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Insights Daily Current Events, 05 December 2014

Insights Daily Current Events, 05 December 2014

India betters rank in net freedom

‘Freedom on the Net 2014’ report says that India is only “partly free” with a rank of 30 out of 65 countries in Internet freedom but as of May this year, it has improved its score.

  • The improvement in India’s score, from 47 out of 100 in 2012-13 to 42 out of 100 in 2013-14, is the largest by any country. Among BRICS and South Asian nations, Brazil and South Africa rank better.
  • Countries are ranked on 21 categories under three broad heads — obstacles to access, limits on content and violations of individuals’ rights.
  • ‘Freedom on the Net 2014’ report is released by Freedom House, an independent US-based watchdog group.

Other observations made by the Report:

  • India improved because of the reduced number of incidents in which ICT (Information Communications Technology) connectivity and access was restricted, the relative transparency in allocation of spectrum; less content blocking and reduced known incidents of physical attacks on internet users for content posted online.
  • Key Internet controls that existed in India between May 2013 and May 2014 included political, social, and/or religious content being blocked, localised or nationwide shutting down of information communication technology, pro-government commentators manipulating online discussions and Internet or phone users being arrested for political or social writings.
  • Mass blocks on access like those imposed following the Kokrajhar riots in 2012 did not occur in 2013 but court-imposed blocks increased. Of particular cause for concern in India, along with the infamous Section 66A of the Information Technology Act, is the proposed web filter.
  • Besides retrieving data from intermediaries, the government’s own surveillance equipment is becoming more sophisticated. A Central Monitoring System (CMS), which will allow government agencies to intercept any online activities, phone calls, text messages and even social media conversations in real time by directly accessing interception equipment on intermediary premises, has caused widespread concern.
  • Political parties are often thought to be impacting content on the Internet, and major ones mobilised thousands of supporters using social networks in advance of the 2014 election.

Globally, Internet freedom declined for the fourth consecutive year. “Authoritarian and democratic leaders alike believe the Internet is ripe for regulation and passed laws that strengthen official powers to police online content.

Sources: The Hindu.

India’s GDP growth will overtake China’s over 2016-18: Goldman Sachs

Goldman Sachs has said India is set to overtake China and become the fastest-growing emerging market during 2016-18.

The new growth cycle is driven by reduced macro imbalances, benign global conditions (lower commodity prices) and structural reforms.

Important observations made:

  • In 2015, Goldman Sachs expects the markets to give 13 per cent returns (after factoring in currency depreciation).
  • Structural reforms and the focus on reviving the economy is expected to boost India’s gross domestic product (GDP) growth to 6.3 per cent in calendar 2015 (6.5 per cent in FY16) and 6.8 per cent in calendar 2016 (7 per cent in FY17). In contrast, China is expected to grow by seven per cent in 2015 and 6.7 per cent in 2016.
  • India’s growth is expected to accelerate in the coming years, while China would witness a gradual slowdown in growth, which economists prefer to describe as “long-landing”.
  • China’s growth in the coming years is expected to remain below seven per cent, while India’s growth revives in the coming years, making it the fastest-growing emerging market. Other emerging markets such as Brazil, Russia and South Africa are expected to grow at a much slower pace on weaker commodity prices.
  • Financial conditions have significantly eased and liquidity conditions have improved. The government is looking at easing investment conditions in India and focusing on project clearances. Also, 2015 is expected to see a rush of foreign direct investments (FDI) coming into India, thanks to liberalising the defence, insurance and construction sectors.
  • Goldman Sachs also expects the Indian rupee to remain largely stable against the dollar, thanks to the capital flows. This means that even as the US Federal Reserve begins to increase rates next year, India will not see the kind of turmoil seen in 2013. However, India’s rupee could appreciate strongly against other developed market currencies such as the euro and the British pound.
  • The biggest risk to India’s growth story will come from the tardy implementation of reforms. The government has its task cut out as far as reforms in the financial sectors and in governance, labour and technology are concerned. Goldman Sachs believes the government will be able to push through reforms to boost manufacturing and infrastructure, implement goods and services tax, use technology to cut red tape and create a more friendly business environment. However, where the government can falter are labour reforms and pushing through changes in the civil services.

Sources: BS.


Task force on Post bats for banking, insurance and e-tail services without delay

A task force on how to leverage the post office network has suggested the central government set up a holding company under the department of posts (DoP) for rollout of banking, insurance and e-commerce services.

The panel was headed by T S R Subramanian, former Union cabinet secretary.

What the report says?

  • The proposed holding company should have five divisions (‘verticals’).Three verticals — banking, insurance and e-commerce — can start working immediately. Government services and the business to business vertical can start as we go along.
  • The task force says that e-commerce could be the second largest activity after banking that DoP can foray into, and become one of the biggest entities in the world. The panel suggests a Post Bank of India as a separate entity, with a branch in each district in the first three years, with an initial capital of Rs 500 crore to be funded by the government.
  • The Post Bank of India can complement the Prime Minister’s Jan Dhan Yojana for financial inclusion. It notes that post offices have a total of Rs 6 lakh crore in deposits, second only to those in the country’s largest bank, State Bank of India (SBI).
  • The panel estimates its proposed restructuring of the postal network can lead to direct job creation in excess of 500,000 in three to five years, apart from indirect jobs.
  • The losses on sale of post cards, inland letters and speed post, which are subsidised, are among the main reasons for the department’s poor financial health. It suggests India Post continue to offer these services, at a relatively lower cost, as it is a government obligation to provide affordable communication tools.

Sources: BS.