14 November 2017-Current Affairs

  1. Hambantota
  2. Vultures
  3. 25 lakh students take National Achievement Survey (NAS)
  4. Loan Waiver Schemes for farmers
  5. A more effective GST

  1. Hambantota

  1. Vultures 
  • Without vultures, dead animals could rot and spread diseases
  • Indian vulture has been listed as Critically Endangered on the IUCN Red List, as the population has severely declined.
  • The cause is attributed to poisoning caused by the veterinary drug diclofenac. The drug is believed to be swallowed by vultures along with the flesh of dead cattle that were given diclofenac. Diclofenac causes kidney failure in several species of vultures
  • The larger Old World vultures lay only a single egg and the smaller New World vultures lay two eggs
  • Reference
  • http://www.thehindu.com/todays-paper/tp-in-school/on-the-brink-of-extinction/article20417259.ece

  1. 25 lakh students take National Achievement Survey (NAS)
  •  National Achievement Survey (NAS),the largest-ever survey of learning outcomes among school students — covering 25 lakh students — was held across India
  • Students of Classes III, V and VIII from government and government-aided schools were tested for their performance in terms of learning outcomes developed by the National Council of Educational Research and Training (NCERT)
  • The exercise is expected to help identify problem areas and facilitate better planning for the future.
  • Reference
  • http://www.thehindu.com/todays-paper/tp-national/25-lakh-students-take-school-survey/article20417798.ece

  1. Loan Waiver Schemes for farmers
  • Institutional credit for farmers
    • One of the primary objectives of India’s agricultural policy has been to improve farmers’ access to institutional credit and reduce their dependence on informal credit.
    • The actions taken were
      • Improving the flow of adequate credit through the nationalisation of commercial banks
      • Establishment of Regional Rural Banks and the National Bank for Agriculture and Rural Development (NABARD).
      • Various farm credit programmes over the years such as the Kisan Credit Card scheme in 1998, the Agricultural Debt Waiver and Debt Relief Scheme in 2008, the Interest Subvention Scheme in 2010-11, and the Pradhan Mantri Jan-Dhan Yojana in 2014.
    • The share of institutional credit to agricultural gross domestic product has increased from 10% in 1999-2000 to nearly 41% in 2015-16.
  • Loan waiver
    • Farm waiver scheme in recent months may slow down the pace of institutional farm credit and pose a challenge to increasing agricultural growth
    • Those residing in the less developed States are more vulnerable and hence remain debt ridden.
    • Studies indicate that access to formal credit contributes to an increase in agricultural productivity and household income. Such links have not been well documented in India
    • Emotional perceptions dominate the political decision quite often
    • 48% of agricultural households do not avail a loan from any source. Among the borrowing households, 36% take credit from informal sources, especially from moneylenders who charge exorbitant rates of interest
    • Farmers with small farms are the ones with less income .Hence formal credit in assisting marginal and poor farm households is important to reduce poverty. This also tends to enhance farmers’ risk-bearing ability and may induce them to take up risky ventures and investments that could yield higher incomes.  
  • Issues
  • Writing off loans put pressure on already constrained fiscal resources, may dissuade lending by the banks, and prove counterproductive to the government’s broader mandate of doubling farmers’ income by 2022-23.
  • Identifying eligible beneficiaries and distributing the amount is a challenge
  • Loan waiver schemes mostly benefit the relatively better off medium and large farmers. This anomaly can be rectified only if the credit market is expanded to include agricultural labourers, marginal and small land holders. The credit policy should be revisited with a focus on the outreach of banks and financial inclusion.
  • Loan waivers provide temporary relief from debt but largely fail to contribute to farmers’ welfare in the long ru Instead, the government should protect farmers from natural disasters and price volatility through crop insurance and better marketing systems.
  • Accelerating investments in agriculture research and technology, irrigation and rural energy, with a concerted focus in the less developed eastern and rain-fed States for faster increase in crop productivity and rural poverty reduction should be given priority.
  • Reference
  • http://www.thehindu.com/todays-paper/tp-opinion/loan-waiver-is-not-the-solution/article20417749.ece

  1. A more effective GST
  • GST will integrate the Indian market, promote economic efficiency by taxing final consumption rather than intermediate goods, encourage voluntary compliance and create a new architecture for cooperative federalism.
  • Issues with GST
    • Three main problems with GST have been
      1.   Complicated tax structure that can create distortions
      2. Difficult compliance procedures that have created working capital stress in many smaller companies
      3.  Technical glitches in the GST network.
    • The complicated federal bargaining in the GST council led to a system of five tax rates, along with a special rate for gold, as well as cesses that go against the very basic principles of value-added taxation.
    • Poor incentive design: States were guaranteed 14% increase in tax revenue rather than a compensation formula adjusted to the growth in underlying nominal gross domestic product.
  • What should GST Council do?
    • Fewer tax slabs– Fix a moderate standard rate .There should be a small list of merit goods to be taxed below it and a small list of demerit goods to be taxed higher than that. With such rationalization, indirect tax rates will be lower than their current level. Higher economic growth will ensure that fiscal accounts do not take a hit.
    • A widening of the GST net to include items such as petroleum, alcohol and real estate, to bring down the GST rates
    • Removal of cesses
    • Streamlining of compliance procedures to avoid working capital stress.
  • Reference
  • http://www.livemint.com/Opinion/vNY6JZBiD8XPRbz0GUVqgJ/Moving-towards-a-more-effective-GST.html