Daily News Mail - News of 26/02/2015

Municipal Corporation to form wing for NULM

• Municipal Corporation will set up a dedicated wing to implement all schemes under National Urban Livelihood Mission (NULM) for BPL families in Chennai.

Poverty Alleviation missions by GoI

National Urban Livelihood Mission (NULM)

• It is a poverty alleviation programme implemented by Ministry of Housing and Urban Poverty Alleviation.
• The mission aim is to reduce poverty and vulnerability of the urban poor households by enabling them to access gainful self employment and skilled wage employment opportunities,resulting in an appreciable improvement in their livelihoods on a sustainable basis,through building strong grassroots level institutions of the poor.The mission would aim at providing shelters equipped with essential services to the urban homeless in a phased manner.In addition,the mission would also address livelihood concerns of the urban street vendors by facilitating access to suitable spaces,institutional credit,social security and skills to the urban street vendors for accessing emerging market opportunities.
• The financing of the scheme shared between Center and State in the ratio of 75: 25 and 90:10 for North-eastern states.

Swarnajayanti Gram Swarojgar Yojana(SGSY)

• It is a poverty alleviation programme implemented by Ministry of Rural Development.
• Swarnajayanti Gram Swarojgar Yojana (SGSY) is an initiative launched by the Government of India to provide sustainable income to poor people living in rural areas of the country. The scheme was launched on April 1, 1999.
• The SGSY aims at providing self-employment to villagers through the establishment of self-help groups. Activity clusters are established based on the aptitude and skill of the people which are nurtured to their maximum potential. Funds are provided by NGOs, banks and financial institutions.
• SGSY is now remodeled to form NRLM (National Rural Livelihood Mission) thereby plugging the shortfalls of SGSY programme. This scheme was launched in 2011 with a budget of $ 5.1 billion and is one of the flagship programmes of Ministry of Rural Development. This is one of the world's largest initiatives to improve the livelihood of poor. This programme is supported by World Bank with a credit of $1 Billion

Cabinet gave approval for establishing BRICS' New Development Bank

• The Union Cabinet gave approval for establishing New Development Bank (NDB) and BRICS Contingent Reserve Arrangement (CRA).
• On the sixth summit in Fortaleza in July last year, heads of the five nation BRICS group - Brazil, Russia, India, China and South Africa - decided to create a development bank as well as a reserve fund to finance infrastructure projects and other sustainable development projects.
• The $100 billion BRICS CRA would help countries deal with short-term liquidity pressures, provide mutual support and further strengthen financial stability.
• The agreement will enter into force and the Bank begin operations only after all member-countries deposit their instruments of ratification with Brazil.
• Presidency of the New Development Bank will be in India for the first six years. The Bank will be based in Shanghai, China’s financial hub.

India is home to 18% of world’s raptors

• India is home to 106 species of raptors, popularly known as ‘birds of prey,’ says a recent publication by the Zoological Survey of India.
• The presence of raptors in the wild serves as a barometer for ecological health. They play an important ecological role by keeping the balance, especially by controlling the population of rodents and other small mammals.
• Among these raptors, the Indian White-backed Vulture, the Long Billed Vulture, the Slender Billed Vulture, the Red headed Vulture and the Forest Owlet are in the ‘critically endangered’ category, and the Egyptian Vulture and the Saker are in the ‘endangered’ list of the International Union for Conservation of Nature’s (IUCN) ‘Red List.’

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 Empowering the states

• The broad contours of a cooperative federal polity where the Centre and States engage as equal partners in development is now emerging after the government on February 24,2015 accepted the recommendations of the Fourteenth Finance Commission. 
• The 14th Finance Commission, headed by former RBI Governor Y.V. Reddy, has broken new ground by recommending a move away from scheme and grants-based support to States to a greater devolution of funds from the Centre’s divisible pool of tax revenues. Thus, it has recommended that the Centre share 42 per cent of the divisible pool with the States, which is 10 percentage points higher than what is the case now. 
• By accepting the recommendation despite the fact that it would lead to a sharp drop in its own share of revenues at a time of fiscal pressures, the Centre has sent out an unequivocal signal of its commitment to the principle of ‘cooperative federalism’. The phrase was first mentioned by Prime Minister Narendra Modi in the context of his decision to replace the Planning Commission with the NITI Aayog. Indeed, the FFC’s report, along with the setting up of the NITI Aayog and the consensus on the implementation of the Goods and Services Tax, are important components of the emerging federal landscape where the Centre confers greater freedom and responsibility on the latter by devolving greater resources to them.
• Consequent to the higher devolution of funds, the Centre is likely to re-evaluate several schemes that it sponsors for the States. This is a natural consequence as the Centre needs to offset its loss of revenue even as States devise their own spending programmes tailored to their needs.
•  It is a fact that some States have been weighed down by the need to cough up their share of funds for Centrally sponsored schemes even if such schemes are not relevant to their needs. For example, for a State such as Kerala with its high literacy levels, a scheme to promote primary education is not relevant, just as one promoting power generation is not relevant to a power-surplus State such as Gujarat. The key to the success of this experiment in cooperative federalism lies in how well the States use the higher revenues and the accompanying freedom to frame their development priorities. 
• Some of the better-developed States such as Tamil Nadu might feel aggrieved at a reduction in their share of devolved funds, ironically because of their better development metrics relative to other States. But this is federalism at work, because the resources freed up thus go to support another State that might be lagging behind on development parameters and per capita income. What is important is whether the FFC has adopted logical and fair measures while designing the allocations - which it indeed has done. (Source - The Hindu)

 In search of quality fiscal adjustment

• Ever since Reserve Bank of India Governor Raghuram Rajan talked about it, “high-quality fiscal adjustment” has become the buzzword for expectations surrounding the contents of this year’s budget. One can’t argue against high-quality fiscal adjustment. But it isn’t clear what it means. We know it doesn’t mean meeting the deficit target by squeezing expenditures in the last quarter of the fiscal year; running arrears with oil and fertilizer companies; or getting public sector companies to cough up additional year-end dividends. In the last few years, this has been the sad tale of fiscal consolidation. This year, too, the deficit target will likely be met by using some or all of the above tactics despite a massive respite from the oil price collapse, large ad hoc increases in excise tax on petroleum products, and an all-time-high equity market.
• It is essential to increase capital and lowering social spending (subsidies) as much as possible. Prima facie, the argument sounds fine. Capital (infrastructure) spending is good because it delivers higher and better-quality economic growth. If doing so requires running a higher deficit, it is still not a bad thing because the added expenditure goes into creating productive capacity, rather than being wasted in higher consumption.
• To get capital spending right, government need to reformulate the medium-term spending and funding plan, and implement the needed structural and regulatory reforms. That’s the right way to recast public infrastructure spending, and not merely as a way to boost near-term growth, especially when there isn’t any compelling reason to do so.
• The second problem lies with conflating subsidies with social protection. Subsidies hide the true cost of resources. This leads to inefficiencies. Consider the use of fertilizer: If it weren’t subsidised, farmers would use less of it, instead adopting different and perhaps better farming techniques. So, eliminating subsidies can be a good thing. But the government isn’t planning to do so. Instead, it is aiming to reduce the overall subsidy bill by better targeting through direct cash transfers. This is a welcome step, but it doesn’t improve efficiency much. The government needs to eliminate subsidies while simultaneously expanding targeted and demand-driven social and unemployment protection programmes.
• But economic growth has stalled in India (notwithstanding recent GDP revisions), and at the centre of this slowdown is languishing corporate investment. There are broadly four binding constraints holding back investment that haven’t changed much in the last few years. In no particular order, India’s environmental laws, land acquisition framework, the structure of public-private partnership (PPP) projects and the high indebtedness of infrastructure companies (the counterpart of which lies in the very high and rising stock of restructured and nonperforming loans among PSU banks) appear to be the constraints. India’s pre-2008 growth miracle was driven largely by corporate investment, not public investment. Unsurprisingly, the growth collapse was also caused by plummeting corporate investment. So, in an obvious way, reigniting corporate investment is the key to getting India back on a sustained high-growth path. Of the four binding constraints, the first two are legislative. But the latter two lie in the purview of the government alone. So, instead of boosting infrastructure spending by a few percentage points, the economy would be much better served if budgetary resources were directed to easing the latter two constraints, either by the government’s taking higher direct stakes in already-approved PPP projects or by increasing PSU bank recapitalisation.
• Doing so is likely to get growth going more quickly than the limited sops the government may have planned for corporates and households by way of modest cuts in taxes here and there or a few percentage points of higher public spending that may or may not materialise.(Source - The Hindu)

Activist Irom Sharmila, who has been on an indefinite fast since November 4, 2000, demanding the repeal of the Armed Forces (Special Powers) Act, has been conferred with the Sthree Shakti award.