News & Events
in this section, we are presenting our readers/aspirants compilation of selected editorials of national daily viz. The Hindu, The livemint,The Times of India, Hindustan Times, The Economic Times, PIB etc. This section caters the requirement of Civil Services Mains (GS + Essay) , PCS, HAS Mains (GS + Essay) & others essay writing competition.
1. Budget’s big dreams for infrastructure
The budget seeks to raise resources for infrastructure via new institutional structures, large-scale monetisation of built-up assets and stepped-up capital expenditure. The multiplier effect of infrastructure investment in India is a high 2.5, in the year it takes place, so the sharp increase in budgeted capital funding, at Rs 5.54 lakh crore, would smartly boost growth. The way forward is to streamline project implementation and follow through.
Raising the foreign direct investment limit in insurance will allow the sector to grow, commensurately increasing the pool of savings available for long-term investment of the kind needed by infrastructure.
Setting up a development finance institution for focused funding of infrastructural projects is clearly a step in the right direction, at a time when the corporate bond market is as yet still maturing, and its capital base of Rs 20,000 crore can be leveraged for at least Rs 5 lakh crore in project funding. In tandem, the move to set up an institution for market-making in the corporate bonds market makes perfect sense.
It would help build an active and vibrant corporate bond market, essential for modern, arm’s-length finance for long-gestation projects. An asset reconstruction company and an asset management company to take bad loans off bank books and recapitalisation of the banks are welcome steps to ease the flow of credit. However, the Centre must not lose interest in the Credit Guarantee Enhancement Corporation, announced in 2019.
Infrastructure is prone to a panoply of project and construction risks, and we do need institutional arrangements to partially guarantee bond payments so as to make infrastructural bonds suitably attractive for long-term investors such as pension funds and insurance companies.
The budget proposes to ease cross-border institutional funds flow for long-term projects. The move to exempt dividend payments of real estate and infrastructural investment trusts from tax deduction at source is sound, as are zero-coupon bonds for infrastructure. Implementation holds the key now.
2. Revenue, expenditure numbers realistic
The concern raised in some quarters that the budget numbers for 2021-22 might be unrealistically optimistic seems misplaced. The Centre’s fiscal deficit is pegged at 9.5% of GDP in 2020-21, due to the pandemic that significantly dented tax and non-tax revenues, and called for higher outlays even as GDP shrank.
The targeted reduction in fiscal deficit next fiscal is due to a reduction in expenditure to 15.6% of GDP from the level of 17.7% of GDP in 2020-21and a marginal increase in gross tax revenues (GTR), even with a 34% rise in capital expenditure. Gross tax revenue, at Rs 22,17,059 crore, is 16.7% higher than the RE of 2020-21, and about 9.9% of GDP.
This is not overambitious. It is only 0.1% higher than the GTR-to-GDP ratio of 9.8% in the RE of 2020-21. The need is to raise efficiency in tax administration. The uptick in GST revenues in January again shows that deploying data analytics to pursue audit trails in the income and production chain helps boost revenues.
With better data mining and analytics, tax collections can only go up further. Broadening the GST base and reducing the number of rates, as recommended by the Fifteenth Finance Commission, will increase efficiency and also shore up direct tax collections.
However, the rise in import tariffs and projected customs revenue mean additional levels of protectionism for some lines of production. The government has also budgeted to raise Rs 1.75 lakh crore through disinvestment and strategic sales in the coming fiscal. It depends on privatisation of BPCL and other firms. The target can be achieved provided the government starts divestment early in the fiscal, instead of waiting for the right time. Implementation holds the key to the viability of the budget numbers.
3. Quick Edit: Rajya Sabha discussion should constructively attenuate the farm laws impasse
In a positive development the time set aside for discussion on the Motion of Thanks to the President’s address in Rajya Sabha has been increased by 5 hours to 15 hours, so that it can be used to debate the farmers’ protests and associated matters. This meeting ground was negotiated between parliamentary affairs minister Pralhad Joshi and leader of opposition in the Rajya Sabha Ghulam Nabi Azad. This is only a small step towards ameliorating the atmosphere of high distrust between government and opposition, but it reflects a recognition of the importance of this work from both sides.
At a time when the country is facing an unprecedented economic crisis triggered by an unprecedented health crisis, bulldozing tactics on government side and stonewalling on opposition side serve India extremely ill. Indeed, it can be argued that such an impasse is dereliction of the duty of our elected representatives. The farm reforms laws, which represent reforms that several opposition parties have actually supported in the past, were passed in Parliament with a bypassing of due process that has borne disharmony and needlessly discredited the laws’ intent. It would be best if many contentious months later, the way forward is found in Parliament.
4.Coup in Myanmar: A balanced outreach to the generals demanding democracy’s restoration is warranted
In a sudden turn of events, the army in Myanmar mounted a coup in the early hours of Monday to seize power from the democratically elected government, whose de facto leader was Nobel laureate Aung San Suu Kyi. In fact, Suu Kyi and President U Win Myint have been detained along with other leaders of the National League for Democracy (NLD) party. Suu Kyi’s NLD had just won a landslide victory in November polls, picking up more than 80% of the popular vote and winning 396 out of the 476 seats on offer.
However, the army-backed party, the USDP, complained of election fraud. The army took these allegations seriously and even threatened to scrap its own 2008 Constitution. It decided to swoop in and take power hours before the first sitting of Parliament since the November polls. Power has now been handed over to Myanmar army chief, Min Aung Hlaing, and a state of emergency has been declared for a year.
Myanmar had been taking baby steps towards a democratic polity since 2011, and the army coup is an enormous setback. But it’s clear that the army was never fully onboard the democratic project, and had hoped for a managed democratic setup whereby it retained significant control. Two successive national elections with growing margins of victory for Suu Kyi and NLD rang alarm bells for the generals – who may have thought the country was inexorably drifting towards democracy in a manner they couldn’t manage. Meanwhile, Suu Kyi had collaborated with the army all this while – even making controversial statements about the Rohingya crisis – perhaps with the hope of reforming Myanmar from within. Clearly, those hopes have been dashed now.
For democratic powers, the tricky part is how to respond to Myanmar’s evolving situation. While international condemnation has been pouring in with US President Joe Biden threatening to reinstate sanctions on Myanmar, this could push the country back into China’s embrace. And that would be a setback for realising a free and open architecture in Southeast Asia, emboldening an assertive Beijing. Therefore, it would be best to strike a middle ground, as Delhi has done, by calling for upholding the democratic process and urging the generals to release Suu Kyi at the earliest. Myanmar’s future prosperity and independence lie in respecting its people’s will, not in becoming a Chinese vassal state.
5.India’s democratic dilemma | HT Editorial
With Myanmar witnessing a coup, bringing to an end a period where the military and the democratic forces coexisted in a complex political structure, India is confronting a familiar dilemma. As a democracy, India’s sympathies naturally lie with a popularly elected system of government, an open society, free speech, and civilian control over military. Its role is underestimated, but, as scholarly work by Constantino Xavier has shown, India has often — without making too much noise about it — promoted democracy in the neighbourhood through active interventions or technical support.
The challenge arises when there is a mismatch between immediate national interests, values, and India’s own power in shaping outcomes. In the case of Myanmar, India shares a critically important relationship with the military — which has been cooperative in helping tackle extremism in the Northeast and is uncomfortable with China’s intrusive presence in its ethnic politics. India also does not have either the tools or the leverage to be able to persuade the military to roll back, or help carve out an inclusive political regime. In this backdrop, Delhi will have little choice but to work the regime in power in Myanmar.
This is, however, a call that needs to be taken depending on the specifics of each case. In Nepal, the alignment between values, interests, and India’s ability to shape outcomes means New Delhi should stand with constitutional democracy, which Prime Minister KP Oli is undermining. In Sri Lanka, the Rajapaksa regime, by withdrawing from an infrastructure agreement with India, has once again shown that besides being authoritarian and exclusivist internally, it is not necessarily receptive to Indian interests externally. This should prompt a rethink in Delhi about its Sri Lanka policy. Or in Bangladesh, the Sheikh Hasina government has been remarkably sensitive to Indian security interests — but its own internal democratic record is weak. This has resulted in Delhi working with Dhaka, at the cost of turning a blind eye to the regime’s excesses. India’s dilemma will only increase because, on one hand, China’s footprint in the region will make Delhi focus on interests, even when its democratic commitment and global partnerships with other democracies will add pressure to focus on values