Insights Daily Current Affairs + PIB: 20 May 2019
Relevant articles from PIB:
Why in News? 18 member Indian Army Mountaineering Expedition team to Mt Makalu (8485m) successfully scaled the peak on 16 May 2019.
About Mt Makalu: Among the eight mountains in Nepal above 8000m, Mt. Makalu is the fourth tallest in Nepal and fifth highest Peak on the Earth with its height 8,463m. Mt. Makalu resides in the eastern Himalayas range just 19Km southeast of the giant Mt. Everest in the border of Nepal and China. At the base of Mt. Makalu, there lies a natural wonder: The Barun Valley.
Why in News? The National Cadet Corps (NCC) Girls’ Mountaineering Expedition to Mt. Tenchenkhang in Sikkim was Recently ‘Flagged Off’.
About MT. Tenchenkhang:
The 6010 metres tall peak is located in Western Sikkim.
Why in News? The annual Singapore India Maritime Bilateral Exercise SIMBEX-2019 held recently.
What is it?
- Singapore India Maritime Bilateral Exercise is a naval exercise between two navies in the Andaman Sea and Bay of Bengal.
- It is an unprecedented level of interoperability, where ships, submarines and aircraft of India and Singapore will participate in multi-dimensional exercises at sea with perhaps very high degree of complexity.
- Since its inception in 1993, SIMBEX has grown in tactical and operational complexity.
What is it? Buddha Purnima also known as Vaishak Purnima is the birth anniversary of Gautama Buddha. 2019 marks the 2,563rd birth anniversary of the Buddha.
- It is an important day charted by Buddhist monks and all followers of the message of Gautam Buddha.
- Interestingly, Buddha Purnima, celebrated in May every year, is even more special because the Buddha’s enlightenment and mahaparinirvan also happened during the Purnima in the month of May.
- The world over, the day is observed through dhana, sila and bhavana.
- To mark the day that is also known as Vesak, in some countries such as Vietnam, China and Japan the Buddha’s idol is bathed in water and flowers.
Relevant articles from various news sources:
Important International institutions, agencies and fora, their structure, mandate.
What to study?
For prelims: subjects under Article 12 and 226.
For mains: implications and significance of the judgment.
Context: The Delhi High Court has ruled that the United Nations is not a State under Article 12 of the Constitution of India and is not amenable to its jurisdiction under Article 226 of the Constitution.
A plea was filed by a former UNO employee who was found guilty of misconduct.
The petitioner was convicted by a US Federal Court and sentenced to 97 months of imprisonment and two years of mandatory probation. He was released and deported to India in May 2014. In his petition, he claimed that due process was not followed in his case.
What’s the issue now?
He had in November 2018, written a letter to the Ministry of External Affairs seeking a grant of permission to initiate legal action against the United Nations Organization (UNO) under section 86 of Civil Procedure Code, 1908. The provision provides that a foreign State may be sued in any Court with the consent of the Central government.
Immunity available to UNO:
The consent of the Government of India is not required to initiate a legal suit against UNO as it is not a foreign state and is only an Internal Organization.
UNO and its officials enjoy immunity under the United Nations (Privileges and Immunities) Act, 1947.
As per Section 2 of Article II of the Schedule of Act, 1947, UNO has immunity from every form of legal process except insofar as in any particular case it has expressly waived its immunity. The immunity granted is all comprehensive and applicability of any national laws are subject to the waiver of the immunity by respondent no.2 (UNO).
- The United Nations is an international organization founded in 1945. It is currently made up of 193 Member States. The mission and work of the United Nations are guided by the purposes and principles contained in its founding Charter.
- States are admitted to membership in the UN by a decision of the General Assembly upon the recommendation of the Security Council.
- The main organs of the UN are the General Assembly, the Security Council, the Economic and Social Council, the Trusteeship Council, the International Court of Justice, and the UN Secretariat. All were established in 1945 when the UN was founded.
Sources: The Hindu.
- Statutory, regulatory and various quasi-judicial bodies.
- Issues related to health.
- Protection of the vulnerable sections of the society.
What to study?
For Prelims: About NPPA, DPCO and scheduled drugs.
For Mains: Issues involved and the need for drug price monitoring, relevance of DPCO.
Context: NPPA has capped the prices of 9 non-scheduled cancer drugs by up to 87%, capping their trade margin at 30%. The new list of drugs is in continuation to the government’s efforts to curb profiteering on these vital drugs.
The NPPA currently fixes price of drugs on the National List of Essential Medicines under schedule-I of DPCO. So far, around 1,000 drugs have been price-capped through this mode.
The trade margin rationalisation has been rolled out as proof of concept, stressing on the new paradigm of self-regulation by the industry.
What is the “Drugs (Prices Control) Order (DPCO)” ?
The Drugs Prices Control Order, 1995 is an order issued by the Government of India under Sec. 3 of Essential Commodities Act, 1955 to regulate the prices of drugs.
The Order interalia provides the list of price controlled drugs, procedures for fixation of prices of drugs, method of implementation of prices fixed by Govt., penalties for contravention of provisions etc.
For the purpose of implementing provisions of DPCO, powers of Govt. have been vested in NPPA. Later, the Drugs (Prices Control) Order (DPCO) 2013 was notified.
Why the DPCO is issued under Essential Commodities (EC) Act ?
Drugs are essential for health of the society. Drugs have been declared as Essential and accordingly put under the Essential Commodities Act.
Are all the drugs marketed in the country under price control ?
No. The National List of Essential Medicines (NLEM) 2011 is adopted as the primary basis for determining essentiality, which constitutes the list of scheduled medicines for the purpose of price control. The DPCO 2013 contains 680 scheduled drug formulations spread across 27 therapeutic groups. However, the prices of other drugs can be regulated, if warranted in public interest.
What is NPPA and its role ?
- National Pharmaceutical Pricing Authority (NPPA), was established on 29th August 1997 as an independent body of experts as per the decision taken by the Cabinet committee in September 1994 while reviewing Drug Policy.
- The Authority, interalia, has been entrusted with the task of fixation/revision of prices of pharmaceutical products (bulk drugs and formulations), enforcement of provisions of the Drugs (Prices Control) Order and monitoring of the prices of controlled and decontrolled drugs in the country.
Why are the prices of medicines rising ?
The reasons for rise in the prices of medicines are :
- rise in the price of bulk drugs;
- rise in the cost of excipients used in the production of medicines like Lactose, Starch, sugar, glycerine, solvent, gelatine capsules etc.;
- rise in the cost of transport, freight rates;
- rise in the cost of utilities like fuel, power, diesel, etc.;
- for imported medicines, rise in the c.i.f. price and depreciation of the Rupee;
- changes in taxes and duties.
Sources: The Hindu.
- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
What to study?
For prelims and mains: key features and significance of BRO conventions, outcomes of recent meeting.
Context: The 14th meeting of the Conference of the Parties (COP) to Basel Convention (COP 14) was held along with the 9th meeting of the COP to Rotterdam Convention and the 9th meeting of the COP to Stockholm Convention in Geneva, Switzerland.
Theme: “Clean Planet, Healthy People: Sound Management of Chemicals and Waste”.
The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal was created to protect people and the environment from the negative effects of the inappropriate management of hazardous wastes worldwide. It is the most comprehensive global treaty dealing with hazardous waste materials throughout their lifecycles, from production and transport to final use and disposal.
The Rotterdam Convention on the Prior Informed Consent Procedure for certain hazardous Chemicals and Pesticides in international trade provides Parties with a first line of defence against hazardous chemicals. It promotes international efforts to protect human health and the environment as well as enabling countries to decide if they want to import hazardous chemicals and pesticides listed in the Convention.
The Stockholm Convention on Persistent Organic Pollutants is a global treaty to protect human health and the environment from highly dangerous, long-lasting chemicals by restricting and ultimately eliminating their production, use, trade, release and storage.
Outcomes of the recent meeting:
In Basel Convention on Control of Transboundary Movement of Hazardous Wastes and their Disposal, two important issues were mainly discussed and decided i.e. technical guidelines on e-waste and inclusion of plastic waste in Prior Informed Consent (PIC) procedure.
In Stockholm Convention on Persistent Organic Pollutants (POP), COP decided to list “Dicofol” in Annex A (Elimination) without any exemption. The “PFOA”, (Perfluorooctanoic acid) was also listed with some exemptions in Annex A of Stockholm Convention.
In Rotterdam Convention on Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, two new chemicals named Phorate and HBCD (hexabromocyclododecane) were added in list for mandatory Prior Informed Consent (PIC) procedure in international trade.
BRS Conventions – Brief Background:
The Basel, Rotterdam and Stockholm (BRS) Conventions are multilateral environmental agreements, which share the common objective of protecting human health and the environment from hazardous chemicals and wastes.
Aim: This “synergies process” aims to strengthen the implementation of the three conventions at the national, regional and global levels by providing coherent policy guidance, enhancing efficiency in the provision of support to Parties to the Conventions, reducing their administrative burden and maximising the effective and efficient use of resources at all levels, while maintaining the legal autonomy of these three multilateral environmental agreements.
- Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures.
What to study?
For prelims and mains: the proposal, need and significance.
Context: The RBI has asked the non-banking financial companies (NBFCs) with assets of more than ₹5,000 crore to appoint a chief risk officer (CRO).
Roles of Chief Risk Officer (CRO):
- The primary role of the risk officer will be identification, measurement and mitigation of risks.
- All credit products (retail or wholesale) shall be vetted by the CRO from the angle of inherent and control risks.
- The CRO’s role in deciding credit proposals shall be limited to being an adviser.
Reporting by CRO:
- RBI has mandated that the CRO shall report directly to the MD and CEO or the risk management committee (RMC) of the board.
- Moreover, in case the CRO reports to the MD and CEO, the risk management committee or the board shall meet the CRO in the absence of the MD and CEO, at least on a quarterly basis.
- The CRO shall not have any reporting relationship with the business verticals of the NBFC and shall not be given any business targets.
Appointment and Transfer:
- The CRO shall be a senior official in the hierarchy of an NBFC and shall possess adequate professional qualification or experience in the area of risk management.
- The CRO shall be appointed for a fixed tenure with the approval of the board.
- There shall not be any ‘dual hatting’ i.e. the CRO shall not be given any other responsibility.
- The CRO can be transferred or removed from his post before completion of the tenure only with the approval of the board.
- And such premature transfer or removal shall be reported to the department of non-banking supervision of the regional office of RBI under whose jurisdiction the NBFC is registered.
With the increasing role of NBFCs in direct credit intermediation, there is a need for NBFCs to augment risk management practices. Ongoing rating downgrades of non-banks which has raised fears of another liquidity crisis.
Sources: The Hindu.
Summaries of important Editorials:
Why an industrial policy is crucial?
India still has no manufacturing policy. Focussing (as “Make in India” does) on increasing foreign direct investment and ease of doing business, important though they may be, does not constitute an industrial policy.
Significance of the Manufacturing sector:
- Manufacturing is an engine of economic growth because it offers economies of scale, embodies technological progress and generates forward and backward linkages that create positive spillover effects in the economy.
- No major country managed to reduce poverty or sustain growth without manufacturing driving economic growth. This is because productivity levels in industry (and manufacturing) are much higher than in either agriculture or services.
Need of the hour:
There is a need for government intervention in the case of market failures. Specific instances of market failure require a government-driven industrial policy: deficiencies in capital markets, usually as a result of information asymmetries; lack of adequate investments inhibiting exploitation of scale economies; imperfect information with respect to firm-level investments in learning and training; and lack of information and coordination between technologically interdependent investments. These are good reasons why an economy-wide planning mechanism is needed in India.
Why have an industrial policy in India now?
- There is the need to coordinate complementary investments when there are significant economies of scale and capital market imperfections.
- Industrial policies are needed to address learning externalities such as subsidies for industrial training.
- The state can play the role of organiser of domestic firms into cartels in their negotiations with foreign firms or governments — a role particularly relevant in the 21st century after the big business revolution of the 1990s.
- The role of industrial policy is not only to prevent coordination failures (i.e. ensure complementary investments) but also avoid competing investments in a capital-scarce environment.
- An industrial policy can ensure that the industrial capacity installed is as close to the minimum efficient scale as possible.
- When structural change is needed, industrial policy can facilitate that process. In a fast-changing market, losing firms will block structural changes that are socially beneficial but make their own assets worthless. East Asian governments prevented such firms from undermining structural change, with moves such as orderly capacity-scrapping between competing firms and retraining programmes to limit such resistance.