Mitras Analysis of News : 14-04-2017

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1.On a glide path (Daily revision of fuel prices) (The Hindu) 

2.Is obsession with “Ease of doing Business” ranking justified? (Live Mint) 

3.Links between PM 2.5 and Breast Cancer (Down to Earth) 

4.Do we need a film censor? (The Hindu)

 

1.On a glide path (Daily revision of fuel prices) (The Hindu) 

Synoptic line: It throws light on the recent proposal to align the prices of petrol and diesel with international price benchmarks (hence daily revision of prices).(GS paper III)

Overview

  • Petrol and diesel prices in some cities will now see daily change in sync with international rates. Initially, this will be effective in five cities including Puducherry and Visakhapatnam, Udaipur, Jamshedpur and Chandigarh as part of a pilot project.
  • It will be extended to other parts of the country after an assessment of consumer response.

Proposed move

  • The government deregulated petrol price in 2010 and diesel price in 2014. It, henceforth, allowed oil marketing companies to decide on the prices of fuel, considering the change in international oil prices and currency exchange rate.
  • Oil marketing companies are now planning to put in place a mechanism under which fuel prices (petrol and diesel) will be aligned to international crude oil prices on a daily basis.
  • Currently, state-run fuel retailers – Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) revise petrol and diesel prices on the 1st and 15th of every month based on average international price of the fuel in the preceding fortnight and the currency exchange rate.
  • Till the project’s outcomes are assessed, the rest of the country will continue with the existing system, under which petrol and diesel prices are calibrated generally on a fortnightly basis.

Implications of the decision

  • It is illogical for an economy integrated with the global financial and commodity markets to keep fuel prices unchanged for as much as a fortnight, aligning prices daily and spreading out the degree of change will lessen the impact on consumers, on both the upside and the downside. Marginal changes in the daily price of fuel will not make or break consumer confidence or fuel inflationary expectations.
  • The revision in oil prices will not affect consumers much as international oil prices do not fluctuate widely on a daily basis. So, change in prices of petrol and diesel will not badly affect the commuters in the long run.  They may be in for a surprise if some major international event affects the price of crude oil and its effects are felt on diesel and petrol prices in India.
  • The new practice will add one more factor to the change in price of essential commodities such as food items, cereals, fruits and vegetables. The prices of essentials may fluctuate on a daily basis, if the mechanism of daily change in fuel prices comes into effect.

Why deregulation of oil prices?

  • Government had freed the regulation of petrol prices in late 2010 and diesel prices were regulated in 2014.
  • Such dismantling was necessary as previous attempts at abandoning the administered price mechanism for India’s largely import-dependent consumption of petroleum products never really took off, even as subsidies distorted the system further.
Dynamic Pricing Issue (was in news last year)

·Indian Oil Corp. Ltd (IOC), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) have also plan to introduce dynamic pricing to their entire retail network in 2017 and beyond.

·Dynamic or real-time pricing implies that the cost of a product is kept flexible. The price of a product varies, depending on the location of the outlet and time of the day. At present, retailers charge uniform prices for diesel and petrol across outlets in a particular region.

·Dynamic fuel pricing is a common practice internationally. If introduced in India, it would give OMCs the leeway they need to fight private-sector rivals in the fuel retail segment.

Way ahead

  • A transparently formulated and dynamic pricing regime would hopefully prevent such distortionary coincidences in the future. It would also allow private companies to compete with the PSU oil marketers, which today control 95% of fuel outlets.
  • The government, on its part, must start winding down the extremely high petroleum product taxes imposed since June 2014, when oil prices began to fall, along with its energy subsidy liabilities.

Question: Since India is aligned with international markets and indices on various fronts, it was long needed to daily revise the prices of petrol and diesel. How it will help to reduce the respite of consumers?

 

2.Is obsession with “Ease of doing Business” ranking justified? (Mint)

Synoptic line: It throws light on the Ease of doing business index and its suitability credentials in Indian context

Overview

  • The recently released World Bank Ease of Doing Business rankings, where India has made an embarrassingly low improvement by a single rank, despite robust efforts made by the government, provide us with an opportunity to introspect if the government’s efforts are in the right direction.

Brief background

  • Government had openly committed to adopt policies that would catapult India to a spot in the top 50 ranks of the World Bank index by 2017. However, this has clearly not happened. India currently ranks 130 among 190 countries ranked by the World Bank, and also holds the lowest rank among its BRICS peers.
  • However, government have expressed doubts that the World Bank has not taken into account several of the reform efforts initiated over the past year.
  • Now government has set itself the target of catapulting India to the 90th rank in this year’s rankings These pursuits are part of an aggressive bid to improve India’s image as a business-friendly economy in the eyes of global investors.

Is this obsession with rankings justified?

  • It is vital to understand that although the 11 parameters that the bank considers for ranking economies including procedures for starting a business, dealing with construction permits or obtaining electricity connections are indicators of how easily businesses in India can administratively operate but several macroeconomic/regulatory issues that are vital for positioning an economy as an attractive investment destination are beyond the rankings’ methodological scope.
  • Moreover, seven of the countries in the top 10 of the World Bank’s rankings are not the top investment destinations, as per a 2016 United Nations Conference on Trade and Development (UNCTAD) report.
  • A working paper by Indian Institute of Management claims that the ease of doing business rankings cannot capture the real cost of doing business in countries with a large unorganized sector costs of production are often lower.
  • The World Bank itself in its 2005 World Development Report indicated that the factors essential for improving a nation’s investment climate such as providing enhanced opportunities and incentives to firms to invest productively, creating jobs and expansion which directly impact a firm’s expected profitability, are influenced by the costs, risks and barriers to competition.
  • Firms will shirk from investing in a jurisdiction where macroeconomic/regulatory factors contribute in enhancing economic costs or risks of doing business.
  • For example, an economy with archaic labour/industrial laws, without a robust intellectual property rights (IPR) regime, a stable and predictable regulatory framework or greater public infrastructure, will add more costs and enhance the risks on the capital of the investing firms.
  • Therefore, “ease of doing business” is just one factor that contributes towards building a mature investment climate and not the only one. India should not lose sight of the bigger picture.

China and Ease of doing business

  • China, widely regarded as the biggest economic success story in recent history. The country has never even figured among the top 50 countries (it is ranked 78 among 190 countries in 2017 rankings) in the ease of doing business rankings but has consistently attracted investments from all around the globe.
  • Hence, it is more than Ease of doing business rank which is required to attract business and FDI.

Benefits for India

  • Trade will benefit India as well. Meeting the evening peak in India when its large solar PV capacity would not be available becomes easier and cheaper. The gains in monetary terms are comparable for both Nepal and India.

Way ahead

  • India ranks abysmally low at 37 out of 38 countries on the 2016 Global Intellectual Property Centre’s IP Index. Hence, securing a stable IPR and innovation climate is an equally important and challenging requirement for transforming the doing-business climate for India and should be of equal focus for the government.
  • Another issue that needs quick attention in India’s quest for improved ranking is the role of state governments. Of the 11 parameters on which the World Bank ranks countries, several require implementation at the level of state governments. For example, efforts for easier access to electricity, quicker construction permits etc. are governed by state laws. Even the mandate for quicker enforcement of contracts is an issue that will require to be dealt with at the level of the district and state high courts rather than at the level of the apex court.
  • Moreover, how quickly one can start a business requires the effective implementation of provisions of the new Companies Act by the state-level Registrar of Companies. For example, as per government estimates, due to reforms undertaken pursuant to the enactment of the new Companies Act, the time frame for getting a company incorporated is 1.86 days. However, based on stakeholder feedback, the World Bank found that it took two to seven days for incorporating a company.
  • Therefore, implementation of reforms by the states is as much a factor in the improvement of India’s ranking as the enactment of pro-business policies/laws by the government.
  • The government’s efforts of continuously ranking states on a 340-point business reform action plan and commitment by the government on enhancing the engagement with the states (on securing better implementation of the World Bank’s ranking matrixes) seems to be measures in the right direction.

How ease of doing business rankings impact the actual functioning of an economy is the matter of a global debate today and while the debate is far from settled, the striking absence of any correlation between economic performance and score on the World Bank’s index should make us pause, and consider whether it is better to focus on structural reforms or long-term investments in human and physical infrastructure. Such improvements may help us improve our rankings as well but that should at best be a by-product rather than a target of public policy.

Question: Though ease of doing business index is an important parameter to measure the openness of an economy but it is not the only measure. Comment.

 

3.Links between PM 2.5 and Breast Cancer (Down to Earth)

Synoptic line: It throws light on the latest findings which establishes a link between PM 2.5 pollutant and breast cancer

Overview

  • Severe impact of pollution on the health have been indicated by various reports. However, for the first time direct links between level of PM 2.5 and Breast cancer have been established.

Key findings

  • Recently, a study was conducted to fill the knowledge gap on the link between air pollution and breast density. The authors say that this is the largest and the only study to examine the link between breast density and PM2.5 or O3.
  • The studyhas established link between PM 2.5 and mammographic breast density, (it is a strong and independent risk factor for breast cancer). The study also found inverse associations between ozone (O3) and mammographic breast density.
  • In medical terminology, breast density is a reflection of relative amounts of epithelial, stromal and fat tissue in breasts.
  • No previous study had indicated such a correlation between the pollutant PM 2.5 and breast cancer.

Severity of the pollutant

  • The study found that a one-unit increase in PM2.5 concentrations was associated with 4 per cent increased chance of having heterogeneously dense breasts.
  • However, a one-unit increase in O3 concentration was associated with three per cent lower chance of having extremely dense breasts.

What is PM

  • Particulate matter (PM) refers to small and medium solid or liquid particles present is atmosphere. Particulate matter consists of organic chemicals, metals, soil and dust.
  • Smaller the particle, the more it is hazardous, as it can go deeper in lungs which has diameter less than 2.5 micrometres.
  • Particles between 2.5 to 10 micrometres are less harmful as they tend to stay in nose and throat.
  • Particulate matters are considered as greatest concern causing human health problems. As mentioned before small particles i.e. less as 2.5 micrometers can go to our lungs and some may get into our bloodstream.
  • Long term exposure to particulate matter invites heart and lung problems. Also studies have shown that it harms most likely to children and older adults.

What causes Particle Pollution?

  • Any type of burning or combustion leads to particle pollution. It can be also generated during construction, unpaved roads, fields etc.
  • Also these particles emitted from automobiles, industries and tobacco smoke etc.

Other deadly pollutants

  • Previous studies have linked breast cancer risk with exposure to Nitrogen Oxide, fine particles < 2.5 μm in diameter (PM2.5), polycyclic aromatic hydrocarbons (PAHs), carbon monoxide, sulfur dioxide and volatile organic compounds

Way ahead

  • The World Health Organizationstates that a concentration of PM 2.5 above 25 PPM (parts per million – a measure of how many particles there are in the air) is unhealthy. The annual average should not exceed 10 PPM. Many European cities typically lie between 10-20 PPM. Beijing has, on average, around 100 PPM. In Delhi, the 2014 average was 140 with peaks reaching 350 or even more, values that are quite literally off the chart.
  • Moreover, A recent study by Harvard Universityhas shown that of the 20 cities with the highest concentration of PM 2.5, 13 were in India. Hence, the key lies in curbing the intensity of PM in the environment.
  • Measures such as vacuum cleaning of roads and curbing of construction waste should be implemented immediately in the urban areas. Moreover, newly enacted Solid Waste Rules 2016 regulates the construction waste but implementation is weak. Hence, strict implementation of new rules is also the need of the hour.
  • Stubble burning in the states such as UP, Haryana and Punjab should be prohibited with zero tolerance. More sustainable ways to extract and dispose the leftover straw should be introduced with the financial support by government.

Question: The notorious impact of PM2.5 is unfolding day by day, it is nuisance to both, environment and health. How government should respond to curtail the intensity of PM?

 

4.Do we need a film censor? (The Hindu)

 Synoptic line: It throws light on the issue whether in mature democracy, there is need of censor board to censor cinema or not? (GS paper II)

Overview

  • India is a vast and complex country and the same freedom enshrined in the constitution applies to the cinemas as well. Though neither the cinema nor the press are separately listed in the constitution but they derive the freedom from Article-19 (1) A, which lists the freedom of speech and expression.
  • The need of censorship is a form of debate whether there should be restrictions to freedom of expression or not.
  • Citizens of the country as complex as ours have varying needs, requirements and sensibilities and one has to strike a balance, because total censorship and absolute freedom can both be problematic.

What is Censor Board?

  • The Central Board of Film Certification (CBFC) known as Censor Board is a statutory body under the Ministry of Information and Broadcasting. In 1983 CBFC has been renamed from Centre Board of Film Censors.
  • It regulates the public exhibition of films under the provisions of the Cinematograph Act 1952.
  • Films can be publicly exhibited in India only after they have been certified by the Central Board of Film Certification.
  • The CBFC’s vision is to ensure good and healthy entertainment in accordance with the provisions of the Cinematograph Act 1952, and Cinematograph (Certification) Rules, 1983. Its mission is to ensure healthy entertainment, recreation and education to the public.

Left, right and centre views on the need of Censor Board

LEFT

Colonial hangover 

  • For the left The Cinematograph Act of 1952 was derived from colonial censorship laws. But the world has changed dramaticallythe average ‘visual literacy level’ has gone up dramatically in this age of 24×7 TV, YouTube and video-selfies.

 When the state considers every citizen rational enough to make serious, life-affecting decisions like for whom to vote (at 18), who to marry (at 21), what career to choose, investments to make etc., then what the need of crossing the threshold and they have their own discern what to watch or not.

  • For them, India is a diverse society; there will always be grievances from some section of civil society. So there is need of an arbitration mechanism to address a wide range of concerns. We need a multi-layered solution to the absurd censorship regime in India. The industry must set up the Film Council of India to deal with civil society grievances. The CBFC’s scope must be limited to certification, with no powers to maim, mutilate or ban any film.
  • Censorship has no space in a mature democracy, if these censors or restrictions continued intolerance will beget worse censorship in the coming years.

RIGHT

Cinema must be regulated

 Rightist sees that idea of censorship is to ensure that people do not get exposed to potentially psychologically dangerous material.

  • According to them, the combination of speech and sight and action in the semi-dark environment of a theatre can impact viewers in ways we cannot even imagine.
  • The power of the visual medium can never be overstated. It carries with it the potential to instil violent modes of behaviour and cannot be equated with other modes of communication. Censorship and reasonable restrictions are required because of the impact that cinema can have on the minds of the viewing public.
  • It is the restrictions which serve as a moral compass for the committee members of the Board. Certification is a dynamic process and one which is likely to change as society changes and evolves.

 CENTRE

Balanced approach

 CBFC is certification board not the censor board, so it should only certify. The ratings are meant to indicate the category under which the films are certified as U, UA, S, and A. And as long as you certify films, you need a certification board.

  •  As a board member it is difficult to balance the message involved in movies and the sentiments of people.
  •  The problem they encountered as board members is that the examining committee tends to see and judge a film on the basis of a song or a dialogue in a film and not the whole. They tend to look at a dialogue and not the context in which it is placed. As a society we are extremely volatile and nervous about saying anything at all as a result, we don’t debate anything and this often gets reflected in the acts of the examining committee which prefers to omit a troublesome part

Way ahead –

  • In the wake of the recent furore by the film industry for CBFC, the government has expressed its desire to strip off CBFC‘s ‘censoring’ powers and will be left only with the authority to ‘certify’, to avoid any further controversies. Such a move is appreciable.
  • However, there is also need to examine the context before censoring, however reasonable restrictions are required because of the impact that cinema can have on the minds of the viewing public.

Question: In a free and democratic society, is there any need to have a censor board?

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