Current Affairs of May - 2017

Problems of the MSME Sector

There are 50 million M.S.M.E. in India that contribute to 38% of India’s GDP and 40% to National Exports and 45% of Manufacturing output and 20% of employment. 45 million of these are unregistered with no access to formal credit and reliance is on money lenders. If these were registered using digitization, Aadhar and technology then it is possible for them to have a credit profile built. This would enable them to get access to cheap credit and stabilize their business.

South Asian Satellite

GSAT-9 launched by ISRO for serving the communication requirements of SAARC nations except Pakistan. The satellite was launched due to PM Modi’s commitment to build such a satellite for SAARC nations. The satellite can be used for Television, tele-medicine, broadcast services etc. The reason for building such a satellite was also to use soft diplomacy for building good relations with neighbours.

Sri Lanka, Pakistan and Bangladesh have space programs but don’t prefer ISRO’s technical expertise even though it is offered at a fraction of the cost of such a service from foreign agencies. China too has been trying to increase its market for satellite launching by lobbying with SAARC nations and so India’s move is in the right direction.

“e-guide” project

Ministry of Culture and Tourism launches “e-guide” project so that tourists can get information on a particular monument for free when the visit it and they won’t have to take service of a paid guide. The visitors can get access to local intranet created for this purpose in the historical sites. The QR code shall be placed at every monument and when a visitor scans it he shall get all information on his phone.

China’s Belt and Road Forum

India remained absent from the meet as it had concerns of sovereignty over the initiative of One Belt One Road Policy of China due to China Pakistan Economic Corridor. CPEC passes through Pakistan occupied Kashmir and so such a project affects India directly. India should however understand that its neighbours have participated and signed many crucial infrastructure related MoU’s with China.

This shall bring them on a greater scale of economic cooperation but can affect India’s position in the South Asian equation. India now should focus on faster implementation of regional connectivity projects with its neighbours to boost an integrated development for all. India should also recognise the geo-political importance of Andaman and Nicobar islands as a regional connectivity hub.

GST slab rates

4 slab GST rates for services has been proposed to replace the single slab of 15% applicable currently. The multi-tier rates might cause classification problems i.e. in deciding to which slab certain services might fit. The states might face revenue loss as some taxes have been merged into GST. But states have the power to levy additional taxes for goods which fall under State list of the constitution.

As GST shall remove the tax on tax system with an efficient tax input credit system prices might fall. The strict anti profiteering clause in GST Act shall make it mandatory to pass on benefits of lower taxation or input credits to consumers.

NITI Aayog's - Three Year Action Agenda

The NITI Aayog wants to replace the current Five year plans with the Three Year Action Agenda, Seven year policy strategy and 15 year long term vision. A problem with the five year plan was that the electoral cycle made the job of policy making to one government but accountability was that of the succeeding government and so no one could be held responsible.

The Three year Agenda gives the current government opportunity to make changes if the Agenda fails to meet expectations. The Seven and 15 year strategies give time to adapt to changing times and aligning policies accordingly.

Separation of Planning from Finance should be another reform undertaken. This shall bring current practices in line with global best practices. The functions of the treasury have no relations with those of broader development issues. Parliament had no time to deliberate or get involved into monitoring and debating the progress of the 11th and 12th Five year plans. This was due to the Parliamentary committees of Finance looking into issues related to government spending and not on the progress of the development plans.

Keeping a separate Parliamentary committee on planning shall ensure that the same fate is not seen with the NITI Aayogs plans too.

NITI Aayog's mandate also includes constitution of state level boards to deliberate on the development issues faced by the states. This provision should be used to create sub-NITI's so that even at state level development plans are in sync with the Central three year Agenda.

Draft National Urban Rental Housing Policy - 2017

The National Housing policy has remained blind to needs of those who can't afford to buy houses irrespective of the subsidy offered to them. The Draft policy shall overcome some of this lacunae.

It aims to address the problems of the migrants who comprise 35% of urban population. This migration had created proliferation of slums. The draft also recognises the drawbacks of the other housing related policies as being focused on home ownership and thus not creating any incentives for growth of rental market on a pan India basis.

Problems of the policy:

  1. Min of Housing and Urban Poverty alleviation which has framed the policy states that the role of the Center is of a facilitator and enabler. It merely extends help through fiscal and non fiscal incentives.
  2. It classifies housing under social rental housing for the poor and market rental housing for hostels for working persons, students, public and private sector employees.
  3. The policy refuses to address homelessness and considers it a livelihood issue. Therefore schemes for construction of shelters come under National Urban livelihoods mission.
  4. The draft also says that housing is a state subject and so Center cant take any fiscal responsibility. But states have no uniform policies and the revenue collected for rental housing are under-utilised.
  5. There are no supply side measures to increase the number of rental housing units and this has been left entirely to the market. On demand side issues, a scheme to offset the cost of high rent is being made by giving cash vouchers to the needy. But such measure is inadequate.

Defence Acquisition Council - Strategic Partnership model

Under the strategic partnership model, private defence industries of India would have received an opportunity to get long term contracts for manufacturing defence platforms like tanks, aircrafts, helicopters etc. The investment cost is huge and would have been recovered by allowing for guaranteed contracts for purchase from the government.

DAC is the top defence procurement related policy making body of India and it has cleared this policy.

Such a step shall bring more investments into defence, aerospace sectors from Indian private companies and MSMEs.

Citizenship to Chakma and Hajong refugees

The center and Arunachal government may soon grant citizenships to Chakma and hajong communities. These had entered India from East Pakistan to escape religious persecution. The refugees belong to the Buddhist and Hindu communities and their citizenship has been a polarising issue in Arunachal Pradesh. The demand is opposed as there are fears that they may outnumber the local population and may change electoral outcomes.

However India has always welcomed immigrants arising out of social, political strife in its neighbours and this issue should not be seen through a religious lens and all moves to mitigate the tensions should be made. The present government has tried to make amendments in the Citizenship Act to project the country as a destination for persecuted Hindus such religious discrimination may complicate matters.

One Belt One Road and India

China in an attempt to utilize its excess capacity in steel, power and infrastructure sector wants this multilateral initiative to succeed. The projects under this have terms like taking loans from China, use of Chinese technology and labor from China. Also the projects are between China and the host country and not with each other. So if there is a road link passing through Afghanistan and Pakistan then the project is between China and Pakistan and China and Afghanistan but not between China , Pakistan and Afghanistan together. All this creates a hegemony of China in the project. India has remained aloof from this due to concerns over the China Pakistan Economic Corridor passing through PoK, it can decide to have projects with China on a case to case basis if they are mutually beneficial.

Asia Africa Growth Corridor - 52nd African development Bank meeting in Gandhinagar

PM Modi has indicated a plan to build an Asia Africa Growth Corridor via sea to counter Chinese presence in that region and also to develop trade ties between Asia and Africa. Japanese assistance has been sought in this regard to counter China’s One Belt One Road initiative. The plan aims to open old trade routes that shall connect ports in Asia to African cities like Jamnagar to Djibouti, Kolkata to Sittwe (Myanmar), Madurai to Mombasa and Zanzibar etc. Japanese participation shall be for building quality infrastructure and Indian expertise at working in Africa shall be used. The Indian private sector shall participate by aiding in formation of joint ventures or consortiums to take up agribusiness, infrastructure projects in Africa.

The aim is to promote industrial corridors in Asia and Africa, integrate the economies and emerge as regional economic bloc. This initiative is brought up by consultation and is profitable and bankable unlike the “Government Funded OBOR”.

Solid waste Management Plan - Draft 3 Year Action Plan (NITI Aayog)

The plan recommends that incineration plants should be set up in large cities for disposal of solid waste that is generated. The biogas plants aren’t the right alternative for such cities as they generate byproducts whose disposal can’t be done in such cities. However for unsegregated waste. The incineration plants produce toxic fumes that are released in the air. In India the waste generated has high moisture content and low calorific value and so isn’t suitable for such plants.

The biomethanification plants don’t release waste products but produce biogas which can’t be used for lighting and also liquid fertilizer which can be an alternative to chemical fertilizers. NISARGRUNA technology developed at BARC, Mumbai can be used here. Such a model has been in practice at many cities and has got good results. The segregation of dry and wet wastes at household levels has to be done and wet waste delivered to such plants. These plants can be located inside cities and thus save cost of transporting wastes to far locations. Transportation of waste alone cost 20-30% of the budget of waste management.

SAMPADA - Supplement Agriculture Modernize Processing and decrease Agri-waste.

Aim is to boost processing of marine and agriculture produce. The scheme has potential to increase investment and improve food processing. It shall create lakhs of direct and indirect jobs in the sector.

National Steel Policy - 2017 (Salient features)

  1. Achieve steel making capacity of 300 million tons by 2030 with an additional investment

  2. Government procurement shall make use of domestic steel products

  3. Boost domestic steel production and create a technologically advanced and globally competitive steel industry.

  4. Increase per capita finished steel consumption to 158 kg by 2030-2031 from the current 61 kg.

  5. Domestically meeting the demand of automotive steel, electrical steel, special steel alloys for strategic applications. Make available washed coking coal and reduce dependence on imports to 65% by 2030-2031

  6. Encourage energy efficient technologies in the steel sector manufacturing so that energy intensity is reduced and production process is more efficient.

India and Turkey Relations

India and Turkey should begin trade and economic ties with each other. Turkey has historically been closer to Pakistan. It is a member of the NATO as well as Baghdad Pact - A regional military alliance established by UK. It is therefore inevitable that it wants to placate Pakistan as it establishes ties with India. India should however continue to engage it in its Middle east policy and convince Turkey to become a bigger trade and economic partner. Turkey has a poor humanitarian record and is under scrutiny from international agencies for human rights violations of the Kurds as well as the Coup plotters.

India and Sunni NATO

US President wants a regional military alliance in the Middle East to counter the Islamic state. This has been dubbed as the Sunni NATO by onlookers. The US President now wants to combine the Arab world against the Islamic state through this alliance and at the same time reduce tensions between Israel and Arab World. Israel too shall be made a partner in this alliance.

There are concerns that such an alliance may be an attempt to counter the growing Iranian influence in the region. Due to the fall in oil prices and the subsequent cuts in production made by the OPEC, Irans influence is growing. It is assertively supporting Shia President Assad's Syrian regime with Russia. This brings it into confrontation against the Sunni Islamic state and the Sunni rebel groups fighting for freedom. The Sunni rebels have Saudi - US backing. Iran is now a regional power equivalent to Saudi Arabia in the Middle East due to the Oil diplomacy. It might due to Saudi Arabia's fears that such an alliance is being proposed.

India fears that such an alliance might put it at a disadvantage against Pakistan as the Sunni military alliance might make it a frontline state to fight Islamic state. This might reduce the pressure on Pakistan to eliminate Anti India terrorist groups operating from its soil.

Anna Vitaran Portal

National informatics centers portal for Public distribution system has enabled the provisions included in National Food security Act, 2013 to be implemented. The provisions relate to full computerisation of target PDS information in public domain, Aadhar seeding to remove bogus and duplicate beneficiaries.

Defence ministry unveils Strategic Partnership model

The aim is to reduce dependence on imports and gradually boost manufacturing in India to meet the needs of the armed forces. The original model proposed selecting a strategic partner for a particular defense platform [helicopters, tanks, submarines] and guaranteeing orders to it for 20 years. This would provide the manufacturer adequate guarantees to invest heavily in infrastructure.

The new model does away with this tieup but gives weightage to the strategic partner who shall build a consortium with Original Equipment Manufacturer but create a ecosystem for indeginous development of the platform.

Aizawl FC beats Mohun Bagan to win maiden I-League in 2017. They are the first team from Northeast to win the tournament.

NITI Aayog conducts “Samavesh” meeting. In this 32 premier education and policy research institutions come together to deliberate on strategies for inclusive development of the country.

Gursharan prasad Talwar regarded as “Father of Indian Immunology” and the Founder director of the National Institutes of Immunology was instrumental in making the vaccine for leprosy.

International Court of Justice (Hague) Verdict (Salient features)

International Court of Justice (Hague) , A principal organ of the U.N. stayed the execution of Kulbhushan jadhav. I.C.J. verdict is binding but it has no power to enforce it. However if a country refuses to accept the verdict it can risk international criticism. India Pakistan have a bilateral convention that grants them permission to deny consular access to prisoners on grounds of security.

This goes against the Vienna convention and so the I.C.J. verdict is significant. It reiterates the supremacy of the Vienna convention over the I.C.J. India and Pakistan are both parties to the convention that gives the I.C.J. right to adjudicate differences in its interpretation.

July 15 is the National Skills Day.

ISBN Codes and India

ISBN is a unique 13 digit code issued to books so that distributors, retailers, publishers can keep track of sales. It was created to uniquely identify each property. In India the H.R.D. Ministry has the role delegated to it from the ISBN International Agency. Complaints have been made to the Agency that the H.R.D. Ministry takes a long process and has introduced censorship in the process as the government asks for synopsis of the contents from the authors for issuing ISBN numbers. This could lead to H.R.D. Ministry losing its responsibility of issuing ISBN.

Country’s longest bridge inaugurated in Assam is 9.15 km long connecting Dhola to sadiya in Assam.

Taiwan becomes the first country in Asia to allow same sex marriages.

Agriculture Income Tax

Agriculture income is defined as the rent or revenue derived from land or income derived from agriculture and buildings on that land. Such income is exempted from calculations of income tax. States have their own legislations on Agriculture incomes and taxations. These multiple legislations mean that the agriculture income is being misused to avoid taxation. The Kelkar committee has also argued in this favor saying that taxing agricultural income above a threshold can increase tax base and reduce tax evasion. This might even lead to lowering of tax rates.

Alternatively Agriculture if declared a business can lead to deduction on all inputs needed for running the business like electricity cost, water cost, capital equipment etc. The farmers can also get benefit of depreciation on buildings and equipments. The threshold at current levels is enough to exclude 95% of the farmers from taxation and so the major outcry is from rich farmers, agriculture companies and actors / politicians claiming to be farmers to enjoy tax benefits.

Fiscal Year - January to December

The chief argument in moving the fiscal year to Jan - Dec cycle is that the current fiscal year doesn't allow for policy makers to take into account the Monsoon situation. The Rabi crop is due for selling and only agricultural operations left are harvesting and cutting. The Kharif crop which accounts for 60% of the production is already assessed by that time as it is harvested in early December.

A Jan - Dec financial year shall make it difficult for assessing the Rabi crop data. A better assessment year is from June to July as it is better for assessment of both Rabi and Kharif crops. However whether such a shift in financial year is necessary when the contribution to economy by agriculture is reducing needs to be studied. Such a transition shall affect Corporates as well as data collection by the government. ASSOCHAM , the umbrella body has argued that making this shift shall lead to a change in accounting practices, book keeping, taxation systems and human resource practices. All such measures shall cost hundreds of crores to the industry.

Rights to Persons with Disabilities Act - Problems

The Dept of Empowerment of Persons with Disabilities in charge of implementation of the Act has framed rules that are against the spirit of the Act. Only a single rule is framed for Education and no rules are framed for “Social security, health, rehabilitation and recreation”. The department also wants to frame a policy now but this should have been done before the Act was passed and not later.

The Act has a controversial clause that states “No person with disabilities can be excluded unless the purpose serves a legitimate aim”. This might be misused to give power to authorities to make many exemptions. The rules have no protection against such misuse. The burden of proving that the aim was legitimate or not rests with the person affected and not the authority.

National commission for minorities

National commission for minorities has a Chairman, Vice chairman and 7 members atleast 5 of whom should be from minorities like Muslims, buddhists, jains, christians, sikhs and parsis. It is a statutory body. It has no powers like a civil court to examine complaints also it has less power than a constitutional body like SC,ST commission or other statutory bodies like NC of Human rights.

Its recommendations are non binding. The proposal to give this body a constitutional status was delayed due to the difference in opinion about what constitutes a ‘minorities’. The Supreme court ruled that religious minorities in states can also be minorities. So Hindus in J&K, North eastern states became a minority. However the original definition wanted minorities to be defined in terms of population at all India level and on basis of religion.


  1. To evaluate progress of development of minorities under the center and state

  2. Monitor working of safeguards provided under center and state laws and constitution.

  3. To advise on effective implementation of these safeguards.

  4. To suggest welfare measures to state and center regarding minorities.

  5. To examine complaints regarding deprivation of rights of minorities.

  6. To examine any other matter referred to it by the center regarding minority welfare.

Agrarian reforms

Leasing of agricultural lands is currently highly regulated and needs to be freed up so that a farmer can lease to anyone. The diversion of land for non agricultural uses can be prevented in an land leasing contract. The restrictions of ceiling on land leased also should not exist as they can restrict economies of scale. The farmers have uneconomical , fragmented land holding can benefit from this schemes. The centers draft land leasing model law doesn’t have the vision to implement such a drastic reform. In the short term eco sensitive zones and tribal land holdings can be restricted from this Act. Governments can have agencies that act as intermediaries and create leased land banks so that interests of both small farmers and industries are protected.

Foreign investment promotion board

Foreign investment promotion board that cleared FDI proposals upto the threshold of Rs. 5000 crore shall be abolished. It was an inter ministerial body headed by the Secretary for Economic Affairs. The body caused delays in approving proposals as multiple consultations were made with different ministries. Under the new policy only the concerned ministry shall approve the proposal expediting work. Rs. 5000 crore and above proposals shall be approved by Cabinet committee on economic affairs. 90% of the FDI was through the automatic route and so the need for the FIPB was reducing.

New Urban Agenda

The Governing council of the UN Habitat has proposed this for building a sustainable urban infrastructure. Sustainable development is important as urbanisation is growing at a rapid pace and thus creating health and other risks. GC has 58 members elected for 4 year term by the Economic and Social Council (ECOSOC).

UN Habitat is a global advocacy group that is mandated to provide operational support to institutions and governments to meet challenges of urbanisation. It helps in identifying and making policies to regulate urbanisation by making it gender responsive, equitable and socially inclusive. Habitat III conference in Ecuador adopted the “New Urban Agenda”.

National Tiger Conservation Authority

Replace the National Tiger Conservation Authority with National Wildlife Conservation Authority as the current body doesn’t have the mandate to consider and act upon issues that effect wildlife in a holistic manner. It focuses only on conservation of Tigers but for this many factors need to be taken into consideration like conservation of habitat and herbivores which in turn affect carnivore population. To augment the mandate of NTCA an amendment to the Wildlife Protection Act shall be needed.

Rules to regulate Cattle trade

With a view to regulate the cattle trade ie. buying and selling of cows, buffaloes, bullocks in India, the Government has sought to create rules under the Prevention of cruelty to animals Act, 1960.

Under this the cattle at the animal markets cannot be sold to slaughter houses but have to be sold only for buyers who can use them for agricultural practices. This move can affect the slaughter house industry that exports $4 billion in buffalo meat and supplies leather to the shoe industry that exports $5 billion.

The slaughter houses can now no longer participate in transactions of cattle at these animal markets throughout India, even in states where cattle slaughter is not banned.

The rules also now want an Animal Market Committee to ensure and maintain the animal markets. The markets are now required to have certain minimum standards of hygiene and other facilities.

The decision on framing of rules has invoked protests from certain states. Also industry representatives of Tannery, Leather, Abattoirs and Meat and dairy products have not been consulted in this process.

Dachigam reserve in J&K is the only habitat for the Kashmiri stag or Hangul. It is the State animal of J&K.

Protests against GM Mustard

GM mustard is being examined for allowing its use in India. The plant has the Barstar-Barnase gene from a soil bacteria and makes it have a higher yield than normal mustard. The field trials haven't revealed any sign of toxicity.

GM crops have to be approved by Genetic Engineering Approval Committee (GEAC) under the Ministry of Environment before the field trials can begin. India already uses GM rapeseed/canola oil and GM soybean oil for consumption. It produces GM Cottonseed oil in large amounts [13 lakh tons] second only to mustard oil which is at 19 lakh tons.

The opposition to GM crops is due to the seeds being protected by patents belonging to foreign multi nationals like Bayer, Monsanto etc. This shall make us dependent on foreign imports.

Mother of Indian Revolution - Madame Cama

Village of Books developed in Bhilar district of Solapur.

Madhya Pradesh

Madhya Pradesh government shall become the first to shift its financial year to January to December. It also was the first state to set up a fully functional housing regulator under Real Estate Regulation Act. The state cabinet had also decided to make River Narmada a living entity.

National Film Awards

K Vishwanath won the Dadasaheb Phalke Award, The highest honor of Indian cinema which includes a Gold Lotus, Shawl, Cash prize and a citation.

Darwaza Band is the new campaign against open defecation launched in Maharashtra as a part of Swachh Bharat Mission