liability Convention

4) The Registration Convention

5) The Moon Treaty

The interesting fact to note is that India is a party to all the above significant space treaties which consecutively structure the most important body of the international space law. But even though India is a member to all these treaties but still then India has got no comprehensive legislation on space and space related matters.

How is space regulated in India? –  The space and space related matters in India are regulated by legal rules belonging to domestic laws. This is because India does not have any legislation on space and space related matters. At present the position in India is that space industry is legally determined by the Indian Constitution, 1950.

Articles mentioned in the constitution of India foster respect for International Law such as Article 51 of the Indian Constitution imposes on the state obligation to strive for the promotion of international peace and security, including maintaining just and reasonable relation between nations, respect for international law and treaty obligation, and settlement of international dispute by arbitration. Under Art 73 the executive power of the union extends a) to the matter relating to which parliament has power to make laws, b) to exercise of such rights, authority and jurisdiction as one exercisable by the Government of India by virtue of any treaty or agreement.

What should the space law include? – There should be national treatment for issues including (i) Funding of space activity; (ii) Safety of space activity; (iii) Insurance;(iv) Licensing;(v) Certification of space technology;(vi); Liability for damage (vi) Responsibility; (vii) Dispute resolution;(viii) Protection of IPR consequent to space activity;(ix) Promotion and financial support to development of space sciences; (x) Protection of environment and ecology and (xi) International cooperation.

Source: TheHindu, Kaushik Dhar(NALSAR)

 

Centre drafts bill to decriminalise beggary

Centre has drafted a bill that will decriminalise beggary and offer a life of dignity to the beggars, homeless and others who live in poverty or abandonment.

Begging is currently a crime under the Bombay Prevention of Begging Act, 1959. Under the Act, a person found begging can be sent to a shelter home or even jail without trial. The draft ‘The Persons in Destitution (protection, care and rehabilitation) Bill 2015’ looks at the issue as a social menace.

Analysis

What is the Bombay Prevention of Begging Act, 1959? – The act was first drafted in 1959 and copied by the rest of the states later. Under the present Act, anyone having no visible means of subsistence and found wandering about in a public space is deemed a beggar. All those who solicit alms in public place under any pretence, including singing, dancing, fortune-telling or street-performing, are also deemed as beggars.

The present Act gives discretionary powers to the police who can pick up anyone on a hunch that the individual is a beggar or a destitute with no means of fending for himself.  If the court is satisfied that the individual is a beggar, the person is then convicted by the court and sent to a beggars’ home for one to three years. Strangely, unlike most other laws, the court can also order the detention of all those who it thinks are dependent on the beggar under the Act.

What is the draft bill about? – The Bill calls for recognizing that destitution is a situation of extreme vulnerability and says there is a constitutional obligation to protect those in destitution and seek to address the vulnerabilities that arise from it.

The Bill calls for the setting up of outreach and mobilization Committees, which should conduct surveys for identifying persons in destitution, create awareness among them about the services available for their benefits and give them the option and help to avail of the same.

It also calls for setting up centres for the care, protection and vocational training of persons in destitution who voluntarily seek the same. These centres should have qualified resident doctors, recreation and other facilities. It also calls for the setting up of referral committees which will identify the needs of persons in destitution and refer them to the respective institutions according to their requirement, including providing medical services, vocational training, shelter and employment opportunities.
The Bill also speaks about the state setting up counseling committees, which will engage in extended interactions with persons in destitution to assist them in opting for specific vocational training as per their preferences. Any person can approach any of these centres or committees established for support and assistance.

Source: TheHindu, TheIndianExpress

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Mains Issue #7: High Speed Railways in India

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High Speed Railways has captured the imagination of public discourse in India especially after the proposal of connecting Mumbai-Ahmedabad with a bullet train. The government formed an entity called the National High Speed Rail Corporation Limited ahead of Railway Budget 2016 to implement the project. But at an estimated expenditure of Rs.98,000 crore the feasibility of such a project has been shrouded in uncertainty?

What is High Speed Railways After All?

High Speed Railways does not have a clear cut definition. Generally it is referred to as a type of rail that travels significantly faster than traditional rail traffic. It uses an integrated system of specialised rolling stock and dedicated tracks.

While there is no single standard that applies worldwide, new lines in excess of 250 km/h and existing lines in excess of 200 km/h are widely considered to be high-speed, with some extending the definition to include much lower speeds (e.g. 160 km/h) in areas for which these speeds still represent significant improvements.

The first such system began operations in Japan in 1964 and was widely known as the bullet train. High speed rail programs have been successful in Japan, China and several European countries such as France, Germany and Spain.

What are the Benefits of High Speed Railways?

The benefits include reduced journey times that impact individuals and business, connectivity benefits to populations and markets, increased passenger comfort, mode shifts from more polluting air and road transport and consequently, lower road congestion. High speed rail can create agglomeration benefits i.e., benefits that accrue from the clustering together of firms and labour markets, and regeneration benefits for an area. The actual construction also provides an opportunity for employment and the potential for technology transfer.

The United Nations Environment Program (UNEP) and the Technical University of Denmark (DTU) published a study on the Ahmedabad-Mumbai train line. It visualised two scenarios. To determine the effects of the bullet train, the study presents two scenarios over the 2010-2050 horizon.

1) Business-as-Usual: Conventional rail use increases insignificantly. This is because better roads increase road usage, especially for inter-city travel. Overall, road transport’s share reduces because road trips by bus and car between Mumbai and Ahmedabad  will fall with an increase in relative travel time compared to other modes(air travel); this fall is partly offset by increased intercity travel.

2) High Speed Rail (HSR) scenario:  High speed trains cater to one-fifth of the total travel demand in 2050, and the growth rate of air travel slows, because of competition from high speed trains. The HSR solution is also cleaner; CO2 emissions in 2050 are also lower by 0.2 MT and further emission drops are possible with decarbonisation of electricity, according to the UNEP. In general, per passenger km, high speed rail has lower greenhouse gas (GHG) emissions than road or air transport.

Where are we on the High Speed Front?

India has been planning for high speed railways for a while now.  It established High Speed Rail Corporation of India Limited as a body to oversee it in 2013. Feasibility studies for various segments of the ‘Diamond Quadrilateral’, a proposed high speed network spanning the country, connecting Delhi, Mumbai, Chennai and Kolkata, were initiated.

The government has pushed ahead with plans to develop a Rs.98000 crore, 505 km segment between Ahmedabad and Mumbai on which it will run “bullet” trains, as high speed trains are often called. A joint feasibility study was submitted by the Indian Railways and the Japan International Cooperation Agency (JICA).

A go ahead has been given before the railway budget for National High Speed Rail Corporation that would oversee the construction and operation the bullet train between Mumbai and Ahmedabad.

The company, which will be implementing the project, under the Indian Railways. It will be a 50:50 joint venture between the Centre and the States – Gujarat and Maharashtra. The authorised capital of the project will be ₹20,000 crore.

Getting to Semi High Speed Railways first!

In February 2014, Henri Poupart-Lafarge of Alstom, manufacturer of trains used on TGV  high speed trains in France, stated that India is at least 5–10 years away from high-speed trains. He suggested the country should first upgrade the infrastructure to handle trains travelling 100 to 120 km/hr.

As part of India’s two pronged strategy there is a focus on upgradation of existing railway system to semi high speed links parallely with bullet trains.

Indian Railways aims to increase the speed of passenger trains to 160–200 km/h on dedicated conventional tracks. They intend to improve their existing conventional lines to handle speeds of up to 160 km/h, with a goal of speeds above 200 km/h on new tracks with improved technology.

In July 2014, a trial run of a “semi-high speed train” with 10 coaches and 2 generators reached a speed of 160 km/h between New Delhi and Agra, but no date has been set for commercial operations.

Recently France’s SNCF has begun working with Indian Railways on a one-year project to study the feasibility of upgrading the 245 km New Delhi – Chandigarh line to permit the operation of ‘semi high speed’ trains at up to 200 km/h, and has agreed to support the pilot projects for a station modernisation programme.

High Speed Railways India

What are the problems with  High Speed Railways in India?

As per Vivek Sahai , former Chairman of the Railway Board, “Do we really need a train speed of 350 kmph? Speaking as a technocrat, I say we should discover the speed at which the train is profitable. If it is 350 kmph then go for it, I have no problems with that,”.

1) Infrastructure – There is serious question raised about the safety of the passengers as the infrastructure on which semi-high speed trains are proposed to run may not be able to run at such high speeds, for example it is preferred to run these trains on 60 kilogram tracks but now they are being tested on 52 kilogram tracks.

2) Investment – The current Mumbai-Ahmedabad bullet train has been financed upto 80% by low interest loans from Japan. India plans to invest around Rs.20000 crore of the total Rs.98000 crore. Even after foreign co-operation high speed rail requires massive investments. New modes of financing would have to be explored for it.

3) Financial Viability – Experts say it is difficult for a highly capital-intensive project of high speed railways to be financially and economically viable. Even if we assume there is no interest cost attached to the project, it is difficult to recover  Rs 98,000 crore worth of investments over the 50-year loan period.  The ridership will be a function of prices. If the prices are kept too high, footfalls will come down; and if the prices are low, there may be losses.

4) Ancillary Costs – Environmental degradation along the route, dislocation of people, noise pollution, as well as regionally imbalanced development are some of the ancillary costs that need to be factored in.

5) Integrated Transport Development – If the first 500 kms is covered in two hours using a high speed train and the remaining 50 kms via another mode is covered in another two hours, then it weakens the case for using high speed rail for that trip, when a flight may be a better option, time and price considered. There is a need for integrated development of all modes of transport.

We need to look at high speed railway as part of a bigger initiative to improve transport system in India  for success rather than a symbolic unviable project.

 

References

 

1) http://indianexpress.com/article/business/business-others/govt-forms-new-entity-for-bullet-train-may-get-rs-200-cr-in-rail-budget/

2) http://www.thehindu.com/todays-paper/tp-business/high-speed-railways-in-india-success-will-ride-on-the-details/article8238506.ece#.VsFg-0wFlyc.gmail

3) https://en.wikipedia.org/wiki/High-speed_rail

4) http://www.rediff.com/business/special/special-will-indias-1st-bullet-train-manage-to-stay-on-track/20151224.htm

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A formal definition for a start-up

The government had recently announced the launch of Start-up India, Stand-Up India campaign. The Start-Up India Action Plan provided incentives for the start-up community in the form of tax breaks, lesser compliance and shut-down procedures, 10,000 crore corpus fund. The government has finally come up with a formal definition for start-ups so that no grey areas remain in seeking benefits  under the name of start-ups.

The government has set out the definition of a ‘start-up’ so that only deserving companies can be able to gain from the ‘Startup India Action Plan’ and to “create a conducive environment for startups in India”.

A government notification says that to be able to benefit from the plan, a ‘start-up’ should have at least 20% equity funding by any incubation, angel or private equity fund, and an accelerator or angel network duly registered with SEBI should be endorsing the innovative nature of the business.

Only the companies that fulfil these conditions would be considered as start-ups up to five years from the date of incorporation till the time that their turnover exceeds Rs 25 crore.

In order to recognising a company as a start-up, the government will use a mobile application/portal until the launch of which, the Department of industrial policy and promotion (DIPP) will be planning an alternative.

Analysis

Why start-ups are important for economy?

1) Revolutionary Products – India has witnessed an IT and telecom revolution. The launch and penetration of smart phones has changed the way services are delivered to end user. For such low cost innovation to continue there is a need for fostering a start-up ecosystem.

2) Impact on surrounding areas – Apart from delivering value to their customers, startups have a direct impact on the cities they make their homes. Infosys has impacted Bangalore and Alibaba has changed Hangzhou. What Google has done to Mountain View and how Microsoft transformed Redmond are case studies in themselves.

3) Quality Employment – Start-ups provide employment opportunities for youth and new employment patterns emerge. Demand and employment opportunities for engineers saw a steep rise after Bangalore became an IT hub.  Local youth had new opportunities to pursue, and experienced talent started moving to these cities in pursuit of a challenging and high-growth career.

Source: Business Standard, YourStory

 

India approves Chabahar port plan

India approved a $150 million project to develop the strategic Iranian port of Chabahar, which includes a transit route to Afghanistan bypassing neighbouring Pakistan. India had already signed a Memorandum of Understanding (MOU) with the Iran government in May 2015, but the deal had been stuck since then.

Analysis

Where is the Chahbahar port? – The Port of Chabahar (or Chah Bahar) is a seaport in Chah Bahar in southeastern Iran. Its location lies in the Gulf of Oman. It is the only Iranian port with direct access to the ocean. The port was partially built by India in the 1990s to provide access to Afghanistan and Central Asia, bypassing Pakistan.

Image: TheHinduGwadar and Chabahar Port

What is its Geo-political significance? – China has been developing the Gwadar port in Pakistan and connecting it with the China-Pakistan Economic Corridor.  Gwadar is part of China’s String of Pearls Strategy, seen as an attempt to circle India by building port infrastructure in Indian ocean. The development of Chabahar port is critical for India to counter this strategy.

Chabahar port also provides India an access to Afghanistan and Central  Asia.

Recommendation to make wilful defaulters public

The Standing Committee on Finance recommended that state-owned banks make public the names of their respective top 30 stressed accounts involving wilful defaulters.

This will act as a deterrent and enable banks to withstand pressure and interference from various quarters in dealing with the promoters for recoveries or sanctioning further loans, the committee said in its report tabled in Parliament on 24th February.

For this, the committee recommended the government amend the RBI Act and other laws and guidelines.

Wilful defaulters owe PSU banks a total of Rs.64,335 crore or 21 per cent of total non-performing assets, (NPA), according to the report.

The committee also recommended that specially-tasked committees be mandated to continually monitor the status of large loan portfolios and submit periodical reports to government and Parliament on the findings.

Analysis

Who is a wilful defaulter? – A wilful defaulter is somebody who has essentially not used the fund for the purpose it has been borrowed or when he has not repaid when he can do so; when he has siphoned off the funds or when he disposed of the assets pledged for availing of loan without the bank’s knowledge.

What is the standing committee on finance? – The system of departmentally related standing committees was instituted by Parliament in 1993. Currently, there are 24 such committees, organised on the lines of departments and ministries. Standing committee on finance is one of them. Other committees are on home affairs, defence etc. These standing committees examine bills that are referred to them. They also examine the expenditure plans of ministries in the Union Budget. In addition, they may examine the working of the departments and various schemes of the government.

Each committee has 31 members: 21 from Lok Sabha and 10 from Rajya Sabha. Parties are allocated seats based on their strength in Parliament. The final membership is decided based on the MP’s area of interest as well as their party’s decision on allocating the seats.

Source: TheHindu,  Rediff

 

Incentivising cashless transaction  

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for introduction of steps for promotion of payments through cards and digital means. The move aims at reducing cash transactions.

Several short term (to be implemented within one year) and medium term measures (to be implemented within two years) have been approved for implementation by the Government Ministries/ Departments/ Organisations.

1) Steps for withdrawal of surcharge/service charge/ convenience fee on card/ digital payments currently imposed by various Government Departments/organisations and introduction of appropriate acceptance infrastructure in Government Departments/ organisations.

2) Rationalization of Merchant Discount Rate (MDR) on card transactions and a differentiated MDR framework for some key transaction segments

3) Mandating payments beyond a prescribed threshold only in card/ digital mode

4) Introduction of formulae linked acceptance infrastructure by the stakeholders of certain card products

5) Rationalisation of telecom service charges for digital financial transactions

6) Promotion of mobile banking

7) Creation of necessary assurance mechanisms for quick resolution of fraudulent transactions and review the payments ecosystem in the country.

Analysis

What is the benefit of cashless transactions? – Promotion of payments through cards and digital means will be instrumental in reducing tax avoidance, migration of Government payments and collections to cashless mode, discourage transactions in cash by providing access to financial payment services to the citizens to conduct transactions through card/ digital means and shifting payment ecosystem from cash dominated to non-cash/less cash payments.

What are some of the initiatives of the government? – While the payment system initiatives taken in the form of Electronic Clearing Service Scheme, National Electronic Funds Transfer, Real Time Gross Settlement Scheme etc. have been impressive, the benefits of modern card/ digital payment systems are yet to reach all sections of the society.

The introduction of the Payment and Settlement Systems Act, 2007 has resulted in deeper acceptance and penetration of modern card/ digital payment systems in the country, Aadhaar Enabled Payment Systems (AEPS) has been brought to effect to leverage upon biometric verification and a domestic card network namely, RuPay.

The Reserve Bank of India has also recently approved licences for setting up of Payments Banks with the objective of greater financial inclusion by the Payments Banks by providing small savings accounts and payments/ remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities.

Source: PIB

 

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LiFi to deliver faster Internet access

French start-up Oledcomm demonstrated the Li-Fi technology at the Mobile World Congress, the world’s biggest mobile fair, in Barcelona. LiFI promises to deliver internet access through light. As soon as a smartphone was placed under an office lamp, it started playing a video.

Laboratory tests have shown theoretical speeds of over 200 Gbps – fast enough to download the equivalent of 23 DVDs in one second.

Li-Fi allows speeds that are 100 times faster than Wi-Fi which uses radio waves to transmit data.

Analysis

What is Li-Fi? – Li-Fi stands for Light Fidelity is a bidirectional, high speed and fully networked wireless communication technology similar to Wi-Fi. The term was coined by Harald Haas and is a form of visible light communication and a subset of optical wireless communications (OWC). Li-Fi is a Visible Light Communications (VLC) system. This means that it accommodates a photo-detector to receive light signals and a signal processing element to convert the data into ‘stream-able’ content.

The technology uses the frequencies generated by LED bulbs — which flicker on and off imperceptibly thousands of times a second — to beam information through the air, leading it to be dubbed the “digital equivalent of Morse Code”.

Has it been tested? – It started making its way out of laboratories in 2015 to be tested in everyday settings in France, a Li-Fi pioneer, such as a museums and shopping malls. It has also seen test runs in Belgium, Estonia and India.

Why do we need it? – Apart from the high speed the number of objects that are connected to the Internet are soaring and the spectrum for radio waves used by Wi-Fi in short supply, Li-Fi offers a viable alternative, according to its promoters.

What are its drawbacks? – Li-fi has its drawbacks – it only works if a smartphone or other device is placed directly in the light and it cannot travel through walls. This restricts its use to smaller spaces.  Li-Fi also requires the lightbulb is on at all times to provide connectivity, meaning that the lights will need to be on during the day.

Source: TheHindu, Wikipedia

 

Sea Level rising fastest since last 2800 years

The world’s oceans are rising at a faster rate than any time in the past 2,800 years, according to a study published in Proceedings of the National Academy of Sciences.

Analysis

As global temperatures continue to rise, ice in the polar regions and glaciers will melt, dumping tons of extra water into the ocean. Warmer water temperatures will also lead the oceans to expand.

What will  be the impact of rise in water level? – The impact of rise in water levels would be multi-fold.

1) It will contaminate drinking water – As the rising sea crawls farther and farther up the shore, in many places it will seep into the freshwater sources in the ground that many coastal areas rely on for their drinking water.

2) It will destroy coastal swamps – Coastal wetlands and swamps are important regions in the ecosystem. They act as a shield against influence of the ocean and provide habitat for wildlife. Rise in water level would destroy these low lying areas.

3) Threat to wildlife – Many forms of wildlife make their home on the beach. As the rising ocean erodes the shoreline and floods the areas in which coastal animals live, animals like shorebirds and sea turtles will suffer.

4) Small Island Nations – Countries like Mauritius, Seychelles, Maldives and many other small island nations in the Pacific are under threat of being submerged completely if the sea levels keep on increasing.

 

FBI vs Apple over unlocking of iPhone

On December 2, 2015, 14 people were killed and 22 were seriously injured in a terrorist attack at the Inland Regional Center in San Bernardino, California, USA which consisted of a mass shooting and an attempted bombing.

FBI announced that it was unable to unlock one of the mobile phones they recovered, a county-owned iPhone 5C used by one of the shooters, due to its advanced security features, including encryption of user data.

FBI asked Apple Inc. to create a new version of the phone’s iOS operating system that could be installed and run in the phone’s random access memory to disable certain security features. Apple declined due to its policy to never undermine the security features of its products. The FBI responded by successfully applying to a federal judge to issue a court order, mandating Apple to create and provide the requested software.

Apple announced their intent to oppose the order, citing the security risks that the creation of a backdoor would pose towards their customers.

Analysis

Privacy vs National Security – The issue has brought to focus the debate of individual privacy over national security. The data from the phone could be helpful in unearthing important evidence about the perpetrators of the crime incident. But there have been reservation among tech companies like Google,  Facebook and Apple of requests from various governments for private data. They fear that the case could set a precedent for future such requests.

What it means for India? – The Information Technology (IT) Act Section 69 confers sweeping powers on the government to retrieve such information. It gives power to issue directions for interception or monitoring or decryption of any information through any computer resource.

But such a case of refusal could be the case in India where companies like Apple would suggest that building a backdoor for one iPhone will compromise the security of all.

Apple is not an Indian company and can refuse to comply with Section 69 of the IT Act, claiming the provision violates California law (where it is based). Apple India Private Ltd, its Indian subsidiary, is registered under the Companies Act but mostly performs administrative and financial functions. Apple does not provide Internet services, and has no software licensing agreement with Indian telecom operators. What’s more, Indian developers whose content is featured in the App Store sign agreements directly with the parent company. Short of proceeding legally against an Apple India director or revoking its import licence — neither of which would be sound measures — the Government of India has limited options to secure its compliance.

Research by Rebecca MacKinnon and Elonnai Hickok suggests the Indian government in 2013 placed 3,598 requests for user data from Facebook with a 53 per cent compliance rate, while the U.S. government made nearly 12,600 requests with a compliance rate of 81 per cent. There is simply no basis or justification for the differential treatment of compliance requests but for the fact that Facebook is a U.S.-based company.

 

Government Likely to Unveil IPR policy

The government is likely to announce its National Intellectual Property Rights (IPR) Policy within a fortnight. The policy will be entirely compliant with the World Trade Organisation’s agreement on Trade Related aspects of IPRs (TRIPS) and will have a special thrust on awareness generation and effective enforcement of IPRs, besides encouragement of IP commercialisation through various incentives.

However, the policy will not suggest any changes in the existing Indian IPR laws or other related policies on the patent-disabling Compulsory Licencing (CL) and the provision-preventing ‘ever-greening’ of drug patents (done through minor modifications of an existing drug).

The government had in November 2014 said it has set up an IPR think-tank to draft the IPR policy. However, despite the think-tank submitting the final draft in April 2015, the announcement of the policy was delayed as the Cabinet note on it had to be circulated among 29 ministries for their suggestions.

IPR Policy will focus on creating IPR awareness at school/college level by making it a part of syllabus/curriculum, and promote organisations such as the National Research Development Corporation to help commercialise the inventions / patents developed at the level of educational institutes.

The policy will also suggest incentives such as tax benefits and fee waivers to encourage R&D and IP creation to strengthen the Make In India/Start-up/Digital India initiatives.

To protect ‘small inventions’ developed especially in the informal / unorganised sectors, the policy will promote ‘utility patents’ (with lower compliance burden and shorter period of protection, when compared to the normal patents) only for mechanical innovations. This ‘utility patents’ may not be extended to the pharmaceutical sector considering the sensitivities involved in ensuring the efficacy of the drugs.

Analysis

What is Section 3 (d)? – Section 3(d) of Indian Patents Act deals with evergreening of patents. It says that besides novelty and inventive step, improvement in therapeutic efficacy is a must for grant of patents when it comes to incremental inventions.

The U.S. and EU firms had said the so-called ‘additional filter’ in the form of “improvement in therapeutic efficacy” for grant of patents was inconsistent with WTO’s TRIPS agreement, a charge which India has denied.

What is Compulsory Licensing?  – Compulsory licensing is when a government authorises a party other than the patent owner to produce the patented product or process, without the patent owner’s consent. India granted its first Compulsory License to Bayer for Nexavar. The EU and U.S. had objected to India’s adoption of CL in industrial sectors (in the National Manufacturing Policy) saying it will discourage investment and innovation. It also objects to its inclusion in Section 84 of India’s Patents Act.

 

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SEVENTH Pay Commission

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Let us start with a formal definition of what are Pay Commissions: Pay Commissions are multi-member bodies intermittently set up by the Government of India after every 10 years, to assess the pay scale of all government employees and give its report on the various changes that need to be incorporated in the salary structure. Since India’s independence, seven pay commissions have been set up on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of Government of India. Headquartered in Delhi, the commission is usually given 18 months to make its recommendation to the finance minister, however the time period can be extended by the government.

Here is a table with details of all the pay commissions that have been set up till date:

Central Pay Commission Number  

Established

 

Report submitted

 

Chairman

First CPC May, 1946 May, 1947 Srinivas Varadachariar
Second CPC August, 1957 August, 1959 Jagannath Dash
Third CPC April, 1970 March,1973 Raghubir Dayal
Fourth CPC June, 1983 Three reports submitted in : June, 1986; December, 1986 and May, 1987 PN Singhal
Fifth CPC April, 1994 January, 1997 Justice S Ratnavel
Sixth CPC October, 2006 March, 2008 Justice B.N Srikrishna
Seventh CPC February, 2014 19.11.2015 Justice A.K Mathur

As pay commissions are the only bodies that fix an employee’s pay for the next ten years, they are considered to be very powerful. Revision of Dearness Allowance (DA) though takes place on a regular basis but that is mostly to compensate for inflation as per the Consumer Price Index. Before starting with the recommendations of the seventh pay commission, let’s go through the components of a government employee’s salary:

  1. Basic Pay – The basic pay that you are entitled to as an employee
  2. 3% annual increase which has been kept same by the 7th pay commission also
  3. Dearness Allowance – An allowance given by the government to its employees to compensate for their cost of living
  4. House Rent Allowance – Allowance to compensate for the rent of the house in which any employee stays, depending on the city of habitation. HRA given to an employee is either of 8%, 16% or 24% of an employee’s gross salary. (from 01.01.2016)
  5. Travel Allowance – Allowance paid by the government to compensate for the employee’s travelling cost. So, if you are a Group D employee and are drawing a salary in the pay band 5200-20200, then the maximum TA that you, as an employee are entitled to was 300, which has now been increased to 900 by the seventh pay commission. However, this too depends on the city of habitation. For the same pay band and grade pay, the ones residing in A1/A cities were entitled to an allowance of 600 which has now been increased to 1350.
  6. City Compensatory Allowance – This type of allowance is offered by the government to its employees to compensate for the high cost of living in metropolis and large cities. (Not applicable to all)

Well, these are the basic components of a government pay slip. Another important aspect is the grade pay and pay band concept, which was introduced by the sixth pay commission.

Salary structure until December 2015, looked like this 9300-3%-34800

9300 here is the basic pay that an employee is entitled to at a particular post. 3% is the annual rate of revision of the basic pay. 34800 is the maximum pay that a person is entitled to while holding the same post. For this pay band, a grade pay of say 4200 was given (grade pay can vary for two people of the same pay band depending on the class/category of employee).  Allowances were calculated on the sum of basic pay and grade pay which in this case is 9300+4200 = 13500.

So, total salary was:  (Basic Pay + Grade Pay) + DA+ HRA+ Other allowances

Considering DA to be 110%, HRA = 20% (depends on the city of habitation) and miscellaneous allowances = 40%

Total salary for an employee as per the sixth pay commission worked out to be = Rs. 36450/-

This was entitled to an annual revision of 3%, so, basic pay goes up by 3% every year and DA revision too takes place regularly. Also, the base of calculation of allowances will now be the revised pay.

9300+ (3% of 9300) = (9579 + GP of 4200) +DA+ HRA+MA would be the salary in second year of service. (Allowance base will now be 9579+4200 = 13779/-)

Let us now discuss the seventh pay commission.

The seventh pay commission was set up by the Government of India in February 2014 and was headed by Justice A.K Mathur. The commission was given 18 months to submit its report and had set up its own officers, advisers, experts and institutional consultants and called for required information from various ministries and departments of the Government of India. The report was submitted to the finance minister by Justice Mathur on 19th November, 2015. All the recommendations were accepted by the government and came into effect from 01.01.2016.

The recommendations were:

  1. It retained the annual rate of revision at 3%.
  2. Minimum salary that can be drawn by an employee has been increased to 18000 per month and maximum to 2.25 lakhs. However, the cabinet secretary will draw a fixed salary 2.5 lakhs.
  3. Military service pay has been increased to 16500/- per month.
  4. It abolished the pay band and grade pay that was introduced by the sixth pay commission and has come up with a new concept of pay matrix.

So, earlier if a person was drawing 9300 as the basic pay with a grade pay of 4200, then total would be 13500. The fitment factor for this band is given to be 2.62 (refer to the table below), thus, as per the matrix, new pay = 13500*2.62 = 35,370/- (=35400/-) + allowances.

[Please note that the pay matrix talked about is only for civilian employees a separate matrix has been released by the commission for military and defence personnel.]

  1. A new term that came up is fitment factor. Fitment factor is the multiplication factor by which the pay will increase. If a person was drawing a basic pay of 15600 with a grade pay of 5400, then total was 21000. The fitment factor for this group is 2.67, so increased salary will be 56,070/-
  2. This means a total of hike of 16% in basic pay and almost 23.55% in pay and allowances altogether.
  3. As per the recommendations, pensions have also increased by 24%.
  4. The commission has also abolished 52 allowances and submerged 36 others.

There are certain important points with respect to Pay Commissions that should be kept in mind:

  1. The recommendations of the Central Pay Commission will benefit the central government employees only. This does not include bank employees, PSU employees (like ONGC, IGCL etc.) or partially government owned companies.
  2. States can pass on the benefits to their employees only after receiving suitable recommendations from the state pay commission.
  3. The Central Pay Commission includes: Railway employees, Defence personnel, Paramilitary forces and other central government department employees.
  4. The recommendations of the seventh pay commission are expected to affect 47 lakh employees and 52 lakh pensioners. These will also have an impact of Rs.74000 crores on the Union Budget and Rs.28000 crores on Railway Budget.

Now, for those of you who did not understand the calculations of moving from grade pay to pay matrix, a condensed table of the same is given below:

table

 

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