SECURE SYNOPSIS: 06 FEBRUARY 2018
NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.
General Studies – 1
Topic: Modern Indian history from about the middle of the eighteenth century until the present- significant events, personalities, issues
The contribution of both Rash Behari Bose and Subhash Chandra Bose to the Indian freedom struggle has been significant
- Both believed the role of armed forces play in the political growth of a nation.
- Both advocated single minded focus on freedom struggle and denounced the dilution of the movement for national liberation through disgression towards social work.
- Both leaders became active the most not from being in India but gaining support in East Asia especially Japan.
- Both believed in revolutionary way of attaining freedom. Rash Behari Bose was even involved in an assassination attempt of the Viceroy of India, Lord Hardinge.
- The Indian, Rash Behari Bose, is even better known in Japan than his namesake and fellow nationalist, Subhash Chandra Bose.
- Bose was instrumental in persuading the Japanese authorities to stand by the Indian nationalists and ultimately to officially actively support the Indian independence struggle abroad. Bose convened a conference in Tokyo in 1942, which decided to establish the Indian Independence League.
- He selected the flag for the Azad Hind movement, and handed over the flag to Subhash Chandra Bose. But although he handed over the power, his organisational structure remained, and it was on the organisational spadework of Rash Behari Bose that Subhash Chandra Bose later built the Indian National Army (also called ‘Azad Hind Fauj’).
- His view of Gandhi was Gandhi is a person whom I respect but he is an Indian saint and ‘a person of yesterday’ whereas Subhash Chandra Bose is the ‘person of today’. This was not the case for Subhash Chandra Bose as he believed in the Gandhian way initially .
- Rash Behari Bose did not belong to any political group.
General Studies – 2
Topic: Issues relating to development and management of Social Sector/Services relating to Health,
What is the need to modify the present Swachh Bharat Abhiyan:-
- Unable to reach target:-
- Access to free toilets has not helped resolve open defecation in India. The programme is unlikely to succeed in its primary task of eliminating open defecation by October 2019.
- The rate of open defecation is not decreasing much:-
- India has far higher levels of open defecation than other countries of the same GDP per capita. For example, India has a higher GDP per capita than Bangladesh, but in Bangladesh only 8.4% households defecate in the open, compared to 55% in India.
- Purity and pollution:-
- The key reason for this is that basic latrines that need to be emptied out manually or pumped by simple machines are unacceptable to higher caste Hindus.
- It is considered polluting to the individual and the home, and historically associated with untouchability. So people rather defecate in open than having a toilet at home.
- It is not just a matter of access but a problem of perceptions of pollution, ritual purity, and caste.
- Even if the government builds free toilets without any leakage or corruption, India will at best have 80 million new toilets that a large proportion of Indians do not want to use.
Why concentrating on developing sewage system makes Swachh Bharat a success:-
- Deeply entrenched cultural contexts must be taken into account for successful policy outcomes. India needs to change perceptions of ritual purity through education and awareness in rural areas. This can be done by investing in sewage systems.
- Enabling local governments to construct sewage systems will solve the purity issue :-
- A toilet that flushes away human waste into the sewage and waste management system solves the problem. If there is a functional sewage system, it is relatively low cost for households to build a toilet in every home that is connected to the sewage system.
- Developing proper sewage system in village would also have wider impact with water not stagnating any more, lesser vector borne diseases etc so the wider objective of sanitation will be achieved.
- Also it would not put stress on manual scavenging and this occupation can slowly fade away giving sense of dignity and equality to the most vulnerable sections.
However challenges exist are:-
- Problem of political incentives when it comes to building sewage systems:-
- It takes years to build sewage systems, and local politicians face all the costs upfront, and the benefits are far in the future.
- Disgruntled citizens and voters complain about the digging of neighbourhoods for years, causing much nuisance to their daily lives.
- These problems essentially act as disincentives of the political class to take action to solve the sanitation problem.
- Pursuit of Swachh Bharat also requires strengthening public health services. Services such as good drainage systems, absence of swamps and ponds that are home to stagnant water, and the supply of safe drinking water all of which reduce exposure to and spread of diseases are classic examples of public goods and require effective government intervention.
Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
De hyphenated policy-
- The policy where one country builds up relations with another country on standalone basis and without any linking (fear of backlash or criticism) with any other country is called de-hyphenation policy
- India’s Non-alignment is the biggest example of de-hyphenated foreign policy where India made relations with both the adversaries of Cold war; US and Russia simultaneously without linking each other.
General features :-
The De hyphenated foreign policy means the foreign policy with:-
- More pragmatism and more need based approach than the traditional ethos
- Rational Public discourse on various foreign policy aspects.
- Active role of elected representatives in foreign policy.
- Efficient use of track 2 and track 3 diplomacy to meet the requirements of dialogues and foreign relations
- Use of economic strengths in relations to deal with the geo political goals
- Using soft power in foreign relations
Case of Israel-Palestine:-
- India, one of the early members of NAM, hesitated to establish full-fledged relations with Israel. Some strategy makers in India then were of the opinion that this might offend Islamic nations.
- As, India remained non-aligned, any state visit by an Indian leader was hyphenated as Israel- Palestine visit. This means the visiting Indian leader used to visit both Israel and Palestine, in-order not to show any favouritism towards any of the two nations.
- In an unprecedented move, India’s PM last year visited Israel and not Palestine. This divestment from NAM and projecting an explicit foreign policy stand is a perfect example of de-hyphenation in diplomacy.
- It doesn’t mean there is any shift in West Asia policy. India is wedded to support for the just cause of the Palestinian people and their government. It has supported Palestine in resolutions sponsored by them or other countries at the UN on many occasions.
Prospects of dehyphenated policy:-
- India’s decision making matters in terms of foreign policy becomes autonomous.
- India’s foreign policy will be solely guided by national interest; delinking other priorities.
- India will be able to develop close ties with Israel without irking Palestine or other Islamic countries
- India can have relations with major oil and trading partners of both Saudi Arabia and Iran; despite both being arch rivals in the region
- This policy will lead to diversification of markets and supplies for India.
- It can improve the India’s image as a rising power where it is taking responsibility and dealing with international issues .This can even trigger India getting permanent seat in UNSC.
- It can also help Arab countries further ensure oil security for India.
- It will help in ensuring a balanced relationship and getting the best from both Israel and Palestine.
- It can lead to more trade especially defence with Israel and also with respect to terror India is more aligned with Israel.
- The fact that India is an upcoming superpower both by domestic and international narratives is a discourse that is directly on a collision course with its policy of non-alignment.
- Indian engagement revolves around protecting a demographic base of more than seven million of the country’s citizens working in the region, responsible for sending over $60 billion in remittances every year into the Indian economy. As India moves towards becoming a larger player in global politics and economics, these pre-existing policies are increasingly in need of review, and de-hyphenating Israel and Palestine was a process long past its due date.
- In the changing geopolitical scenario, the complexities and interactions have increased. Watertight compartmentalisation isn’t possible in such situations
- National interest should be considered while resorting to hyphenation or dehyphenation on case to case basis.
Topic: Issues relating to development and management of Social Sector/Services relating to Health,
- India is concerned with many health issues be it malnutrition, infant mortality, rising non communicable diseases, growing number of deaths due to cancer etc. The national health protection scheme or the Ayushman Bharat health insurance scheme is the step in the right direction which can give impetus to healthcare in India.
- The scheme seeks to provide health cover to 10 crore economically vulnerable families.
- Every family will be provided Rs. 5 lakhs annually for secondary and tertiary health care.
- 2000 crore are allocated for the scheme in the budget 2018.
- The overall investment required for the scheme is estimated to be around Rs. 10,000 crores to Rs. 12,000 crores.
- The Premium for every household is expected to be Rs.1000 to Rs. 1200 annually.
- The scheme is acentrally sponsored scheme. The centre intends to bear 60 percent of the cost. Remaining 40 percent will be borne by the states.
- The scheme will replace Rashtriya Swasthya Bima Yojana under which, the government provided Rs.30,000 annually for healthcare. Under NHPS, Rs.30,000 is increased to Rs. 5 lakhs.
- The centre will face an annual burden of around Rs. 5000- 6000 crores towards premium. The rest will be come from state governments.
- NITI Aayog expects that at least 50% of the beneficiaries will use the scheme in the first year.
It is not feasible:-
- The amount of Rs 5 lakh per family is a massive and unexpected hike from the existing fund of Rs 1 lakh per family. This amount is 17 times bigger than the RSBY scheme and will cover 40% of India’s population.
- Though it improved access to health care, it did not reduce out-of-pocket expenditure (OOPE), catastrophic health expenditure or health payment-induced poverty.
- The NHPS addresses those concerns by sharply raising the coverage cap, but shares with the RSBY the weakness of not covering outpatient care which accounts for the largest fraction of OOPE.
- The NHPS too remains disconnected from primary care.
- Universal health insurance through private hospitals has not worked for the poor anywhere.Biggest beneficiaries are the private hospitals and insurance companies. There is no substitute for public health care.
- The government’s proposals do little to prevent poor health in the first place. India is plagued by increasing levels of water and air pollution, some of it worsened by pro-business policies. Malnutrition, poor sanitation and lack of proper housing also remain major problems.
- Earlier programme failures cast new doubts:-
- In its final iteration in 2016-2017, the RSBY also targeted 5.9 crore families, and managed to enroll 3.6 crore families. Thus the government’s announcement today of reaching ten crore families is also vastly ambitious
- There is evidence to show that despite efforts towards pushing for increased insurance coverage, neither have the poorest been reached out to nor has there been efficient financial protection.
- In real terms and as a percentage of GDP, there is a decline in the health budget this year.
- It would take six more months to finalise the scheme and then perhaps a few more months to contract insurance agencies and providers. So it is uncertain if the scheme will be fully implemented this year
It is feasible because:-
- The NHPS will be financially viable, despite a high coverage offered to the few who fall sick in any year, because the rest in the large pool do not need it that year.
- Will bring healthcare system closer to the homes of people.
- It can achieve its goal as only 40 per cent of India’s population will be covered under this insurance scheme. If the National Health Protection Scheme is properly implemented and monitored we would have taken an important step in creating a Swasth Bharat.
Role of states:-
- State governments have the main responsibility of health service delivery and also need to bear the major share of the public expenditure on health. The National Health Policy (NHP) asks the States to raise their allocation for health to over 8% of the total State budget by 2020, requiring many States to double their health spending.
- Both Central and State health agencies or their intermediaries will have to develop the capacity for competent purchasing of services from a diverse group of providers. Otherwise, hospitals may undertake unnecessary tests and treatments to tap the generous coverage. The choice of whether to administer NHPS through a trust or an insurance company will be left to individual States.
- Financially, the scheme will cost ₹10,000-12,000 crore annually over 5 years, with premium costing 1200 per annum. Despite drawing resources from cess, it will need state funding support of 40% to boost central allocation.
- Public health falls in state list. Hence, state government has to share responsibility of effective delivery of healthcare services on the ground. They have to double their GDP spending in healthcare to provide for the infrastructure needed for this scheme.
- The shortage of doctors and other personnel and the non-availability of public or private hospitals need to be looked upon by respective state governments.
Challenges with states:-
- Questions arise when centre has not raised its public expenditure on health will the states be inspired to raise their allocation for health to over 8%
- The NHPS needs a buy-in from the States, which have to contribute 40% of the funding. Even with the low cost coverage of the RSBY, several States opted out. Some decided to fund their own State-specific health insurance programmes.
- The southern states have vibrant and mature insurance schemes with Andhra Pradesh, Telangana, Tamil Nadu and Karnataka virtually racing towards universal health coverage. The scheme may enable them to avail of financial assistance from the central government and use the resultant savings for other health needs in the primary healthcare segment to avert disease and keep costs low.
- Universal health coverage is widely practised in the world. So India needs to accept it too.
- Also the public healthcare needs to be strengthened especially in rural areas.
- The government needs to provide adequate funding to improve the quality of services as well.
- In a federal polity with multiple political parties sharing governance, an all-India alignment around the NHPS requires a high level of cooperative federalism, both to make the scheme viable and to ensure portability of coverage as people cross State borders.
General Studies – 3
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
5) What is capital gains tax? What is the rationale behind Centre’s decision to bring back the long-term capital gains tax (LTCG) on equities, which was scrapped in 2004-05? Discuss its implications. (250 Words)
- In the recent budget ,the government announced the imposition of 10% tax on gains of over ₹1 lakh made on any form of investment in listed equities and mutual funds with a holding period of over one year.
What is a Capital Gain?
- Any profit or gain that arises from the sale of a ‘capital asset’ is a capital gain. This gain or profit is charged to tax in the year in which the transfer of the capital asset takes place.
- Capital gains are not applicable when an asset is inherited because there is no sale, only a transfer. However, if this asset is sold by the person who inherits it, capital gains tax will be applicable. The Income Tax Act has specifically exempted assets received as gifts by way of an inheritance or will.
- Short-term capital asset – An asset which is held for not more than 36 months or less is a short-term capital asset.
- Long-term capital asset – An asset that is held for more than 36 months is a long-term capital asset .From FY 2017-18 onwards – The criteria of 36 months has been reduced to 24 months in the case of immovable property being land, building, and house property.
Rationale behind the government’s initiative and benefits:-
- The Centre has justified the new tax arguing that it helps avoid the erosion of its tax base and levels the playing field between financial assets and investment in manufacturing.
- Tax revenues for the government from share market has remained marginal due to the exemption. The government was losing an estimated ₹49,000 crore in taxes from LTCG exemption
- Several cases of misuse of LTCG have been reported in the last few years where investors used listed firms for legalizing illicit wealth. This can be tackled now.
- It can bring parity between excessive speculation and investment, the government believes
- Foreign portfolio investors pay no tax even on short-term gains under the terms of the tax avoidance treaty that India has with Singapore and Mauritius. So, about 60 per cent of equity trades have zero tax. This will not be the case from now on
- Investors can now exercise greater freedom when it comes to redeeming their equity investments. As the difference between LTCG and STCG is 5%, investors who had wait for an entire year just to avail of the tax benefits, even if they wanted to book profits earlier, won’t have to stay invested. On several occasions, waiting for an entire year has proved to be costly for investors.
- Investment decisions will now be based on the market situation and not based on tax concerns.
- Until now, tax benefits were skewed in favour of listed equities but after the announcement, there would be a more level-playing field between listed shares and the other asset classes including real-estate, bonds and gold
- The impact of the tax will be quite huge as FIIs and DIIs might prefer other attractive destinations to park their money and get better returns as tax compliance stands to increase their operational costs
- The flip side of such move is the government will have to collect LTCG tax in a manner similar to the income tax since it can’t forecast the timing and profit/loss arising from sale and purchase of securities by an individual.
- The taxpayer will have to calculate and pay tax and declare it in tax returns. This will require more groundwork for taxmen to assess the returns and revenue arising from the LTCG tax.
- Another aspect of LTCG tax collection is any loss arising out of sale/purchase of securities can be set off against their gains, thereby reducing the net gains on which tax will be calculated.
- Though the grandfathering clause provides some relief, it has also made things difficult.
- The highly technical construct of the amendment seeking to grandfather the appreciation in the value of the stocks and mutual fund units up to 31 Jan 2018, has made things complex for investors and fund managers
- The stock market volatility may also go up now because the LTCG tax will result in a behavioural change among investors.
- Since the difference between the STCG and LTCG is only 5% now, few investors may wait for a year to sell. Resultantly, the stock market volatility will increase due to increased short-term activity
- Will hit the average middle class investor. The sharp fall in both the Nifty and the Sensex after Budget day has been linked to the new tax.
- Short term trading :-
- The smaller differential between short and long-term capital gains tax itself will discourage the long-term holding of stocks in favour of short-term trading activity. It is also likely to discourage to some extent the growing culture of investing in equities for the long run.
- The double whammy of the STT and LTCG will further privilege short-term trading in stocks over long-term investment. Being the only country in the world to impose both the STT and LTCG, India is also likely to become a little less attractive to foreign investors when compared to its peers.
- For domestic investors, tax advantage in equity market investments over other asset classes would diminish
- Despite the constraints, the government would do well to at least soften the negative impact of the new tax by allowing indexation (allowing a set-off based on inflation rate) of capital gains and removing the STT on equity investments.
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
6) On what basis is the World Bank’s Ease of Doing Business global rankings prepared? Why India has dismal ranking in one of the components of Ease of Doing Business index i.e “enforcing contracts”? Why is it important to improve this component? Examine. (250 Words)
- Indiafor the first time moved into the top 100 in the World Bank’s Ease of Doing Business global rankings on the back of sustained business reforms over the past several years.
Basis of world bank’s ease of doing business:-
- Nation’s ranking in the “ease of doing business” index is based on the average of 10 sub-indices which are:
- Starting a business
- Dealing with construction permits
- Getting electricity connections
- Registering property
- Getting credit
- Protecting minority investors
- Paying taxes
- Trading across borders
- Enforcing contracts
- Resolving insolvency.
Why India has low rank:-
- As per the World Bank, the enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court (competent court), and the quality of judicial processes index, evaluating whether the country has adopted a series of good practices that promote quality and efficiency in the court system. India ranks very low in this.
- India’s ranking in the ‘enforcement of contract’ component is 164 .The report says that it takes an average of 1,445 days (or nearly four years) to enforce a contract in India. In this, the distance to frontier (DTF) ranking score is 40.76. The all-told cost to a litigant to recover amounts legitimately due to him is 31% of the value of the claim.
- The judiciary in India is already plagued with pendency of cases and case disposal is slow due to multiple factors like:-
- More appeals
- Low judges to cases ratio
- Lack of modernisation of courts
- The World Bank puts India at 156th position among 190 countries on starting new business. As far as construction permit is concerned India ranked poorly at 181.
Why is it necessary to improve:-
- The World Bank report is the first touch point for investors who plan to do business in another country. Its rankings are closely examined and can determine the investment attractiveness of a country.
- The one about “enforcing contracts” is directly dependent on a country’s ability to provide an effective dispute resolution system.
- Government is taking measures like Parliament even passed the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act.
- The purpose behind the Act is to provide a forum with upgraded infrastructure to resolve a certain class of disputes, classified as “commercial disputes” in the Act, in a time-bound and effective manner. The legislation also requires establishment of appropriate infrastructure and manpower training on a constant basis.
- To secure changes in the remaining areas will require not just new laws and online systems but deepening the ongoing investment in the capacity of states and their institutions to implement change and transform the framework of incentives and regulation facing the private sector. India’s focus on ‘doing business’ at the state level may well be the platform that sustains the country’s reform trajectory for the future.
- For attracting new investment, both foreign and domestic, several macroeconomic issues have to be addressed. These include political and economic stability, law and order maintenance, quality physical infrastructure, and buoyancy in financial markets.
Topic: Issues related to direct and indirect farm subsidies and minimum support prices;
7) Recently the union government promised a minimum support price (MSP) that is 50% higher than farmers’ cost of production. In the light of the criticisms made against this move, critically examine how this will be implemented. (240 Words)
- In the recent budget ,government has decided to keep MSP for all the unannounced crops of kharif at least at one and half times of their production cost .This decision will prove to be a ‘historic’ step towards doubling the income of farmers.
Criticisms of the move:-
- There are some doubts if the finance minister meant the entire cost of production or some reduced amount as difference between C2 which is the total cost of production and A2+FL( Only covers the partial cost of production) is substantial. The MSP has been 50% higher than A2+FL for the last ten years.
- It may also be mentioned that cost plus pricing of MSPs, be it cost A2+FL or C2, is fraught with dangers as it totally ignores the demand side.
- Only a fraction of the farmers actually have access to MSP.
- There is no provision in the budget to increase the ambit of farmers who are covered by MSP and that is a problem in addition to how the MSP is calculated
- Farmers also argue that MSP is only announced for 25 crops, while for other crops they have to deal with market volatility. There is no MSP for fruits and vegetables.
- MSP often does not reach farmers as the government does not procure on time and the farmer has to make distress sales at rates lower than the MSP.
- There is no clarity on how the implementation takes place.
- There are concerns whether all states would agree with that cost
- Also as MSP and Inflation highly co-related and any increase in MSP will eventually resulted into price hike of many agricultural products,
How is this supposed to be implemented:-
- The government will ensure payment of full MSP even if farmers sell below MSP.
- Grameen Agricultural Market (GRAM) will provide farmers a means to sell directly to buyers.
- State Cooperative Banks, District Central Cooperative Banks and PACCS would get a lot of business from farmers.
- The government decision to raise the MSP by 1.5 times for all notified crops in the coming Kharif season would help SSBs, DCCBs and PACCS get business
- If the government means C2 as cost of production then it will help increase the farmer’s profit.
- There need to be reforms in APMC acts to ensure farmer selling directly to farmers
- Government needs to analyse the recommendation of the M.S Swaminathan Report which suggested MSP over C2
General Studies – 4
Topic: ethical issues in international relations
Refugee crisis is looming all over the world with Syrian refuges moving towards Europe, Rohingya refugees moving towards Bangladesh and India. So there is a need to analyse the ethical considerations that are necessary to resolve the crisis.
The ongoing migrant or refugee crisis though appears to be a question of political nature and a result of civil war, is more of a humanitarian crisis and highlights the failure and apathy of the world community to put the people first.
Some of the problems of countries which are conflict ridden today are also to the colonial rulers so it is the moral responsibility to solve/address the problem .
The reason refugees travel to other countries is because they believe that they will die in their current situation. So as humans it is the moral responsibility to help people in need.
There was a moral consensus that states have a responsibility to come to the aid of those fleeing the persecution of their states after the Second World War when a person lost their citizenship it became almost impossible to protect their human rights. From this strong moral consensus the United Nations Convention Relating to the Status of Refugees (1951) was born, and an attempt to put our sense of moral responsibility into international law as made. At the same moment, an international body, the United Nations High Commissioner for Refugees (or UNHCR), was created to oversee the implementation of the convention .
The states should remember the principle of non-refoulement, which holds that a state cannot deport a person who has a well-founded fear of persecution.
States rather than considering the refugees as a economic burden need to accept them as this ill only lead to multiculturalism, employment as well for instance Germany has been successful in accommodating the refugees.
Merely cutting down on refugees like securing the water boundaries and not allowing embarkment of the refugee ships in the European countries is just a superficial treatment to a deeper problem. The world community should take the responsibility for resolving the instability due to terrorist factions in these countries. The countries need to understand that in a global world so intricately connected benefit to the refugees will ultimately benefit the world as a whole.