2014 CGS 4 - 53be22088a900

Current
general studies
2014
CGS-4
Member Name: Anand Mohan Member's Email address: dubledoreslair@gmail.com 61.8.129.229
GKTodays Target 2014 Programme for Civil Services Examinations 2014
www.gktoday.in
January 28 to February 10, 2014
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Contents
Communal Violence Bill 2011 ...................................................................................................................................... 3
Fundamentals of Macro-prudential and Micro-Prudential Regulations ................................................................ 6
Fundamental of Subsidy Economy ............................................................................................................................. 7
Food Subsidy ...................................................................................................................................................... 10
Fertilizer Subsidy ................................................................................................................................................ 12
Petroleum Subsidies .......................................................................................................................................... 14
Basics of Farmer Producer Companies .................................................................................................................... 15
Curative Petition & Special Leave Petition ............................................................................................................... 17
Article on GAVI Alliance .............................................................................................................................................. 17
Report : Internal Migration for Education and Employment among Youth in India ........................................... 18
Draft guidelines on poll manifestos by Election Commission ............................................................................... 18
Model Questions for Mains

1. Discuss the constitutional Provisions regarding secularism in India. Do you think that our forefathers obviated the communal
violence while framing the constitution? Opine.
2. Law and order is undeniably a State subject but when communal or caste-based violence results in the gratuitous killing and
displacement of innocents, the issue ceases to be a State problem and turns into a national catastrophe. Do you agree with this view?
Opine.
3. Differentiate between Microprudential regulations and Macroprudential regulations with examples. Do you think that
Macroprudential and Microprudential regulations are complimentary to each other for a resilient and robust financial system?
Discuss.
4. "Subsidies are as much an economic tool as are taxes to facilitate smooth functioning of the economy." Discuss.
5. Differentiate between Public
MemberGoods, Merit
Name: Anand Goods
Mohan andEmail
Member's Non-Merit Goods. On what account,
address: dubledoreslair@gmail.com the economic case for subsidising
61.8.129.229
"merit goods" is the strongest? Elaborate.

6. Critically discuss the fiscal implications of National Food Security Act.
7. Write a critical note on India's current Fertilizer subsidy regime. On what account, present subsidy regime is skewed heavily in
favour of urea? Do you think that the Nutrient Based Subsidy scheme is a step in the right direction? Discuss making a case for
Urea to be included in NBS scheme.
8. What is a Farmer Producer Company and how does it work? Explain why the progress of FPCs has been so low in India?
9. Differentiate between Curative Petition and Special Leave Petition with respect to Judiciary in India.
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Fundamentals
Communal Violence Bill 2011
In February 2014, the UPA-II government decided to not to go ahead with the introduction of the Prevention of Communal and Targeted
Violence (Access to Justice and Reparations) Bill. This article revisits the important issues with this bill.
Constitutional Provisions regarding Secularism

The concept of secularism has been explicitly as well as implicitly embodied in the Constitution of India. The most
important components of secularism as enshrined in the Indian constitution are as follows:
Preamble: The word 'secular' did not first occur either in Article 25 or 26 or in any other Article or
Preamble of the Constitution. By the Constitution (42nd Amendment) Act, 1976, the Preamble was
amended and for the words 'Sovereign Democratic Republic' the words 'Sovereign, socialist, secular,
Democratic Republic' were substituted.
Article 14 guarantees right to equality;
Article 15 and 16 prohibit any discrimination on the ground of religion, caste, etc;
Freedom of speech and expression all other importance freedom of all the citizens are conferred under
articles 19 and 21;
Article 25 to Article 28 confers rights to practice religion;
Article 44 provides for the directive principle to enact uniform civil laws treating all the citizens as equal.
Among the religious rights, the constitution guarantees freedom of conscience, freedom to profess, practice and
propagate religion and also freedom to establish religious institutions and manage or administer their affairs. The
Constitution also guarantees religious minorities the right to establish and administer educational institutions of
their choice and to conserve their script, language and culture.
The above provisions indicate that the constitution of India has endeavoured to build up in India the philosophy of
secularism on freedom, equality and tolerance in the field of religion. Constitution does not build a wall of separation
between the state and religion. India does not have a state religion. The state will neither establish a religion of its
own nor confer any special patronage upon any particular religion.
What are the constitutional provision regarding communal violence?
The constitution of India via its Article 355 says that it shall be duty of the Union to protect every State against
external aggression and internal disturbance and to ensure that the Government of every State is carried on in
accordance with the provisions of Constitution.
What efforts have been made by the successive governments to tackle communal violence in India?
Communal riots have become a distinct feature of communalism in India. Communal riots are not caused
spontaneously and they are rarely caused by religious animosity. History has been that the communal violence in
India has occurred due to conflicting political interests, which are often linked to economic interests. Till 2002, the
successive governments did not take any notable legislative actions but to check the sporadic events of communal
violence, the UPA government had in 2005 brought forward the Communal Violence (Prevention, Control and
Rehabilitation of Victims) Bill, 2005. This bill provided measures for Prevention and control of communal violence;
Speedy investigation and trials as well as rehabilitation of victims. This bill could never see the light of the day and
the parliamentary standing committee tagged this bill as something, which violates the basic federal principle of the
Indian Constitution. After that, the National Advisory committee drafted and brought forward the Prevention of
Communal and Targeted Violence (Access to Justice and Reparations) Bill. Recently, the UPA-II government has
deferred this bill also.
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What were the salient features of the Communal Violence Bill 2005?
The most important provision of the above bill was about declaring the Communally Disturbed Area. As per
provisions of this bill, if the state government was of the view that communal violence is taking place in one or more
areas of the state, which can pose a danger to the secular fabric, integrity, unity or internal security of India; then the
state government can declare that area in question as "communally disturbed area". Once that is done, the district
magistrate or the competent authority appointed by the state government can take measures such as regulating
assembly, directing persons to deposit their arms, searching premises etc. to control communal violence.
Apart from this, the bill also provided for double punishment as per other laws. The bill empowered the state
government to establish special courts to try the offences related to communal violence. For rehabilitation, the bill
provided creation of Communal Disturbance Relief and Rehabilitation Councils (CDRRC) at national, state and
district levels. It also made provisions that such district level council shall pay at least 20% of total compensation as
immediate compensation to victims.
However, this bill failed to become an act. The most important reason was that it was more tilted towards the post-
violence scenario and not about checking the violence in the first place. Further, there were ambiguities regarding
declaring the communally disturbed area and the state government officials were given unprecedented powers
without any accountability. Further some provisions overlapped with the Criminal Procedure Code and some even
violated the provisions of the constitution and other statutes.
Overall, the 2005 bill was held to be against the federal principle enshrined in the constitution.
What are the important provisions of the 2011 Bill?
The important provisions of this bill are as follows:
It includes acts which may result in injury to persons or property, if such acts are directed against
persons on the basis of their affiliation to any group, and if such an act destroys the secular fabric of the
nation. Sexual assault, hate propaganda, torture and organized communal violence included.
The public servants were made punishable for failing to discharge their stated duties in an unbiased
manner.
The duties of the public servants also include duty to provide protection to victims of communal
violence.
There is a provision to establish a National Authority for Communal Harmony, Justice, and
Reparation (NACHJR) and State Authorities for Communal Harmony, Justice, and Reparation
(SACHJRs). These would prevent acts of communal violence, incitement to communal violence, contain
the spread of communal violence, and monitor investigations into acts of communal violence.
Central and state governments given authority to intercept any messages or transmissions if they feel that
such messages may lead to communal violence.
The public officials liable to be prosecuted for offences under the bill. The state government would need
to grant sanction for such prosecution within 30 days.
The states are required to set up Human Rights Defender of Justice and Reparations in every district. The
Human Rights defender will ensure that those affected by communal and targeted violence are able to
access their rights under existing laws.
There are provisions of state and district-level authorities for assessing compensation for victims of
communal violence. There are several obligations of the states towards victims, such as the
establishment of relief camps, ensuring proper facilities, medical provisions and clothing for those within
such camps, etc.
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Why the 2011Bill has been opposed and on what grounds it has been now deferred by the Government?
The 2011 bill sought the fundamental changes in how the present system of governance deals with the violence
against minorities. The bill has religious minorities at its heart, though it also deals with SCs and STs. The major
flaws in the bill are as follows:
The bill defines that the term "group" against which communal violence occurs stands to be a linguistic or
religious minority. So, what would happen if there is a communal violence by the minority against the
majority? Although a democracy must protect its minorities from violence, but there are several regions
in India where otherwise majorities are minorities and otherwise minorities are majorities. The bill
projects as of only minority is vulnerable to communal violence, thus is anti-majority. Thus, no member of
the majority community can ever be a victim. It opens up a huge scope for abuse and would act that they
would never be charged under the act.
Second contention is with the creation of the National Authority under the bill at the Central level. This
has been seen as an attempt to curtail the jurisdiction of the states as any direction issued to the state
authority by the National Authority is binding.
In the bill, hate propaganda' is an offence against minority community and not otherwise. The law makes
only members of the majority community culpable and discriminates on the basis of a religion or caste.
The definition of the hostile environment is not clear, to which acts would precisely fall under the ambit of
this Act. Therefore it may also include a speech, music or video clippings which may have the capability of
creating an intimidating, hostile or offensive environment and who shall have the discretion to decide as
to which Act qualifies as being intimidating or hostile is left out.
The bill makes the public officials liable for riots against minorities. It says that if the "communal and
targeted violence against minorities takes place, it will automatically be assumed that the civil servant in
charge of law and order has not exercised lawful authority vested in him or her under law and he or she
shall be guilty of dereliction of duty.
It seems to be a welcome move because often public officials wait and act as per the orders of their
political masters. By making it clearly their own responsibility, the bill seeks to strengthen the civil
servant against the politician. But this is only half truth. The remaining half is that the riots are partly
produced by politicians and leaders who may or may not be the part of the government. Communal violence
is also a function of socio-economic fabric of a particular town. A civil servant may be extremely
successful in carrying out his duties at one place may find himself or herself helpless at another place, just
because of many factors. Thus the provisions of the bill have a prejudice against public officials.
Thus, overall, the bill has many flaws. In February 2014, the government was forced to abandon plans to introduce
this bill. The notable points from the debate which led to deferral of the bill are as follows:
The bill was mainly opposed on the ground that Law and Order is a state subject and central
government has absolutely no jurisdiction in bringing such a bill. As pointed out by Arun Jaitley of BJP, the
bill is entirely beyond the legislative competence of Parliament. This was countered by Kapil Sibal of UPA
by saying that if it is a state-sponsored communal activity, then it is not a law and order issue.
The bill includes provisions on what sort of action should be taken against state government officials who
fail to prevent riots, and provides guidelines for the maintenance of public order. These are exclusively
state subjects and this within the domain of the state executive. The opposition claimed that the
government is willing to pass this bill just before elections to win the Muslim votes.
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The bill assumes that only members of a minority can be targeted during a riot, that the majority
community will never be victims. This provision was revised but then it drew censure from chief
ministers such as Jayalalitha, who claimed that the bill would give "unfettered powers" to human rights
bodies at the centre and state, allowing them to issue orders to the state government.
Model Questions:
1. Discuss the constitutional Provisions regarding secularism in India. Do you think that our forefathers obviated the communal violence
while framing the constitution? Opine.
2. Law and order is undeniably a State subject but when communal or caste-based violence results in the gratuitous killing and displacement of
innocents, the issue ceases to be a State problem and turns into a national catastrophe. Do you agree with this view? Opine.
Fundamentals of Macro-prudential and Micro-Prudential Regulations

While reading the business newspapers, we very often come across these two terms. The dictionary meaning of the
term "prudential" something involving or showing care and forethought, especially in business and finance. The
major focus of prudential regulations is to check the risks or limit the risk-taking behaviour of financial institutions
and thus prevent potential financial crises. In this article, we try to understand the basic differences in the two and
their link for financial soundness of an entity or system.
Microprudential versus Macroprudential Regulations
In simplest language, the Microprudential regulations seek to enhance the safety and soundness of individual
financial institutions, while macro prudential regulations focus on the welfare of the financial system as a whole.
The most important objective of both is to mitigate risk. Macroprudential and Microprudential regulations /
policies generally complement and reinforce each other in pursuit of their respective goals. For instance, the health
of individual institutions is a necessary, though not sufficient, condition for system-wide stability, while a stable
system contributes to the health of individual institutions. However, in certain circumstances, there can be conflicts
because of overlapping policy mandates and the way in which policies are applied.
The following table makes out the differences between the two:
Are Microprudential and Macroprudential Regulations complimentary?

The prudential policy instruments or tools that are applied to individual financial entities are micro-prudential;
while those applied to the entire system are macro-prudential. One example of Microprudential regulations is Basel
Regulations. As a part of the Basel requirements, RBI mandates each bank to adhere to norms which help the
particular bank to ensure that the capital it holds is commensurate with the risks to which it is exposed. The other
examples include the buffers (of two types viz. Capital Buffer and Liquidity Buffer), and balance sheet requirements.
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The Macroprudential regulations adjust the overall levels of the banking system. This implies that success or failure
of Macroprudential policy is dependent upon the Microprudential policy to a great extent. At the same time, both
policies depend on capital and liquidity tools that are deployed at the level of the individual institution. Prudential
standards are, in essence, safety standards providing a backstop of resilience both to the firm and to the system and
are thus complimentary to each other.
Logic behind Regulations
Traditional Microprudential regulation of banks is based on the logic of reducing the risk profile of individual system.
Macroprudential policy addresses the interconnectedness of individual financial institutions and markets, as well as
their common exposure to economic risk factors. It also focuses on the procyclical behavior of the financial system in
the effort to foster its stability. One of the key purposes of Macroprudential policy is to address negative externalities
by acting as a countervailing force to the natural decline in measured risks in a boom and the subsequent rise in
measured risks in the downturn. It also aims to mitigate risks linked to financial sector concentration and
interconnectedness. As such, Macroprudential policy has both a time dimension and a cross-sectional (or structural)
dimension.
Model Question:
3. Differentiate between Microprudential regulations and Macroprudential regulations with examples. Do you think that
Macroprudential and Microprudential regulations are complimentary to each other for a resilient and robust financial system?
Discuss.
Fundamental of Subsidy Economy

What is Subsidy?
The word subsidy is derived from the Latin subsidium, meaning troops stationed in reserve, and essentially implies
coming to assistance from behind. In most common parlance, Subsidy means grant. This grant may be in the form of
either cash or kind and is generally given to promote an economic policy or social policy. Subsidy is generally
understood to be a grant extended by the Government, however, that is not a very strict definition. The various forms
of subsidy include direct subsidies such as cash grants, interest-free loans; indirect subsidies such as tax breaks,
premium free insurance, low-interest loans, depreciation write-offs, rent rebates etc.
Subsidies have been provided widely throughout the world as a tool for realizing government policies. There are six
primary categories of subsidies as follows, divided by purpose:
Export subsidies,
Subsidies contingent upon the use of domestic over imported goods,
Industrial promotion subsidies,
Structural adjustment subsidies,
Regional development subsidies,
Research and development subsidies.
By beneficiary, there are two primary categories:
Subsidies that are not limited to specific businesses or industries (non-specific subsidies), and
Subsidies those are limited to specific businesses and industries (specific subsidies).
Apart from the above, the subsidies can also be divided into broad subsidies and narrow subsidies. The most
common forms of subsidies are those to the producer or the consumer. Producer/Production subsidies ensure
producers are better off by supplying market price support, direct support, or payments to factors of production.
Consumer/Consumption subsidies commonly reduce the price of goods and services to the consumer.
Subsidies are commonly used by governments to promote general welfare (eg. housing, education, sustenance).
However, they can also be used as tools of political and corporate cronyism or to erect barriers to trade.
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How subsidy is different from Taxes?
Subsidies are the opposite of taxes because government gives money to individuals or firms, instead of collecting
money from individuals or firms. A subsidy in its simplest form is a negative tax a reverse flow (transfer) from the
government to the public or an income/consumption supplement for individuals. Further, Subsidies, like taxes,
may thus be lump sum, proportional (ad valorem or specific) or progressive. Subsidies are as much an economic tool
as are taxes to facilitate smooth functioning of the economy.
How subsidies are estimated on the basis of Public Goods, Merit Goods and Non-Merit classification?
The estimation of the subsidies is done by the standard classification into public, merit and non-merit goods. A brief
description of the same is given below:
Public Goods: Public good is a good in that individuals cannot be effectively excluded from use and where
use by one individual does not reduce availability to others. Examples of public goods include fresh air,
national defense, flood control systems, public transport and street lighting. Since these services are
available to all, they are normally characterised by nonrivalry and non-excludability in consumption. Since
these services are available to all citizens, they do not exclude anyone. Thus, such goods cannot be priced and
hence are not included in the calculation of subsidies.
Merit Goods: Merit goods are those goods whose consumption leads to positive externalities. This
implies that when a merit good is consumed, the public benefit is greater than the private benefit. For
example, vaccination against a contagious disease is a merit good. Similarly, other merit goods are
environmental protection and minimum level of education (primary education), for all. The social benefit
resulting from these goods/services is much greater than the sum of private benefits to individual consumers.
This is because these goods contain elements of 'externality' beneficial to the society as a whole. Other
examples of merit goods are roads and bridges, flood control and research pertaining to agriculture, space,
atomic energy, etc. The availability of benefits in the form of externality justifies the subsidies on these
goods.
Non-Merit Goods: The non-merit goods are those goods whose consumption leads to negative
externalities. In consumption of such goods, the benefit of subsidies provided on such goods accrues to the
individual consumers. In case of non-merit goods, the cost of providing the commodity/service to the society
is higher than the price fixed for providing it to the consumer. These subsidies result in the transfer of
benefits to the individual consumer in a number of ways as follows:
o Cash subsidies - Providing food or fertilisers to the consumer at prices lower than those at which
the government procures the commodities.
o Interest or credit subsidies : Loans given at rates lower than market rates. This takes the form of
concessional credit to small scale industries or priority sector loans to individuals to buy a taxi, an
auto-rickshaw or to set up some small enterprise by buying some equipment.
o Tax subsidies: Tax exemption of medical expenses, postponing collection of tax arrears
o In-kind subsidies: Provision of free medical services though government dispensaries, provision
of equipment to physically handicapped persons.
o Procurement subsidies: Purchase of foodgrains at an assured price which is intended to be
higher than the prevailing market price.
o Regulatory subsidies: Fixation of prices of goods produced by the public sector at less than the
cost with a view to providing inputs to industry or helping certain other categories of consumers.
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Examples are making steel, coal or other minerals available to industry, providing electricity to
farmers at a rate much lower than the cost.
Why the economic case for subsidising "merit goods" is the strongest?
Going in line with the above description, the Public goods such as defence, general administration etc. is not
amenable to usual pricing mechanisms and therefore subsidies are not relevant for this category. The Merit goods
which inter alia include primary education, public health, sewage and sanitation, many social welfare schemes, soil
and water conservation, agricultural research, flood control and drainage, roads and bridges and scientific research
have positive externalities and that is why the economic case for subsidising "merit goods" is the strongest.
In case of the non-merit goods such as food, fertiliser and education beyond elementary level; the element of
externality is limited. Government may justify such subsidies on the basis of such grounds as mentioned in the Directive
Principles of Constitution of India or to other social and equity objectives.
The provision of subsidies on non-merit goods has come in for sharp criticism since in their case; the benefits accrue
to the individual while the costs are borne by the society. Moreover, in several cases, instead of the intended
beneficiaries, the benefits are appropriated by better-off sections. For example, it is alleged that benefits of the
provision of cheap electric energy to farmers are, by and large, appropriated by rich and affluent farmers. Similarly,
better off sections may take advantage of a generalised scheme of public distribution of food grains or other essential
commodities.
What is difference between Subsidy and Transfer Payments?
Transfer payments refer to the payments that are made without any exchange of goods or services. The generally
result in the redistribution of income. A subsidy is a type of transfer payment. Other examples are welfare
expenditures and social security contribution by the government. For example, under Swawlamban Yojana,
Government will contribute Rs. 1000 per year to each NPS account opened in the year 2010-11 and for the next four
years, that is, 2011-12, 2012-13, 2013-14 & 2014-15.
What are Budgetary Subsidies?
The subsidies which are provided in the Budget are budgetary subsidies. The estimation of budgetary subsidies are
computed as excess of the cost of providing a service over the recoveries from the service. These costs are taken as the
sum of the following:
Revenue expenditure on the concerned service;
Annual depreciation on cumulative capital expenditure for the creation of physical assets in the service;
and
Interest costs of the cumulative capital expenditure, equity investment in public enterprises, and loans
given for the service concerned including those to public enterprises.
What are the current trends in Subsidies in India?
Kindly note the following observations for your preliminary as well as Mains examination.
Aggregate central budgetary subsidies in 1998-99 were estimated to be Rs. 79828 crore, amounting to 4.59
percent of GDP. The estimated major subsidies in 2012-13 are around 2.4 per cent of GDP, in the tune of
Rs. 1, 90,015 crores. The 2012-13 budget set out the governments intention to maintain total subsidies to
under 2 per cent of GDP in 201213 and reducing to less than 1.75 per cent of GDP over the following three
years.
The relative share of the various sectors is as follows:
Relative Share of Major Sectors in All India Subsidies
Sector Subsidy Amount Rs. Crore %
Agriculture, Rural Development & Allied Activities 44568 18.9
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Irrigation & Flood Control 23802 10.1
Energy 22927 9.73
Industry & Minerals 22101 9.37
Other Subsidies 19820 8.41
Elementary Education 18606 7.89
Transport 17490 7.42
Secondary Education 15214 6.45
Medical & Public Health 13740 5.83
Other Education including Technical Education 10286 4.36
General Economic Services 8937 3.79
Water Supply & Sanitation 7734 3.28
Social Welfare and Nutrition 6391 2.71
Housing 4136 1.75
Most of the subsidies in India are Non-merit subsidies. In 1998-99, the non-merit subsidies accounted 75.3%
of the total subsidies. As per a 2003-04 study, the non-merit subsidies amounted to about 56.5 percent of
total subsidies in 1998-99.
The share of social services which include education, health, family welfare, water supply and sanitation
and labour and employment is only 21.2 percent in total subsidies, and the share of economic services, viz.,
agriculture, rural development, energy, industry and minerals, irrigation and flood control, science,
technology and environment is 78.8 percent in the total subsidies.
The relative share of centre is about one-third of the total subsidies, and that of the states, two-thirds
Total Central Government subsidies in 2012-13 were in the tune of Rs. 1, 90,015 crores. Out of this, the
food subsidy accounts for Rs. 75,000 crores (39.5%), fertilizer subsidy Rs. 60,974 crores (32.1 %) and
petroleum subsidy Rs. 43,580 crores (22.9%). Taking food, fertilizer and petroleum, these three subsidies
account for 94.5 percent of the total explicit subsidies. Other Central Government subsidies on Railways,
interest subsidy etc. account for barely 5.5 percent.
Subsidy bill on fuel, food and fertilizers for 2014-15 is Rs 2,46,397 crore, against Rs 2,45,452 crore in the
revised estimates for 2013-14. FY15s estimates include an increase in the food subsidy by a whopping Rs
23,000 crore to Rs 1, 15,000 crore for 2014-15 fiscal.
Food Subsidy
What are the Issues related to Food Subsidy & Procurement in India?
The Government of India fixes the Minimum Support Price (MSP) of foodgrains at which procurement is made from
the farmers. The Central Issue Price (CIP) of foodgrains at which foodgrains are sold under different government
schemes and allocations of quantity of foodgrains under Targeted Public Distribution Scheme (TPDS) and other
welfare schemes are also fixed by the Government of India. The difference between the Economic Cost and the
Central Issue Price is reimbursed by the Government of India as consumer subsidy to the Food Corporation of India
(FCI). The economic cost includes MSP, procurement costs/incidentals and distribution costs. In this way, in our
country, the food subsidies comprise three components:
Subsidies to farmers through support prices
Subsidies to consumers through public distribution system
Subsidies to the Food Corporation of India (FCI) in its purchase and maintenance of buffer stocks.
The major objective of the minimum support prices is to keep foodgrains production at a comfortable level. At the
same time, since FCI needs to purchase the foodgrains without any limit, it has resulted in inflated FCI stocks much
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larger than the buffer stocks. The fallouts of this is known to all of us. The maximum benefit of the MSP has been
accrued only by the farmers of Punjab, Haryana, Western UP, Andhra Pradesh and Chhattisgarh. Furthermore, the
MSP has also distorted the cropping pattern on favour of supported crops, particularly rice and wheat. The major
reforms suggested by various panels with respect to the procurement of foodgrains are as follows:
Government should fix the target of foodgrain procurement every year before the sowing season. Once the
targets with 10%, the food procurement should be suspended.
Government should start a price insurance scheme on the lines of farm insurances.
The FCI operations are limited to select states only; the operations should be expanded into multiple states.
PDS penetration should be increased and leakages should be reduced. The Cash transfer of food subsidies is
on this line.
Trends in Food Subsidy:
Increasing Food Subsidy Bill: Between 2006-07 and 2011-12 the food subsidy in India more than tripled
and several factors have contributed to this increase. These include the rising economic costs; rising MSP;
rising procurement costs and increasing distribution costs.
Food Subsidy with respect to National Food Security Act: The food security law seeks to provide heavily
subsidised foodgrains to nearly two third of the population and is seen as a big drag on government
finances in the coming years. According to this act, the poorest section of population would get wheat at Rs
2/kilo and rice at Rs 3/kg. Implementation of National Food Security act would cost Rs 88,500 crore in
2014-15, which is almost same as the total food subsidy last year. The total food subsidy bill for 2014-15 is
pegged at Rs 1.15 lakh crore, up from Rs 92,000 crore in the revised estimate of 2013-14. The share of food
subsidy in total subsidy provided by the central government is estimated to rise to 45 per cent from 41 per
cent when the UPA-2 returned to power in 2009-10. Further, since, the Food Security act mandates the
identification of beneficiaries to be completed within one year after the commencement of the Act
(Q2FY14), it would reduce additional costs to some extent in the coming fiscal.
What was WTO Bali meet agenda and what is the so called Early Harvest?
Whatsoever may be the legit objectives of the governments, subsidies are often seen as instruments of giving
excessive protection to domestic industries. In such cases, subsidies act as a barrier to trade, by distorting the
competitive relationships that develop naturally in a free trading system. The recent issue which finally brought a
victory for India at Bali in 2013 is based upon such premises.
What is Peace Clause?
The recently highlighted issue was on Article 13 (aka peace clause) of the WTO's AoA (Agreement on Agriculture).
This article says that domestic support measures and export subsidies of a WTO Member that are legal under the
provisions of the Agreement on Agriculture cannot be challenged by other WTO Members on grounds of being illegal
under the provisions of another WTO agreement. Thus, Article 13 (due restraint) of the Agriculture Agreement
protects countries using subsidies which comply with the agreement from being challenged under other WTO
agreements. Without this peace clause, countries would have greater freedom to take action against each others
subsidies, under the Subsidies and Countervailing Measures Agreement and related provisions.
The Peace Clause has expired on January 1, 2004. It was now possible, therefore, for developing countries and
nations favouring free trade in agricultural goods, such as the Cairns Group, to use the WTO dispute settlement
mechanism in order to challenge, in particular, U.S. and EU export subsidies on agricultural products.
While the food subsidies distort markets, the Agreement on Agriculture limits market distorting farm subsidies at
10% of the aggregate production.
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How it would impact India?
Once the National Food Security Act is enacted; India would be at risk of violating this 10% cap. So, India as well as
other developing countries wanted their right of stocking foodgrains and providing food subsidy to be protected
from the WTO litigations. India was struggling on this front via WTO negotiations. India wanted a permanent
solution to provide income support to poor farmers and food security to the poor. Developing nations, including
India, called for an 8-9 year peace clause while the developed nations, including the USA, were prepared to extend
only a 2-year window.
What was outcome of the Bali Meet?
The WTO agreed to allow countries to provide subsidy on staple food crops without any threat of punitive action.
The final deal allows the countries such as India to fix a Minimum Support Price (MSP) for farm produce and to sell
staple grains to the poor at subsidised rates. It also permits countries to store foodgrains to meet contingency
requirements. It was agreed that all schemes providing support in relation to procurement for public stock-holding
programmes for staple food crops will be protected from WTO litigation. All traditional staple food crops, without
any numerical limit, will be covered under the decision. This deal was termed by many as Early Harvest.
Fertilizer Subsidy
What are current trends in Fertilizer subsidy?
Fertilizer subsidy is the difference between the retention price of fertilizers and the price at which fertilizers are
made available to consumers. The difference is paid to industry as subsidy. Fertilisers, after oil and food, account for
the third-biggest share of Indias total subsidy bill, which is estimated at Rs 2.46 crore for 2014-15. The total
fertiliser subsidy in 2014-15 has been pegged at Rs. 67,970 crore. Out of this, subsidy for imported urea is pegged at
Rs 12,300 crore, domestic urea is Rs 31,000 crore and sale of de-controlled fertilisers (like phosphatic & potassic
fertilisers) is Rs 24,670 crore.
What are the major issues of Fertilizer Subsidies?
Application of fertilisers was popularised in our country during the Green Revolution of the 1960s and the 1970s.
Incremental use of fertilizers in synergy with high yield seeds proved to be of tremendous contribution to the success
of Green Revolution. However, the prices of fertilizers kept increasing. Since the Government wanted to encourage
use of mineral based fertilizers; it started providing reimbursements to companies to compensate for high cost of
production for the mineral-based fertilisers and for selling it at low costs to the farmers. This is all what we call
fertilizer subsidy.
However, this has been a major contentious issue today. The major problems are as follows:
The objective of the government is to support the farmers but the question is exactly how much of that
really goes to the pocket of the farmers and how much is siphoned by the companies.
It has been debated that the beneficiaries have been the large farmers and not small & marginal farmers.
While deciding on the subsidy regime, it has to be kept in mind that Urea accounts for almost 50 per cent of
fertiliser application and India is NOT self sufficient in Urea production. At the same time, distroted subsidy
regime may deplete the NPK use ratio. The normally accepted ratio is 4:2:1.
What is the current Fertilizer Subsidy Regime in India?
Till 2003, the subsidy to urea was under the provisions of the Retention Price Scheme (RPS). Under RPS, the
difference between retention price (cost of production as assessed by the Government plus 12% post tax return on
networth) and the statutorily notified sale price was paid as subsidy to each urea unit. Later the RPS regime was
dismantled and a Concession Scheme for urea units based on the prices of feedstock used and the vintage of plants
was introduced, which was called New Pricing Scheme or NPS. This scheme was introduced from April 1, 2003. It
had various phases like NPS-I (2003-2004), NPS-II (2004-2006) and NPS-III (2006 onwards). We note here that
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Urea is the only controlled fertilizer, which is sold at statutory notified uniform sale price. The Phosphatic and
Potassic fertilizes are under a decontrolled regime and are sold at indicative maximum retail prices (MRPs).
The problems faced by the manufactures in earning a reasonable return on their investment with reference to
controlled prices, are mitigated by providing support under the New Pricing Scheme (NPS) for Urea units and the
concession Scheme for decontrolled Phosphatic and Potassic fertilizers. The statutorily notified sale price and
indicative MRP is generally less than the cost of production of the irrespective manufacturing unit. The difference
between the cost of production and the selling price/MRP is paid as subsidy/concession to manufacturers.
As the consumer prices of both indigenous and imported fertilizers are fixed uniformly, financial support is also
given on imported urea and decontrolled Phosphatic and Potassic fertilizers.
Problems with NPS
o The problem with New Pricing Scheme was that the fertilizer companies started bleeding due to fixed
Urea prices and rising cost of Inputs such as Natural Gas and Naptha. As much as 80% of Indias
production of urea is gas-based. The government increased the prices of Urea but still the prices have
been skewed. At present, the urea-based fertilizers cost Rs. 5,360 per tonne, while the potash and
phosphate fertilizers cost Rs. 24,000 per tonne.
o Since, Urea is available at such a cheap price that people not only started unbalanced use of this fertilizer but
also Urea was illegally exported to neighbouring countries. So, the New Pricing Scheme III needed a
modification so that the companies are allowed to hike urea prices and also there can be a check on the
imbalanced use of soil nutrients and reduce government's subsidy burden. Earlier, the government had
plans to decontrol the urea sector by bringing it under the Nutrient Based Subsidy (NBS) scheme.
Soumitra Choudhary Panel
o A committee headed by Planning Commission member Soumitra Choudhary had also suggested freeing of
the sector. But somehow, the political class could not take bold steps and Urea is still under price control
regime.
o The Soumitra Choudhary Committee also recommended that the NBS policy, which is applicable only on P
and K fertilisers needs to be extended for urea also. This has become all the more desirable to maintain
the ratio between MRP of urea vis-a-vis P and K fertilisers, which is essential for balanced fertilisation.
o On January 23, 2013, the government formed a GoM, which will look into the modified New Pricing
Scheme (NPS) III for urea as well as consider earlier proposals for de-regulating the sector.
Nutrient Based Subsidy (NBS) scheme for other fertilizers
Government of India is implementing Nutrient Based Subsidy (NBS) policy w.e.f. 1st April 2010. The
notable features of this scheme are as follows:
This scheme is for 22 grades of decontrolled fertilizers namely DAP, MAP, TSP, DAP Lite, MOP, SSP,
Ammonium Sulphate and 15 grades of complex fertilizers.
These fertilizers are provided to the farmers at the subsidized rates based on the nutrients (N, P, K & S)
contained in these fertilizers.
Additional subsidy is also provided on the fertilizers fortified with secondary and micronutrients as per
the Fertilizer Control Order such as Boron and Zinc.
The subsidy given to the companies is fixed annually on the basis of its nutrients content (i.e. Nitrogen,
Phosphate, Potash and Sulphur).
Under this scheme, Maximum Retail Price (MRP) of fertilizers has been left open and
manufacturers/marketers are allowed to fix the MRP at reasonable level.
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Problems of the NBS Scheme
The objective of this scheme was that it would foster balanced use of the fertilizers and thus would
improve soil health and also reduces the government outgo on fertiliser support. The policy has been so
far failed to achieve the first objective of improving the soil health. The reason is the prices are skewed
towards low prices of Urea.
How the NBS Scheme could not improve the Soil Fertility?
The above discussion makes it clear that on the one side we have Urea available for Rs. 5360 per tonne,
while on the other hand we have potash and phosphate fertilizers, which cost Rs. 24,000 per tonne.
Urea, as we know, is destined for use as a nitrogen-release fertilizer. Urea has the highest nitrogen
content of all solid nitrogenous fertilizers in common use.
The skewed price regime led to skew in the use of the fertilizers. We use the NPK Ratio to label fertilizer
based on the relative content of the chemical elements nitrogen (N), phosphorus (P), and potassium (K).
The ideal NPK ratio for healthy soil should be 4:2:1. But one of the study conducted by the Fertiliser
Association of India says the nitrogen-phosphorus pot-ash (NPK ) ratio in 2011-12 was 10:4:1. There can
be two reasons for such a skewed ration, one is that the K and P fertilizers could not reach farmers in
time, second is that there is indiscriminate use of Urea.
This data is of one year later than the launch of NBS scheme. This indicates that the scheme is not being
implemented properly. The experts blame the partial NBS scheme for distortion. The rapid increase in
phosphorus and potassium prices, along with the control over prices of urea is creating the problem. This
growing imbalanceMember
in the useAnand
Name: of nutrients isEmail
Mohan Member's a very bad
address: sign for agricultural
dubledoreslair@gmail.com productivity in the long run.
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Petroleum Subsidies
What are the major issues in Petroleum Subsidy regime?
The Government provides energy subsidy with the objective of protecting consumers from international price
volatility and providing energy access for its citizens, especially the poor. However, energy subsidies place a heavy
burden on government budgets, while often failing to reach their targeted beneficiaries.
Three petroleum products, namely kerosene, domestic LPG and diesel are sold for less than international market
prices, with the government providing a fiscal subsidy on LPG and Kerosene. The subsidy, however, covers only a
part of the difference between the cost price (including marketing costs) and the selling price of these three
petroleum products, thereby resulting in under-recoveries for the OMCs.
Cash assistance is provided by the government as partial compensation for the total under-recoveries incurred by
OMCs. The amount of cash assistance is determined on an ad hoc basis and is usually more than half of the total
amount of under-recoveries. Given the total size of the under-recoveries, the amount of cash assistance exceeds the
fiscal subsidy provided on PDS kerosene and domestic LPG. Cash assistance is allocated from the fiscal budget and is
accounted for under the expenditure category compensation to oil companies for under-recoveries on account of
sale of sensitive petroleum products.
What were recommendations on Oil subsidy reforms by Kirit Parikh Committee?
In 2010 a government committee led by Kirit Parikh recommended that much more substantial reforms were
needed, including full deregulation of diesel prices, and periodic increases of domestic liquefied petroleum gasoline
(LPG) and Public Distribution System (PDS) kerosene prices. The committee made the following recommendations:
B Domestic petroleum product prices have to reflect that of international prices. The government should
allow pass-through of international oil prices to domestic users. This will enable the public sector OMCs
and upstream oil companies to remain financially stable and solvent
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B There is no justification for continuance of subsidy for diesel and petrol and as such their prices should be
raised by Rs 2.33 per litre and Rs 4.72 per litre respectively
B An additional excise duty of Rs 80,000 per vehicle should be levied on diesel car owners
B Smartcards should be used to provide subsidy to the target/needy group on kerosene and 14.2 LPG
cylinders. Subsidy on LPG cylinders should be discontinued immediately except for the below the poverty
line households.
B The price of kerosene should be increased by Rs 6 per litre and that of LPG by Rs 100 per cylinder. The
kerosene price increase should be in line with the nominal growth in agricultural GDP. LPG price should be
increased in line with per capita income.
B The governments policy of incurring a cost of Rs 1.42 lakh crore towards compensating the OMCs for the
under recoveries is a complete failure. The compensation burden has reached a level of 25 per cent of total
revenue receipts in 2008-09, which is totally unviable and perilous to the long-term health of the economy.
In June 2010, the Indian government deregulated the price of petrol. However, prices for diesel, kerosene and
domestic LPG continue to be regulated. Even in the case of petrol, OMCs can only change prices every fortnight, and
only after seeking approval from the government.
Reduction of fuel subsidy needs a very strongly determined government at the centre, which we lack. The coalition
government needed to appease various social groups.
Model Questions:
4. "Subsidies are as much an economic tool as are taxes to facilitate smooth functioning of the economy." Discuss.
5. Differentiate between Public Goods, Merit Goods and Non-Merit Goods. On what account, the economic case for subsidising "merit
goods" is the strongest? Elaborate.
6. Critically discuss the fiscal implications
Member Name:of National
Anand Mohan Food Security
Member's Act. dubledoreslair@gmail.com 61.8.129.229
Email address:
7. Write a critical note on India's current Fertilizer subsidy regime. On what account, present subsidy regime is skewed heavily in favour
of urea? Do you think that the Nutrient Based Subsidy scheme is a step in the right direction? Discuss making a case for Urea to be
included in NBS scheme.
Basics of Farmer Producer Companies

On the recommendations of an expert panel led by Y.K. Alagh, Centre had amended the Indian Companies Act, 1956,
in 2002-03 to provide for producer companies. A Farmer Producer Company is a hybrid between cooperative
societies and private limited companies.
Here are some important observations:
1. The objective of the concept of FPC is to organize farmers into a collective to improve their bargaining
strength in the market.
2. They are owned and governed by shareholder farmers (or artisans) and administered by professional
managers.
3. They adopt all the good principles of cooperatives and the efficient business practices of companies and
also seek to address the inadequacies of the cooperative structure.
4. A Farmer Producer Company can be formed by any 10 or more primary producers or by two or more
producer institutions, or by a contribution of both. They can undertake activities related to production,
harvesting, procurement, grading, pooling, marketing, processing, etc., of agricultural produce.
5. Non-producers seeking to invest in these companies as shareholders are precluded under the statute
concerned.
6. The Farmer Producer companies have democratic governance, each producer or member has equal voting
rights irrespective of the number of shares held. There is a limitation on the amount that can be distributed
as dividend. Profit is largely distributed on the basis of patronage, which acts as a reward for members
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contributing to the business. There can be 5-15 directors and expert directors can be co-opted for
professional guidance.
Problems of FPCs
India has some 80 Farmer Producer companies so far. India's first Farmer Producer Company was the Vanilla India
Producer Co. in Kerala (est. 2004). Now here are some problems of these companies, which explain why the
progress has been so low in India.
The first issue is that there isa restriction on trading in the shares of a FPC, as of now there is no exit route
for investors.
If some one is non-producer and wants to invest in the equity of these companes, it is not possible. The fall
out of this is that it is not easy to mobilize sizeable funds as primary producers do not have the
wherewithal to contribute large amounts to the share capital.
As of now, there is little state support to FPCs. Since the FPCs are profit-oriented organizations, they have
limited avenues to get donations also.
As of now, the banks are not very much familiar of the concept, so these companies have limited access to
banks.
The next problem is to get the APMC (agriculture produce marketing committee) licence, which is a must
for trading in agri produce.
There is a need to make concerted efforts to promote and nurture producer companies. State governments need to
extend all the benefits of farmers cooperatives to them. The legislation concerned needs to be amended to make
these companies more attractive for investors. Then awareness has to be created about this structure among banks
so that they may provide term loans and working capital loans to producer companies. Since agriculture income is
exempted from income tax, it would be appropriate that similar exemptions are also given to producer companies set
up by farmers.
The concept is an excellent one; if implemented in right earnest, it offers great promise of being a win-win
proposition for farmers as well as consumers. (Inputs Live Mint)
Farmer Producer Companies in Budget 2013-14
Farmer Producer Organizations (FPO), including Farmer Producer Companies (FPC), have emerged as
aggregators of farm produce and link farmers directly to markets.
To signal our support to them, the Government has decided to provide matching equity grants to registered
FPOs upto a maximum of 10 lakh per FPO to enable them to leverage working capital from financial
institutions. A sum of 50 crore has been earmarked for this purpose.
Besides this, a Credit Guarantee Fund will also be created in the Small Farmers Agri Business Corporation
with an initial corpus of 100 crore.
Other Proposals
The Finance Minister also proposed matching equity grants to registered Farmer Producer Organisations
(FPOs) up to a maximum of Rs.10 lakh per FPO to enable them to leverage working capital from financial
institutions with an outlay of Rs. 50 crore. At the same time, an initial corpus of Rs. 100 crore has been set
aside for a Credit Guarantee Fund under the Small Farmers Agri Business Corporation. However, the
programme is incumbent on amendments to the Agriculture Produce Marketing Act by the State
governments.
Model Question:
8. What is a Farmer Producer Company and how does it work? Explain why the progress of FPCs has been so low in India?
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Curative Petition & Special Leave Petition

What is Curative Petition?
The concept of Curative petition was evolved by the Supreme Court of India in the matter of Rupa Ashok Hurra vs.
Ashok Hurra and Anr.(2002) where the question was whether an aggrieved person is entitled to any relief against the
final judgement/order of the Supreme Court, after dismissal of a review petition. The Supreme Court in the said case
held that in order to prevent abuse of its process and to cure gross miscarriage of justice, it may reconsider its
judgements in exercise of its inherent powers. For this purpose the Court has devised what has been termed as a
"curative" petition. In the Curative petition, the petitioner is required to aver specifically that the grounds mentioned
therein had been taken in the review petition filed earlier and that it was dismissed by circulation. This has to be
certified by a senior advocate. The Curative petition is then circulated to the three senior most judges and the judges
who delivered the impugned judgement, if available. No time limit is given for filing Curative petition.
What is Special Leave Petition?
Special leave petition is a power of Supreme Court of India granted by Constitution Article 136. This article says that
Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination,
sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
Special Leave Petition has been used frequently to obviate the bar put by article 262 on SC for hearing the matters
related to inter-state riparian disputes.
Article 262 says this:
262. (1) Parliament may by law provide for the adjudication of any dispute or complaint with respect to the
use, distribution or control of the waters of, or in, any inter-State river or river valley.
(2) Notwithstanding anything
Member Name: in Member's
Anand Mohan this Constitution, Parliament may
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61.8.129.229
Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint as
is referred to in clause (1).
Article 136 answers the question on how could the parties go to the Supreme Court when there is a clear and explicit
bar on the jurisdiction of the courts in the case of a river-water dispute?
By using the powers of Article 262, Parliament enacted the ISWD Act. Now, the riparian issues are sent to a Tribunal
under the ISWD Act. The bar provided for in Article 262 is overcome by the Special Leave Petition or SLP that has
been empowered to Supreme Court via Article 136 (whether relating to river-water or any other dispute). The
Supreme Court has first to decide in its discretion whether it should grant or deny the requested Special Leave.
Article on GAVI Alliance
GAVI Alliance (Global Alliance for Vaccines and Immunization) is a public-private international health partnership
that aims to save childrens lives and improve peoples health by increasing access to vaccines in poor and
developing countries. It does this by bringing together all the stakeholders donor governments, developing
countries, World Bank, UNICEF, WHO, Bill & Melinda Gates Foundation, international finance and development
organizations, and pharmaceutical industry in one decision making body. The GAVI Alliance was started in 2000 at
a time when the number of children getting immunized were stagnating or even dwindling in the developing
countries.
Achievements
From the time of its inception, it has helped save 370 million child deaths by immunizing them from life-threatening
diseases such as Hepatitis B, Hib, polio, tetanus, pertussis, etc.
Method of operations
Countries that are eligible for funding draw up plans for their immunization programme, apply for funding and then
implement the immunization program on their own. To make sure that the immunization program is sustainable and
that recipient countries seriously carry it out, they are also required to partly fund the cost of vaccines.
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Indias involvement with GAVI
India started receiving support for its immunization programme from GAVI in 2002. Apart from that, India is the
largest supplier of vaccines to GAVI with 55% of its vaccines coming from the country. Recently, it also agreed to
contribute $4 million to the alliance over the next four years. This will give it a chance to interact with the donor
constituency and discuss relevant issues with them.
Report : Internal Migration for Education and Employment among Youth
in India
A research paper titled Internal Migration for Education and Employment among Youth in India was released by
the UN Habitats Global Urban Youth Research Network in Jan 2014. It maps the trend of in-country migration among
youth for the purpose of higher education or
employment. The salient findings of this report are as About UN Habitat
UN-Habitat, also known as United Nations Human Settlements
follows: Program is a UN agency for sustainable urban development and
In the last 10 years, a total of 11 crore youth human settlements. It was established in 1978 and has its
headquarters in the UN Office at Nairobi, Kenya. It is mandated by
(aged 15-32 years) migrated within the the United Nations General Assembly to promote socially and
country for education, employment or after environmentally sustainable towns and cities with the goal of
providing adequate shelter for all. It is also a member of UNDP.
marriage. UN-Habitat works in more than 70 countries in five continents
Of the 11 crore youth, over 70% moved on focusing on seven areas:
Urban Legislation, Land and Governance;
account of marriage. While nearly 10% Urban Planning and Design;
shifted in search of employment, over 3.5% Urban Economy;
Urban Basic Services;
(37 lakh) did so on account of education. The Housing and Slum Upgrading;
Risk Reduction and Rehabilitation;
share of educational migration has increased.
Urban Research and Capacity Development.
This is partly due to the increase in
government funded colleges like IITs, NITs, IIMs and private universities over the past decade.
To pursue education, more number of men migrated than women. Thus, out of 37 lakh, 26 lakh were men
while 11 lakh were women.
Only 17% youth (6.2 lakh) out of total 37 lakh in the past 10 years migrated out of their home state while
the balance 83% moved to another district within their state for higher education.
The most important states from the perspective of migration for education are Delhi, Maharashtra,
Karnataka, Uttar Pradesh, Bihar, Andhra Pradesh, Kerala, West Bengal and Rajasthan. Of these states, Delhi,
Maharashtra, Karnataka are the main destinations (i.e. attracting migrants from other states), whereas
Bihar, Uttar Pradesh, Kerala, Andhra Pradesh, West Bengal and Rajasthan are the main source states of
migrants. Karnataka received the largest exodus 1.8 lakh from other states and Uttar Pradesh sent out
most students 1.1 lakh.
On the basis of these findings, the paper attempts to start a discussion on whether Indian states should worry about
internal brain drain. It also raises a pertinent question whether Indian states receiving maximum migration are
capable of providing enough jobs to students graduating out of their colleges.
Draft guidelines on poll manifestos by Election Commission
For the first time, the Election Commission has released draft guidelines for poll manifestos of political parties. These
guidelines come in the wake of a Supreme Court ruling in July 2013 that asked the election body to regulate the
content of manifestos, especially poll freebies.
The draft guidelines acknowledge the fact that parties have a right to propose welfare measures in poll manifestos
but at the same time also point out that such announcements should neither dent the process of free and fair
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elections nor hamper the level playing fields for all parties and candidates. They prohibit parties from making
promises that could vitiate the electoral process or exert undue influence on voters.
The parties should only make promises that are in line with the welfare measures enumerated in the Directive
Principles of State Policy. All promises should also conform to the ideals and principles enshrined in other parts of
the Constitution.
In the interest of transparency, credibility of poll promises and level playing field, the guidelines ask the parties to
explain the rationale behind their promises and the proposed funding mechanism.
The guidelines thus try to ensure that while welfare measures for the needy are allowed to be included in poll
manifestos, promises made for relatively well off or non-deserving citizens are prohibited.
The draft guidelines will be finalised and formally incorporated in the Model Code of Conduct after
comments/suggestions from all political parties. They will apply to all future polls, starting with the upcoming
general election.
Micro notes
Current Upward Limit of Election Expenses
During 2009 Lok Sabha elections, most candidates were allowed to spend a measly Rs 25 lakh on
the campaign, while the cap for assembly seats was Rs 10 lakh. The EC revised the upward limit to
Rs 40 lakh and Rs 16 lakh for Lok Sabha and assembly constituencies, respectively. Such numbers
may suffice for student union elections at a sizeable university, but do no justice to the crores that
candidates routinely spend in order to win state-level or national elections. (noted from TOI)
Major sources of Caffeine and Caffeine Use Disorder
Caffeine is the most commonly used drug in the world and many people are dependent on it to the point
that they suffer withdrawal symptoms. The researchers have called it Caffeine Use Disorder. Caffeine is
found in everything from coffee, tea, and soda, to pain relievers, chocolate, and host of food and beverage
products. (Noted from TOI)
Biggest bottleneck in smooth trade between SAARC nations is tardy procedural clearances.
One of the major reasons that do not allow smooth trade between SAARC countries is the tardy procedural clearances
required to export as well as import to these countries. A study conducted for four countries viz. India, Nepal, Bangladesh
and Bhutan says that this region is one of the toughest places to move goods due to archaic procedures. If you wish to move
pulses from Nepal to Bhutan via India, getting procedural clearances would take 23 days. For importing-exporting orange
between India and Bhutan, traders need 18 days to get 32 clearances.
Trade Based Money Laundering
Trade based money laundering is called next frontier in the international money laundering. It is an alternative remittance
that allows illegal organisations the opportunity to earn, move and store proceeds disguised as legitimate trade. Value can
be moved through this process by false-invoicing, over-invoicing and under-invoicing commodities that are imported or
exported around the world. This method is extensively used by underground banking, unlicensed money service
businesses, hawalas, etc., have all utilized trade to move value as settlement of a debt arising from remittances overseas.
H10N8
H10N8 is the latest bird flu to come out in China. H10N8 is an avian influenza virus involved a new strain that carries genes
from H9N2 viruses and has a mutation associated with adaptation of mammals. A old woman in Jiangxi provenance of
China has died from H10N8 avian flu infection, the first report of that strain infecting humans.
James Webb Space Telescope
The James Webb Space Telescope (JWST), previously known as Next Generation Space Telescope (NGST), is a planned
space telescope optimized for observations in the infrared, and a scientific successor to the Hubble Space Telescope and
the Spitzer Space Telescope. The telescope is a project of the national aeronautics and space administration (NASA), the
United States space agency, with international collaboration from the European Space agency and the Canadian Space
agency, including contribution from fifteen nations.
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Project Lucy
Project Lucy is a proposal to decompose methane in the atmosphere using beamed radio frequency transmissions, possibly
assisted by further technologies. It is a part of geo-engineering efforts to reduce warming in the Arctic. The project aims to
design, build and test a microwave transmission system targeting low-altitude methane clouds with the aim of breaking
the first C-H bonds as soon as the methane erupts into the atmosphere from the Arctic Ocean. The transmitters can be
mounted on submarines, planes and after 2015 on boats drilling rigs when the Arctic ice cap has melted.
Mount Sinabung
Mount Sinabung is a large volcano on Sumatra Island in Indonesia. Sinabung is an andesitic-dacitic stratovolcano with total
of four volcanic craters, only one being active. The volcano was erupted on 1 February 2014 sent clouds of hot ash 2
kilometers into the air and engulfed nearby villages. Reports claims that atleast 14 people died as a result of eruption.
Juthika Roy
Juthika Roy was a legendary bhajan (devotional) singer, who was a favourite of Mahatma Gandhi, Jawaharlal Nehru and
Indira Ghandi. She had sung more than 200 Hindi and 100 Bengali songs in her four decade long career. She recorded
devotional songs for Hindi film industry also. She was then known as the Adhunik Meera after Meera Bai. She was
awarded Padma Shri in 1972. Roy passed away at the age of 93.
Murchison (Meteorite)
Murchison is one of the most studied meteorites due to its large mass, the fact that it was an observed fall, and that it
belongs to a group of meteorite rich in organic compounds. The Murchison meteorite is named after Murchison, Victoria, in
Australia. The laboratory estimation shows that Murchison contains common amino acids such as glycine, alanine and
glutamic acid as well as unusual ones like isovanile and pseudoleucine.
Taishan Research Station
Taishan station is a Chinas fourth Atlantic research base opened recently. The site is between Zhongshan and Kunlun
stations, which were previously built by the Chinese. It can accommodate up to 20 people during the Antarctic summer and
is equipped with a runway for fixed-wing aircraft, specially designed for taking off on snow and ice. Taishan station, which
will be used in summers, is expected to be in service for the next 15 years. It will contribute research on bio-ecology and
remote satellite sensing.
Offshore India Fund
An offshore India fund refers to a mutual fund that invests its assets abroad and not in India. Offshore funds offer investors
access to international markets and major exchanges. They are similar to traditional mutual funds. In India, any fund that
invests at least 65% of the assets in domestic equities would be treated as a domestic equity oriented fund and not an
offshore fund though it has exposure to foreign markets.
Stuart Hall
Stuart Hall was a Jamaican-born cultural theorist and sociologist who lived and worked in the United Kingdom from 1951.
Hall was one of the founding figures of school of thought that is known as British Cultural Studies. When Stuart Hall came
on the scene in the mid-1960s, the study of culture and popular culture in particular, was not taken very seriously. Hall
helped change that. He was dubbed the godfather of multiculturalism for the huge influence had on academics around the
world. He was President of the British Sociological Association 1995-97. Stuart Hall died at 82.
Mobile Seva
The Mobile Seva is the national mobile-governance initiative of DEITY. It aims to provide government services to the
people through mobile phones and tablets. It has been developed as the core infrastructure for enabling the availability of
public services through mobile devices. Mobile seva enables the integration of the mobile platform with the common e-
Governance infrastructure consisting of State Data Centers, State Wide Area Networks, State and National Services
Delivery Gateways. It enables a government department to integrate both web and mobile based services seamlessly and
enhances the access to electronic services tremendously leveraging the very high penetration of mobile phones, especially
in rural areas.
HYLITES
HYLITES or Hyderabad Live Train Enquiry System is the new and fresh kind of railway enquiry system of India launched
by South Central Railway. HYLITES is a GPS (Global Positioning System) and GPRS (General Packet Radio Service) based
smart phone application that operates on android based platform. HYLITES will display real time information of the live
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status of Train information like arrival, departure, platform numbers etc from Secunderabad, Hyderabad and Kachigoda
junctions and stations.
Teleradiology Software Product (RADSpa)
RADSpa is a radiology workflow intelligence to streamline, increase productivity, reduce the Turnaround Time, reduce the
costs of operations, and improve the quality of patient care in the Healthcare space. RADSpa is an integrated RIS/PACS and
Radiology workflow solution all rolled into one. This solution is suitable for hospitals, imaging centers and clinics.
RADSpa can cater from a single radiologist low volume system to a multi-site/multi radiologists teleradiology platform
with high volumes without serious reinvestment from the client.
Primary Market Advisory Committee (PMAC)
The Primary Market Advisory Committee was set up by SEBI to advise it on issues related to the regulation and
development of IPOs and other primary market segments. The committee comprises of a chairman and other 18 members.
The terms of reference of the committee includes advising SEBI on matters to be taken up for changes in the legal
framework to introduce simplification and transparency in systems and procedures in the primary market. Besides, it has
also been mandated to advise SEBI on matters relating to regulation of intermediaries for ensuring investor protection in
the primary market.
Tequila crisis in Mexico
Tequila crisis or Mexican peso crisis a informal name given to the impact of the 1994 Mexican economic crisis on the South
American economy. The Tequila effect occurred because of sudden devaluation of the Mexican peso, which then caused
other currencies in the region (the Southern Cone and Brazil) to decline. The falling peso was propped up by USD 50 billion
loan granted by then US president Bill Clinton.
Direct to Home (DTH) Scheme
Direct-to-Home (DTH) scheme is a newly proposed scheme through which government aims to plug leakages and
handover pensions, work wages and other entitlements directly to beneficiaries across the country. DTH scheme is
currently implemented in Andhra Pradesh and government is planning extend it throughout the country. Under the DTH
scheme, women, disabled, widows, elderly and students will not have to go banks or post offices to get their entitlement.
DTH utilises help of micro-ATMs, modern technology, mobile connectivity to deliver the facilities.
Kribhco-Yara Bribery Scandal
Kribhco-Yara bribery scandal is a major bribery scandal between the Norwegian fertiliser major Yara and a former Indian
bureaucrat and his son for securing a joint venture with Krishak Bharati Cooperative Limited (Kribhco) in 2007. The
company was negotiating with Kribhco during 2006-07 for setting up a joint venture project. In April 2011, Yara
International appointed law firm Wiersholm to conduct an external investigation in this matter. Yara in 2012 had released
the main findings of the investigation which said that an unacceptable payment of USD one million in 2007 to consultant in
India is documented, related to negotiations with Kribhco. Recently, CBI has started the preliminary enquiry regarding the
scandal and named the then officer and his son as suspects in this case.
New Index on Housing Startsup
The Housing Start up Index, a first of its kind initiative in the country, is a critical indicator of economic growth relating to
various sectors such as banking, mortgage, labour, steel, cement and paint. HSUI, is an indicator of volume of construction
in the housing sector during certain period, covering 27 cities across the country. The index was launched in close
coordination with the RBI and National Sample Survey Organisation. Internationally, only six developed countries
Canada, USA, Japan, France, Australia and New Zealand are having housing start up index on a regular basis and India has
become the seventh country to have such exercise.
DNA sequencing
DNA sequencing is the process of determining the precise order of nucleotides within a DNA molecule. It includes any
technology that is used to determine the order of the four bases viz., adenine, guanine, cytosine and thymine- in strand of
DNA. The DNA sequencing technology has been used in laboratories to uncover genes related to diseases.
DNA analysis is diagnostically proven as very useful and a sensitive tool. In this modern diagnostic DNA analyses can
diagnose inherit genetic defect and also disease causing pathogen can be detected by identifying genes of that organism.
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The DNA analysis in disease diagnosis and medical forensics involves procedures like- hybridization technique, DNA
profiling, etc. Few examples of DNA analysis in genetic disease diagnosis are:
Sickle cell anemia can be detected by digesting mutant and normal -globin gene and performing hybridization
with a cloned -globin DNA probe.
Huntingtons disease can be diagnosed by the analysis of RFLPs in blood related individuals.
Alzheimers disease, researchers have found a gene on chromosome number 21 which is believed to be
responsible for inheriting this disease and they developed a DNA probe that located the genetic marker for this
disease.
There are also diagnostic systems developed and are is underdevelopment to detect the disease by DNA analysis for
diseases like- fragile X syndrome, Friedrichs ataxia, cystic fibrosis, muscle dystrophy, diabetes, cancers, obesity, etc.
WQXGA
WQXGA (Wide Quad Extended Graphics Array) is a display resolution of 2560x1600 pixels with a 16:10 aspect ratio. The
name comes from it being a wide version of QXGA and having four times as many pixels as a WXGA (1280x800) display. In
2010, WQXGA made its debut in a handful of home theater projectors targeted at the Constant Height Screen application
market. Both Digital Projection Inc and projection design released models based on a Texas Instrument DLP chip with a
native WQXGA resolution, alleviating the need for an anamorphic lens to achieve 1:2.35 image projections. Released in
November 2012, Google's Nexus 10 is the first consumer tablet to feature WQXGA resolution. Before its release, the highest
resolution available on a tablet was QXGA (2048x1536), available on the Apple iPad 3rd and 4th generations devices.
Samsung have recently announced that the next generation Samsung Galaxy Note 10.1 tablet will also feature a WQXGA
resolution.
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GKTodays Target 2014 Programme for Civil Services Examinations 2014

January 28 to February 10, 2014

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Model Questions for Mains

"merit goods" is the strongest? Elaborate.

Constitutional Provisions regarding Secularism

Fundamentals of Macro-prudential and Micro-Prudential Regulations

Are Microprudential and Macroprudential Regulations complimentary?

Fundamental of Subsidy Economy

Basics of Farmer Producer Companies

Curative Petition & Special Leave Petition

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