DAILY NEWS ANALYSIS 02 APRIL
POLITY
Centre defines J&K domicile rules
- The Union government has issued a notification defining “domiciles” in the new Union Territory (UT) of Jammu and Kashmir for protecting jobs in the Group D category and entry-level nongazetted posts for the domiciles.
- Definition of domiciles
- The order defines a domicile as one “who has resided for a period of 15 years in the UT of J&K or has studied for a period of seven years & appeared in Class 10th /12th examination in an educational institution located in UT of J&K or who is registered
- as a migrant by the Relief and Rehabilitation Commissioner (Migrants).’’
- The order says that the domiciles will be eligible “for the purposes of appointment to any post carrying a pay scale of not more than Level 4”.
- The Level 4 post comprises positions such as gardeners, barbers, office peons and waterman and the highest rank in the category is that of a junior assistant.
- A senior government official said the reservation for domiciles would not apply to Group A and Group B posts and like other UTs, recruitment would be done by the Union Public Service Commission (UPSC).
- Changes made in PSA
- The Ministry of Home Affairs order has also made amendments to the Public Safety Act (PSA), 1978. It changes the criteria for appointing the PSA advisory board on the recommendation of a search committee headed by the Chief Secretary instead of the Chief Justice of the J&K High Court.
- It also bars sitting High Court judges to be made part of the board without the Chief justice’s consultation. The board has a crucial role to play in release of detenus.
- The order scraps a clause that dealt with the power to regulate place and conditions of detention.
- It removed a clause that prohibited J&K residents booked under the Act to be lodged in jails outside.
- Additional Info
- There are 12 States, including Himachal Pradesh, where provisions of special status under Article 371 apply. The provisions pertain to regulation of ownership and land transfer in order to conserve the limited resources and to ensure that the State preserves its unique identity.
HEALTH
India sees a sharp spike in infections
- Twenty-four categories of medical devices would be regulated as “drugs”, according to a decision by the National Pharmaceutical Pricing Authority (NPPA). This would prevent suppliers from hiking rates to more than 10% of their prices.
- About NPPA
- National Pharmaceutical Pricing Authority (NPPA) was constituted vide Government of India Resolution dated 29th August, 1997 as an attached office of the Department of Pharmaceuticals (DoP), Ministry of Chemicals & Fertilizers as an independent Regulator for pricing of drugs and to ensure availability and accessibility of medicines at affordable prices.
- Its functions are:
- 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.
Antismog guns installed at 14 large project sites in the Capital
What does an antismog gun do?
- The antismog gun sprays nebulised water droplets into the air through high-pressure propellers, which help dust particles to settle down.
Order of Supreme Court
- On January 13, the Supreme Court had said that antismog guns should be mandatory in projects that require environmental clearance from the State or Centre, and have a built-up area of over 20,000 square meters.
DEFENCE
Still no bulls eye, in volume and value
- Increase in Defence exports of India
- Based on the latest estimates released by the Stockholm International Peace Research Institute (SIPRI) in the period between 2009-13 and 2014-18, Indian defence imports fell even as exports increased.
- Factors responsible for increase in exports
- ‘Make in India’ initiative, as part of which a number of components from Indian private and public sector enterprises have been prioritized by the government.
- Under ‘Make in India’ initiative, the Defence Procurement Procedure (DPP) lays out the terms, regulations and requirements for defence acquisitions as well as the measures necessary for building India’s defence industry.
- It created a new procurement category in the revised DPP of 2016 dubbed ‘Buy Indian Indigenously Designed Developed and Manufactured’ (IDDM).
- The ‘Make’ procedure has undergone simplification “earmarking projects not exceeding ten crores” that are government funded and ₹3 crores for MSMEs that are industry-funded.
- In addition, the government has also introduced provisions in the DPP that make private industry production agencies and partners for technology transfers.
- Public sector driven: Among arms producers, India has four companies among the top 100 biggest arms producers of the world, which are Indian ordnance factories, Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL) and Bharat Dynamics Limited (BDL).
- In 2014, govt. also delisted or removed several products that were restricted from exports. It dispensed with the erstwhile No Objection Certificate (NOC) under DPP restricting exports of aerospace products, several dualuse items and did away with two-thirds of all products under these heads.
Explaining falling imports
- Indian defence acquisitions have also fallen due to the cancellation of big-ticket items. For e.g. the India-Russia, joint venture for the development of the advanced Su57 stealth Fifth Generation Fighter Aircraft (FGFA).
- India cancelled involvement in 2018 due to rising dissatisfaction in delays with the project as well as the absence of capabilities that would befit a fifth generation fighter jet.
- In 2015, the Modi government reduced the size of the original acquisition of 1126 Rafale (MMRCA) from Dassault to 36 aircraft, which is also responsible for significantly driving down the import bill.
- Challenges ahead
- Small Medium Enterprises still face stunted growth because India’s defence industrial model creates disincentives for the private sector.
- Governments have tended to privilege Defence Public Sector Units (DPSUs) over the private sector, despite ‘Make in India’.
Reference: https://www.thehindu.com/opinion/lead/still-no-bullseye-in-volume-and-value/article31230343.ece
ECONOMY
The battle to set oil prices
- The global economy, grappling with the COVID19 pandemic, is now facing an energy war, with crude oil prices crashing in the international market. Crude oil prices tanked, as the Organization of the Petroleum Exporting Countries (OPEC) and its partners failed to reach any consensus on cutting back production to levels that would enable prices to remain stable.
- The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization of 14 nations with world's "proven" oil reserves.
- The stated mission of the organization is to "coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets, in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.
- The current OPEC members are the following: Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia (the de facto leader), the United Arab Emirates and Venezuela. Ecuador, Indonesia and Qatar are former members.
- The U.S., as the largest oil producer today, has stayed away from the OPEC plus arrangement, hoping that production cuts by OPEC-plus countries will help it increase its market share.
- OPEC plus refers to OPEC’s cooperation with non-OPEC oil producers to effect production cuts.
- OPEC+ informally referred to as the ‘Vienna Group’, includes10 Non-OPEC nations, notable among them Russia, Mexico and Kazakhstan.
- Russia refused any production cuts, unleashing an energy war with Saudi Arabia. There has been a spectacular fall of around 30% in crude oil prices.
- Demand for oil had already weakened owing to the global economic slowdown, and this weakening has become more pronounced due to the COVID19 pandemic, which has hit China’s economy and reduced consumption by the world’s largest importer.
- Why Russia has refused any production cuts?
- Russia’s decision to reject any production cuts is driven directly by its strategy of denying market share to American shale oil producers. The latter rely on higher prices in the range of $50 -$60 to remain profitable because of higher production costs. At $31 per barrel, not more than five American shale oil producers can remain profitable.
- Russia also remains resentful of sanctions imposed on Rosneft, which is building the gas pipeline project Nord Stream 2 across the Baltic Sea, carrying Siberian gas to Germany, a major consumer.
- Moscow has accused Washington of using geopolitical tools for commercial reasons.
- Saudi-Russian oil war
- Both Saudi Arabia and Russia depend heavily on oil revenues — upwards of 80% of export revenues accrue from crude oil.
- Both are also fighting to retain market share.
- It has been reported that Saudi Arabia has agreed to supply crude oil at lower rates to refiners in India and China, two primary customers, but refused to supply to other refiners in Asia. This will impact on India’s oil procurement from the U.S.
Benefit to importing countries
- India, with 80% of its energy requirements met by imports from the international market, stands to save ₹10,700 crores for every $1 drop in prices. While this may help manage the current account deficit, fiscal deficit and inflation, there are non-oil related collateral factors that can cause countervailing adverse economic impact.
- Can Russia and Saudi Arabia sustain the energy war for long?
- Unlikely, Saudi Arabia’s production cost is the cheapest in the world and it can ramp up production to 12 million barrels a day. By offering discounts, it can undercut other producers, including Russia.
- Domestic considerations also matter.
Reference: https://www.thehindu.com/opinion/op-ed/the-battle-to-set-oil-prices/article31230648.ece
RBI relaxes export rules, allows States and UTs to borrow more
- “In view of the disruption caused by the pandemic, the time period for realization and repatriation of export proceeds for exports made up to or on July 31, 2020, has been extended to 15 months from the date of export,” the RBI said.
- The measure will enable exporters to realize their receipts, especially from COVID19 affected countries, within the extended period, and also provide greater flexibility to exporters to negotiate future export contracts with buyers abroad.
- The central bank has also formed an advisory committee to review the ways and means limit for State governments and union territories.
- What are Ways and Means Advances?
- The ‘Ways and Means Advances’ is a scheme that helps to meet mismatches in receipts and payments of the government.
- Under this scheme, a government can avail itself of immediate cash from the RBI.
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