Editorial Simplified : 26th May

//Editorial Simplified : 26th May

Editorial Simplified : 26th May

Editorial Simplified : 26th day of May 2016

This Series of posts covers the essential Editorial from prominent newspapers. The Editorial from the newspapers are compiled by the Subject Teachers form the Academy and provided in notes format so that the aspirants does not waste their precious time in sifting through the newspapers. 

The aspirants are advised to bookmark this page for future reference 

Click on the tab below to read the Editorial Simplified for each newspaper

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[accordion_content accordion_label=”Business Standard”]

Editorial : Royalty and risk

Context:

Welcome decision to revoke order on GM seeds royalty.

What is the news?

Union Govt has revoked set of licensing guidelines it issued on May 18 for the agricultural technology sector.

What made the govt issue these guidelines initially

Proposed guidelines arose out of a disagreement  between the government and the world’s largest seed company, Monsanto, over the local prices of GM seeds in India, in particular for Bt-cotton.

What is the issue exactly?

  • Last December, the agriculture ministry notified the Cotton Seeds Price (Control) Order, which returned cotton seeds to the ambit of the Essential Commodities Act, making their prices a matter of government intervention.
  • Subsequently, it had notified new licensing guidelines, which would have put a lid on royalty payments from Indian seed farms for all new varieties of Bt-cotton seeds to Monsanto’s local joint venture (with Maharashtra Hybrid Seeds).

What is worrisome?

  • With the revocation of the earlier notification on the royalty cap, the immediate concerns are over, but there is no clarity yet on how the government wishes to approach the question of royalties for seeds technology.
  • Implications for other IPR-heavy sectors are also worrying.
  • Bt-cotton was not developed with financial support from the Indian government. If the government was concerned about distress in the cotton sector – and that is its right and its duty – then it should have found some other way to target assistance to cotton farmers and avoided imposing a cap on royalty.
  • If royalties are being used to evade international transfer pricing regulations, then it is necessary to examine royalty payments in a prospective manner.

Conclusion

Any such decision should be taken not only transparently but also prospectively so that it does not raise questions in investors’ minds about the predictability and stability of the policy environment.


Editorial : A bumpy ride?

Context:

India’s policy makers will need to respond to US Fed

What is the news?

Indian stock market posted its biggest single-day gain on Wednesday as the BSE’s benchmark index, Sensex, gained over two per cent.

What might be the reason for  gain?

It was attributed to the prospects of good rains and a marked improvement in the global perception of how the Indian economy is likely to fare in the coming months.

What is U.S. Planning w.r.t their markets?

They are going to raise the policy rate and that has serious implications for the global economy, and for India.

What would be the generic effect?

  • There would be shifts in the pattern of global fund flows and corresponding readjustments in currency exchange rates.
  • Those effects would require policy makers elsewhere to review their policy stances.

Effect on Indian markets

  • Changes may not be favourable for India, which has benefitted from cheap commodity prices in general, and low energy prices in particular, over the past two years.
  • Substantial portfolio investments have flowed into rupee treasuries and equity in past two years.
  • These favourable factors may now be playing out.
  • But an increase in dollar interest rates will lead to US treasury yields moving upwards — and the dollar may rise.Hence, portfolio investors may pull some of their corpus out of emerging markets and head for the American bond market instead.
  • This could mean a falling rupee.
  • If the rupee falls even as prices of crude oil and gas rise, a larger CAD is likely.
  • Higher energy prices could lead to higher inflation in India.
  • If any of this happens, the RBI would be forced to respond. There would be less room to cut interest rates.
  • The Budgetary assumptions and calculations with respect to the fiscal deficit and to energy and fertilizer subsidies might need to be revisited
  • Subsidy assumptions also would need to be reallocated.
  • If the stock market slides lower, the disinvestment programme would be hit hard.
  • A weaker currency may not be enough to revive exports. Exports have been shrinking for the past six quarters and the current account has stayed under control only due to the low energy prices.

Conclusion

  • Policy makers cannot simply continue to rely on low energy prices and high portfolio inflows.
  • Rather, they have to tackle the issues, which hobble Indian manufacturing and make exports uncompetitive.

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[accordion_content accordion_label=”Indian Express”]

Editorial : Keep inspectors away

Context:

India has been marred with problem of license raj which is showing no signs of stopping

A recurring problem

  • Recent move by the government to regulate the licensing of genetic modification crop technology along with imposing stock controls and turnover limits and raiding of warehouses reinforces the belief that a License raj is here to stay
  • Various measures like light regulation for start-up ventures, including ensuring no inspection for three years for a business relating to labour and environment, and compliance with law, post self-certification have yielded slow results

Lighter regulations

  • Many have made a strong case for a system of self-certification, with some checks built in, especially for small and medium enterprises
  • Global oil prices have started climbing back again, limiting the gains of the government (lower oil import bill and inflation)
  • It offers the government an opportunity to review outdated laws and regulations

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[accordion_content accordion_label=”The Hindu”]

Editorial : Raising the stakes with Chabahar

Context :

Chabahar port

What is the news?

Trilateral transport corridor project has been inked in Tehran by PM Modi and Iran and Afghanistan.

Background of Chabahar port

  • New Delhi and Tehran had agreed in 2003 to develop the port.
  • But the project did not take off,owing to international sanctions against Iran over its nuclear programme, but also on account of inertia in Delhi.
  • Removal of sanctions after Iran’s nuclear deal has provided Delhi an opportunity to revitalise bilateral ties.

What will be the benefits to India

  • Road, rail and port development projects will change the way India, Afghanistan and Iran do business.
  • Economic and strategic significance for India.
  • India and Afghanistan will be able to utilize full economic potential now due to connectivity issues being reolved.
  • Once the Chabahar port is developed, Indian ships will get direct access to the Iranian coast; a rail line to the Afghan border town of Zaranj will allow India a route around Pakistan. This will boost trade with Iran and Afghanistan.
  • Proposed free trade zone in the Chabahar area offers Indian companies a new investment destination.
  • From a strategic point of view, Chabahar is situated just 100 km from Pakistan’s Gwadar port, the centre piece of a $46 billion economic corridor that China is building. Hence, Chabahar port will act as a gateway for India to Central Asia bypassing the China-Pakistan arc.

What will be the challenges to India?

  • India’s record in  executing and finishing big-ticket projects abroad is far from consistent.
  • Also, with Tehran becoming the new destination of global powers, India needs to energise its diplomacy to keep engagement with Iran on an even keel, irrespective of outside pressure.

Way forward

With the Chabahar project, India has raised the stakes in Tehran substantially, and also raised the bar on its own regional ambitions. It cannot afford to let bilateral ties drift again, as it happened over the past decade.


Editorial : ISRO’s new frontiers

Context:

Reusable Launch Vehicle (RLV) BY ISRO

What is the news?

With the successful launch of the first technology demonstrator of the indigenously made Reusable Launch Vehicle (RLV), ISRO has taken a step in building  vehicle that can be reused multiple times to launch satellites into orbit.

Certain details of the project

  • Hypersonic flight lasted about 770 seconds from lift-off to splashdown in the Bay of Bengal, reached an altitude of 65 km before re-entering the atmosphere at nearly five times the speed of sound.
  • Some of the objectives of this week’s launch were to test the aero-thermodynamic characterization of the vehicle with wings when it re-enters the atmosphere at hypersonic speed; the control and guidance system; the control system to land the vehicle at a specific location; and the hot structure, the basic body-carrying part of the vehicle with heat protecting tiles.
  • The ultimate objective is to test the vehicle’s performance when it travels at a speed of Mach 25 using air-breathing propulsion.

Note:

  • Learning from the mistakes of the U.S. National Aeronautics and Space Administration (NASA) in its space shuttle programme, ISRO will not use the same reusable vehicle to launch satellites and carry astronauts as it drastically reduces the payload capacity and thereby increases the cost per kg.
  • ISRO will shield the launch vehicle from intense heat to reduce, if not completely eliminate, refurbishment expenses.

 How long till ITZ  commercial usage?

10 to 15 years, and several more launches.

 Benefits for India

  • Cutting down by as much as 80 per cent the cost of launching satellites into orbit.
  • Enables the vehicle to be reused within a very short span of time.
  • Launching satellites at a far cheaper cost than other space agencies.
  • Currently, the bulk of the launch cost comes from building the rocket, which can be used just once, as the rockets get burnt on re-entry into the atmosphere.
  • No other space agency has reusable launch vehicles in operation, and ISRO has taken a lead in developing one.

Way forward

If all works as per plan, ISRO should be able to break even after 25 to 50 launches, bringing down the cost of further launches on the same vehicle.


Editorial : On the road to smartness

Context:

Smart Cities

What is the news?

With the second round of 13 cities making it to the  list, there are 33 urban agglomerations that have become “smart cities”.

What are the usual trend w.r.t smart cities?

  • Idea of city managers accepting a ‘challenge’ to make specific ‘smart’ proposals is being followed in different countries.
  • Cities in the developed world are focused on self-driving cars, electric vehicles and smart grids, while those in India are yet to meaningfully address basic issues such as walkability, public transport, waste management and pollution.

Expectation from a smart city in India

  • By integrating IT, motorists could be guided to available parking spaces in various locations in a city, using real-time information.
  • It should be possible to even predict the availability of parking spaces based on usage patterns.
  • Robust IT connectivity and digitalization.

What would be the benefit from a smart city?

  • Bound to increase property values, and governments should tap into the surplus to fund more programmes, especially affordable housing.

Certain issues with the whole scenario

  • City administrations have done a poor job of gathering data available from multiple sources and analyzing them to make informed decisions on civic services.
  • Cities that have successfully bid for Central seed funding face the real challenge of attracting private partners to raise the massive resources needed.
  • The 20 cities chosen in the first round are expected to spend Rs.48,063 crore on projects, and the 13 in the second round, Rs.30,229 crore. Intelligent parking could be one way to mobilise funds and cut congestion.
  • Cities have not integrated the databases of their service agencies for water, transport, property and energy, and are therefore unable to serve citizens online.

Way forward

All cities can become smart, if the Urban Development Ministry makes available off-the-shelf open source technology solutions for management.

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By | 2016-05-26T19:51:23+00:00 May 26th, 2016|Categories: Editorial Simplified|Tags: , , , |0 Comments

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