GST :A REVIEW FROM GOVT POINT OF VIEW

GST :A REVIEW FROM GOVT POINT OF VIEW

What is Nirbhay missile?

What is Nirbhay missile?
'Nirbhay', a two-stage missile, is 6-metre long, 0.52 metre wide and with a wingspan of 2.7 metre. It can carry the designated warhead at a speed of 0.6 -0.7 Mach. Its launch weight is about 1500 kg.
What is Nirbhay Missile?
On Tuesday, India successfully conducted a flight test of its state-of-the-art sleek cruise missile ‘Nirbhay’, which is capable of carrying warheads of up to 300 kg. The indigenously designed and developed long-range sub-sonic cruise missile was launched from a test range at Chandipur along the Odisha coast. Defence Research and Development Organisation (DRDO) sources told PTI that the missile was launched from a specially designed launcher from the launch complex-3 of the Integrated Test Range (ITR) at Chandipur in Odisha’s Balasore. This was the fifth experimental test of the homegrown missile system. This is a big feat for India because out of the four earlier trials ever since its debut launch in 2013, only one was successful.
How does it function?
‘Nirbhay’, a two-stage missile, is 6-metre long, 0.52 metre wide and with a wingspan of 2.7 metre. It can carry the designated warhead at a speed of 0.6 -0.7 Mach. Its launch weight is about 1500 kg.
With an operational range of 1,000 km, the missile is fueled by a solid rocket motor booster developed by the Advanced Systems Laboratory (ASL). The missile is guided by a highly-advanced inertial navigation system which is also indigenously designed and developed by the Research Centre Imarat (RCI), DRDO sources had told PTI. ‘Nirbhay’ missile can travel with a turbofan or turbojet engine. The way it functions is this: Soon after the cruise missile is able to achieve its designated altitude and velocity, the booster motor is separated and the engine automatically switches on taking further propulsion.
A DRDO scientist associated with the project told PTI that ‘mid-way in its flight, the missile’s wing opens up by commands generated by the high-tech on-board computer for stabilising the flight path’. There are ground-based radars and IAF aircraft that help track the missile’s trajectories from lift off to splash down.
What happened during earlier test flights?
The maiden test flight of ‘Nirbhay’ held on March 12, 2013 had to be terminated midway for safety reasons due to malfunction of a component. However, the second launch on October 17, 2014 was successful, he said. In the next trial conducted on October 16, 2015, the missile deviated from its path after covering 128 km. The last test flight held on December 21, 2016 had to be aborted after 700 seconds of its test flight as it deviated from its designated path. All these trials were conducted from the same base at Chandipur ITR.
Three Pune labs contributed significantly for crucial parts of Nirbhay missile
Three Pune laboratories of the DRDO played a significant role for crucial parts like initial booster, warhead and the launcher for Nirbhay missile. Pune-based High Energy Material Research Laboratory (HEMRL) has contributed for the initial booster system that launches the missile. Armament Research and Development Establishment (ARDE) helped in developing the warhead of the missile and its special launcher was designed and developed by the Research and Development Establishment (Engineers), R&DE(E) at Dighi in Pune.

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Restructuring of National Rural Drinking Water Programme

Cabinet approves continuation and Restructuring of National Rural Drinking Water Programme

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has accorded its approval for continuation and restructuring of National Rural Drinking Water Programme (NRDWP) to make it outcome-based, competitive and better monitored with increased focus on sustainability (functionality) of schemes to ensure good quality service delivery to the rural population.

A sum of Rs. 23,050 crore has been approved for the programme for the Fourteenth Finance Commission (FFC) period 2017-18 to 2019-20. The programme will cover all the Rural Population across the country. The restructuring will make the programme flexible, result-oriented, competitive, and will enable the Ministry towards to reach the goal of increasing coverage of sustainable Piped Water Supply.

The details of the decision are as follows:

1. National Rural Drinking Water Programme (NRDWP) is to be continued co-terminus with the 14th Finance Commission cycle till March 2020.

2. With the restructuring of the NRDWP, there will be 2% earmarking of funds for Japanese Encephalitis (JE) /Acute Encephalitis Syndrome (AES) affected areas.

3. A new Sub-programme under NRDWP viz. National Water Quality Sub-Mission (NWQSM) which has been started by the Ministry of Drinking Water and Sanitation in February 2017 will address the urgent need for providing clean drinking water in about 28000 Arsenic & Fluoride affected habitations (already identified). As per estimates, about Rs. 12,500 crore as Central share will be required over 4 years i.e. up to March, 2021. This is being funded from the allocation under NRDWP.

4. Pre-financing for the agreed schemes, to the extent of half of the second instalment amount, will be made by the State Governments, which will be reimbursed later on from the central funding. If the State(s) fails to claim this amount before 30th November in the financial year, then, these funds will become a part of the common pool, which will be released to the high performing States, which have already pre-financed the requisite Government of India share on a first come first serve basis.

5. Other half of second instalment of funds will be released to the States based on functionality status of completed piped water supply schemes, which will be evaluated through a third party.

6. The Cabinet has approved Rs. 23,050 crore for the programme for the FFC period 2017-18 to 2019-20.

The NWQSM aims to cover all rural population in Arsenic/Fluoride affected habitations with clean drinking water on a sustainable basis by March 2021. States have been given more flexibility in utilization of NRDWP funds by reducing the number of components under the programme.

As per the Integrated Management Information System (IMIS) of the Ministry of Drinking Water and Sanitation, about 77% of rural habitations in India have achieved a fully covered (FC) status (40 litres per capita per day) and 56% of the rural population have access to tap water through public stand posts within which 16.7% have household connections.

Background:

The NRDWP was started in 2009, with a major emphasis on ensuring sustainability (source) of water availability in terms of potability, adequacy, convenience, affordability and equity. NRDWP is a Centrally Sponsored Scheme with 50.50 fund sharing between the Centre and the States. Over the years, learning from the success achieved and the deficiencies felt during the implementation of NRDWP, certain modifications are needed in existing guidelines and procedure of release of funds to the States for making the programme more outcome-oriented and competitive.

Keeping in view the need to make the NRDWP more result-oriented, incentivize competition amongst States and focused on sustainability, a series of discussions were held with States, various stakeholders / domain experts / international institutions and NITI Aayog, some amendments in the guidelines of the programme have been introduced. These are giving more flexibility to the states in utilization of NRDWP funds by reducing the number of components under the programme. Focus on piped water supply, increase level of service delivery, thrust on coverage of water quality affected habitations (National Water Quality Sub-Mission to tackle Arsenic & Fluoride affected habitations, JE / AES areas), coverage of Open Defecation Free (ODF) declared villages, SAGY GPs, Ganga GPs, Integrated Action Plan (IAP) districts, Border Out Posts (BOP) with piped water supply and Institutional set up for proper O&M of water supply assets etc. have been introduced.

National Testing Agency (NTA) to conduct entrance examinations for higher educational institutions

Cabinet approves Creation of National Testing Agency (NTA) to conduct entrance examinations for higher educational institutions

The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved creation of National Testing Agency (NTA) as a Society registered under the Indian Societies Registration Act, 1860, and as an autonomous and self-sustained premier testing organization to conduct entrance examinations for higher educational institutions.

Features:
· The NTA would initially conduct those entrance examinations which are currently being conducted by the CBSE.
· Other examinations will be taken up gradually after NTA is fully geared up.
· The entrance examinations will be conducted in online mode at least twice a year, thereby giving adequate opportunity to candidates to bring out their best.
· In order to serve the requirements of the rural students, it would locate the centres at sub-district/district level and as far as possible would undertake hands-on training to the students.

Constitution:
· NTA will be chaired by an eminent educationist appointed by MHRD.
· The CEO will be the Director General to be appointed by the Government.
· There will be a Board of Governors comprising members from user institutions.
· The Director General will be assisted by 9 verticals headed by academicians/ experts.

Finances:
NTA will be given a one-time grant of Rs.25 crore from the Government of India to start its operation in the first year. Thereafter, it will be financially self-sustainable.
Impact:
Establishment of NTA will benefit about 40 lakh students appearing in various entrance examinations. It will relieve CBSE, AICTE and other agencies from responsibility of conducting these entrance examinations, and also bring in high reliability, standardized difficulty level for assessing the aptitude, intelligence and problem solving abilities of the students.

Background:

In view of the need to have a specialized body in India like the most advanced countries, the Finance Minister in the Budget speech of 2017-18 had announced setting up of a National Testing Agency (NTA) as an autonomous and self-sustained premier testing organization to conduct all entrance examinations for higher educational institutions.

India needs a federal green agency

India needs a federal green agency
It should oversee interstate environmental challenges such as clean air
The thick smog that has enveloped north India over the past few days is a public health emergency. The callous response by various government agencies to what has become an annual affair is nothing short of scandalous. There is a deeper problem here. As every state blames the other, the weak policy response is also an indication of an institutional vacuum to deal with public goods issues in a federal political system.

The story so far is well known. Citizens living in the National Capital Region are among the millions who have been left gasping as farmers in neighbouring states burn stubble on their farms, before preparing them for the winter sowing cycle. The immediate responses include calls for a ban on such biomass burning. However, as Mridula Ramesh of the Sundaram Climate Institute has written in Firstpost, a far better alternative to a unilateral ban is to examine solutions based on an understanding of why farmers burn stubble in the first place. Any viable policy response should take into account the needs of the farmers as well as city dwellers.

A key principle of policy design is that the intervention should focus on the root of the problem—stubble burning, in this case. The distortion should be dealt with directly. In this case, is it possible to change the incentives for farmers who burn biomass?

The standard economic solution is to impose a Pigouvian tax on farmers to ensure the polluter pays for his actions. Such a tax would change incentives by increasing the cost of stubble burning. However, the Pigouvian solution is neither politically practical nor just. A far better way to deal with the effects of stubble burning comes from the work of Ronald Coase.

Coase argued, in a landmark paper published in 1960, that the solution to externalities such as pollution is not unilateral action but complex bargaining between different interest groups. The bargaining will be based on how much farmers value stubble burning on the one hand and how much city dwellers value clean air on the other.

One example of the use of the Coasean method is the landmark New York City Watershed Agreement of 1997. New York had been asked by government regulators to build an expensive water filtration plant to improve the quality of water it supplied citizens. To reduce costs, the city negotiated with upstream farmers who were polluting the watershed area to either buy out their land or pay them to change farming methods.

In the case of the smog in north India, it could mean that farmers should be paid to invest in better technologies to deal with the stubble left over from the previous harvest. A subsidy will change their incentives. Such a Coasean bargain is premised on two preconditions. First, property rights need to be assigned. Second, there needs to be a credible agency to manage the negotiation. India has neither right now.

The assignment of property rights in this case is devilishly difficult. The more practical solution is that the state governments of Delhi, Punjab and Haryana be considered the representative agencies for their respective citizens. They should negotiate on how the cost of changing farming practices will be shared. A first step will be to estimate the amount to be paid for every hectare of farmland that is shifted away from stubble burning.

The second problem is the lack of an institutional structure to deal with such federal negotiations, especially when the three state governments are run by three different political parties. This is where the Union government needs to step in as a coordinating agency. It can also offer to bear half the fiscal costs of any green bargain between the three states.

However, a better solution over the long term is to set up a federal agency like the Environmental Protection Agency in the US, with powers to get states to the bargaining table. The exact contours of such an agency will need to be debated by climate change scientists, economists, environmental activists and political parties. The current institutional vacuum needs to be filled.

There is also a broader lesson here. The ongoing fiscal decentralization is welcome, but India still needs an effective Union government to hold a complex country together. One challenge that needs central coordination is the provision of national public goods—be it national defence or monetary stability or environmental quality.

The winter smog that chokes millions of people every year needs to be dealt with through a long-term institutional strategy rather than hasty administrative responses each time citizens choke.

Does India need a new institutional architecture to deal with multi-state problems such as air pollution?

Distributive justice and utilitarianism

Distributive justice and utilitarianism
Utilitarianism’s handling of the reality of heterogeneous populations and consequent inequality is perverse
Utilitarianism is one of several ethical theories addressing the question of how to assess the “goodness” of any state of affairs. In the history of ideas, the most distinguished proponents and defenders of utilitarianism have been the great English thinkers Jeremy Bentham (1748-1832) and John Stuart Mill (1806-73).

Bentham’s is one of the foremost names in British jurisprudence: A man who held the notion of “natural rights” to be “nonsense upon stilts”, he nevertheless also fought for the abolition of slavery. J.S. Mill, a child prodigy who grew into an adult genius, is known (apart from his contributions to the principles of political economy) for his tracts On Liberty and On Utilitarianism. Utilitarianism, as encompassed in what is called the “Benthamite Social Welfare Function”, is a staple feature of contemporary economic theory. Among economist-philosophers in the modern era, a notable proponent of utilitarianism has been the Nobel Prize-winning game theorist John Harsanyi.

In summary form, utilitarianism is well-served by that clichéd description of it as demanding “the greatest good of the greatest number”. Stated more rigorously, the “goodness” of any state of affairs is taken to be reflected by the sum of the utilities derived from that state by all the individuals in a community (this sum is what is called the Utilitarian or Benthamite Social Welfare Function). In comparing the “goodness” of alternative states of affairs, utilitarianism will recommend that state in which the sum of individual utilities is larger. “Utility”, for present purposes, may simply be interpreted as “desire fulfilment”. (It is said that the famously irascible Cambridge economic theorist Frank Hahn, growing weary of philosophical definitions, once told his class that “utility is the damned thing you maximize”!) In order to be able to sum utilities across individuals, some special assumptions about personal utility must be made—in particular, that utility is “cardinal” (which permits statements such as “my utility is twice as much in state x as in state y”) and also “interpersonally comparable”, that is, commensurable across individuals.

What does utilitarianism have to say about distributive justice? To fix ideas, let us ask: What is the optimal distribution of income that utilitarianism would prescribe in a two-person world? Typically, the assumption is that both individuals share the same utility function defined on income—and further, that utility increases as income increases, though at a declining rate, to accommodate the thesis of “diminishing marginal utility”. Notice that social welfare under utilitarianism is a sum of individual utilities. When will this sum be maximized? Suppose we have a fixed amount of income, say Rs100, to distribute between the two individuals, what is the optimal distribution?

Suppose the welfare-maximizing distribution is an unequal one, say, Rs40 to individual 1 and Rs60 to individual 2. Then, because of diminishing marginal utility of income, if we were to transfer some income from person 2 to person 1, the gain in utility to person 1 would be greater than the loss in utility to person 2, that is, on net, social welfare would increase with a transfer of income from the richer to the poorer person. And this must continue to be the case as long as one person has more income than the other. This is just another way of saying that an unequal distribution can never be a welfare-maximizing distribution. The optimal distribution of income, under utilitarianism, must always be an equal one.

The above equality result, some thought will reveal, is driven by the assumption of identical utility functions for the two individuals which increase with income at a diminishing rate. The condition for maximum social welfare is equalization of the two individuals’ marginal utilities—and given the assumption of identical utility functions, the accidental by-product of equal marginal utilities at the optimum is equal incomes. Take away the assumption of identical utility functions, and what do we have?

This is the problem that Amartya Sen addressed in his Radcliffe Lectures at the University of Warwick, subsequently published in book form in 1973 with the title On Economic Inequality. Specifically, he considered a situation in which, given the two-person world invoked earlier, person 1 experiences exactly half as much utility as person 2 at each level of income, because, let us say, person 1, unlike person 2, is physically handicapped. What would the utilitarian welfare-maximizing distribution of income now look like? At the optimum, the two persons’ marginal utilities would have to be equalized. This will happen when person 2’s income is twice the income of person 1.

Elementary considerations of “need” would prompt us to prescribe a greater share of income for the disadvantaged person 1. Utilitarianism does precisely the opposite. As Sen has pointed out, utilitarianism rewards the more efficient “pleasure machine”, instead of compensating the more needy disabled individual. By 1973, Sen was already anticipating his subsequently-developed “capability theory”, wherein well-being is seen to be a matter of human capability rather than desire satisfaction. Utilitarianism’s assumption of identical utility functions depends on the postulation of homogeneous populations. But the world as we know it has populations that are heterogeneous, that is, people are not identical in their non-income characteristics. Heterogeneity is of the essence of inequality, a problem which utilitarianism handles inadequately, indeed perversely.

Bolshevism: A hundred years on

Bolshevism: A hundred years on
Even though Bolshevism is probably dead, both the populist-nationalists and the liberals are likely to borrow strands from Marxism to address issues of inclusion and inequity
The Great October Revolution of 1917 in Russia began with a minor revolution in February of that year. Tsar Nicholas II, who had ruled since 1894, was forced to abdicate his throne by Petrograd insurgents and a provincial government was installed. The last tsar was brought to that situation by factors that included the bloody suppression of a revolution in 1905, anti-Semitic pogroms, a Bloody Sunday in 1905 in which the Imperial Guards fired on unarmed demonstrators, and defeat in the Russo-Japanese war. The Bolsheviks were themselves a ragtag team of anti-imperialists. Vladimir Lenin, Joseph Stalin and Leon Trotsky were not united or cohesive in their violent protests against the establishment. Lenin’s April Theses eventually became the foundational principle for the Soviet worker councils of workers’ and soldiers’ deputies and they seized power from the liberals in early November 1917 (the Gregorian calendar records the October revolution as having started on 7 November). Political communism in Soviet Russia, which was to last 72 years, was born.

Lenin’s April Theses called for power to pass to the proletariat and away from the bourgeoisie. He called for all land to be nationalized and for banks to be consolidated into a single Soviet-controlled entity. Importantly, he also advocated a Comintern, or an organization created to spread communism internationally. This last edict, to create a de facto “marketing” department, led in the following decades to Mao Tse-Tung’s revolution in China, and the advent of political communism in many countries like Spain (the only Western European country to have a Communist revolution), Vietnam, North Korea and India.

Indian communism was born in the first plenums of the Comintern. M.N. Roy attended the second world congress of 1920 as a delegate of the Communist Party of Mexico (which, bizarrely, he helped found). Roy was also the common link between Marxism and the Anushilan Samiti, a revolutionary nationalist organization born in Calcutta (now Kolkata) that advocated violent overthrow of British rule. Other members of Anushilan and its sibling Jugantar group were also converted to Marxist-Leninist thinking during long periods in jail. A separate strand of Indian communism was born in Maharashtra with Shripad A. Dange, who, having become disillusioned with Gandhianism, wrote a pamphlet titled Gandhi vs Lenin. The pamphlet led to a meeting between Roy and Dange and the Communist Party of India (CPI) was activated. This organization gained prominence and notoriety when Roy, Dange, Singaravelu Chettiar and others were charged in 1924 under the Cawnpore Bolshevik Conspiracy case with seeking “to deprive the King Emperor of his sovereignty of British India, by complete separation of India from imperialistic Britain by a violent revolution”. A third thread to Indian communism, banned during British rule, came from those who were persuaded by Marxist-Leninist thinking but were part of the mainstream Congress Socialist Party (CSP). The ban was lifted during World War II when Britain and Russia became allies against Nazi Germany.

Caught between the diktats of Moscow and a national cause, the CPI made a major decision to abstain from the Quit India Movement, believing the freedom struggle would compromise its fight against fascism. This marginalized the CPI as India proceeded towards independence. When China and the Soviet Union broke with each other in the early 1960s, the CPI split as well, adding CPI (Marxist), or CPM, as a more moderate and national version relative to the internationally guided CPI. Dange and the CPI lost steam after the split and the party splintered and drifted into extremism. The CPM became a mainstream political party that has had continuing influence in the state politics of West Bengal, Kerala and Tripura.

Even as the All India Trade Union Congress threatens strikes and information technology workers in Bengaluru contemplate a new union, the CPM’s influence on national politics has been waning. Bolshevism, and more generally communism of the Marxist-Leninist variety, which defined the major political competition of the 20th century, has receded. China is the only large country to hang on to the tag, but its political practice today is that of a one-party state with a unique combination of central political control and market economics. As the world evolves from the industrial age to an information age and more workers become freelancers, the very nature of a “soviet” has become obsolete. Paradoxically, tsar-like authoritarians, professing to speak for the people, have filled the void.

The defining political competition of the 21st century is likely to be between populist-nationalism (Pop-Nat) and liberal democracy. Even though Bolshevism is probably dead, both the populist-nationalists and the liberals are likely to borrow strands from Marxism to address issues of inclusion and inequity. Neither the fully collective view nor the unbridled free-market view, both of which held sway for periods in the 20th century, is likely to prevail for decades to come.

We will have a very different political fight between the haves and the have-nots in this century, but that basic tussle that forced Nicholas to abdicate a century ago is set to continue. It is endemic to the human condition.

P.S. “The worst form of inequality is to make unequal things equal,” said Aristotle.