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Jan 28, 2015

28 Jan 2015 News Updates

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Swift progress on smart cities

Swift follow-up on MoUs to develop Ajmer, Allahabad, and Visakhapatnam
India and the U.S. have made swift progress on their agreement to develop Ajmer, Allahabad and Visakhapatnam as smart cities by setting up task forces for each city, chosen for its significance to tourism and trade.
The decision on task forces was taken at a meeting on Tuesday between Union Urban Development Minister M. Venkaiah Naidu and visiting U.S. Secretary of Commerce Penny Pritzker.
On Sunday, India and the U.S. had signed three memoranda of understanding (MoUs) for developing the three cities.
Mr. Naidu said Ajmer and Allahabad were chosen because they were centres of religious significance and drew tourists in large numbers.
He said these mid-sized cities had the potential to develop into major hubs for religious tourism. “They need development on various fronts and can be models for the development of other cities.”
Visakhapatnam was picked because it, being a coastal city, had the potential to develop into a tourist destination.
The Minister said Andhra Pradesh (after the bifurcation) was trying to develop itself, and the government was keen to offer aid and logistical support to it.
“Through the MoU, we are trying to quicken the pace of development of Visakhapatnam with its large coast and naval significance,” Mr. Naidu said.
Each of the three task forces would formulate concrete action plans in the next three months.
Each team would have three representatives each from the Centre and respective State governments and the U.S. Trade and Development Agency (USTDA). These task forces would discuss city-specific features, requirements of the project and how to raise funds.
Ms. Pritzker described Tuesday’s meeting as a “pursuance of the directive of President Barack Obama to work on the economic dimension of strategic and commercial dialogue between him and Prime Minister Narendra Modi.” She also referred to Andhra Pradesh Chief Minister N. Chandrababu Naidu and Rajasthan Chief Minister Vasundhara Raje as ‘go getters’ and said U.S. companies would be asked to seize the opportunities in India.
Mr. Venkaiah Naidu said it was time for both sides to walk the talk by acting quickly and concretising the agreements reached. “The joint statement and the MoUs have raised high hopes about smart cities becoming a reality. President Obama’s visit to India has even furthered these expectations.”
The call on the three cities was taken in September last following Mr. Modi’s visit to the U.S. A draft concept note, prepared by the Ministry of Urban Development, had laid down some markers for the identification of smart cities to be developed in India.

Source - The Hindu

[Ed] Dealing with PDS reform

The Shanta Kumar panel’s recommendations are broadly in the right direction
The Shanta Kumar panel to rationalise the National Food Security Act, 2013, has made some sensible suggestions. The law, by placing a huge burden on the exchequer for illusory public gain, requires a sense of balance. The subsidy involved in providing 5 kg of cereals (wheat, rice, coarse grain) per capita per month to 67 per cent of the population at Rs.3/2/1, is conservatively estimated at Rs.1.3 lakh crore. The real problem with the outgo is that it does not help food producers or consumers. National Sample Survey findings tell us that only 6 per cent of farmers, essentially big landlords, sell wheat or paddy to a procurement agency, while the rest are forced to sell below the support price to recover costs as quickly as possible. If most producers are outside the ambit of the procurement network, consumers too rely on the market for more than half their grain needs. NSSO figures say the average Indian requires close to 11 kg per capita of foodgrain a month, more than what the food law sets out to provide. The suggested changes involve providing a larger quantity of grain to fewer people. The food law entails an annual procurement of 61 million tonnes, close to half of which will not find its way to the poor, with leakages at 47 per cent. High procurement without liquidation of stocks has led to inflation, while fair price outlets remain under-stocked. This is clearly an absurd situation.

Even as the proposed moves are broadly in the right direction, they could run into resistance from States. The panel has suggested that subsidised grain (7 kg per person per month for 40 per cent, and not 67 per cent of the population) be given at 50 per cent of the MSP, and not Rs.3 or less. If States such as Tamil Nadu want to continue with their universal PDS, they will have to take a hit of about Rs. 5 per kg just on BPL rice — the difference between the proposed issue price of Rs.10 a kg and the BPL price of Rs. 5 a kg. Besides, they will end up buying more grain at above-poverty-line rates as the proportion of BPL foodgrain available to States will fall. While the proposed steps will enhance grain availability in the market and reduce the incentive for diversion, the cases of Tamil Nadu and Chhattisgarh, where universal PDS has been successful, deserve a specific response. Other States too may want to tailor the scheme to suit regional needs.

The committee has rightly suggested that the Jan Dhan-Aadhaar network be used to transfer subsidy to beneficiaries. Reforms in pricing, targeting and delivery of grain will lead to an annual saving of Rs. 30,000 crore, which should be used for rural infrastructure. Moving to direct transfer is to be welcomed, as there seems no other option to plug leakages and check corruption in the distribution of subsidies.
Source - Business Line

[Ed] Budget cues

India’s forex reserves have hit an all-time high of $322.14 billion, even as its current account balance seems set to turn positive this quarter and the rupee is among the few currencies strengthening against the dollar. To appreciate these developments, one must only rewind to end-August 2013, when reserves had depleted to $275.5 billion, the rupee had plunged to 68.8 to the dollar and the preceding four quarters had reported average current account deficits of over $23 billion each. The last time India recorded a current account surplus was in January-March 2007.

Whether or not we are re-entering a period of current account surpluses, one thing is clear: the rupee and deficits aren’t posing the worries that they did not too long ago. The problem then encompassed the rupee’s external as well as “internal” purchasing power, thanks to double-digit inflation. The RBI was compelled to raise interest rates, on account of high domestic inflation as well as to prevent speculators from “shorting” the rupee. But today, with consumer price inflation easing to around 5 per cent and official forex reserves bolstered to thwart any speculative attacks on the rupee, the RBI has headroom to cut interest rates.

The above turnaround, of course, owes primarily to global crude prices. A nearly 60 per cent decline over the last eight months translates into annual forex savings of over $80 billion. Low oil prices are also the main driver for the disinflationary pressures currently gaining momentum. This virtuous combination — a strong rupee, balance of payments stability and low inflation — is an opportunity that the present government must exploit. The US president’s just-concluded visit, the IMF projecting India’s growth rates to overtake China’s in the next couple of years, a successful Vibrant Gujarat summit and macroeconomic and political stability have all helped significantly raise the country’s economic profile. The global investor community is once again looking at India as a place to do business in. The budget should reinforce this faith by redoubling the government’s commitment to growth, reforms, fiscal consolidation, and a stable and predictable tax regime.

Source - Indian Express

India appeals to DSB over import of U.S. farm products

India has appealed to the Dispute Settlement Board of the World Trade Organization (WTO) for a panel decision on its issues with the U.S. over agricultural imports.

“WTO Secretariat received today a notice by India announcing its decision to appeal certain issues of law and legal interpretation in the panel report in the case ‘India —— Measures concerning the importation of certain agricultural products’,” the WTO said on Monday.

India had in 2012 imposed some prohibitions with regard to importation of various agricultural products from the U.S. because of concerns related to Avian Influenza.

This import prohibition is maintained through India’s Avian Influenza (AI) measures, mainly, the Indian Livestock Importation Act, 1898.

The U.S. contended that India’s AI measures amounted to an import prohibition that was not based on the relevant international standard or on a scientific risk assessment.

Panel view
The dispute settlement panel (DSP) ruled that India’s AI measures were inconsistent with the Sanitary and Phytosanitary (SPS) agreement because they were not based on the relevant international standards. India claimed that the panel committed several legal errors in its interpretation and application of numerous articles of the SPS agreement. — PTI

Source - The Hindu

IS threatens to kill hostages within 24 hours

Demands militant’s release; Tokyo ‘working with Amman’ to free the captives
The Islamic State jihadist group threatened on Tuesday to kill a Japanese journalist and a Jordanian pilot within 24 hours unless Amman frees a jailed woman militant.
A video released on jihadist websites shows a picture of Japanese hostage Kenji Goto holding a photograph of Jordanian pilot Maaz al-Kassasbeh.
A voiceover, purportedly by Mr. Goto, warns that Jordan is blocking the Japanese journalist’s release by failing to free Sajida al-Rishawi, a would-be suicide bomber on death row since 2006.
It follows a video released last week in which the group claimed to have beheaded another Japanese hostage, Haruna Yukawa, and said Mr. Goto would be killed next if Rishawi was not freed.
Japan said following the new threat that it was seeking help from Jordan.
“The government in this extremely difficult situation has been asking for assistance from the Jordanian government towards securing Goto’s early release,” Chief Cabinet Secretary Yoshihide Suga told reporters.
Moments after the new video appeared, Mr. Goto’s mother Junko Ishido said: “I think the government should do whatever it can do”.
“Kenji does not hold any animosity toward the Islamic State. He went to the Islamic State out of his extreme concern for Mr. Yukawa,” she told Japanese media.
Earlier Tokyo said it was working with Jordan to free both Mr. Goto and Mr. Kassasbeh.
Both countries are closely cooperating towards the return of each of them to their countries,” Deputy Foreign Minister Yasuhide Nakayama told reporters in Amman.
Jordan’s King Abdullah pledged full cooperation with Japan during a meeting with Mr. Nakayama to ensure Mr. Goto’s release, Tokyo said.
The new video says Goto and Kassasbeh will be killed within 24 hours if Rishawi is not freed, and urges the Japanese government to put pressure on Jordan.
There was no immediate comment from Jordan, a moderate Muslim nation that is one of Japan’s closest diplomatic allies in the Middle East.

On death row
Mr. Kassasbeh was captured by IS on December 24 after his F-16 jet crashed while on a mission against the jihadists over northern Syria.
Rishawi was sentenced to death by a Jordanian court in September 2006 in connection with triple hotel bomb attacks in Amman the previous year that killed 60 people.
IS apparently beheaded Yukawa, a Japanese contractor, last week after a 72-hour deadline for a $200 million ransom passed without payment. — AFP

Source - The Hindu

An empty structure is not a toilet: Supreme Court

Survey of school toilets in Andhra Pradesh and Telangana presents bleak picture.
Calling an empty shell of a room 'toilet' without providing users any of the required facilities does not make it a “toilet in reality”, the Supreme Court declared on Tuesday.
A Bench of Justices Dipak Misra and Prafulla C. Pant made the observation in a written order stressing the need for clean and safe toilets for girls in schools.
The court pointed to how authorities build a certain “structure”, christen it 'toilet' and then forget about it from their memory.
“It can be said without any fear of contradiction that a toilet in structure only is not a toilet in reality,” the Bench observed in its three-page order.
“Toilets meant for schools, which are co-educational and the girls' schools have to have such toilets which are clean and acceptable having proper facilities,” the order read.
The court passed the order while perusing a report submitted by its own committee, which conducted a survey of school toilets in two States – Andhra Pradesh and Telangana. The report was scathing on the state of toilet facilities, especially for girl students.
This continues to be the state of affairs in both States despite an earlier direction from the apex court to frame schemes in this regard. The court's orders and this hearing was based on a petition filed by J.K. Raju in 2013, highlighting the plight of girl students in the two States.
“It has to be borne in mind by the authorities of the two States that clean and safe toilets also help in sustaining the health conditions of the students,” the Bench observed.
The court's order gains significance as the Prime Minister in his Independence Day speech had urged the importance of separate and clean toilets for girls. He had said that by next year, every school should have toilets for girls and boys.
The court ordered Secretary, School Education Department, of both States to be personally present in court on March 10, 2015. It further ordered the scheme to be framed and filed in the apex court within the next four weeks.

Source - The Hindu