Mitras Analysis of News : 19-7-2017

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1.Masking the flaws (The Hindu)

2.Genetic isolation, harmful for India (Down to Earth)

3.Explained: Impact of GST on Infrastructure

 

1.Masking the flaws (The Hindu)

 Synoptic line: It throws light on the India’s performance of SDG targets and the task which further lies ahead. (GS paper II)

Overview

  • India had adopted an ambitious global development agenda in the form of Sustainable Development Goals in 2015. Comprising 17 goals and 169 targets the SDGs expand on the millennium development goals (MDGs) adopted in 2000.
  • The government claims to have made substantial progress in achievement of the Sustainable Development Goals (SDGs) in its Voluntary National Review (VNR) report, to be presented at the ongoing UN High-Level Political Forum (HLPF). However, this position is bit dubitable.

Sustainable development goals

  • The concept of the SDGs was born at the United Nations Conference on Sustainable Development, Rio+20, in 2012. The objective was to produce a set of universally applicable goals that balances the three dimensions of sustainable development: environmental, social, and economic.
  • The SDGs replace the Millennium Development Goals (MDGs), which in September 2000 rallied the world around a common 15-year agenda to tackle the indignity of poverty.
  • The MDGs, adopted in 2000, aimed at an array of issues that included slashing poverty, hunger, disease, gender inequality, and access to water and sanitation. Enormous progress has been made on the MDGs, showing the value of a unifying agenda underpinned by goals and targets. Despite this success, the indignity of poverty has not been ended for all.
  • If MDGs were minimum standards, the SDGs- integrating environment, social and economic dimensions are one the most comprehensive list of global goals the world has ever committed to.

sdg

Review of SDG (Achievements made)

  • A total of 44 nations, including India, have volunteered for review on various SDGs relating to issues like poverty, hunger, health and gender inequality.
  • India’s report, prepared by the NITI Aayog, attributes the sharp reduction of poverty from 45.3% in 1993-94 to 22% in 2011-12 to the economic growth after liberalisation.
  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has lifted millions out of poverty since its inception in 2005. It created more than two billion person-days of employment in 2016-17.
  • To reduce hunger and malnutrition, the National Food Security Act aims to provide foodgrains to 66% of the population, covering about 800 million people. To ensure transparency, 77% of the ration cards have been linked to Aadhaar. This step will help to achieve SDG goal no. 2.
  • The government, through its National Mission on Sustainable Agriculture, provision of soil health cards and crop insurance, claims to have helped small and marginal farmers, who form 80% of our farmer population.

Certain contentious issues

  • Despite of all the claims, India’s growth story of the last two decades has accentuated inequalities, perpetuated poverty and limited the choices of historically marginalised communities.
  • Though MGNREGA has been lauded to lift millions out of poverty but budgetary allocation to the scheme has slowed down in recent years.
  • On food security front, field evidence suggests that mandatory linkage with Aadhaar is excluding the most-needy in interior tribal areas.
  • The claim on the front of farmer’s welfare also falls flat in view of nearly 3,00,000 farmers committing suicide in last two decades. The government may have promised to double farmers’ income, but the increase in MSP is strikingly meagre.
  • Further, the Shanta Kumar committee’s recommendation of replacing PDS by cash transfer which will dispense with the procurement system, if it materialises, will sound the death knell to small-scale farming.

Way ahead

  • Government need to work on various front to fulfil the targets under SDG. Moreover, having an integrated approach for supporting progress across the multiple goals is crucial to achieving the SDGs. For example, India has made significant progress over the years on basic health indicators like Infant Mortality Rate (IMR), Maternal Mortality Rate (MMR), institutional deliveries and vaccination coverage. However, 62.4% of the total health expenditure is still out of pocket, putting a huge burden on the poor and the middle class.

Question–  Critically analyse India’s progress on SDG fronts? What more India can learn?

 

2.Genetic isolation, harmful for India (Down to Earth)

 Synoptic line: It throws light on the factor as how inter-caste marriages may have promoted the diseases in certain subpopulation. (GS paper III)

Overview

  • A genetic isolateis population of organisms that has little genetic mixing with other organisms within the same species.
  • The occurrence of genetic diseases in certain subpopulations in India and other countries in South Asia is well known. Indian scientists now suspect that this could be due to genetic isolation caused by endogamous marriages over generations.

Scientific approach towards understanding diseases.

  • Endogamous marriages meaning people marrying within a subpopulation based on caste, gotra, language or culture lead to reduced genetic variation.
  • In genetics, the phenomenon of a small number of ancestors giving rise to many descendants is known as “founder event” or a population bottleneck. A study of anthropologically different subpopulations in South Asia has revealed that many of them are a result of strong ‘founder events’.
  • There is less genetic variation because these subpopulations have lived in genetic isolation despite co-living with other groups for centuries due to various factors including caste. Such populations are vulnerable to recessive genetic diseases (in which an offspring gets disease-causing genes from both parents). This risk, researchers say, is very different from that due to marriages among close relatives.
  • Researchers have highlighted the problem through example of Vysya population which has size of more than 3 million. The Vysyas have about 100-fold higher rate of a metabolic disorder called Butyrylcholinesterase (BChE) deficiency compared to other groups. Such people are highly sensitive to anesthesia administered prior to surgery.

Way ahead

  • The next step would be to identify specific recessive diseases among various subpopulations and identify genes responsible for them. Once recessive genetic diseases specific to different groups are mapped, preventive steps like prenatal testing, premarital counseling and screening can help decrease burden of such diseases in communities.

Question–  Caste divisions had made Indian society to suffer socially as well as on health fronts. Comment.

 

3.Explained : Impact of GST on Infrastructure (GS paper III)

Introduction

  • The infrastructure sector is the backbone of the Indian economy. The government has been making efforts to boost the sector through various schemes and incentives.
  • According to the government, total infrastructure spending is expected to be about 10% of GDP (gross domestic product) during the 12th Five-Year Plan (2012–17), up from 7.6% during the previous Plan. The Airports Authority of India plans to develop city-side infrastructure at 13 regional airports, with help from private entities for building of hotels, car parks and other facilities. Significant allocations have been made to power, urban development and inland waterways sectors

Taxes on Infrastructure prior to GST

  • The recent introduction of the goods and services tax (GST) could have significant impact in terms of spending on infrastructure.
  • In the pre-GST era, there was dichotomy in the applicable indirect tax regime relevant to infrastructure. While Central laws provided exemptions and concessions, state VAT (value-added tax) and entry tax laws were applicable to goods procured.
  • In addition, the cascading effect of Central and state indirect taxes was a concern, due to a high base for levy of respective taxes and a restrictive credit mechanism. There was also litigation at the Central and state levels on classification of contracts, valuation, jurisdiction of state on inter-state works contracts and other issues.

Post GST

  • GST being a concurrent tax on supply of goods and services is expected to bring in predictability for infrastructure projects. There are some changes that would have an impact on indirect taxation—taxability of works contracts being one.
  • As works contracts are limited to only immovable properties, turnkey contracts which do not result in immovable property would now be treated as composite supplies. Further, valuation of goods and services in works contracts, which has typically sparked differences between Central and state indirect tax authorities, would now be put to rest with the legislation laying down unambiguously that works contracts would be regarded as supply of services.
  • Other contracts which do not result in immovable property could be regarded as composite supplies, and depending on the principal supply, tax liability would arise either as a supply of goods or services.
  • While there is apprehension that a flat GST rate of 18% would lead to increased incidence on infrastructure projects, availability of input tax credits would neutralize such concerns. Thus, contractors and suppliers could look forward to a simpler and efficient tax regime.
  • Power is an important component of infrastructure. Electricity being outside the purview of GST, power generation companies would continue to have indirect taxes as a significant cost factor. Further, an increase in rate of services and withdrawal of exemptions and concessions for power projects is expected to have an impact on power companies.
  • Similarly, withdrawal of exemptions for road, water supply and sewerage projects sponsored by government and local authorities is expected to increase government spend. However, availability of higher pool of input tax credit in the hands of the contractors could help neutralize such increases. So introduction of GST seems to be a mixed bag for the infra sector predictability and efficiency being the key advantages, while non-inclusion of sub-sectors, higher rate and certain restrictions are negatives.

Question–  Post GST regime, what will be the impact on private investment in infrastructure?

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