Detailed News Articles: 4 July 2019
July 4, 2019Shiksha IAS Academy
1. 27% of children with disabilities have never been to school: UNESCO
Commissioned by the UNESCO, the Tata Institute of Social Sciences has prepared the report titled State of the Education Report for India 2019: Children with Disabilities.
Findings of the report:
• Nearly three-fourths of five-year-old children and one-fourths of kids aged between 5 and 19 with disabilities in India are out of school.
• Analysis of the current situation indicated that an estimated 7.8 million children aged under 19 lived with disabilities in India.
• Only 61 per cent of CWDs aged between 5 and 19 were attending an educational institution compared to the overall figure of 71 per cent when all children are considered. About 12% had dropped out, while 27% had never been to school at all.
• The number of children enrolled in school drops significantly with each successive level of schooling and that there are fewer girls with disabilities in schools than boys.
• Large number of children with disabilities do not go to regular schools but are enrolled at the National Institute of Open Schooling (NIOS).
• National estimates of the proportion of the population with disabilities is much lower than international estimates leading to questions about the disability measures used In the census.
• The report talks in detail about challenges such as inadequate allocations, delays in releasing funds and under-utilisation of allocation.
• Inclusive education (IE), wherein children with disabilities go to mainstream schools rather than special schools, under the Centre’s Sarva Shiksha Abhiyan (SSA) continues to remain a distant dream.
• The report, called for policy interventions to improve the situation.
• The vision of an inclusive and non-discriminatory education system for children with disabilities has to explicitly state the need for focusing on the education of girls with disabilities.
• The attitude of parents and teachers towards including CWDs into mainstream education is also crucial to accomplish the goal of inclusive education besides accessibility to physical infrastructure, processes in the school, assistive and ICT technology and devices being essential resources.
• The Right to Education Act mandates enrolment, but not the provision of resources needed for the actual education of a child with disabilities. The report recommended amending the Right To Education (RTE) Act to better align with the Right of Persons with Disabilities (RPWD) Act by including specific concerns of education of such children.
• Further measures are needed to ensure quality education for every child to achieve the goals and targets of agenda 2030 and more specifically Sustainable Development Goal 4 (Quality Education).
2. PMLA and IBC do not overlap
The National Company Law Appellate Tribunal (NCLAT) has said that the Prevention of Money Laundering Act (PMLA), 2002 gets invoked simultaneously with the Insolvency and Bankruptcy Code and that neither of the laws has an overriding effect over the other.
Prevention of Money Laundering Act:
• The Prevention of Money Laundering Act of 2002 provides for the prevention of money laundering and the confiscation of property earned by engaging in money laundering.
• This act makes it obligatory for banks and other financial institutions including intermediaries to verify the identity of their customers, and maintain records and supply information as prescribed to the Financial Intelligence Unit – India.
• The Prevention of Money Laundering Act was amended in 2005, 2009 and 2012.
• Further amendments have been made through the Finance Act 2018 which have widened the scope of the act and augmented its effectiveness.
Insolvency and Bankruptcy Code:
• The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy.
• This was enacted for reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of the value of assets of such persons.
• The observation was made in a case relating to Rotomac Global Private Limited.
• Bank of Baroda had initiated insolvency proceedings against Rotomac and since the resolution process did not attract any viable and feasible resolution plan, National Company Law Tribunal, Allahabad had ordered liquidation.
• Meanwhile, the Directorate of Enforcement had launched an investigation against the company and its directors on the basis of inputs from the Central Bureau of Investigation (CBI) and found that the accused had misappropriated/diverted bank funds, committed criminal breach of trust and laundered the money so diverted.
• The agency also made provisional attachments of the properties lying in the name of the company and its directors.
• The Liquidator for Rotomac, had sought the release of assets attached by the Directorate of Enforcement, which was rejected by NCLT, Allahabad.
• Against this, the liquidator moved the NCLAT.
• The NCLAT, citing the provisions of the PMLA, said it relates to ‘proceeds of crime’ and the offence relates to ‘money-laundering,’ resulting in the confiscation of property derived from, or involved in, money-laundering.
• It made it clear that, therefore, as the ‘Prevention of Money Laundering Act, 2002’ or provisions therein relates to ‘proceeds of crime,’ it is held that Section 14 of the Insolvency and Bankruptcy Code (IBC) is not applicable to such proceeding.
• Section 14 of the Insolvency and Bankruptcy Code, 2016 prohibits any proceeding or judgment or decree of money claim against the corporate debtor after the order of moratorium which is passed on the insolvency commencement date.
3. Budget 2019 needs to give the economy a much needed stimulus
• Experts have opined that there are certain alarm bells which have been set ringing across the financial system.
• These include:
• Faltering GDP growth,
• A consumption slowdown,
• A truant monsoon that has already hit kharif sowing,
• Global trade tensions and
• A freeze in the credit market
• As a matter of fact, these above factors form the backdrop to the maiden Budget of the Finance Minister, Nirmala Sitharaman.
Case of finding a balance in the Union Budget:
• It is important to note that the Minister has had less than a month to work on this crucial Budget which is expected to work its magic on the economy.
• The Finance Minister has to push for growth, which means stimulus measures, but also stay fiscally responsible, which means sticking to the fiscal deficit glide path.
• This balance is almost impossible to achieve in an environment where tax revenues do not offer enough support for a stimulus package.
• The questions before Ms. Sitharaman are simple: Should she opt to stimulate consumption in the economy even if it means putting the fiscal deficit glide path in temporary cold storage? If yes, what is the best way to do that?
• Following from the above are subsidiary questions such as these:
1. Will the resultant higher borrowings crowd out the private sector borrowers and push up market interest rates at a time when the monetary authority is driving rates down?
2. What will be the impact on inflation?
3. Should the stimulus be in the form of cutting taxes and putting more money in the hands of the consumer? Or should it be in the form of even higher spending on infrastructure that will have definite fiscal spin-offs?
4. And what about welfare spending? The government has already announced an expansion of the Pradhan Mantri Kisan Samman Nidhi Yojana that will take away ₹87,500 crore this fiscal. And there are many other pet schemes of this government that need to be funded.
Taking a Look at Ground realities:
• It is important to note that GDP growth fell to 5.8% in the fourth quarter of 2018-19, with important industry segments reporting a fall in growth.
• Sale of automobiles, which is the bellwether for the larger economy, has been sliding since October 2018. Moreover, in the first quarter of the current fiscal, sales volumes are down by about 18%.
• Next, fast moving consumer goods, two-wheeler and consumer durables manufacturers are all reporting dull rural sales.
• Further, real estate and construction, which is one of the biggest job creators in the economy, have been numb for several months and are a direct cause of the credit freeze in the markets now.
• It is clear that the bottom has fallen off consumption demand, something reflected in the annual results of a host of companies in the consumer sector.
• Given these important factors, there is little doubt that the economy needs a stimulus.
• The downside to the government embarking on this path is clear.
• Direct tax revenue growth failed to meet budgeted levels in 2018-19, falling short by ₹82,000 crore from the target of ₹12 lakh crore.
• As a matter of fact, Goods and Services tax collections, though rising, are still not stabilising at the required level of between ₹1,00,000 and ₹1,10,000 crore a month.
• Experts opine that it will be next to impossible for the government to meet its over-ambitious tax estimates in the interim Budget for 2019-20.
• What compounds matters is the fact that there are bills to pay from the year 2018 to the Food Corporation of India and a couple of other public sector undertakings which helped the government ‘achieve’ the fiscal deficit target the same year.
Weighing the different options available:
• There are a few options that the government can consider for off-balance sheet financing.
• The first one would be taking up the idea on asset sales.
• The interim Budget had earmarked ₹90,000 crore from disinvestment.
• Experts opine that if the government is able to successfully pull off the Air India sale, it would be almost half-way there. There are a host of other government companies that can be sold off to raise the targeted proceeds.
• Second, a one-time transfer from the Reserve Bank of India’s reserves, which is under the consideration of the Bimal Jalan Committee.
• However, if reports of the committee’s deliberations are to be believed, it may be futile for the government to hope for a major windfall here. The committee will anyway submit its report well after the Budget is presented.
• Third, 5G spectrum auctions. While there is reason to hope for some support here, it is unlikely that it would materialise this fiscal. It is important to note that the telecom companies are still licking their wounds from the combined effect of past excesses and bruising competition in the market. Their appetite, as it is, is poor for any more spectrum. So pushing through a 5G auction now would be disastrous.
• That leaves us with just one option — that of increasing borrowings which will, of course, mean curtains for the fiscal deficit target of 3.4% this fiscal. As a matter of fact, higher government borrowings may elbow the private sector borrowers out.
Consequences of Increased borrowings by the Government:
• Increased borrowings by the government will have the unintended negative consequence of pushing up market rates which is something that the government would not desire.
• And then, of course, there will be questions to answer from Standard & Poors and Moody’s which are certain to take a dim view of the fiscal indiscretion.
A Ray of Hope: An Initiative from SEBI
• There is some good news too. Thanks to the recent directive of the stock market regulator, the Securities and Exchange Board of India directing mutual funds to put away 20% of their liquid scheme investments in government securities, a new market opens up for the government.
• Whether it is deep enough to absorb the increased borrowings is a matter of detail but it can certainly cushion the market to some extent.
• Second, yields on government securities are at around 6.82% currently. So even a 10 or 20 basis point rise due to higher borrowings may not cause much dissonance.
• The market is aware of the difficult circumstances now and should be able to take this in its stride.
• As for the ratings agencies, the government needs to be in dialogue with them, reiterate its commitment to fiscal discipline and reassure them that this is a temporary aberration.
Looking at Stimulus:
• Sitharaman would also need to identify the best way to impart stimulus.
• There are two choices: a) either to cut taxes and let consumers to go out and spend the excess, or
b) just borrow and spend on asset creation in infrastructure.
• Experts opine that given that there is a serious slowdown in consumer-facing sectors, the better option may be to put more money in the hands of consumers.
• A good option to consider would be adjusting income tax slabs and increasing deductions under Section 80C which is a measly ₹2 lakh now.
• Better still would be to increase the interest deduction for housing loans which would also give a boost to the real estate market.
• These measures would run counter to the reform objective of easing out all exemptions and lowering rates. But then that is under examination by the Direct Tax Code (DTC) panel; the concessions given now will automatically become a temporary measure assuming that the DTC is soon implemented.
• The fall in tax revenues from the concessions will be eventually made up downstream from indirect taxes if consumers spend the extra money in their hands.
The choice to borrow and spend is indeed a difficult one but in the current circumstances this may be inevitable. Fiscal conservatives are bound to frown at this and there would be dire warnings of the consequences of not adhering to the fiscal deficit commitment.
4. A scheme for farmers that has not reached most farmers
• The Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), which is a cash transfer programme, has a long way to go in terms of both its implementation and scope of coverage. Even as the cropping season is under way, the scheme’s support has not reached farmers in most of the country’s regions.
• Launched by the Centre at the end of its previous tenure and made effective retrospectively from December 1, 2018, experts opine that the measure is a necessary state response to assuage agrarian unrest.
• As a matter of fact, the scheme’s original objective, to “supplement financial needs” of the country’s Small and Marginal Farmers (SMFs) and to “augment” farm incomes, has now been broadened to include all categories of agricultural landowners.
• This expansion, it is believed would benefit an additional 10% of rural landed households.
• It is important to note that PM-Kisan offers ₹6,000 a year per household in three instalments. Broadly speaking, this amounts to only about a tenth of the production cost per hectare or consumption expenditure for a poor household.
• Hence, though what the programme offers is meagre, it promises some relief to poor farmers by partially supplementing their input costs or consumption needs.
Not linked to land size:
• The cash transfer is not linked to the size of the farmer’s land, unlike Telangana’s Rythu Bandhu scheme, under which farmers receive ₹8,000 per annum for every acre owned.
• It is important to note that while landless tenants have been left out in both the schemes, the link with land size makes the support provided by the Telangana scheme more substantial.
• PM-Kisan also falls short of Odisha’s Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme, which includes even poor rural households that do not own land.
• Experts opine that though the first quarterly instalment, for the December 2018-March 2019 period, was to be provided in the last financial year (2018-2019), the benefits of PM-Kisan have not reached farmers in most parts of the country. Next, with kharif cultivation activity under way already, the scheme’s potential to deliver is contingent on its immediate implementation.
• There are 125 million farming households owning small and marginal holdings of land in the country, who constitute the scheme’s original intended beneficiaries. However, at present, the list of beneficiaries includes only 32% (40.27 million) of these households.
• Further, a majority of the intended beneficiary households are yet to receive even their first instalment of ₹2,000.
• Only 27% (33.99 million) received the first instalment, and only 24% (29.76 million) received the second.
• In budgetary terms, only 17% of the estimated ₹75,000 crore expenditure has been spent. Moreover, implementation in certain States has been prioritised. U.P., for instance, accounts for one-third of total beneficiary households — 33% (11.16 million) in the first instalment and 36% (10.84 million) in the second.
• About half of the State’s SMF households have been covered. Only two other States — Gujarat and Andhra Pradesh — have gained a prominent share. A total of 17 States have received a negligible share of the first instalment, accounting for less than 9%.
Taking Stock of the larger structural issues:
• Experts have opined that for the scheme to be effective, PM-Kisan needs to be uniformly implemented across regions. However, one needs to be mindful that it is not a fix for larger structural issues.
• Cash transfers will cease to be effective if the state withdraws from its other long-term budgetary commitments in agricultural markets and areas of infrastructure such as irrigation.
• It is important to note that subsidies for inputs, extension services, and procurement assurances provide a semblance of stability to agricultural production.
• Food security through the National Food Security Act is also closely linked to government interventions in grain markets.
• If the budgetary allocations shift decisively in favour of cash transfers, they will be a cause for great concern. Further, the scheme recognises only landowners as farmers. Tenants, who constitute 13.7% of farm households and incur the additional input cost of land rent, don’t stand to gain anything if no part of the cultivated land is owned. Hence, there is a strong case to include landless tenants and other poor families.
• Moreover, though the scheme is conceptualised to supplement agricultural inputs, it ceases to be so without the necessary link with scale of production (farm size) built into it.
• It becomes, in effect, an income supplement to landowning households. If income support is indeed the objective, the most deserving need to be given precedence.
5. Power play: on Karnataka political crisis
What is the anti-defection law?
• ‘Aaya Ram Gaya Ram’ was a phrase that became popular in Indian politics after a Haryana MLA Gaya Lal changed his party thrice within the same day in 1967.
• The anti-defection law sought to prevent such political defections which may be due to reward of office or other similar considerations.
• The Tenth Schedule was inserted in the Constitution in 1985.
• It lays down the process by which legislators may be disqualified on grounds of defection by the Presiding Officer of a legislature based on a petition by any other member of the House.
• A legislator is deemed to have defected if he either voluntarily gives up the membership of his party or disobeys the directives of the party leadership on a vote. This implies that a legislator defying (abstaining or voting against) the party whip on any issue can lose his membership of the House. The law applies to both Parliament and state assemblies.
Are there exceptions under the law?
• Yes, legislators may change their party without the risk of disqualification in certain circumstances.
• The law allows a party to merge with or into another party provided that at least two-thirds of its legislators are in favour of the merger.
• In such a scenario, neither the members who decide to merge, nor the ones who stay with the original party will face disqualification.
• Various expert committees have recommended that rather than the Presiding Officer, the decision to disqualify a member should be made by the President (in case of MPs) or the Governor (in case of MLAs) on the advice of the Election Commission.
• This would be similar to the process followed for disqualification in case the person holds an office of profit (i.e. the person holds an office under the central or state government which carries a remuneration, and has not been excluded in a list made by the legislature).
How has the law been interpreted by the Courts while deciding on related matters?
• The Supreme Court has interpreted different provisions of the law.
• The phrase ‘Voluntarily gives up his membership’ has a wider connotation than resignation
• The law provides for a member to be disqualified if he ‘voluntarily gives up his membership’. However, the Supreme Court has interpreted that in the absence of a formal resignation by the member, the giving up of membership can be inferred by his conduct.
• In other judgments, members who have publicly expressed opposition to their party or support for another party were deemed to have resigned.
Is the decision of the Presiding Officer subject to judicial review?
• The law initially stated that the decision of the Presiding Officer is not subject to judicial review. This condition was struck down by the Supreme Court in 1992, thereby allowing appeals against the Presiding Officer’s decision in the High Court and Supreme Court.
• However, it held that there may not be any judicial intervention until the Presiding Officer gives his order.
• An important example to cite in this regard is from the year 2015, when the Hyderabad High Court, refused to intervene after hearing a petition which alleged that there had been delay by the Telangana Assembly Speaker in acting against a member under the anti-defection law.
Is there a time limit within which the Presiding Officer has to decide?
• The law does not specify a time-period for the Presiding Officer to decide on a disqualification plea. Given that courts can intervene only after the Presiding Officer has decided on the matter, the petitioner seeking disqualification has no option but to wait for this decision to be made.
• There have been several cases where the Courts have expressed concern about the unnecessary delay in deciding such petitions.
• In some cases this delay in decision making has resulted in members, who have defected from their parties, continuing to be members of the House.
• There have also been instances where opposition members have been appointed ministers in the government while still retaining the membership of their original parties in the legislature.
Does the anti-defection law affect the ability of legislators to make decisions?
• The anti-defection law seeks to provide a stable government by ensuring the legislators do not switch sides. However, this law also restricts a legislator from voting in line with his conscience, judgement and interests of his electorate.
• Such a situation impedes the oversight function of the legislature over the government, by ensuring that members vote based on the decisions taken by the party leadership, and not what their constituents would like them to vote for.
• Political parties issue a direction to MPs on how to vote on most issues, irrespective of the nature of the issue.
• Importantly, several experts have suggested that the law should be valid only for those votes that determine the stability of the government (passage of the annual budget or no-confidence motions).
6. Mumbai marooned
• Urban flooding has acquired extraordinary dimensions in our times and poses a great challenge to urban planners the world over.
• The frequency of urban floods has increased with not a year passing without some city or the other getting inundated.
• The recent floods of Chennai in December 2015, the Kashmir Floods in 2014, the Surat Floods in 2006 and the Mumbai Floods in 2005 reflect the escalating vulnerability of our Cities to Mega flood situations.
• To mitigate the threat of urban floods to our Growing Cities, the NDMA had formulated the National Guidelines on ‘Management of Urban Flooding’ in 2010 which details the various mitigative and preparatory actions that would enhance the risk resilience quotient of our cities for such a disaster.
• As a part of its mandate, the National Disaster Management Authority (NDMA) has been making efforts to prepare guidelines for the management of different disasters and some cross-cutting themes.
• Even though urban flooding has been experienced over decades in India but sufficient attention was not given to plan specific efforts to deal with it.
• In the past, any strategy on flood disaster management largely focused on riverine floods affecting large extents of rural areas. Mumbai floods of July 2005 turned out to be an eye-opener.
• Realizing that the causes of urban flooding are different and so also are the strategies to deal with them, NDMA decided to address urban flooding as a separate disaster, delinking it from floods.
• It is important to note that urban areas are centres of economic activities with vital infrastructure which needs to be protected 24×7.
• In most of the cities, damage to vital infrastructure has a bearing not only locally but could even have global implications.
• They are also densely populated and people living in vulnerable areas, both rich and poor, suffer due to flooding.
• It has sometimes resulted in loss of life, damage to property and disruptions in transport and power, bringing life to a grinding halt, causing untold misery and hardships.
• Even the secondary effects of possible epidemics and exposure to infection takes further toll in terms of loss of livelihood, human suffering, and, in extreme cases, loss of life.
• Therefore, management of urban flooding has to be accorded top priority.
Factors Contributing to Flooding:
1. Meteorological Factors:
• Cyclonic storms
• Small-scale storms
• Snowfall and snowmelt
2. Hydrological Factors:
• Soil moisture level
• Groundwater level prior to
• Natural surface infiltration rate
• Presence of impervious cover
• Channel cross-sectional shape and roughness
• Presence or absence of over bank flow, channel network
• Synchronization of runoffs from various parts of watershed
• High tide impeding drainage
3. Human Factors:
• Land use changes (e.g. surface sealing due to urbanization, deforestation) increase runoff and sedimentation
• Occupation of the flood plain and thereby obstructing flows
• Inefficiency or non-maintenance of infrastructure
• Too efficient drainage of upstream areas increases flood peaks
• Climate change effects, magnitude and frequency of precipitation and
• Urban micro-climate may enforce precipitation events
• Sudden release of water from dams located upstream of cities/towns
• Failure to release water from dams resulting in backwater effect
• Indiscriminate disposal of solid waste
Looking at Flooding in Cities:
• Cities may be situated on the coasts, river banks, near downstream/ upstream of dams, inland or in hilly areas. There are several cities which may fall under more than one of these categories.
• Rainfall occurs in different seasons on differently located cities in India.
• Local rainfall finds its way into streams/ nallahs and finally joins a river or the sea through local drains in coastal areas.
• Geographically, the cities/towns may be categorized as per the following scenarios:
1. Coastal Cities:
• Coastal cities/towns, which are located on the coastline, experience flooding due to localized rainfall, storm surges caused by cyclones. They also get affected by high tides, coinciding with localized rains.
2. Cities on Major Rivers:
• Many cities/towns are located on the banks of small and big rivers. Floods in those rivers cause inundation of the flood plains as very often urban growth has indiscriminately spread into flood plains, reducing the area into which floods can naturally overflow.
3. Cities near Dams/Reservoirs:
• There are cities/towns which are located along a river, either downstream or upstream of dams/ reservoirs. Those located downstream of reservoirs can get flooded by release of water in excess quantities.
• Sometimes cities/towns located upstream of a dam/reservoir also get affected by rising level of backwaters when release of water is sometimes withheld during the flood season.
• There have been instances when water was released suddenly without appropriate notice, causing severe loss of life and property.
4. Inland Cities:
• Cities/towns located inland can experience floods largely because of localized heavy rainfall within the watershed due to overwhelming of the stormwater drainage system capacity.
5. Cities in Hilly Areas:
• Cities/towns located in the hilly areas experience flash floods due to localized heavy rainfall which can also result in landslides.
• Recently, the city of Mumbai once again struggled to stay afloat after the first heavy spell of rain this year (2019).
• This brought back memories of the July 2005 flood.
• As a matter of fact, each massive rainfall event is making it evident that the city is putting on a brave front and projecting resilience, but the failure of the Maharashtra government to upgrade its tattered infrastructure is taking a heavy toll and weighing down on the financial capital.
• In Ratnagiri, a dam gave way creating a catastrophe; flights have been cancelled and normal life is affected.
• Critics point out that there is a lack of resolve among political leaders, rampant inefficiency and lack of integrity in the administrative machinery.
• Since Mumbai is one of the wettest metropolises in India, getting about 210 cm of rain annually, it should have been a top order priority to restore rivers and canals to manage floods.
Looking at a recent report filed by the Comptroller and Auditor General:
• In a recent report, the Comptroller and Auditor General has identified prolonged delays in the upgrading of storm water drain infrastructure in Mumbai.
• On the other hand, after the deluge of 2005, the consensus was for the flood-carrying capacity of the Mithi river in the city to be increased.
• However, the Mithi river, being choked and polluted, was again overflowing this year (2019).
The Way Forward:
• There is a need for a new urban paradigm.
• For one thing, Mumbai, Thane, Ratnagiri and Raigad have, during the last century, displayed a high seasonality index, indicating a relatively small monsoon window bringing a lot of rain.
• This is in contrast to steady, prolonged rain in the central districts in Maharashtra.
• So a new climate change-influenced normal could mean fewer days of torrential rain and erratic monsoons.
• Managing them calls for a new approach that is ecological, and makes restoration of existing urban wetlands and creation of reservoirs and water channels a high priority.
• It is important to note that the water question is the biggest challenge for Indian cities today, as both drought and flood are common.
• State governments should give it priority and address it by making urban planning people-centric. A strong framework is needed to manage water, starting with Mumbai.