Towards ENSURING quality Education

Towards ENSURING quality Education 

The department of School Education & Literacy is taking several steps to make school education job-oriented and qualitative. The Department is implementing a component of Vocationalisation of Secondary & Higher Secondary Education under Centrally sponsored scheme of Rashtriya Madhyamik Shiksha Abhiyan (RMSA) with an aim to prepare educated, employable and competitive youth for various sectors of the economy and global market. It also envisages to fill the gap between educated and employable, reduce the dropout rate at the secondary level and decrease the pressure on academic higher education. The scheme involves introduction of job-oriented vocational subjects in sectors like Retail, Automobile, Agriculture, Telecommunication, Healthcare, Beauty & Wellness, IT-ITes, Electronics, Security, Media & Entertainment, etc. along with the general education subjects from class IX to class XII.

For granting academic equivalence to students of Industrial training Institutes (ITIs) affiliated with National Council for Vocational Training (NCVT), Memorandum of Understanding (MoU) was signed by National Institute of Open Schooling (NIOS), an autonomous organisation of Ministry of Human Resource Development with the Directorate General of Training, Ministry of Skill Development & Entrepreneurship on 15^th July, 2016. The MoU provides a mechanism for grant of Secondary and Senior Secondary certificate to ITI students/passouts who have pursued two years of ITI course, after class 8^th and 10^th respectively.

In order to provide quality education to students at the secondary level, various interventions are funded under RMSA. These include provisions for:

(i)                 additional Teachers to improve Pupil Teacher ratio,

(ii)               induction and In-service training for Teachers and Principals including leadership training

(iii)             Maths and Science kits

(iv)             ICT facilities in school,

(v)               Lab equipments

(vi)             Special teaching for learning enhancement.

Under Sarva Shiksha Abhiyan (SSA), the State Governments and UT Administrations are supported on several interventions to improve teaching standards, including regular in-service teachers’ training, induction training for newly recruited teachers, training of untrained teachers to acquire professional qualifications, additional teachers for improving pupil-teacher ratio, academic support for teachers through block and cluster resource centres,  continuous and comprehensive evaluation to equip the teacher to measure pupil performance and provide remedial action wherever required, and teacher and school grants for development of appropriate teaching-learning materials, etc. The Right of Children to Free and Compulsory Education (RTE) Act, 2009 specifies statutory duties and responsibilities of teachers and lays down the minimum qualifications for a person to be eligible for appointment as a teacher in elementary schools. Under SSA, textbooks are provided to all children in Government/Local Body and Government aided schools, including Madarsas desirous of introducing the State curriculum, within an upper ceiling of Rs. 150/-per child at primary level and Rs. 250/- per child at upper primary level. The SSA norms also provide for 2 Sets of uniforms to children from the deprived community viz. all girls, SC, ST and BPL boys, @ Rs. 400 per head. It also supports States/UTs on early grade reading, writing & comprehension, and early Mathematics programmes through a sub-programme namely ‘Padhe Bharat Badhe Bharat’ (PBBB) in classes I and II.

Further the Government has launched Rashtriya Aavishkar Abhiyan (RAA) programme on 09.07.2015, inter alia, as a sub-component of Sarva Shiksha Abhiyan and RMSA to motivate and engage children of the age group of 6-18 years in Science, Mathematics and Technology through observation, experimentation, inference drawing, model building, etc. both through inside and outside classroom activities.

For improving the quality of school education, the School Standards & Evaluation framework, known as ‘Shaala Siddhi’ has been developed by National University of Educational Planning and Administration (NUEPA), to enable schools to evaluate their performance in a more focused and strategic manner and to facilitate them to make professional judgments for improvement.

In order to improve quality of education, the National Council of Educational Research & Training (NCERT) conducts periodic national surveys of learning achievement of children in grade III, V, VIII and X. Four rounds of National Achievement Survey (NAS) have been conducted so far for grade V and three rounds for classes III & VIII. These reveal improvement in learning achievement levels of pupils, in identified subjects from first round to fourth round. From the current year onwards, the Government has decided to conduct annual National Achievement Surveys covering all students from class 1-8 in all Government and Government aided schools. The students learning assessment will be according to the Learning Outcomes developed by NCERT for all subjects covering all classes in the elementary cycle.

ICAR institutions gear up to help raise farmers’ incomes

ICAR institutions gear up to help raise farmers’ incomes

Technology and its dissemination to farmers’ fields plays a crucial role in Indian agriculture. Recognising that scientific research will be critical to doubling farmers’ income in the next five years, institutions under the Indian Council of Agriculture Research (ICAR) are gearing themselves to deliver.

In the horticulture sector that involves vegetables, fruits, flowers, spices, aromatic plants and plantation crops, scientists  are not only working towards developing new varietal seeds that give higher production, are resistant to pests, diseases and climatic changes but are also addressing issues of post-harvest losses and marketing under public-private partnerships.

Official statistics for 2015-16 reveal that India harvested 286.1 million tonnes of horticulture produce from 24.4 million hectares of land. As per the first advance estimates the production for 2016-17 is estimated at 28.7 million tonnes from 24.3 million hectares of land. The total output is expected to be higher by 2 % over the previous year.

Of this, the production of fruits is estimated at 92 million tonnes, which is higher than in 2015-16. The output of vegetables is likely to be around 168.6 million tonnes with tomato, and potato having registered a marginal increase over previous year. 

Lately horticulture sector has grown by over 7 per cent and has the potential for providing nutritional security as well as profitability to farmers particularly the small and marginal ones. The percentage share of horticulture in Indian agriculture is around 33 per cent. Being second-largest producer of fruits and vegetables, India exported in 2014-15 fruits and vegetables worth Rs. 7474.14 crores.

 Vegetables can contribute largely towards food and nutritional security of the people, particularly the poor.  They are a rich source of vitamins, minerals and plant fibres which provide food and nutritional security. These also generate high income and employment, particularly for small farmers. There has been a revolution in the production of vegetables in the country in the last three and a half decades.  

The demand for vegetables and fruits is said to be growing due to urbanization and rise in income levels and therefore, there is focussed attention on research in this sector. Much of the research in horticulture is being done under the ICAR’s All-India Coordinated Research Products (AICRP) headquartered at IHRI (Indian Institute for Horticulture Research) which has the mandate for identification and release of varieties and hybrids through multi-location testing with National Active Germplasm Sites under different agro-climatic zones.

While IIHR is the nodal centre for research and transfer on fruits, vegetables and pesticide residues, it coordinates research with regional stations at Hirehalli in Karnataka, Bhubaneshwar in Odisha and various Krishi Vigyan Kendras. The centres are involved in farmers’ on-farm and off- farm training and capacity building. Besides, it has collaborative linkages with the Department of Science and Technology, Department of Biotechnology, NABARD and Council of Scientific and Industrial Research and international universities and organisations. Gaps identified in ongoing research are addressed through externally aided collaborative projects in a time-bound manner.

Among the latest premier technologies developed by agriculture scientists and taken to farmers’ fields are of triple disease resistant tomato (Arka Rakshak),  onion (Arka Kalyan and Arka Niketan), chilli (Arka Saphal and Arka Lohit), okra (Arka Anamika) and brinjal (Arka Anand and Arka Keshav) and stringless French Bean variety (Arka Suvidha) which are grown in over 31 lakh hectares in various parts of the country. The salt-resistant Dogridge rootstock (on which grape creeper is grafted) identified for development of various varieties of grape including the sweet, dark, thin-skinned, seedless variety is much in demand. In addition organic farming packages have been developed for vegetables.

 To prevent the mango orchard from being hit by fruit flies, researchers have developed eco-friendly pheromone trap which has become very popular with farmers as the trap catches the pest and prevents attack on the fruit.

In ornamental crops tuberose hybrid variety (Arka Prajawal) has a share of 38 per cent of the total sown area in the country. It has been adopted by farmers not only on Tamil Nadu but also in Uttar Pradesh and West Bengal. Other notable varieties in ornamental crops are cut-rose varieties of Arka Parimala, Crossandra variety of Arka Ambara and Carnations (Arka Flame). The rose varieties are comparable to imported varieties and new strategies are being developed to beat competition within the country. Notable is Arka Swadesh under polyhouse conditions.

In the area of mushroom cultivation that fetches good price for farmers, Pink Oyster Mushroom variety has become popular. Other varieties too have been picked up for commercialisation with sellers are coming up with technological advancements in packaging.

With 60 per cent of farming under rain-fed conditions, the agriculture sector is gradually but firmly moving towards the idea of producing more from less water in keeping with the Prime Minister Modi’s slogan “More crop per drop”. Agriculture scientists at Central Horticulture Experiment Station in Bhubaneswar have oriented their research towards upgrading technologies for standardisation of drip and micro irrigation in vegetables, water management and in situ conservation using plastic mulch and drip-cum-mulch in vegetables crops in farmers fields. Some of the technologies had been adopted by the state government under the Rashtriya Krishi Vikas Yojna that gave flexibility to states for use of funds.

Farmers who visit various vegetable and crop development centres of the ICAR can not only get knowledge, technology, seeds and saplings for fruit, vegetable, mushroom cultivation, organic farming, bio-intensive management of pests and diseases but also information on commercially viable post-harvest technologies, protocols for export of fruits, machinery for farm, mushroom spawn production, seed-cum-fertilizer drills at all the centres in Bangalore, Bhubaneswar, Haryana, Assam and Sikkim.

Several of these technologies have been transferred to farmers’ fields or which ICAR institutions have won awards. Technologies and research varieties are also put on display-cum-sale at Krishi Melas organised frequently in various parts of the countries to facilitate farmers. At these melas scientists are available for dissemination of first-hand knowledge to farmers and addressing their concerns. Such inter-faces are held in the all-important animal husbandry, dairy sector and fisheries as well which have been identified as crucial areas of growth which will bring income to farmers.

With growing awareness, various ICAR centres have now opened up cells to extend services for formulation of business plans for farmers and entrepreneurs who also want to market farm produce gainfully in national and international markets.

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Chenani- Nashri Tunnel: An Infrastructure Marvel

Chenani- Nashri Tunnel: An Infrastructure Marvel

Nestled amidst picturesque valley, snow capped mountains, lush-green meadows and tall trees, Jammu & Kashmir is an absolute visual treat. The road journey between Jammu and Srinagar leaves one spellbound. But the natural beauty apart, the route is also a difficult one with long, winding roads that tend to get blocked in inclement weather. But very soon people driving on this route will not only have their journey time cut by two hours, but will also experience the pleasure of driving through a world class technical marvel. The 9.2 km Chenani-Nashri tunnel near Udhampur will enhance the drivers’ pleasure many fold once it is opened to traffic.  

Built  between Udhampur and Ramban at an elevation of 1,200 metres on one of  the most difficult terrains of the Himalayas, the Chenani-Nashri tunnel  is not only the country's longest road tunnel but also happens to be Asia's longest bi-directional highways tunnel. An ideal example of ‘Make in India’ and ‘Skill India’ initiative of the Government of India, the tunnel is 9.2 km long with twin-tube all-weather passage. It forms part of the project for widening of the National Highway No-44 or the old NH-1A from Jammu to Srinagar.

The structure consists of 9 kms long main tunnel with two lanes. The diameter of the main tunnel is 13 metres. In addition to this there is a parallel escape tunnel for of 6 metre. The two tubes are connected to each other through 29 cross passages at regular intervals. There are two minor bridges on the south and north sides and 4-lane approach roads with Toll Plazas on both ends. The bi-directional tunnel has fully transverse ventilation system. There are inlets bringing fresh air at 8 metre intervals and outlet for exhaust every 100 metres.  The tunnel also has fully-integrated control system with ventilation, communication, power supply, incident detection, SOS call box and fire fighting. Fitted with intelligent traffic mechanism, the tunnel has fully automatic smart control and no human intervention will be required for its operations. The tunnel  is also equipped  with advanced scanners to ward off any security threat. Experts say very few tunnels in the world have this kind of fully integrated tunnel control.

A well-equipped fully-computerised operation room has been set up for surveillance of vehicles inside the twin tubes.  The maximum height limit permitted inside is 5 meters and for checking the height special sensors have been installed just before the toll points at both ends. Besides providing mobile network of telecom operators including Airtel, Idea and BSNL, 92.7 FM Radio channel facility is also functional inside the tunnel.

The Chenani Nashri tunnel is designed in such a fashion that it provides safe and all-weather route, resulting in a time savings of two hours for motorists travelling along the highway between Jammu and Srinagar that is prone to frequent and long traffic jams due to landslides, snow and sharp curves, breakdown of vehicles and accidents etc. It is also expected to result in a saving of fuel worth Rs 27 lakh per day on traffic projections. The tunnel will reduce the distance between Jammu and Srinagar by about 30 km. The project also precluded large-scale deforestation as tree cutting was not required.

The project is a "historic milestone", contributing significantly to the programme and idea of 'Make in India' and 'Made in India', as it has been constructed by an Indian company- IL&FS. The project has provided employment to over 2,000 unskilled and skilled youth of Jammu and Kashmir as 94 per cent of the work force was from the state, according to IL&FS. It will not only ensure preservation of environment in the Patnitop area and but will provide for better integration of people of the state by providing better connectivity. It will also give a major boost to the state economy.

On the anvil is another tunnel at Zojila pass, situated at an altitude of 11,578-ft on Srinagar-Kargil-Leh National Highway which remains closed during winters (December to April) due to heavy snowfall and avalanches cutting off Leh-Ladakh region from Kashmir. The project aims at providing much-needed all-weather connectivity between Kashmir valley and Ladakh. Among the driving delights that will then follow, would include the journey to Kailash-Mansarovar - the abode of Lord Shiva. Mammoth machinery has already been deployed to cut through the tough Himalayan rocks for this purpose.  Once it is constructed, the tunnel will make this centre of pilgrimage more accessible.

Also, pilgrimage to Char Dham is likely to become a lot safer as work is underway on a new alignment for connecting the four abodes of Gangotri, Yamunotri, Kedarnath and Badrinath in the Himalayas at an investment of about Rs 12,000 crore to provide all-weather connectivity. 

With all these new and upcoming developments, not only is it going to be more safe and convenient to negotiate the arduous Himalayan roads, but the economy of the region is also going to start looking up with more employment opportunities and better infrastructure for trade.

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Multi-Lateral New Development Bank to Aid India

Multi-Lateral New Development Bank to Aid India

                                                                                  

New Development Bank (NDB) is the first Multi-lateral Development Bank established by developing countries and emerging economies – Brazil, Russia, India, China and South Africa (BRICS) – in accordance with the agreement on New Development Bank signed on 15^th July, 2014 in Fortaleza, Brazil. The NDB members represent 42 percent of world population, 27 percent of the global surface area and accounting for over 20% of the Global GDP (Figure 1).

Figure 1: NDB members represent 42 percent of world population, 27% of the surface area and account for over 20 percent of global GDP.

The NDB was established aiming to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional fi­nancial institutions for global growth and development. The five member nations – Brazil, Russia, India, China and South Africa – have an equal shareholding in the NDB (Figure 2).

Figure 2: Shareholding Structure of New Development Bank

The NDB has an initial authorized capital of USD 100 billion and initial subscribed capital of USD 50 billion of which USD 10 billion will be paid-in capital (Figure 3). The initial subscribed capital is equally distributed amongst the founding members.

Figure 3: Capital of New Development Bank

The NDB intends to be fast, flexible and efficient, without sacrificing quality. The Bank strives for having a short loan-processing time, aiming to design, negotiate, review and approve loans within a period of 6 months. Insofar as procurement policies and environmental and social standards are concerned, the NDB will, whenever possible, rely on country systems.

The NDB received an “AAA” institutional rating from China Chengxin Credit Rating and China Lianhe Credit Rating and commenced engagement with international rating agencies. In July 2016, the NDB issued its debut a green financial bond in the China onshore interbank bond market. The size of the issue is RMB 3 billion (USD 449 million). The bond has a five-year term and nominal interest rate of 3.07%.

The NDB is building-up partnerships with multilateral and national development banks, which will allow it to tap into the expertise of established development institutions, strengthen its capacity to assess and implement projects as well as assist the Bank in increasing capillarity of its operations. The NDB has signed Memoranda of Understanding with World Bank and Asian Development Bank as well as leading commercial banks from the NDB member states.

Projects in India

            During the first year of work, the Board of Directors of the NDB approved a wide range of operational, financial and HR policies that took into account good practices adopted by other multilateral and national development institutions.

In 2016, the NDB Board of Directors has approved seven projects, of which two are in India, for a total of over USD 1.5 billion, in the areas of renewable and green energy, and transportation. All projects are coherent with the Bank's mandate of supporting infrastructure projects, with more than 75% of projects dedicated to sustainable infrastructure, mainly renewable energy generation.

The seven approved projects will support the creation of about 1500 MW of Renewable Energy capacity and are estimated to result in the reduction of greenhouse gas emissions by over 4 million tons per year.

The two projects in India target up-gradation of major district roads in Madhya Pradesh and Renewable Energy generation. The Madhya Pradesh Roads project will provide US$ 350 million sovereign loan to the Government of India for upgrading approximately 1500 km of major District roads in the State. The project would result in reconstruction and rehabilitation of 1,500 km of roads with focus on all-weather road availability and improved road maintenance and asset management. The project fosters inclusive economic growth through increased incomes as a result of improved connectivity and access to markets for interior regions of the state. The signing of the loan agreement for this project is likely to happen soon. The loan will be provided for 20 years with a grace period of 5 years.

The Second Project financed by the New Development Bank (NDB) in India will lead to generation of about 500 MW Renewable Energy thereby preventing generation of 815,000 tonne CO₂ per annum. USD 250 million sovereign guaranteed loans will be given to Canara Bank in three tranches under this project.

The Second Annual Meeting of the Board of Governors of NDB is now scheduled to be held in Delhi from 31^st March to 2^nd April, 2017 in which both Finance Minister & Vice Finance Minister of China, Vice Finance Minister of Russia, Secretary of International Affairs, Ministry of Finance of Brazil and DDG, Ministry of Finance of South Africa have confirmed their participation among others. During the three day Annual Meeting of Board of Governors, many Memorandum of Understanding (MOUs) with Multi-lateral Development Banks will also be signed among others.

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Bangladesh and India’s terrorism problem

Bangladesh and India’s terrorism problem
While Bangladesh has cracked down, the West Bengal government’s failure to act is worsening the situation
With Bangladesh Prime Minister Sheikh Hasina finally making her long-awaited state visit to India next week, there is already much discussion about how the bilateral relationship can be taken to the next level. Some have suggested focusing on the development of the Bay of Bengal region; others have urged that seemingly intractable diplomatic challenges such as the Teesta river water-sharing agreement be resolved first. There have also been reports of a defence deal as well as agreements to boost trade, transit and energy security. Surprisingly, the issue of radical Islamist terror, which has been gaining ground not just in Bangladesh but also in West Bengal, has received limited attention, even though counter-terrorism has been one of the biggest success stories of the bilateral relationship.

For many years, New Delhi’s primary concern with Dhaka was anti-India elements using Bangladeshi territory as a safe haven. On the one hand, militants from the North-East took advantage of the porous border to slip away from Indian security agencies. On the other, there were radical Islamist groups such as Harkat-ul-Jihad al-Islami Bangladesh (HuJI-B) and Jamaat-ul-Mujahideen Bangladesh (JMB) that sought to foment trouble in both countries.

The first decade of this century was a particularly bad decade since Khaleda Zia, with her less-than-favourable view of India, and her Islamist allies allowed malcontents to flourish. It was not until August 2005, when the JMB triggered some 500 bombs in all but one district of Bangladesh within half an hour, that Khaleda Zia changed tack. However, the situation only changed in any meaningful way when Sheikh Hasina returned to power in 2009. She immediately cracked down on Islamist militancy and assured New Delhi that Bangladeshi territory would no longer support anti-India activities.

But now the tables seem to have turned. Many of those who were feeling the heat in Bangladesh found refuge in West Bengal, where they have regrouped and reorganized themselves into a relatively potent force, as was evident in the 2014 accidental blast in Burdwan, which literally blew the lid off the JMB’s extensive network in Bengal. The JMB has had a presence in Bengal for more than a decade and has carried out subversive activities in this country before; but the Burdwan blast exposed for the first time a conspiracy to dislodge the government in Bangladesh being plotted in India.

Notably, the JMB and its ilk have benefited in no small measure from the benign gaze of West Bengal chief minister Mamata Banerjee, who has chosen to curry favour with Islamic hardliners. Such myopic politics not only brings no significant benefits to her voters in the long run but also erodes the national interest and, in this case, threatens national security.

On the Bangladeshi side too, the situation has been complicated by a new wave of violent religious polarization—which has also swept terror groups such as Al-Qaeda and the Islamic State into the fray. This wave rose with the 2013 Shahbagh protest movement, when the Sheikh Hasina government’s decision to execute war criminals from 1971 was met with virulent opposition from the Jamaat-e-Islami (JeI). At the time, the latter was the country’s largest religious-political party (it has since been derecognized as a political party), and its leadership found itself facing the hangman’s noose.

The public support for secularism and progressive values has seemingly galvanized hardline elements, resulting in this recent surge of Islamist militancy wherein secular bloggers and activists as well as foreign citizens have been targeted. As Animesh Roul from the New Delhi-based Society for the Study of Peace and Conflict notes for the counter-terror centre at the US’ West Point military academy: “Jamaat-ul-Mujahideen Bangladesh (JMB) and Harkat-ul-Jihad al-Islami Bangladesh (HuJI-B), both of which trace their lineage to JeI, have become increasingly militant and energized. New groups have also emerged such as Ansar al-Islam, which has acted as the Bangladeshi wing of al-QaRs.ida in the Indian Subcontinent (AQIS), and Jund al-Tawheed wal Khilafah (JTK), whose loyalties lie with the Islamic State, making Bangladesh a new field of competition for the global jihadist powerhouses.”

This competition seems to have already spilled over into India. Earlier this month, Idris Ali, a suspect in the Dhaka café attack, was arrested from Kolkata. Previously, the Birbhum-born Islamic State sympathizer Abu Musa had told the National Investigation Agency (NIA) that the Dhaka attack masterminds had travelled to India, stayed in Kolkata and met with him in Malda. Musa was arrested last year and a chargesheet filed by the NIA in December mentions his plans to carry out lone wolf attacks as well as underlines his links to JMB militant Abu Suleiman and former Indian Mujahideen militant Shafi Armar, a Bhatkal native who has been fighting in Syria with the Islamic State.

Clearly, Bangladesh and India (particularly in West Bengal) are facing similar threats. The difference is that while the former has gone on the offensive with raids and crackdowns across the country, in West Bengal, the government refuses to even acknowledge the threat. Earlier this week, after The Times Of India reported that Dhaka had informed Delhi of a threefold increase in infiltration into India by HuJI and JMB militants, state officials in Bengal dismissed the report as scare-mongering by the Centre. Presumably, such an assessment is driven by domestic political compulsions but that doesn’t help anybody’s case.

What should India and Bangladesh do to cooperate on terror?

GST: anti-profiteering measures necessary?

GST: anti-profiteering measures necessary?
Competition and an open market place is the best tool for keeping prices in check
The anti-profiteering clause under the GST is meant to 'reassure' that there would not be any significant rise in prices or inflation consequent to the implementation of Goods and Services Tax,

One of the key features of the revised draft model goods and services tax (GST) law (released in November 2016) is a provision enabling the Central government to constitute an authority to monitor the prices businesses charge for goods and services in the lead-up to, and following the introduction of, GST. If established, the authority will examine whether any reduction in a business’ cost base, or in the tax rate on goods and services as a result of the introduction of GST, is passed on to consumers in the form of appropriately reduced prices.

No mention is made as to who will undertake this task, how it will be undertaken, when it will commence, when it will end, and why it is necessary to add an additional compliance burden on Indian businesses already struggling to keep pace with the preparation for the introduction of a GST, even if it is delayed by three months or so to July 2017. Given that the model GST law has not yet been enacted, it is not likely that an authority will be constituted or appointed soon. With the GST due to commence next year, one must ask, “Why bother with anti-profiteering provisions at all?”

Overseas experience indicates that anti-profiteering provisions are only effective if there is a significant lead-in time to allow the relevant authority to educate consumers and businesses as to their respective rights and obligations. It is this education process that has the greatest impact on consumer confidence and business behaviour.

Once the tax commences, the prices set by businesses should be commensurate with the relevant market sensitivities, expectations and acceptance. If it is possible that an Indian business can set a market price without regard to consumer sentiment, the time to influence that market power is before the tax commences, not after. With such a short “lead-in” time before the GST commences, the authorities have little or no time to exert any such influence. To cite an Australian expression, once the GST has commenced, “the horse has bolted”. Australia was the first country to enact similar provisions when it replaced a series of inefficient taxes with a GST in July 2000. The Australian Competition and Consumer Commission (ACCC) was charged with the responsibility of monitoring prices 12 months before the commencement of GST. In August 1999, it was noted by the chairman of the ACCC that “any well-informed, competitive market operating in a climate of low inflation and good corporate citizenship will ensure that the vast majority of businesses will act fairly”.

Is it not a reasonable expectation that in a dynamic and competitive market such as India, market forces will ensure that any reduction in an Indian business’ cost base will flow through to lower prices?

Assuming the anti-profiteering provisions remain, the ACCC road map is instructive. Firstly, the ACCC’s focus was on educating consumers and businesses. This included the publication of pricing guidelines, communication strategies for different market segments and “hot lines” for consumers and businesses to get advice. Education was supported by extensive and sophisticated monitoring of prices leading up to the introduction of GST and in the months immediately following. The fall back was enforcement where there was blatant exploitation and profiteering (only 11 businesses were prosecuted in total).

Malaysia also introduced an anti-profiteering provision, along with the introduction of GST in April 2015. However, it led to widespread litigation and was found to be administratively difficult to implement.

There are several implementation challenges in enforcing such a provision. The government will need to come up with detailed guidelines on the mechanism for computation of benefit and administration. For example, whether the profit has to be computed at the product level or the entity level. Do we do this analysis for each of the costs or only the major costs? Also, what if businesses increase the prices before the implementation of GST, in anticipation of the benefit that would accrue?

From a business perspective, exploiting customers is not a viable business strategy. Being caught out exploiting customers is fatal. Ultimately, it is competition and an open marketplace that is the best tool for keeping prices in check. India has a competitive, open and growing market. Both Indian businesses and consumers are well placed to enjoy the benefits of GST, without government price monitoring.

From an administrative perspective, the short GST implementation time frame means that enforcement is likely to be the only viable approach to administering these provisions. Once the GST has commenced, businesses and advisers would have moved on, but not so the authorities responsible for administering the provisions. Litigation and damage to unfortunate and unsuspecting businesses will inevitably follow with little or no impact on prices.

India has made an important economic decision—to introduce a GST and repeal a number of inefficient taxes. Let’s hope the Central and state governments start focusing on making it easier for businesses to comply with the GST rather than imposing another compliance regime which adds nothing to the economy and detracts from the benefits of moving to a GST.

What is the special category status #ukpcsinterview

What is the special category status
#ukpcsinterview

What is SCS?

The Constitution does not include any provision for categorisation of any State in India as a Special Category Status (SCS) State. But, recognising that some regions in the country were historically disadvantaged in contrast to others, Central plan assistance to SCS States has been granted in the past by the erstwhile Planning Commission body, National Development Council (NDC). The NDC granted this status based on a number of features of the States which included: hilly and difficult terrain, low population density or the presence of sizeable tribal population, strategic location along international borders, economic and infrastructural backwardness and non-viable nature of State finances.

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.

What other States are seeking SCS status?

Apart from Andhra Pradesh which is in the news lately, Bihar and Odisha had recently demanded SCS status but they have not been granted the same as they did not meet the criteria.

What is the basis of A.P.’s claim for SCS status?

Following the bifurcation of A.P., Andhra lost a large volume of its revenue due to Hyderabad remaining the capital of Telangana. In a debate in the Rajya Sabha on the A.P. Reorganisation Act on February 20, 2014, then Prime Minister Manmohan Singh had said that SCS would be “extended to the successor State of Andhra Pradesh ... for a period of five years.” This oral submission by the then PM has been the basis for A.P.’s claim to the status.

What has been the Centre’s response?

In a reply to a TDP MP’s question in Parliament on this claim, then Minister of State for Finance Jayant Sinha had said in April 2016 that the Centre had no proposal to modify the criteria for SCS status. And that the increased devolution as recommended by the FFC (which included revenue deficit grants following the bifurcation) is already flowing to the State