Current Affairs Analysis

21st September 2016 Current Affairs Analysis – IASToppers

Railway Budget; Plan and Non-Plan Expenditure; New York Declaration; OFC Connectivity; Antimicrobial Resistance; etc.
By IT's Current Affairs Analysis Team
September 21, 2016


Polity & Governance

  • Merger of rail budget with general budget
  • Advancement of the Budget presentation
  • Merger of Plan and Non Plan classification in Budget and Accounts
  • Cabinet approves provision of submarine OFC connectivity between mainland (Chennai) and Andaman & Nicobar Islands


  • Govt announces 27 more cities in second round
  • Moody’s sees slower pace of new bad loans

Environment & Ecology

  • National wastewater reuse policy sought

Bilateral & International Relations

  • UN General Assembly Adopts Historic New York Declaration for Refugees and Migrants
  • 193 countries sign declaration to stamp out drug-resistant infections

Key Facts for Prelims

  • India’s first coastal industrial corridor
  • International Day of Peace


Polity & Governance

Merger of rail budget with general budget

The Union Cabinet has approved the proposal of Ministry of Finance to merge Railway budget with the General budget.



  • The presentation of separate Railway budget started in the year 1924, and has continued after independence as a convention rather than under Constitutional provisions.

Administrative and financial arrangements:

The arrangements for merger of Railway budget with the General budget have been approved by the Cabinet with the following administrative and financial arrangements:

  • The Railways will continue to maintain its distinct entity -as a departmentally run commercial undertaking as at present.
  • Railways will retain their functional autonomy and delegation of financial powers etc. as per the existing guidelines.
  • The existing financial arrangements will continue wherein Railways will meet all their revenue expenditure, including ordinary working expenses, pay and allowances and pensions etc. from their revenue receipts.
  • The Capital at charge of the Railways estimated at Rs.2.27 lakh crore on which annual dividend is paid by the Railways will be wiped off. Consequently, there will be no dividend liability for Railways from 2017-18 and Ministry of Railways will get Gross Budgetary support. This will also save Railways from the liability of payment of approximately Rs. 9,700 crore annual dividend to the Government of India.

The merger would help in the following ways:

  • The presentation of a unified budget will bring the affairs of the Railways to centre stage and present a holistic picture of the financial position of the Government.
  • The merger is also expected to reduce the procedural requirements and instead bring into focus, the aspects of delivery and good governance.
  • Consequent to the merger, the appropriations for Railways will form part of the main Appropriation Bill.
[Ref: PIB]


Advancement of the Budget presentation

The Cabinet has approved, in principle, for advancement of the date of Budget presentation from the last day of February to a suitable date.


  • The exact date of presentation of Budget for 2017-18 would be decided keeping in view the date of assembly elections to be held in States.

This would help in following ways:

  • The advancement of budget presentation by a month and completion of Budget related legislative business before 31st March would pave the way for early completion of Budget cycle and enable Ministries and Departments to ensure better planning and execution of schemes from the beginning of the financial year and utilization of the full working seasons including the first quarter.
  • This will also preclude the need for seeking appropriation through ‘Vote on Account’ and enable implementation of the legislative changes in tax; laws for new taxation measures from the beginning of the financial year.
[Ref: PIB]


Merger of Plan and Non Plan classification in Budget and Accounts

The cabinet has approved the merger of Plan and Non Plan classification in Budget and Accounts from 2017-18, with continuance of earmarking of funds for Scheduled Castes Sub-Plan/Tribal Sub-Plan. Similarly, the allocations for North Eastern States will also continue.


This would help in resolving the following issues:

  • The Plan/Non-Plan bifurcation of expenditure has led to a fragmented view of resource allocation to various schemes, making it difficult not only to ascertain cost of delivering a service but also to link outlays to outcomes.
  • The bias in favour of Plan expenditure by Centre as well as the State Governments has led to a neglect of essential expenditures on maintenance of assets and other establishment related expenditures for providing essential social services.
  • The merger of plan and non-plan in the budget is expected to provide appropriate budgetary framework having focus on the revenue, and capital expenditure.

What is plan and non-plan expenditure?

Non-plan expenditure is what the government spends on the so-called non-productive areas, such as salaries, subsidies, loans and interest, while plan expenditure pertains to the money to be set aside for productive purposes, like various projects of ministries.

[Ref: PIB]


Cabinet approves provision of submarine OFC connectivity between mainland (Chennai) and Andaman & Nicobar Islands

The Union Cabinet has given its approval for provision of a direct communication link through a dedicated submarine Optical Fibre Cable (OFC) between Mainland (Chennai) and Port Blair & five other islands viz. Little Andaman, Car Nicobar, Havelock, Kamorta and Great Nicobar.


  • The estimated cost of the project is Rs. 1102.38 crore including operational expenses for 5 years.
  • The project is likely to be completed by December 2018.

Significance of the move:

  • The approval would equip Andaman & Nicobar Islands (ANI) with appropriate bandwidth and telecom connectivity for implementation of e-Governance initiatives; establishment of enterprises & e-commerce facilities.
  • It will also enable the provision of adequate support to educational institutes for knowledge sharing, availability of job opportunities and fulfil the vision of Digital India.

Why an OFC connectivity in Andaman and Nicobar Islands is important?


  • The Andaman and Nicobar Islands are of immense strategic significance for India.
  • The geographical configuration and the location of the Andaman & Nicobar Islands chain in the Bay of Bengal safeguard India’s eastern seaboard.
  • Provision of secure, reliable, robust, and affordable telecom facilities in these islands is of importance from a strategic point of view to the country and also an important requirement for the socio-economic development of the islands.


  • Currently the only medium of providing telecom connectivity between Mainland and Andaman & Nicobar Islands is though satellites, but the bandwidth available is limited to 1 Gbps.
  • Satellite bandwidth is very costly and its availability is limited due to which future bandwidth requirement cannot be met solely through it.
  • Then, there is an issue of redundancy, that is, no alternate media is available in case of any emergency.
  • Lack of bandwidth and telecom connectivity is also hampering socio-economic development of the islands.
  • Hence it is essential to have submarine OFC connectivity between the Mainland India and Andaman & Nicobar Islands, being the only option for catering to projected future bandwidth requirements.
[Ref: PIB]



Govt announces 27 more cities in second round

The Union Ministry of Urban Development has shortlisted 27 cities from 12 States in the list of third batch of Smart Cities Mission.


  • These cities were shortlisted based on scores obtained in the latest round of the Smart City Challenge competition in which total 63 cities had participated.
  • This competition list was topped by Amritsar in Punjab. With five cities, Maharashtra has the highest number of cities in the list.
  • The list also includes four cities each from Tamil Nadu and Karnataka, three cities from Uttar Pradesh and two each from Rajasthan and Punjab.
  • Nagaland and Sikkim with one city each for the first time have made it to the list.


  • Earlier in the first batch announced in January 2016, 20 cities had made into the list. In the second batch 13 cities were selected. With declaration of third batch, total 60 cities have been chosen for the Smart Cities Mission.

27 shortlisted smart cities (Rank wise) are:


[Ref: BL]


Moody’s sees slower pace of new bad loans

According to a report released by Moody’s Investors Service, India’s banking system is moving past the worst of its asset quality slump. 


Highlights of the report:

According to the report,

  • While the stock of impaired loans may still increase during the horizon of this outlook, the pace of new impaired loan formation should be lower than what it has been over the last few years.
  • While the operating environment for Indian banks is supported by a stabilising economy, the asset quality indicator still remains a problem but the picture is getting better on account, according to the report.
  • However, asset quality will remain a negative driver of the credit profiles of most rated Indian banks. But, the pace of deterioration in asset quality over the next 12-18 months should be lower than what was seen over the last five years.
  • The ratings outlook on 11 of the banks is positive, reflecting the global rating agency’s positive outlook on the sovereign rating and the high degree of government support that could be expected for the banks, if needed.

Key factors of the report:

This outlook is based on the company’s analysis of five key factors—

  1. Operating environment,
  2. Asset risk and capital (stable),
  3. Funding and liquidity,
  4. Profitability and
  5. Government support.
[Ref: The Hindu]


Environment & Ecology

National wastewater reuse policy sought

According to the PwC report on “Closing the water loop, reuse of treated wastewater in urban India”, India needs a national wastewater reuse policy.


  • The suggestion for such a policy comes against the backdrop of the PwC report highlighting “water stress to be a perennial concern’’ in most Indian cities.

Why India needs a national wastewater reuse policy?

  • The country is expected to add approximately 404 million new urban dwellers between now and 2050. This rapid urban growth will be linked with higher industrial output and greater energy demand thus adding to the urban water stress. Hence, sound policy and regulatory interventions by the Central and State Governments are a prerequisite for the launching of innovative reuse projects.
  • The policy is needed to help address the “perennial concern” of urban water stress by mandating targets and laying out legislative, regulatory and financial measures to hit those targets.

Significance of the proposed policy:

  • Institutionalising the reuse of treated wastewater could go a long way in helping utilities to address this challenge in an effective manner.
  • Like other infrastructure sub-sectors in India, the wastewater sector would also have to be driven by government initiatives and implementation models would be designed around these initiatives.
  • The PwC study suggested that the Ministry of Environment and Ministry of Water Resources should work together to define quality norms for different grades of industrial water. This would help standardise the design of reuse systems nationwide.
[Ref: The Hindu]


Bilateral & International Relations

UN General Assembly Adopts Historic New York Declaration for Refugees and Migrants

World leaders have adopted New York Declaration for Refugees and Migrants at the United Nations General Assembly (UNGA).


  • UN Secretary-General Ban Ki-moon also launched a new campaign called Together – Respect, Safety and Dignity for All to respond to rising xenophobia and turn fear into hope.
  • United Nations and International Organization for Migration (IOM) signed the new agreement by which IOM officially becomes a related organization of the United Nations system.

What does this adoption mean?

  • The adoption of the New York Declaration means that more children can attend school; more workers can securely seek jobs abroad and more people will have real choices about whether to move once the conflicts are resolved.

Key features of the Declaration:

By adopting the declaration, world leaders are committed to,

  • Protect the human rights of all refugees and migrants, regardless of status. This includes the rights of women and girls and promoting their full, equal and meaningful participation in finding solutions.
  • Ensure that all refugee and migrant children are receiving education within a few months of arrival.
  • Prevent and respond to sexual and gender-based violence.
  • Support those countries rescuing, receiving and hosting large numbers of refugees and migrants.
  • Work towards ending the practice of detaining children for the purposes of determining their migration status.
  • Find new homes for all refugees identified by the Office of the UN High Commissioner for Refugees (UNHCR) as needing resettlement.
  • Expand the opportunities for refugees to relocate to other countries through labour mobility or education schemes.
  • Strengthen the global governance of migration by bringing the International Organization for Migration (IOM) into the UN system.
[Ref: TOI]


193 countries sign declaration to stamp out drug-resistant infections

The 193 countries of the United Nations have agreed a landmark declaration to rid the world of drug-resistant infections or “superbugs” or Antimicrobial resistance (AMR).


  • It is the fourth time a UN declaration has been reached on a health issue, following HIV in 2001, non-communicable diseases in 2011 and Ebola in 2013.

Way ahead:

  • The signatory countries now have two years to submit action plan. These submitted plans are expected to address the seriousness and scope of the situation. It will also agree on sustainable, multi-sectoral approaches to addressing antimicrobial resistance.

What is Superbugs?

  • Antimicrobial resistance (AMR) happens when microorganisms such as viruses, bacteria, fungi and parasites change when they are exposed to antimicrobial drugs. These microorganisms are also termed as “superbugs”.
  • As a result, the medicines or drugs become ineffective and infections persist in the body further increasing the risk of spread to others.
[Ref: AIR]


Key Facts for Prelims

India’s first coastal industrial corridor


  • The Manila-Based regional development financing bank, Asian Development Bank (ADB) has approved a $631-million loan to the proposed Vishakhapatnam-Chennai industrial corridor (VCIC), the first coastal one in the country.
  • The fund will help develop the first key 800-km section of the planned 2,500-km East Coast Economic Corridor.
  • The coastal industrial corridor is expected to boost development on eastern coast of India and enable seamless trade links with other parts of Southeast and South Asia.
  • The VCIC section of the East Coast Economic Corridor (ECEC) connects four economic hubs and nine industrial clusters. It will be first industrial corridor developed along India’s coast.
  • The ECEC will extend from Kolkata (West Bengal) in the northeast of India to Tuticorin (Tamil Nadu) near the southern-most point of the country.


International Day of Peace


The International Day of Peace is observed across the world on 21 September every year to strengthening the ideals of peace, both within and among all nations and peoples. This day is also observed as a day of ceasefire. The theme for the year 2016 is: “The Sustainable Development Goals: Building Blocks for Peace”.

This day coincides with its opening session of UNGA which usually held annually on the third Tuesday of September. In 2001, UNGA again unanimously voted to designate the Day as a period of non-violence and cease-fire.


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