SAMVEG IAS’30Day Plan for UKPCS Prelims2016 (Day3) -

SAMVEG IAS’30Day Plan for UKPCS Prelims2016 test (Day3)

Clamping down on ordinance raj

Both superior courts and constitutional functionaries have routinely deprecated the propensity of governments to take the ordinance route for mere political expediency. The temptation to use the power vested in the President and the Governors under Articles 123 and 213 of the Constitution is generally a result of one of the following three reasons: reluctance to face the legislature on particular issues, fear of defeat in the Upper House where the government may lack the required numbers, and the need to overcome an impasse in the legislature caused by repeated and wilful disruption by a vociferous section of the Opposition. The verdict of a seven-member Bench of the Supreme Court breaks new ground in highlighting the constitutional limitations on the cavalier resort to ordinances. The Supreme Court had already declared in 1986, in D.C. Wadhwa, that repeated re-promulgation of ordinances was unconstitutional. Now, in Krishna Kumar Singh v. State of Bihar, it goes deeper and concludes that the failure to place an ordinance before the legislature constitutes abuse of power and a fraud on the Constitution. It noted in this case that a 1989 ordinance by which the State government took over 429 Sanskrit schools in Bihar was promulgated several times until 1992, but not once tabled in the State Assembly.

The judgment widens the scope of judicial review of ordinances. The court can go into whether the President or Governor had any material to arrive at the satisfaction that an ordinance was necessary and to examine whether there was any oblique motive. The judgment will be welcomed by those who believe in constitutional propriety, legislative control over lawmaking and the larger ethical basis for the exercise of power in any circumstance. However, it is not always that the ordinance route can be neatly explained as a cynical move to privilege political expediency over parliamentary accountability. While contending that ordinances should be issued only to meet certain exigencies and under compelling circumstances, it is equally important to understand that disruption as a parliamentary tactic plays a significant role. A dysfunctional House sometimes constitutes a compelling circumstance in itself. Generally, it is the combination of Opposition obstructionism and government obstinacy in not making any concessions to those across the aisle that derails legislative business and leads to ordinances. The courts can only define the boundaries between the use and abuse of power, but it is up to parties in the legislature to observe the limits of constitutional propriety and show that they have both the time and the will to enact laws.

 

How to go about chasing black money

The focus of any sustainable reform of the taxation structure must be on reducing flows of tax evasion, not going after existing caches of black money

The flow of tax evasion every year is what should be the focus of any drive targeting black money, rather than the caches accumulated from past tax evasion. Those stocks certainly existed, but the really large holders of these assets had long ago moved on from physical forms (like cash or gold or real estate) to financial assets. These typically took the form of loans to large commercial construction companies, which simply would not have been able to access the financial capital they needed without borrowing in cash on the informal market. Cash came in particularly handy to pay the wages of construction workers.

The problem is that we did not develop bond markets in the country as we should have, to the point where large construction projects could easily access formal financing. Historically, infrastructure construction worldwide has been bond-financed, including the rail network in colonial India. It was because the bond market today remains so poorly developed that there was such buoyant demand for loans in cash, and therefore for accumulation of black wealth in liquid loanable form. The treasurers of political parties will bear this out.
Lending rates on these channels are astronomically high. The borrowers would have much preferred a regulated bond market where rates would have been far lower, but that market was quite simply missing. Bond markets today call for a whole ecosystem, with credible rating agencies to give lenders the confidence to move into that disintermediated financial space, instead of just being risk averse and placing their savings with banks or other aggregators like the Life Insurance Corporation of India (LIC).
Notwithstanding demonetization, there still remains a large outstanding stock of loans taken in cash by commercial construction companies, which will have to be unwound. Through formal bank channels? The lenders would clearly prefer payback in cash. There will continue to be cash scarcity in the economy until those demands for cash are fully satiated.
Until then, there will not be enough cash for the kinds of everyday purchases that cannot immediately be shifted to digital platforms. Aggregate demand in the system will continue to be squeezed as a result, imposing a growth cost that we can ill afford. Cash transactions can only be shifted to a digital platform at a measured pace over time. What we do not need are jerky ill-judged moves, such as that by the Delhi Metro, to a particular mobile wallet, that have to be rolled back the next day.
The thing to do is to remonetize the economy fully for now, and to reduce cash dependence in a planned sector-specific manner. Unless remonetization is complete, growth cannot be restored, employment cannot be generated, and the political popularity of demonetization will get eroded.
Moving everyday transactions to a digital platform cannot be done overnight. Mobile wallets are in business in pursuit of profit, so if they provide a service they have to be paid for it. What the digital move has done, therefore, is to introduce friction into the payment system. Who is paying? When you digitally pay just the value of your purchase to your vegetable seller, the cost of the service is being loaded on to the seller. He accepts it willingly now, because he does not want his business to be restricted to those with cash. Over time, the cost of the conversion will be loaded on to the final consumer (and it already is, by milk suppliers in Delhi, for instance).
Even though the user base of mobile wallets is expanding by the hour, they are reporting losses. While the volume of transactions has exploded, their total value is reported to have remained flat, because the average value of each transaction has come down. The costs of mobile-wallet companies are a function of the number of transactions they put through, while their revenue is calibrated to value. The losses are worrying because mobile wallets are essentially deposit-taking non-bank financial institutions. I am unclear as to whether the regulatory structure for these new enterprises is in place. A crash of any one of them will be catastrophic. It is also possible that the losses have arisen because of extravagant sponsorships. In the recent cricket Test series between India and England, the name of a mobile wallet sponsor is displayed prominently even on the stumps.
There is already scattered evidence that small retail establishments which initially put up notices to say they accepted mobile wallets, have now firmly gone back to cash, because of initial hiccups which might have been due to server overload. Or maybe these episodes were invented as an excuse for sellers not wanting to pay for the service.
Another reason for retailers retreating from wallets is that their employees still demand payment in cash. Retail employees just cannot afford to receive their salaries any other way since their biggest monthly payment, which is rent for the rooms where they live, can only be paid in cash. House rentals will be among the last bastions to fall when it comes to moving away from cash payments. Doctors, tutors for their children, all demand payment in cash. These are the small channels for tax evasion which will prove stubbornly resistant to change.
That gets us to that infamous beast, black money. The important thing about is that it comes in many sizes. The sense that the economy is divided into a few large practitioners of the black arts through which black money is accumulated, and the rest who are untouched by it, is completely false. There are many millions who earn incomes well above the taxable threshold, who are below the tax radar and prefer to stay there. They will stay with cash. In a supply-constrained market, like housing, they know that tenants cannot move away. So the cash requirement of the economy cannot be substantially curtailed just yet.
As far as the tax authorities are concerned, these small offenders will have to be overlooked while they focus on the big missed opportunities. Every country which has successfully reformed its taxation structure, such as Chile, for example, has done just that. And for that, the information base for tax tracking was already in place. The available avenues were just not being used. We did not need demonetization for that.
Take, for example, purchases of big expensive cars, the big labels like Mercedes-Benz or BMW. The number of such cars bought and registered every year is information already in the database of the motor vehicles department of every state. In recent years, no purchase of a car has been possible without a PAN number. Why were these databases not tapped to start an investigation on a presumption of taxability? Surely, the owner of a Mercedes-Benz would have income above the taxable threshold? Or clients at high-end hospitals, where the facilities include theatres for both surgery and movie-screening, and pools, spas and fine-dining options for family members accompanying patients?
The very first paper I wrote on fiscal issues was one recommending the use of presumptive methods for taxability. The idea was by no means new. It had been practised in a large number of countries with huge success.
Israel, for example, in its early years needed tax revenue, and it had to do it in a way which would not alienate taxpayers since the country needed to stand united in the face of external hostility. For a big purchase like a yacht or a luxury car by a moneyed immigrant, there would be a presumptive taxable income estimated at some multiple of the value of the transaction. Restaurant owners would be taxed on a presumption of taxability based on capacity. The formula was arrived at through discussions with restaurant associations on what seemed fair, and was not contestable. Those that did not meet the presumptive income had to pay the tax anyway, and eventually closed down. The presumptive tax worked as an efficiency incentive. Most of all, these methods are survey-based and formulaic, and thus prevent the caprice and intrusive character of tax terrorism.
Another avenue of trackability peculiar to India is expenditure on high-end weddings. I have heard of events, but never actually attended any, replete with portable air conditioners, which cool open spaces with a long duct that transports away the heat from the engine. In the summer months, the number of such devices needed and the electricity consumed can well be imagined. It would have been a relatively simple matter to track the leasing points of either the devices themselves or the generators which power them, or the consumption peaks for power pulled off the grid.
But we live in a country where utility companies are not able to collect their dues, leaving public-sector banks groaning under default. A simple administrative requirement for PAN numbers attached to electricity dues or leasing of generators would have led to higher revenue for both the income-tax department and power distribution companies.
Large-scale tax evasion has long been practised right in the face of the income-tax authorities through political connections. Those without political connections have had to pay their way out. Either way, unless these features of the taxation system are reformed, there is nothing demonetization can do for tax revenue. What it did was to cause some temporary dislocation at the high end of the wealth and income scale, which lasted for a much shorter period than it did for the rest.
It was that short-lived inconvenience suffered by high net-worth individuals that fuelled the widespread political support for the move, as reported by many opinion surveys. But that French Revolution moment will give way if Madame Defarge finds she cannot buy the wool with which to do her knitting.

Charting our artificial intelligence future

In the great software of the universe, we will remain a beautiful bug, and AI will increasingly become a normal feature

Galileo viewed nature as a book written in the language of mathematics and decipherable through physics. His metaphor may have been a stretch for his milieu, but not for ours. Ours is a world of digits that must be read through computer science.

It is a world in which artificial-intelligence (AI) applications perform many tasks better than we can. Like fish in water, digital technologies are our infosphere’s true natives, while we analogue organisms try to adapt to a new habitat, one that has come to include a mix of analogue and digital components.

We are sharing the infosphere with artificial agents that are increasingly smart, autonomous, and even social. Some of these agents are already right in front of us, and others are discernible on the horizon, while later generations are unforeseeable. And the most profound implication of this epochal change may be that we are most likely only at the beginning of it.
The AI agents that have already arrived come in soft forms, such as apps, Web bots, algorithms, and software of all kinds; and hard forms, such as robots, driverless cars, smartwatches, and other gadgets. They are replacing even white-collar workers, and performing functions that, just a few years ago, were considered off-limits for technological disruption: cataloguing images, translating documents, interpreting radiographs, flying drones, extracting new information from huge data sets, and so forth.
Also read: Tech in 2017: What will change?
Digital technologies and automation have been replacing workers in agriculture and manufacturing for decades; now they are coming to the services sector. More old jobs will continue to disappear, and while we can only guess at the scale of the coming disruption, we should assume that it will be profound. Any job in which people serve as an interface—between, say, a GPS and a car, ingredients and a finished dish, or symptoms and a corresponding disease—is now at risk.
But, at the same time, new jobs will appear, because we will need new interfaces between automated services, websites, AI applications, and so forth. Someone will need to ensure that the AI service’s translations are accurate and reliable.
What’s more, many tasks will not be cost-effective for AI applications. For example, Amazon’s Mechanical Turk program claims to give its customers “access to more than 500,000 workers from 190 countries”, and is marketed as a form of “artificial artificial intelligence”, But as the repetition indicates, the human “Turks” are performing brainless tasks, and being paid pennies.
These workers are in no position to turn down a job. The risk is that AI will only continue to polarize our societies if we do not manage its effects. It is not hard to imagine a future social hierarchy that places a few patricians above both the machines and a massive new underclass of plebs. Meanwhile, as jobs go, so will tax revenue; and it is unlikely that the companies profiting from AI will willingly step in to support adequate social-welfare programmes for their former employees.
Also read:Reverse-engineering artificial intelligence
Instead, we will have to do something to make companies pay more, perhaps with a “robo-tax” on AI applications. We should also consider legislation and regulations to keep certain jobs “human.” Indeed, such measures are also why driverless trains are still rare, despite being more manageable than driverless taxis or buses.
Still, not all of AI’s implications for the future are so obvious. Some old jobs will survive, even when a machine is doing most of the work: A gardener who delegates cutting the grass to a “smart” lawnmower will simply have more time to focus on other things, such as landscape design.
Another source of uncertainty concerns the point at which AI is no longer controlled by a guild of technicians and managers. What will happen when AI becomes “democratized” and is available to billions of people on their smartphones or some other device?
For starters, AI applications’ smart behaviour will challenge our behaviour, because they will be more adaptable to the future infosphere. A world where autonomous AI systems can manipulate our choices will force us to rethink the meaning of freedom. And we will have to rethink sociability as well, as artificial companions, 3D servants, or life-like sexbots provide attractive and possibly indistinguishable alternatives to human interaction.

It is unclear how all this will play out, but we can rest assured that new artificial agents will not confirm the scaremongers’ warnings, or usher in a dystopian science-fiction scenario. Brave New World is not coming to life, and the “Terminator” is not lurking just beyond the horizon either. We should remember that AI is almost an oxymoron: Future smart technologies will be as stupid as your old car. In fact, delegating sensitive tasks to such “stupid” agents is one of the future risks.

All these profound transformations oblige us to reflect seriously on who we are, could be, and would like to become. AI will challenge the exalted status we have conferred on our species. While I do not think that we are wrong to consider ourselves exceptional, I suspect that AI will help us identify the irreproducible, strictly human elements of our existence, and make us realize that we are exceptional only in so far as we are successfully dysfunctional.
In the great software of the universe, we will remain a beautiful bug, and AI will increasingly become a normal feature.

Nasa announces 2 missions to study early solar system

The mission will help Nasa scientists to learn how planets and other bodies separated into layers like cores, mantles and crusts early in their histories

The US space agency Nasa on Wednesday announced two unmanned missions to asteroids designed to study one of the earliest eras in the history of the solar system.

They have been baptized Lucy and Psyche, and the National Aeronautics and Space Administration (Nasa) hopes to launch them in 2021 and 2023, respectively.
The period Nasa wants to learn more about is an era less than 10 million years after the birth of the sun.
The Lucy mission — named for a famous, critical hominin fossil set found in Ethiopia in 1974 — will involve sending a robotic spacecraft to study Jupiter’s so-called Trojan asteroids. These are thought to be relics of a much earlier era in the history of the solar system.
“This is a unique opportunity,” said Harold Levison, principal investigator of the Lucy mission.
“Because the Trojans are remnants of the primordial material that formed the outer planets, they hold vital clues to deciphering the history of the solar system. Lucy, like the human fossil for which it is named, will revolutionize the understanding of our origins.”
Meanwhile the Psyche mission aims to explore a huge, one-of-a-kind metal asteroid, called 16 Psyche, that is about three times farther away from the sun than the Earth is.
Most asteroids are rocky or icy but this one is thought to be mostly of iron and nickel, like the Earth’s core.
Nasa said scientists are considering the possibility that Psyche could be an exposed core of an early planet as large as Mars but which shed its rocky outer layers due to violent collisions billions of years ago.
The mission will help scientists learn how planets and other bodies separated into layers like cores, mantles and crusts early in their histories.
“This is an opportunity to explore a new type of world - not one of rock or ice, but of metal,” said Psyche principal investigator Lindy Elkins-Tanton, of Arizona State University in Tempe.
“16 Psyche is the only known object of its kind in the solar system, and this is the only way humans will ever visit a core. We learn about inner space by visiting outer space,” Elkins-Tanton said.

SAMVEG IAS’30Day Plan for UKPCS Prelims2016 test (Day2) -

President’s New Year address to Governors/Lt. Governors

President’s New Year address to Governors/Lt. Governors

My dear Governors and Lt. Governors:

1.                  Let me begin by extending warm greetings and best wishes to you for a year full of peace, prosperity and happiness.

2.                  The year that has just gone by was a year of mixed fortunes. It began on a very promising note with the economy performing well, overcoming the weak global economic trends. GDP growth of 7.2 percent in the first half of 2016-17 – same as that of last year – is a pointer to the fact that our economic recovery has been on solid grounds. In 2014 and 2015, below normal rains had caused rural distress. A good monsoon in 2016 is expected to improve agricultural production and increase rural employment and incomes. Though our exports have been affected by weak global demand, we have a stable external sector. Reviving exports will remain a challenge but we can overcome it by improving the competitiveness of the domestic industry.

3.                  Demonetization, while immobilizing black money and fighting corruption, may lead to temporary slowdown of the economy. We all will have to be extra careful to alleviate the suffering of the poor which might become unavoidable for the expected progress in the long term. While I appreciate the thrust on transition from entitlement approach to an entrepreneurial one for poverty alleviation, I am not too sure that the poor can wait that long. They need to get succour here and now, so that they can also participate actively in the national march towards a future devoid of hunger, unemployment and exploitation. The recent package announced by the Prime Minister will provide some relief.

Hon’ble Governors and Lt. Governors:

4.                  This year, there will be elections in as many as seven states. The dates for elections in five states have already been announced. The conduct of free and fair elections has made our democracy one of the most vibrant in the world. Elections reflect the attitudes, values and beliefs of the people towards their political environment. They symbolize the sovereignty of the people and provide legitimacy to the authority of the government. They also serve the purpose of regulation of public policies and mobilization of public opinion.

5.                  As we have all experienced, elections are usually marked by competitive populism, electoral rhetoric and vote bank politics. Noisy debates can deepen the fault-lines in the society. You, as Governors and Lt. Governors, command respect and attention of the people of your state. Through your interaction and wise counsel, you can play an important role in easing the tensions in the society. Goodwill must prevail between different communities. At times, harmony may be put to test by vested interests. Communal tensions may rear their ugly head. Rule of law must form the sole basis of dealing with any such challenging situation.

Governors and Lt. Governors:

6.                  In a pluralistic democracy like ours, tolerance, respect for contrary views and patience are a must. These values have to be preserved. India is a multi-faceted nation of 1.3 billion people, 122 languages, 1600 dialects and 7 religions. In the words of Pt. Jawaharlal Nehru which I quote: "It is a country held together by strong but invisible threads” (unquote). India’s strength lies in her diversity. The multiplicity in culture, faith and language is what makes India special. There will always be divergent strands in public discourse. We may argue. We may disagree. But we cannot deny the prevalence of multiplicity of opinion. You can, through your calm influence, inculcate amongst the citizens of your state this fundamental ethos of our civilization.

Hon’ble Governors and Lt. Governors:

7.                  You are the first citizens of your states. When you assumed this exalted office, you had taken an oath to protect, preserve and defend the Constitution. This pious document protects the liberty of the people and promotes the well-being of the citizens. It decrees inclusiveness, tolerance, self-restraint, and protection of women, senior citizens and weaker sections as essential ingredients of our polity. Our institutions of democracy must operate on these vital features. Strong credible institutions lead to good governance ensuring a healthy functioning of the democracy.

Dear Governors and Lt. Governors:

8.                  You all have a very important role to play in the improvement of higher education in your states. As chancellors and visitors of various universities, you can work with the academic leaders to effect holistic changes for quality up-gradation in the institutions of higher learning. I have been exhorting the academia to concentrate on attaining excellence through original research and technology development. A look at numerous social problems affecting millions of women and men in our farms and factories clearly shows that humane values have not yet become a dominant driver of our intellectual pursuits. This should receive your focused attention. Our interactions at the conferences at Rashtrapati Bhavan have yielded several positives in areas like: faculty sourcing and development; ICT for pedagogic refinement; research and innovation; industry-academia interface; and alumni involvement. I am aware of the good work being done by many of you in this field. Interaction amongst academic institutions can help spread best practices. These institutions can leverage knowledge and experience to the benefit of all. Your keen interest can rejuvenate a sector that is best positioned to support an innovation-led knowledge economy.

9.                  Another area where I envisage a role for you is in promoting art and culture in your respective states. As I have said elsewhere, art and culture are our link with the past. They provide the foundation for our current thought and by extension, the platform for our future action. They also provide a stable base to life and make it possible for us to have a joyous existence. With art and culture, we can experience life in its fullest and most meaningful form. They add to the overall happiness and well-being of the society.

Hon’ble Governors and Lt. Governors:

10.              Before I conclude, I express my deep appreciation to you all for coming together on this platform for our interaction. Within the limited time available, let us share some of our key concerns. I do look forward to our extended interface in the Governor’s Conference, when we will have the time to hear each one of us in detail.