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The Hindu Analysis Free PDF Download

Date: 03 February 2020

No room for panic

  • Coronavirus outbreak is declared a ‘public health emergency of international concern’ by WHO
  • First confirmed fatality outside China, with a death in the the Philippines.
  • Death toll in China: 304
  • Kerala: a second case being detected.
  • There is an urgent need to raise public awareness.
  • Cases have been reported wherein people have not exhibited symptoms in spite of being infected.

Cognisant of constraints

  • Saturday: interim report of the 15th FinanceCommission was tabled in Parliament.
  •  It has largely preserved the devolution mathematics of its predecessor.
  • The commission has recommended a one percentage point reduction.
  • A crucial new parameter, demographic performance,has been added to the mix.
  • The commission has flagged the issues dogging the GST, especially as indirect taxes constitute almost half the total tax revenues of the Union.
  • The new tax has yet to stabilise leaving a majority of the States dependent on compensation from the Centre.
  • Having been mandated to adopt the population data from the 2011 Census, the commission has incorporated the additional criterion to ensure that States that have done well on demographic management are not unfairly disadvantaged.
  • And since the norm also indirectly evaluate performance on the human capital outcomes of education and health, it has been assigned a weight of 12.5%.
  •  Urban local bodies, especially municipalities in cities with populations of more than one million, are set to get a larger share of the pie.
  • The commission has also been justifiably critical of the Union and State governments’ tendency to finance spending through off-budget borrowings and via parastatals.

 Falling short of aspirations

  • There were many expectations from the Union Budget2020: that it would
  •  reverse the falling growth rate
  • reduce unemployment
  • rekindle the animal spirits needed to revive private investment
  •  Budget can be judged in terms of its effect on rural demand, investment and private sentiments — all critical elements for recovery.
  • Skill development allocation: Finance Minister’s own accord, there is a huge, unmet demand for teachers, paramedical staff and caregivers, and skilled workers.
  • Finance Minister has allocated a paltry ₹3,000crore for skill development.
  • The Budget could have given tax incentives to companies to provide internships and on-site vocational training to unemployed youth.
  • The country cannot afford to let the worlds largest workforce waste this way.
  • The government remains very determined to present itself as being fiscally prudent.
  •  Budgetary allocations for the PM-KISAN and theMGNREGA are disappointing.
  • The MGNREGA is allocated ₹61,500 crore, which is less than ₹71,000 crore for the current fiscal year. Going by the last year, disbursement under thePM-KISAN will also be less than budgeted, unless the beneficiary base is expanded.
  • These two schemes are good instruments for income transfers to small and marginal farmers, landless labour who spend most of their income and generate demand for a wide range of goods and services.
  •  Rural roads, cold storage, and logistical chains are crucial for the growth of income and employment in rural India.
  •  The allocation of ₹1.7 lakh crore for transportation infrastructure is also a welcome step.
  • Getting private investment: private investment depends on the cost of capital along with the certainty of returns.
  • Many projects have been mired in contractual disputes with government departments and various regulatory hurdles. All these factors make infrastructure investment unnecessarily risky and render these projects unattractive for investors.
  • A well-developed bond market should draw upon domestic insurance funds, pension funds and mutual funds which are capable of investing in corporate bonds across different schemes.
  • Finance Minister has extended the window for the restructuring of loans for micro, small and medium-sized enterprises till March 31, 2021.
  • The threshold for audit of the accounts has been increased from ₹1 crore to ₹5 crore for those entities that carry out less than 5% of their business transactions in cash.
  •  The reluctance to abolish the angel tax that results in harassment of start-ups and their investors is unfathomable.
  • Another welcome feature is the scheme to allow the non-banking financial companies into the Trade Receivables Discounting System (TReDS).
  • The abolition of dividend distribution tax, and the assurance that tax-related disputes will be considered with compassion.
  • The future of the economy will turn on whether the government walks the talk in terms of public investment and the promises made to different sections of society including the taxpayer and companies.

The Budget’s blurred social sector vision

  •  Finance Minister Nirmala Sitharaman began her speech by saying that the Union Budget was “woven around three prominent themes” — aspirational India, economic development for all and building a caring society.
  • Achieving any of these would require extraordinary efforts on the social sector front starting with allocating additional resources for health, education, nutrition, employment guarantee, and social security schemes.
  •  Judging by the current scenario, an expansionary budget with a focus on the social sector would have also made economic sense.
  • MGNREGA and the Public Distribution System(PDS) are two important lifelines for the rural poor.
  • MGNREGA is failing to fully play the role of filling the gap because of poor implementation and inadequate funds.
  • MGNREGA expenditure is also known to have high multiplier effects through boosting consumption demand in rural areas.
  •  The food subsidy allocated for 2020-21 is only₹1.11 lakh crore, which, once again, is slightly higher than the previous year’s RE of ₹1.08 lakh crore.
  • This is much less than the budget estimate (BE) of last year, of ₹1.8 lakh crore, which is closer to the actual subsidy required for meeting the costs of the grain distributed through the PDS and other welfare schemes.
  • Health and education also did not see any significant increases in allocations this year. The BE for the much publicised Ayushman BharatYojana/Pradhan Mantri Jan Arogya Yojana stays at ₹6,400 crore, the same as last year.
  • The budget for the Prime Minister’s OverarchingScheme for Holistic Nutrition, or POSHAN Abhiyaan, another flagship scheme of this government, sees a meager increase of ₹300 crore.
  •  There is an overall increase of ₹5,000 crore-₹6000 crores each in the overall education and health budgets which are hardly sufficient to cover for inflation.
  •  It is clear that the agenda of the present government for the social sector is for greater privatisation and withdrawal of the state.
  •  This is reflected not just in the low allocations but also policy pronouncements such as introducing the public-private partnership model for medical colleges and district hospitals or the push, in the Economic Survey, for narrowing the coverage under the PDS.

 It’s time for the Shaheen Bagh protests to end

  • The protesters at Shaheen Bagh in Delhi have made their point.
  • The picketers, primarily Muslim women of the area,have demonstrated their resolve to stand up not just for the rights of the Muslim minority but, more importantly, for the secular spirit of the Constitution.
  • Waving the national flag, carrying photos of MahatmaGandhi and B.R. Ambedkar, and reciting the words of the Constitution’s Preamble, they have challenged the government’s narrative that the Citizenship (Amendment) Act was merely an attempt to fulfill Gandhi’s wishes.
  •  However, there is a time when protest movements become counterproductive and the organizers and participants of such movements should have the sagacity to recognise this fact.
  • With the Delhi Assembly elections around the corner, they have increasingly become pawns in the electoral game being played in the national capital.
  • Therefore, it is time for the protesters to recognise that their actions are leading to far more negative outcomes than positive ones.
  •  The entire exercise has outlived its usefulness.
  • They should learn from the Mahatma who did not desist from calling off protest movements when he recognised that they had outlasted their effectiveness.


  •  Money earned in India by NRIs will be taxed, says Nirmala
  •  Union Finance Minister Nirmala Sitharaman on Sunday scotched fears that provisions introduced in the Budget would bring Indian workers’ income in zero tax jurisdictions, like the UAE, into the Indian tax net.
  •  Unidentified miscreants open fire at JMI
  • Two unidentified bike-borne men reportedly opened fire in the air near the anti-CAA protest site outside Jamia Millia Islamia late on Sunday night.
  • Nirbhaya case: Centre seeks nod for executions
  • The Centre on Sunday sought to remove the stay on the execution of the four convicts in the December 16, 2012, Nirbhayagang-rape and murder case, asserting that the credibility of the judiciary and its ability to execute death sentences were at stake.
  •  Study on bat-hunters of Nagaland under scanner
  • Rise in millionaires contesting Delhi Assembly polls: ADR report
  • A report by election watch body — the Association for Democratic Reforms (ADR) — has revealed that the number of millionaire candidates contesting the Delhi Assembly elections has increased by 34% in comparison to the last elections held in February 2015.
  •  ‘Haryana’s Harappan site to create jobs’
  • Residents hail Centre’s move to set up a national museum at Rakhigarhi