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Insights Daily Current Events, February 11, 2014

Deepa M & Lohith 


February 11, 2014


Andhra Pradesh reorganization bill 2013 features

  • Andhra Pradesh Reorganization Bill, 2013 is a draft bill proclaiming the bifurcation of the Andhra Pradesh state into two states, Telangana and residuary Andhra Pradesh.
  • There would be a common High Court and its expenditure would be apportioned between the two successor states based on population ratio until a separate HC is set up under Article 214 for the state of AP. The existing Public Service Commission shall be the Public Service Commission for the state of AP and the UPSC would, with the approval of President, act as the PSC for Telangana
  • The ministry of water resources, GOI shall constitute Krishna River Management Board and Godavari River Management Board within a period of 60 days from the date of coming into force of the Andhra Pradesh Reorganization Bill-2013. The Boards shall be responsible for the administration, regulation and maintenance of the head works of the dams, reservoirs or head works of canals and hydel power projects as notified by the GOI on Krishna and Godavari Rivers strictly to implement all the awards made by the Tribunals
  • The Boards shall be responsible for making an appraisal of proposal for construction of new projects on Krishna and Godavari rivers and give technical clearance.
  • The Governor shall have special responsibility to the security of life, liberty and property of all those who reside in the common capital of Hyderabad. The Governor’s responsibility shall extend to matters such as law and order, internal security and safety of all vital installations in the discharge of these functions. This transitory provision shall cease to be have effect after such period not exceeding 10 years
  • The Bill provides for creation of separate cadres of All India Services in respect of the two states from the appointed day, Advisory Committee(s) would be constituted to ensure fair and equitable treatment of all employees
  • The GOI shall help the successor states of Telangana and AP in raising additional police forces for maintenance of public order and shall also deploy one additional unit of the force in Hyderabad for a period of five years
  • The Greyhound training centre in Hyderabad shall function as common training centre for the successor states for three years. In this period of three years, the GOI shall assist the successor state of AP in setting up a similar training centre for Greyhounds. The existing Greyhound and OCTOPUS forces shall be distributed between the two states.
  • Of the total equity of Singareni Collieries Company Limited, 51 per cent shall be with Government of Telangana and 49 per cent with Government of India. Existing coal linkages of SCCL shall continue without any change. New linkages shall be allotted to the successor States as per the new coal distribution policy by Government of India.
  • Allocation of natural gas will continue to be done as per the policies and guidelines issued by the GOI. The royalties payable on domestic onshore production of oil and gas shall accrue to the state in which such production takes place.
  • Allocation of power from Central generating stations shall be allocated to the successor states in the ratio of the average of the actual energy consumption of last five years of the relevant Discoms. For a period of 10 years, the successor state that has a deficit of electricity shall have the first right of refusal for the purchase of surplus power from the other state.


Rs. 6,000-crore subsidy for gas-based power plants

  • The Power Ministry has moved a note before the Cabinet Committee on Economic Affairs (CCEA) with a proposal for a Rs. 6,000-crore subsidy for distribution companies and a financial restructuring package to improve the viability and utilization of stranded gas-based power projects across the country
  • The subsidy component would compensate the State discoms to act as a buffer to allow them to buy power at a higher rate and sell it at lower rates to consumers
  • This support would be for the administered pricing mechanism gas-based plants which would be hit by the increase in the price of gas from April 2014
  • As for the financial restructuring package, the note proposes that in view of the financial stress being experienced by generating entities on account of lack of gas supply, the commercial operation date (COD) would be extended by one more year to allow companies restructuring of loan any time up to three years from COD, instead of two years, allowed at present
  • It also proposes a three-year moratorium (beyond the revised COD) on debt serving coupled with waiver of penal interest. Further, in case of stranded gas-based plants, it proposed to allow capitalization of interest during the proposed three-year moratorium.
  • Another proposal stated if that if the power projects were able to import natural gas and tie up consumers, then they would get an extra loan from the Power Finance Corporation as working capital as part of the financial relief
  • It also proposes full re-financing of rupee loan with external commercial borrowing (ECB) subject to an overall cap on borrowings and project companies hedging forex risk.

Agro-forestry needs more investment

  • Agro-forestry requires innovative models to attract more investment as the sector is emerging as an environmentally sustainable food production system
  • Agro-forestry offers a significant opening in resetting priorities on farm sustainability, Inadequate investment, lack of suitable extension strategies and weak market linkages compound the woes of this sector
  • Agro-forestry development is hampered by lack of policy incentives, inadequate knowledge dissemination, legal constraints and poor coordination among its beneficiary sectors
  • Integration of farm and forest crops would not only prevents further land degradation but also ensures timber and firewood availability to rural population
  • Government has approved the National Agro-forestry Policy as the sector is playing an important role in maintaining the natural resource base and increasing the overall productivity in the rain fed areas in arid and semi-arid regions
  • Focus of agro-forestry is important as ever increasing human and livestock population would place greater demands on natural resources amid challenges of climate change and degradation of water and land.

 India’s economic growth likely to be ‘below trend

  • Indian economy’s growth is expected to be “below trend” even as neighboring China and most of the developed nations are expected to see better prospects said by OECD
  • The conclusions are based on Composite Leading Indicator (CLI), which are designed to anticipate turning points in economic activity.
  • “In the emerging economies, the CLIs point to growth around trend in China, Brazil and Russia, and to growth below trend in India
  • These readings also indicate that a re-balancing is happening in the global economy with better growth anticipated in the developed world than in the developing countries

Related information


The Organization for Economic Co-operation and Development (OECD) is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade

  • It is a forum of countries committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, and identify good practices and co-ordinate domestic and international policies of its members.
  • The OECD originated in 1948 as the Organization for European Economic Co-operation (OEEC),
  • The OECD defines itself as a forum of countries committed to democracy and the market economy, providing a setting to compare policy experiences, seek answers to common problems, identify good practices, and co-ordinate domestic and international policies
  • Its mandate covers economic, environmental, and social issues

The OECD promotes policies designed:

  • To achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy;
  • To contribute to sound economic expansion in Member as well as nonmember countries in the process of economic development; and
  • To contribute to the expansion of world trade on a multilateral, nondiscriminatory basis in accordance with international obligations.

Drugs Prices Control 

  • All medicines specified in the National List of Essential Medicine 2011 (NLEM) have been included in the first schedule of DPCO, 2013 (the Drugs (Prices Control) Order, 2013) and brought under price control.
  • There are 614 formulations specified in the first schedule of DPCO, 2013 covering 27 therapeutic groups including medicines used in the treatment of Cancer, Tuberculosis, Diabetes, Cardiac disease, vaccines etc.
  • Significant reduction in prices have been effected on the medicines notified under DPCO, 2013 as compared to the highest price prevailed prior to the announcement of DPCO, 2013.
  •  The National Pharmaceutical Pricing Authority (NPPA) has notified the ceiling prices in respect of 404 medicines till last month under the Drugs Prices Control Order (DPCO), 2013.
  • Prices of 112 drugs have reduced over 40% after the enforcement of DPCO, 2013.

          Administrative Control of NPPA 

  • The Department of Pharmaceuticals in the Ministry of Chemicals & Fertilizers has notified the Drugs (Prices Control) Order, 2013 {DPCO, 2013} on 15th May, 2013 in supersession of DPCO, 1995.
  • There is a change in the methodology of pricing of drugs, moving from ‘cost based pricing’ to ‘market based pricing’.
  • There are 348 medicines (652 formulations) with specified dosage and strength in the National list of Essential Medicines, 2011 (NLEM) which have been included in the first schedule of DPCO, 2013 and brought under price control.
  • Out of total NLEM drugs, National Pharmaceutical Pricing Authority (NPPA) has already notified the ceiling process in respect of 404 formulations up to January, 2014 under the provision of the said order.
  • In respect of drugs not covered under the Drugs (Prices Control) Order, 2013 i.e. non-scheduled drugs, manufactures fix the prices themselves without seeking the approval of Government.
  • However, DPCO, 2013 provides for monitoring the maximum retail price (MRP) of these non-scheduled formulations that no manufacturer can increase the MRP of a non-scheduled medicine more than 10% of MRP during preceding 12 months.
  •  The Government has not studied the cost of scheduled medicines under DPCO, 2013.
  • The government is not planning to shift the National Pharmaceutical Pricing Authority (NPPA) to the Union Health Ministry.

National Pharmaceutical Pricing Authority (NPPA)

  • NPPA is an organization of the Government of India which was established, inter alia, to fix/ revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995.
  • The organization is also entrusted with the task of recovering amounts overcharged by manufacturers for the controlled drugs from the consumers.
  • It also monitors the prices of decontrolled drugs in order to keep them at reasonable levels.

Functions of National Pharmaceutical Pricing Authority

  • To implement and enforce the provisions of the Drugs (Prices Control) Order in accordance with the powers delegated to it.
  • to deal with all legal matters arising out of the decisions of the Authority;
  • to monitor the availability of drugs, identify shortages, if any, and to take remedial steps;
  • to collect/ maintain data on production, exports and imports, market share of individual companies, profitability of companies etc, for bulk drugs and formulations;
  • to undertake and/ or sponsor relevant studies in respect of pricing of drugs/ pharmaceuticals;
  • to recruit/ appoint the officers and other staff members of the Authority, as per rules and procedures laid down by the Government;
  • to render advice to the Central Government on changes/ revisions in the drug policy;
  • to render assistance to the Central Government in the parliamentary matters relating to the drug pricing.

Integration of NRHM and MDMS 

The Ministry of Human Resources Development has written to the Education Departments of all States for coordination with National Rural Health Mission (NRHM) for effective implementation of Rashtriya Bal Swasthya Karyakram (RBSK).

Rashtriya Bal Swasthya Karyakram (RBSK)

  • RBSK is a new initiative of the Government of India which aims to screen and manage children from birth to 18 years of age for defects at birth, deficiencies, diseases, developmental delays including disabilities.
  • During the current year (FY 2013-14), a total of 3.45 crore children including school children were screened under the scheme.
  • About 12 lakh children were identified with health conditions and referred to the health facilities for further management.
  • 4844 dedicated block level mobile health teams have been mobilized for providing early screening of children both in anganwadis and schools.
  • All newborns born at public health facilities and at home are screened for birth defects by health personnel and ASHAs respectively, between six weeks to six years of age at Anganwadi centres and between six years to 18 years of age who are enrolled in Government and Government aided schools by Mobile Block Health Teams.
  • The children with identified health conditions are referred to the appropriate facility for further interventions.
  • The implementation of the RBSK is reviewed by the Joint Review Missions for Mid Day Meal Scheme (MDMS) during their visit to the States.
  • The representatives of the Ministry of Health & Family Welfare are involved with the Governance structures of the MDMS at all levels to ensure proper coordination in this regard.

Nutritional Support to Children and Women under National Food Security Act 

  • The National Food Security Act, 2013 (NFSA), provides for cost sharing between the Central and the State Government in respect of entitlements for pregnant women and lactating mothers and children upto 14 years of age.
  • These entitlements are to be delivered through existing Integrated Child Development Services (ICDS) and Mid Day Meal (MDM) schemes for which cost sharing norms already exist.
  •  A pilot scheme for maternity benefit viz. Indira Gandhi Matritva Sahyog Yojana (IGMSY) is also under implementation in select districts of the country.
  • The Act provides that the schemes, guidelines, orders, etc., existing on the date of commencement of the Act, shall continue to be in force till such schemes, guidelines, orders etc. are specified or notified under the Act or the rules made thereunder.
  • The Act provides for a two-tier grievance redressal mechanism consisting of District Grievance Redressal Officer for each district for expeditious and effective redressal of grievances and State Food Commission for monitoring and review of implementation of the Act.
  •  The Act also contains provision for internal grievance redressal mechanism.
  • Besides, the provisions for transparency and accountability in the Act include setting up of Vigilance Committees at State, District, Block and Fair Price Shop (FPS) levels with due representation to the local authorities, Scheduled Castes, Scheduled Tribes, women and destitute persons or persons with disability to inter alia regularly supervise implementation of all schemes under the Act.
  • The Act inter alia provides for a period not exceeding 365 days after the commencement of the Act for identification of eligible households for receiving subsidized food grains under the Targeted Public Distribution System (TPDS).
  • Food grains under the Act have been allocated so far to 10 States/UTs, as per the progress in identification of beneficiaries reported by them.
  • As reported by these State Governments, ration cards as per NFSA have been provided to the identified beneficiaries.

Focus on Development of Infrastructure for Food Processing During 12th  Plan

  • The Ministry of Food Processing Industries introduced a Central Sector Scheme of Infrastructure Development for food processing with three components during 11th Plan.

The details of the each component and the achievements made there under are given below-

a.                Mega Food Parks Scheme

  • The scheme provides for creation of modern infrastructural facilities for food processing sector.
  • The scheme envisages financial assistance in the form of grant-in-aid @ 50% of the project cost excluding land component in general areas and @ 75% in North East Region and difficult areas subject to a maximum of Rs. 50 crore per project.
  • During the 11th Plan, 30 Mega Food Park were approved by the Government in 3 phases.
  • The Ministry has accorded ‘final’ approval to 14 Mega Food Parks while remaining 16 have been accorded ‘in principle’ approval.  However, out of the 30 Mega Food Parks, 3 Mega Food Parks have been cancelled by the Ministry for failure of the Special Purpose Vehicle to implement the projects.
  • During the 12th Plan, out of 12 Mega Food Parks, Project to be sanctioned ‘in principle’ approval has been accorded to 10 projects for implementation.
  • Final approval is accorded to the projects on meeting the various conditions of acquiring land, financial closure, registration of company under Companies Act, etc. as per the scheme guidelines.

b.                  Cold Chains, Value Addition and Preservation Infrastructure Scheme

  • Financial Assistance is provided in the form of grant-in-aid @ 50% of the total cost of Plant & Machinery and Technical Civil Works in general areas and @ 75 % in North East Region and difficult areas subject to a maximum of Rs. 10 crore per project.
  • A total 79 Cold Chain projects were approved by Govt. for providing financial assistance during the 11th plan, out of which 74 projects have been sanctioned by the Ministry in different parts of the country.
  • Out of these 74 projects, 27 projects have already started commercial production, 18 projects have been cancelled for violation of scheme guidelines and remaining 29 projects are in various stages of implementation.
  • During the 12th Five Year Plan, the scheme has been upscaled by the Government for taking up 75 new cold chain projects with financial outlay of Rs.786 crores.
  • Out of these, 66 cold chain projects have already been sanctioned by the Ministry till date which are at various stages of implementation.

c.                   Setting up/ Modernization of Abattoirs Scheme

  • Financial Assistance is provided in the form of grant-in-aid @ 50% of the total cost of Plant & Machinery and Technical Civil Works in general areas and @ 75 % in North East Region and difficult areas subject to a maximum of Rs. 15 crore per project.
  • The Ministry had taken up 10 projects under this scheme in the country during 11th Plan. The project at Ahmednagar (Maharashtra), Dimapur (Nagaland) & Kolkata (West Bengal) have been completed.
  •  During 12th Plan, Ministry  has accorded approval for 14 more Abattoir Projects  in various States in the Country.
  • The Ministry had envisaged a new Centrally Sponsored Scheme namely National Mission on Food Processing (NMFP), which has been launched during 12th Plan w.e.f. 01.04.2012 to be implemented through State/UT Governments.
  • Some of the ongoing schemes of the Ministry have been subsumed in the NMFP in addition to the new components to provide better outreach for the schemes of the Ministry to the entrepreneurs throughout the country.
  •  The NMFP scheme is implemented as a centrally sponsored scheme in all the States with the funding ratio of 75:25 by the Govt. of India and States except for North Eastern States, where the funding ratio is 90:10.
  •  All the UTs are funded on 100% grant basis by the Govt. of India.
  • An amount of 184.69 crore has been released to State Governments/UTs during the year 2012-13 and Rs.22.25 crore during the year 2013-14 till date.