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The Hindu Analysis Free PDF Download

Date: 19 September 2020

 

Continuity in Change

  • Shinzo Abe has passed on the baton to his long-term associate, Yoshihide Suga
  • Mr. Suga promises continuity rather than change as he takes the reins.
  • His choice is itself an indicator of that continuity: he has been Chief Cabinet Secretary since 2012, as well as the top spokesperson and a key implementer of Mr. Abe’s policies.
  • Tasks of reviving the economy and controlling the COVID-19 pandemic

  • He will need to steer through the outcome of the U.S. Elections.
  • China’s growing aggressiveness
  • Worldwide economic downturn
  • Success of the Tokyo Olympics - rescheduled for July 2021
  • For India, Mr. Abe’s exit is a loss
  • Special Strategic and Global Partnership
  • Annual Prime Ministerial summits from 2006
  • Quadrilateral
  • India-Japan civil nuclear partnership through the Diet (parliament), Japan’s first with a non-NPT country
  • One of his last meetings as Prime Minister was a telephonic summit with Prime Minister Narendra Modi, announcing the signing of the Acquisition and Cross-Servicing Agreement, a significant step in defence cooperation.
  • Foreign Minister-level meeting of the Quad countries in Tokyo next month

Reform Friction | ToI

  • Harsimrat Kaur Badal (Akali Dal) has resigned
  1. Creating a viable alternative to agricultural market produce committees (APMCs)
  2. Facilitating contract farming
  • Both can help small farmers discover fair prices for farm produce and bring better services to the farmgate.
  • APMCs - cartelisationtransporting produce
  • States are often hostage to big farmer and middlemen lobbies
  • By striking compromises on GST compensation, Centre could have offset the complaints of states of revenue loss for sales outside APMCs.
  • PM Modi has made a weighty promise to farmers, 86% of whom are small and marginal farmers, to double their incomes by 2022.
  • Centre has clarified that it isn’t undermining APMCs or MSPs but merely increasing competition by allowing agribusinesses, food processors, wholesalers, exporters and big retailers to source directly from farmers.
  • Despite amending the Essential Commodities Act to remove stockholding limits and intemperate regulations on most commonly consumed commodities, Centre has again banned onion exports.
  • Such moves run counter to the professed desire to find new export markets and hinder farmers from securing the benefit of even small increases in wholesale prices.

Another Afghan peace push and a role for India

  • 19 years after the 9/11 attacks
  • September 12: intra-Afghan talks between the Taliban and the Afghan High Council for National Reconciliation opened in Doha.
  • The initiation of intra-Afghan talks was a key element in the U.S.-Taliban peace deal signed in Doha on February 29.
  • Originally planned to begin on March 10, the process had to overcome many hurdles.

  • Originally Ambassador Khalilzad had spelt out four objectives
    1. An end to violence by declaring a ceasefire
    2. An intra-Afghan dialogue for a lasting peace
    3. The Taliban cutting ties with terrorist organisations
    4. U.S. troop withdrawal
  • Instead of an Afghan-led, Afghan-owned and Afghan-controlled reconciliation, it had become a U.S.-led and Taliban-controlled process with nobody claiming ownership or responsibility.
  • Timelines were fixed for the U.S. drawdown by mid-June (followed by complete withdrawal by April 2021) and for removal of Taliban from the UN Security Council sanctions list by end-May.
  • The Taliban have released 1,000 members of Afghan security forces and the Afghan authorities have freed over 5,000 Taliban from their custody.
  • This process took longer than originally foreseen but has now been completed.
  • The two elements that remained open ended in the U.S.-Taliban deal are the ceasefire declaration and the intra-Afghan talks.
  • Gen Kenneth McKenzie - numbers would be down to 4,500
  • The levels of violence showed no respite.
  • Dr. Abdullah Abdullah, Chairman of the High Council regretted that more than 12,000 Afghans had been killed and another 15,000 injured since end-February.
  • The number of attacks on government security forces and installations averaged over 80 a week.
  • The leader of the Haqqani Network, Sirajuddin Haqqani, who is also the second-in-command of the Taliban happens to be on the U.S. wanted list with a reward of $10 million for information leading to his capture or death.
  • All this is difficult to reconcile with the notion that the U.S. considers the Taliban a partner in counter-terrorism operations against the IS and other terrorist groups.
  • The current reality is that 74% of Afghan population is below 30 and has lived, for most part, in a conservative but open society.
  • The reality is major powers have limited interests.
  • For the U.S.,the peace talks provide U.S. President Donald Trump an exit opportunity weeks before his re-election bid.
  • India’s vision of a sovereign, united, stable, plural and democratic Afghanistan is one that is shared by a large constituency in Afghanistan, cutting across ethnic and provincial lines.
  • A more active engagement will enable India to work with like-minded forces in the region to ensure that the vacuum created by the U.S. withdrawal does not lead to an unravelling of the gains registered during the last two decades.

On the GST issue

  • GST Council meeting - first week of October  
  • Sharp disagreement between States – Centre
  • States were lured by the promise of 14% annual growth in GST revenue over the base year of 2015-16.
  • Any shortfall from this (for five years) was to be compensated by levying a cess on luxury and sin goods.
  • States have been reminding the Centre of this promise of compensation for five years.
  • Last GST Council meeting - Centre gave the States two options
  • States could borrow ₹97,000 crore (the shortfall in the GST revenue compensation) from the Reserve Bank of India (RBI) under a special window at a low rate of interest.
  • Borrow ₹2.35-lakh crore (the total compensation shortfall) from the market with the RBI facilitating it.
  • The burden of repayment would be borne by the future collections from the compensation cess.
  • Revenue will fall by much more than 20%.
  • Corporate sector profits will fall sharply.
  • Some sectors such as FMCG, and e-commerce will do well.
  • But companies in sectors such as airlines, hotels and consumer durables will show losses and, therefore, pay little tax.
  • Similarly, income tax collection will fall since a large number of workers have lost employment and/or have faced salary cuts.
  • GST collection will also be short by much more than 20%.
  • The production of luxury and sin goods has been severely impacted and they pay the high rate of tax — 18%, 28% and cess on top.
  • Consequently, the indirect tax/GDP ratio can be expected to fall from 10.5% to 8% resulting in a drop of ₹7 lakh crore.
  • Thus, at an optimistic guess, if the economy declines by only 10%, the total tax collection will be down by about ₹12-lakh crore in 2020-21.
  • Even if the States take the loan of ₹2.35-lakh crore they would have an uncovered deficit of ₹4-lakh crore.
  • This points to the dire position of the Centre (and the States) and the inevitability of a large borrowing programme.
  • Only the Centre is in a position to do such massive borrowing.

NEWS

  • PM hails historic reforms in agriculture; says govt committed to MSP support for farmers
  • PM Modi inaugurates Kosi Rail mega bridge & 12 railway projects in Bihar
  • COVID recovery rate improves to 78.86 per cent
  • India -Japan economic cooperation is on upswing: S Jaishankar
    1. India has a vision for Indo-Pacific, as indeed does Japan.
  • Stage all set for 13th edition of IPL Cricket in Abu Dhabi
  • FM introduces Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Bill, 2020 in Lok Sabha
  • High level expert group looking into matters related to COVID vaccine: Harsh Vardhan
  • 5.71 % increase in sowing area coverage of kharif crops: Govt
  • Bamboo industry to play critical role in post-COVID economy: Dr Jitendra Singh
  • 1,100 indigenous PPE kit makers developed by govt till date: Smriti Irani
  • Prime Minister Narendra Modi thanks US President Trump for birthday wish
  • CDSCO has granted test license permission for manufacture of COVID-19 vaccine: Govt
    1. Central Drugs Standard Control Organisation, CDSCO has informed that requirements and guidelines to conduct clinical trial or grant of permission for marketing of new drugs including vaccines are prescribed under New Drugs and Clinical Trials Rules, 2019.
    2. Minister of State for Health Ashwini Kumar Choubey stated in a written reply in the Lok Sabha that CDSCO has granted test license permission for manufacture of COVID-19 Vaccine for preclinical test, examination and analysis to seven manufacturers in India.
    3. An inactivated whole virion candidate vaccine for SARS-CoV-2 has been developed by Bharat Biotech International Ltd using the virus isolate provided by ICMR-National Institute of Virology, Pune.
    4. Characterization of the vaccine candidate has been undertaken at ICMR-NIV followed by safety and tolerability studies in small animals like rats, mice and rabbits.
    5. A DNA vaccine has been developed by Cadila Healthcare Ltd. Pre- clincial toxicity studies were conducted in small animals and the vaccine has been found to be safe and immunogenic. Phase II clinical trials are ongoing.