Insights Daily Current Affairs, 31 May 2018
Topic: Development processes and the development industry the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders.
Special Category Status for Bihar
Context: CM Nitish Kumar has appealed for Special Category Status for Bihar. He has highlighted various issues impeding Bihar’s development and implored the central government for granting the Special Category Status (SCS) for the state.
What’s the issue?
Six states — Bihar, Chhattisgarh, Goa, Jharkhand, Orissa and Rajasthan — at different points in time have been demanding special category status. However, the Inter-Ministerial Group had rejected Bihar’s plea to be considered a special category State.
Reasons for demand:
It is observed that Bihar not only had the highest number, but also the highest proportion of backward districts compared with any other state. As many as 36 out of 38 districts in Bihar were backward as per the rankings of Inter Ministry Task Group (IMTG). It is also a fact that Bihar has occupied the last rank in terms of real per capita GSDP among all States in all the years 2000 through 2012. Bihar accounted for roughly 2.8 % of the GDP but 8.2% of the country’s population during 2009-12.
What is Special Category Status?
There is no provision of SCS in the Constitution; the Central government extends financial assistance to states that are at a comparative disadvantage against others. The concept of SCS emerged in 1969 when the Gadgil formula (that determined Central assistance to states) was approved.
Some prominent guidelines for getting SCS status:
- Must be economically backward with poor infrastructure.
- The states must be located in hilly and challenging terrain.
- They should have low population density and significant tribal population.
- Should be strategically situated along the borders of neighboring countries.
What kind of assistance do SCS States receive?
The SCS States used to receive block grants based on the Gadgil-Mukherjee formula, which effectively allowed for nearly 30 per cent of the Total Central Assistance to be transferred to SCS States as late as 2009-10.
- Following the constitution of the NITI Aayog (after the dissolution of the Planning Commission) and the recommendations of the Fourteenth Finance Commission (FFC), Central plan assistance to SCS States has been subsumed in an increased devolution of the divisible pool to all States (from 32% in the 13th FC recommendations to 42%) and do not any longer appear in plan expenditure.
- The FFC also recommended variables such as “forest cover” to be included in devolution, with a weightage of 7.5 in the criteria and which could benefit north-eastern States that were previously given SCS assistance. Besides, assistance to Centrally Sponsored Schemes for SCS States was given with 90% Central share and 10% State share.
When was the first Special Category status bestowed?
The NDC first accorded SCS in 1969 to Jammu and Kashmir, Assam and Nagaland. Over the years, eight more states were added to the list — Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and, finally, in 2010, Uttarakhand. Until 2014-15, SCS meant these 11 states received a variety of benefits and sops.
Considering special status to any new State will result in demands from other States and dilute the benefits further. It is also not economically beneficial for States to seek special status as the benefits under the current dispensation are minimal. States facing special problems will be better off seeking a special package.
For Prelims and Mains: SCS and associated issues.
Sources: the hindu.
Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Context: The US military has renamed its Pacific Command to US-Indo Pacific Command, underlining the growing connectivity between India and Pacific Oceans. The symbolic move came in recognition of the growing importance of the Indian Ocean in US strategic thinking.
What necessitated this move?
The renaming reflects the existing geographic coverage of the command and the acknowledgment of the increasing connectedness between the two oceans — Pacific and India —, but also, more broadly, the process of India’s re-entry into the US government’s “Asia” orbit.”
- Formerly known as United States Pacific Command, it is a unified combatant command of the United States Armed Forces responsible for the Indo-Asia-Pacific region. It is the oldest and largest of the unified combatant commands.
- Its commander, the senior U.S. military officer in the Pacific, is responsible for military operations in an area which encompasses more than 100 million square miles, or roughly 52% of the Earth’s surface, stretching from the waters off the west coast of the United States to the west coast of India, and from the Arctic to the Antarctic.
- The Commander reports to the President of the United States through the Secretary of Defense and is supported by Service component and subordinate unified commands, including U.S. Army Pacific, U.S. Pacific Fleet, U.S. Pacific Air Forces, U.S. Marine Forces Pacific, U.S. Forces Japan, U.S. Forces Korea, Special Operations Command Korea, and Special Operations Command Pacific.
Significance of INDOPACOM:
U.S. Indo-Pacific Command is critical for “a region open to investment and free, fair and reciprocal trade, not bound by any nation’s predatory economics or threat of coercion, for the Indo-Pacific has many belts and many roads.”
Also, renaming the combatant command is strategically significant, in that it reflects a recognition within the U.S. government that East Asia and the Indian Ocean Region are gradually becoming a single competitive space. It’s also shrewd marketing — a way of reaffirming to New Delhi and to the rest of the world that India is, and ought to be, an indispensable pole of the future Asian order.
The US move comes in the wake of a series of measures by China that have raised tensions in the South China Sea. China claims almost all of the South China Sea. Vietnam, Philippines, Malaysia, Brunei and Taiwan have counter claims over the area. The US also rejects China’s claims of ownership of the area.
However, the effectiveness of an Indo-Pacific defense and security strategy and US-India cooperation will still depend on the level of discussion and coordination across combatant commands and bureaus.
- For Prelims: INDOPACOM.
- For Mains: Growing significance of Indian ocean region and the need for international collaboration.
Sources: the hindu.
Topic: Inclusive growth and issues arising from it.
Govt weighs linking drug prices to WPI inflation
Context: The government is considering the feasibility of linking the permitted annual increase in prices of non-scheduled formulations to the Wholesale Price Index (WPI) in a bid to regulate the prices of drugs.
The move, if implemented, could deal a big blow to the Pharma- industry. The industry is currently in a situation where there are strong incentives for companies to market non-scheduled formulations to avail to automatic 10% increase. Compounded over five years, the price of a non-scheduled drug goes up by over 60%.
The NITI Aayog has recommended an amendment to the Drug Price Control Order (DPCO) 2013, suggesting that prices of non-scheduled drugs be also be linked to WPI to regulate them like the prices of scheduled drugs.
What necessitates this?
According to DPCO 2013, prices of scheduled drugs are revised in line with the wholesale price index (WPI) of the previous calendar year. As a corollary, the companies are even required to cut the prices if there is a decline in the annual WPI. However, manufacturers of medicines not under price control are allowed to increase the maximum retail price by 10% annually. According to DoP, only about 850 drugs are under price control as against the more than 6,000 medicines available in the market of various strengths and dosages.
Pharma companies see this proposal as a serious adverse development and say it has the potential to cause irreparable damage to the Indian Pharma industry. Given the real annual inflation, increase based only on WPI is not at all reasonable as the industry has to deal with the rising cost of manufacturing.
- Additionally, according to the proposal, in case of a negative WPI, mandating the National Pharmaceutical Pricing Authority (NPPA) to change the ceiling price of scheduled drugs and it will not be required for individual drugs to reduce their MRPs if they are already lower than such revised ceiling price.
- Pharma lobby groups have supported the equalization of the annual price increase between scheduled and non-scheduled drugs.
Sources: the hindu.
Topic: Infrastructure- railways.
Context: The Indian Railways conducted a one-day workshop ‘Mission Raftaar’ in which officials discussed ways to increase the average speed of freight and passenger trains. Issues such as “punctuality, rolling stock, removing bottlenecks in terms of traffic, elimination of unmanned level crossings were discussed” at the workshop.
About Mission Raftaar:
‘Mission Raftaar’ aims at doubling the average speed of freight trains and increasing the average speed of coaching trains by 25 kmph over a five-year period.
Significance of the mission:
The average speed of freight trains is 24 kmph and that of passenger trains, excluding suburban trains, is 44 kmph. Increasing the average speed of trains is considered essential for reducing travel time for passengers, transit time for cargo, operational cost, and improving revenues and the railway’s market share.
- For Prelims: Mission Raftaar.
- For Mains: Railway reforms.
Sources: the hindu.
Topic: Infrastructure- roadways.
Pradhan Mantri Gram Sadak Yojana
Context: The Government of India and the World Bank has signed a $500 million loan agreement to provide additional financing for the Pradhan Mantri Gram Sadak Yojana (PMGSY) Rural Roads Project, implemented by Ministry of Rural Development.
PMGSY was launched on 25th December 2000 as a fully funded Centrally Sponsored Scheme to provide all weather road connectivity in rural areas of the country. The programme envisages connecting all habitations with a population of 500 persons and above in the plain areas and 250 persons and above in hill States, the tribal and the desert areas.
Facts for Prelims:
Andhra Pradesh gets new state bird, state flower:
Four years after the bifurcation of Andhra Pradesh, the government of the residual state has announced its state symbols.
- State bird: Rama Chiluka (psittacula krameri) or rose ringed parakeet.
- State animal: Blackbuck (antilope cervicapra) or Krishna Jinka.
- State tree: Neem (azadirachta indica) or Vepa Chettu.
- State flower:
State symbols of Telangana:
- State bird: Palapitta.
- State animal: Jinka or spotted deer.
- State tree: Jammi Chettu (prosopis cineraria).
- State flower: Tangidi Puvvu (senna auriculata).