Insights Daily Current Events, November 29, 2013

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November 29, 2013

NATIONAL

Anti-poverty schemes ineffective: study

  • An analysis done in the Planning Commission reveals that the anti-poverty programmes are leaky and inefficient, unable to lift Indians out of poverty. It shows India can close the poverty gap by spending just a fraction of its annual anti-poverty budget. The cost of pushing all households above the poverty line would have been Rs. 55,744 crore during 2011-12 if cash transfers were used instead of anti-poverty schemes.
  • In 2011-12, the year for which the latest NSSO Consumption Expenditure Survey data is available, the government had spent Rs. 72,822.07 crore on food subsidy. The expenditure in the same year on the government’s seven flagship schemes was Rs. 1,09,379 crore.
  • The analysis shows that our anti-poverty programmes are so leaky and inefficient that even after spending crores year after year, millions of Indians remain below the poverty line. Instead the government can lift everybody above the poverty line by simply giving them cash.
  • Poverty gap is the amount of cash given to a household to lift it above the poverty line. It is the difference in the level of consumption of the households below the poverty line and those on the line.
  • The analysis uses the Tendulkar Poverty Line, according to which a household of five people subsists with a monthly consumption of Rs. 874.50. This poverty line is very close to the World Bank Poverty Line of an income of $1.25 a day (on Purchasing Power Parity basis).
  • Households with lower consumption levels are said to be below the poverty line or living on less than the bare minimum required to subsist. The government has on an average spent close to Rs. 1 lakh crore per year since 2004 on anti-poverty schemes.
  • India does not use household income levels for defining the poverty line for lack of official payroll data.

Tendulkar Committee on poverty estimation:

  • Tendulkar’s committee had computed poverty lines for 2004-05 at a level that was equivalent, in purchasing power parity (PPP) terms, to one U.S. dollar per person per day, which was the internationally accepted poverty line at that time.
  • Unlike the old method of estimating poverty by calorie consumption, the Tendulkar committee had suggested a broader definition, one that included spending on food, education, health and clothing.
  • Using the Tendulkar methodology, the number of people living below the poverty line had increased. According to its calculations, these people rose from 28.3 per cent of the population in rural areas in 2004-05 to 41.8 per cent.
  • The number of people below the poverty line in urban areas remained unchanged at 25.7%. At the national level, the number of people below the poverty line rose from 27.5 per cent to 37.2 per cent in 2004-05, based on the new methodology.

Courtesy- http://www.business-standard.com/article/economy-policy/tendulkar-method-abandoned-new-panel-to-review-poverty-data-112032300100_1.html)

  • Since several representations were made suggesting that the Tendulkar Poverty Line was too low, the Planning Commission, in June 2012, constituted an Expert Group under the Chairmanship of Dr. C. Rangarajan to once again review the methodology for the measurement of poverty
  • The Rangarajan Committee is deliberating on this issue and is expected to submit its report by middle of 2014. Since the data from the NSS 68th round (2011-12) of Household Consumer Expenditure Survey is now available, and the Rangarajan Committee recommendation will only be available a year later, the Planning Commission has updated the poverty estimates for the year 2011-12 as per the methodology recommended by Tendulkar Committee.

 Courtesy – http://planningcommission.nic.in/news/pre_pov2307.pdf

A step towards improving access to institutional deliveries

  • The Ministry of Health and Welfare has planned to set up “birth waiting homes” close to healthcare centres to enable pregnant women in remote areas to gain access to prenatal care as their due date nears.
  • Palanquins or carts are to be used to transport pregnant women across difficult terrain in the bid to improve institutional deliveries. The palanquins would be hired under the National Rural Health Mission (NRHM). The pregnant woman would be provided all support and incentives to move into these facilities at least a week before her delivery date.

National Rural Health Mission (NRHM) and National Health Mission (NHM)

  • National Rural Health Mission (NRHM) was launched in 2005, to provide accessible, affordable and quality health care to the rural population, especially the vulnerable groups.
  • The thrust of the mission is on establishing a fully functional, community owned, decentralized health delivery system with inter-sectoral convergence at all levels, to ensure simultaneous action on a wide range of determinants of health such as water, sanitation, education, nutrition, social and gender equality. Institutional integration within the fragmented health sector was expected to provide a focus on outcomes, measured against Indian Public Health Standards for all health facilities.
  • As per the 12th Plan document of the Planning Commission, the flagship programme of NRHM will be strengthened under the umbrella of National Health Mission which will have universal coverage. The focus on covering rural areas and rural population will continue along with up scaling of NRHM to include non-communicable diseases and expanding health coverage to urban areas
  • May 2013 has approved the launch of National Urban Health Mission (NUHM) as a Sub-mission of an over-arching National Health Mission (NHM), with National Rural Health Mission (NRHM) being the other Sub-mission of National Health Mission.

 Courtesy – Wikipedia

To know more about the initiatives of National health mission, refer the below links-

 http://nrhm.gov.in/

 http://en.wikipedia.org/wiki/National_Rural_Health_Mission

INTERNATIONAL

IAEA inspectors invited to visit Arak plant

  • Iran has invited U.N. inspectors to visit its Arak heavy-water plant, in tune with the spirit of the Geneva agreement signed recently.
  • After three decades of hostility, this move promises a better relationship between Iran and the West.
  • The Arak facility produces heavy water for the nearby research reactor that is under construction. During the Geneva talks, Iran’s interlocutors -US, Russia, China, Britain, France and Germany wanted Iran to halt all work on the facility related to the production of plutonium that can be used to develop an atomic bomb.
  • Consequently, the deal signed in Geneva halts work on the production of reactor fuel, as well as the reprocessing unit, which is necessary for separating plutonium from the spent reactor fuel. Iran has also agreed not to fuel the reactor, or transfer fuel and heavy water to the reactor site. Besides, it would not install any additional reactor components at Arak. Construction work at Arak would continue, but neither new fuel will be produced nor new equipment be installed.

Aircraft from Japan, South Korea defy China’s new air defence zone

  • Aircraft from South Korea’s military and Japan’s Self-Defence Forces have carried out flights through China’s newly established Air Defence Identification Zone (ADIZ) in the disputed East China Sea, with both countries indicating they will defy China’s plans to bolster its control over the contested region.
  • Earlier S.Korea had expressed regret over China’s announcement, with the ADIZ overlapping with parts of the South Korean air defence zone in the region.
  • Several countries, such as South Korea and Japan, have already set up similar zones, which are pre-defined areas in international airspace within which a country monitors and tracks aircraft that are heading towards its territorial airspace.
  • The U.S. too had defied China’s demand that all aircraft notify authorities before entering the ADIZ, with two B-52 bombers carrying out at a pre-scheduled training mission and flying through the zone for two and a half hours without notifying China.

China reiterates support to Sri Lanka on human rights

  • China has reiterated it’s support to Sri Lanka(SL) and has called on the international community ‘to respect the right of the Sri Lankan government and people to choose their own path of promoting human rights’, amid recent criticism of the country’s human rights record.
  • At the recently concluded CHOGM meeting, UK, Canada and Mauritius had sharply criticised Sri Lanka’s human rights record, particularly with regard to alleged human rights violations and war crimes by the Sri Lankan armed forces during the final phase of the island’s ethnic conflict that ended in May 2009.
  • Backing its decision on supporting Sri Lanka, it said SL had made big strides in promoting human rights and realising national reconciliation and that China supported the Sri Lankan government’s efforts to safeguard independence, sovereignty and territorial integrity.
  • China has, in the past, been Sri Lanka’s strongest supporter at the United Nations, shielding Lanka from international criticism over its human rights record. It also said that the international community should refrain from ‘complicating’ the issue.

Women’s rights resolution passed at UN

  • A U.N. General Assembly committee has agreed a landmark first resolution on women’s rights defenders, despite a hard fought campaign by an alliance to weaken the measure.
  • In order to get it passed by consensus, the Norwegian-led coalition had to delete the text that had condemned “all forms of violence against women”.
  • African nations, the Vatican, Iran, Russia, China and conservative Muslim states had sought to weaken the resolution, which calls on all states to publicly condemn violence against women human rights defenders, amend legislation that hinders them and give activists free access to U.N. bodies.
  • The international community had sent a clear message. It’s unacceptable to criminalise, stigmatise or curtail women’s human rights defenders.
  • African countries had insisted on highlighting respect for customs and traditions. Russia, Iran and China had called for language which insisted the rights defenders should follow national laws, diplomats and activists.
  • In the end, Norway agreed to delete a paragraph which said states should ‘strongly condemn all forms of violence against women and women human rights defenders and refrain from invoking any customs, traditions or religious consideration to avoid their obligations’.

ECONOMICS

Cabinet rejects proposal to change FDI policy in pharma

  • The Cabinet has rejected a proposal from the Department of Industrial Policy and Promotion (DIPP) to ban complete takeovers by foreign companies of critical lifesaving drugs production facilities.
  • The DIPP had proposed to lower the cap for Foreign Direct Investment (FDI) from 100 % to 49 %, subject to approval of the Foreign Investment Promotion Board (FIPB), as it feels an alarming number of foreign acquirers of cancer oncology injectables and APIs manufacturing facilities have, over the last two years, post-takeover, shut down the manufacturing units and R&D centres of the acquired companies. This, the DIPP feels, can render the country vulnerable in the critical area.
  • The Cabinet decided that government policies cannot be revisited every three months and so the DIPP’s proposal on changing the policy on FDI in pharma was rejected.

RBI eases group limit for NBFCs in insurance Joint Ventures (JVs)

  • The RBI has decided to consider a case-to-case basis relaxation of the 50% group limit norm for NBFCs (non-banking finance companies) in the equity of insurance joint venture.
  • The IRDA (Insurance Regulatory and Development Authority) requires an insurance company to expand its capital, taking into account the stipulations of the Insurance Act and the solvency requirements of the insurance company.
  • The current restriction of a group limit of the NBFC to 50% of the equity of the insurance JV may act as a constraint for the insurance company in meeting the requirement of IRDA.

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Rajiv Gandhi Equity Savings Scheme or RGESS

  • Rajiv Gandhi Equity Savings Scheme or RGESS is a new equity tax advantage savings scheme for equity investors in India, with the stated objective of “encouraging the savings of the small investors in the domestic capital markets.
  • It aims to attract first-time small investors into capital market by offering them tax benefits.
  • It is exclusively for the first time retail investors in securities market.
  • §This Scheme would give tax benefits to new investors who invest up to Rs. 50,000 and whose annual income is below Rs. 10 lakh.
  • The Scheme not only encourages the flow of savings and improves the depth of domestic capital markets, but also aims to promote an ‘equity culture’ in India. This is also expected to widen the retail investor base in the Indian securities markets.
  • The maximum Investment permissible under the Scheme is Rs. 50,000 and the investor would get a 50% deduction of the amount invested from the taxable income for that year.

For more information refer – http://www.bseindia.com/rgess/