Current Affairs Analysis

21th December 2015 Current Affairs Analysis

By IT's Current Affairs Analysis Team
December 21, 2015



Polity & Governance

  • ‘New Delhi Declaration on Political Finance 2015’
  • MHA sends back anti-conversion Bills of Rajasthan & Chhattisgarh


  • US Senate passes IMF reform in favour of emerging markets
  • India ranks 97th on Forbes’ best countries for business list
  • Textiles Minister Launches ERP System to Boost Handloom Industry

Polity & Governance

‘New Delhi Declaration on Political Finance 2015’

The Election Commission of India (ECI) endorsed a set of radical reforms in the area of electoral funding. These include the introduction of a cap on expenditure incurred by political parties during poll season and also on donations made by individuals and corporations to parties.

  • The two day Regional Conference on the Use of Money in Politics and Its Effects on Peoples Representation was recently concluded at New Delhi.
  • This conference culminated in the New Delhi Declaration 2015 on Political Finance Regulation in South Asia.
  • The Conference was jointly organized by the Election Commission of India, International IDEA (an intergovernmental body wherein India is one of the founding members) & India International Institute of Democracy and Election Management (IIIDEM).

About ‘New Delhi Declaration on Political Finance 2015’:

  • The Declaration unanimously adopted by the house, is in response to the needs for strengthening the regulation of political finance (uneven access or use of money) across the South Asian region and elsewhere in the world.
  • The declaration adequately ensures level playing among all political parties and ultimately serves the welfare of public rather than special interests.
  • It contains nine overarching principles including adoption of a holistic approach to regulation, comprehensive coverage, closing of monitoring gaps, coordinates efforts with stakeholders and agencies along with facilitating participation of women in electoral democracy.
  • The declaration, which aims at improving “architecture for monitoring of expenditures and contributions”, advocates spending limits for different political parties during election season.
  • It supports a common expenditure limit that would include the expenses of the candidate and the political party he/she represents in the election.
  • Currently, the ECI only tracks the candidates’ expenses. There is no cap on how much a political party can spend.
  • The declaration guidelines also talk about regulating “private contributions” to political parties. “To ensure that the citizen remains at the heart of a democracy and not the interests of large donors, it is reasonable to limit the amount of private funding that an individual or corporation may donate,” the guidelines state.
  • Corporate donations, at present, make up a big chunk of the funds raised by national parties in India.
  • Anonymous donations should be strictly regulated and if not banned outright, then should be limited to an amount that is considered acceptable and not at risk of unduly influencing the political process,” the guidelines add.
  • A general code of conduct for the media for election coverage, state funding of polls (in conjunction with decriminalisation of politics and realistic spending limits) and appropriate civil and criminal sanctions for effective enforcement are among the other recommendations.

[Courtesy: PIB, Business Standard, Indian Express]

MHA sends back anti-conversion Bills of Rajasthan & Chhattisgarh

The Ministry of Home Affairs has sent the pending anti-conversion Bills of Rajasthan and Chhattisgarh back to these States. It does not mean that the Bills have been rejected by the Centre, the process is still on.

Background of Chhattisgarh Bill:

  • The Dharma Swatantraya Sanshodhan Vidheyak, 2006, introduced in the Chhattisgarh Assembly, has been returned.
  • The Chhattisgarh Bill says the return of a person to his ancestors’ religion shall not be construed as “conversion.” It accords with the ghar vapsi campaign of the right wing groups.
  • The Bill says any person who wants to convert will have to inform the district magistrate who will be the final authority.

Background of Rajasthan Bill:

  • The Rajasthan Anti-conversion Bill was passed by the Assembly in 2008; however President refused to give assent. The Bill says the five year jail term and fine of Rs. 50,000 to anyone abetting religious conversion.

The Bills were forwarded by their respective governors to the Centre in 2013.

The MHA sent it for consultations among the Ministries of Culture, Tribal Affairs, Minority Affairs and Women and Child Development.

[Courtesy: The Hindu]


US Senate passes IMF reform in favour of emerging markets

The Upper house of the United States Congress commonly known as US Senate ratified reforms to boost the representation of emerging economies at the International Monetary Fund as part of a budget bill that will clear the way for new industrial powerhouses like China and India to have more clout at the international lender- IMF.

The reforms are the biggest change in the governance of the Fund since it was established after World War Two.

Key Points:

  • The House and Senate have passed a $1.1-trillion spending plan that includes language implementing the IMF reforms, which have been awaiting congressional ratification since 2010, a delay that spurred global criticism of the US.
  • The package awaits the signature of President Barack Obama, who supports the change.
  • A sprawling budget deal to keep the US government operating through next September contained a measure to put Brazil, China, India and Russia among the IMF’s top 10 shareholders and give emerging markets more influence at the global lender.
  • Plans agreed in 2010 to give emerging markets more voting power and double the Fund’s resources have been delayed by Congress.
  • Under the reform, all 188 members’ quotas will increase as the Fund’s quota resources rise to about 477 billion special drawing rights, the IMF currency, ($659.67 billion) from about 238.5 billion, the Fund said in a statement.

China under the new regime:

  • Under the new regime, China’s vote at the IMF would increase to 6 per cent from 3.8 per cent.
  • China, the world’s second-largest economy, currently ranks sixth in voting shares at the IMF, behind the US, Japan, Germany, France and the UK. Under the 2010 plan, China would jump to third, while India would climb to eighth from 11th and Brazil would move up four spots to 10th.
  • China’s central bank welcomed the move in a statement and said China would become the third-largest shareholder under the changes, from its previous sixth position.

Opinions on the new regime:

  • “The 2010 reform plan will improve the representation and voice of emerging markets and developing countries in the International Monetary Fund and is conducive to protecting the IMF’s credibility, legitimacy and effectiveness,” said the Chinese central bank.
  • “These reforms represent an important step but still only constitute a partial shift in making the IMF’s governance structure fully representative of emerging markets’ growing influence in the world economy,” said Eswar Prasad, Professor of Trade Policy at Cornell University.
  • Some Republican lawmakers had previously said the shift would give too much influence to countries that don’t share US interests, while others questioned the need for international bailouts.
  • Emerging-market leaders had warned that the IMF would lose legitimacy if its voting structure didn’t reflect the growing economic clout of countries such as India and China. The delay may have helped push China to establish the Asian Infrastructure Investment Bank, a development lender similar to the World Bank.

[Courtesy: Business Standard, Live Mint]

India ranks 97th on Forbes’ best countries for business list

India has ranked a low 97th out of 144 nations, behind Kazakhstan and Ghana, on Forbes’ annual list of the best countries for business in 2015.

The very bottom of the list features a number of emerging markets restrained by high levels of corruption and little freedom.


  • India is ranked 97th on the list, with Forbes saying that while the country is developing into an open-market economy, traces of its “past autarkic policies” remain.
  • India has scored poorly on metrics like trade and monetary freedom and tackling challenges like corruption and violence.
  • The country performed moderately well on certain factors and ranked eighth on investor protection, 41st on innovation, 57th on personal freedom and 61st on property rights.
  • It scored low on trade freedom, ranking 125th and on monetary freedom it ranked 139th. On technology it ranked 120th, 77th on corruption and 123rd on red tape.

Challenges India is facing according to Forbes:

  • India has many challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities.
  • The publication added that India faces other challenges like high spending and poorly-targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration.
  • Forbes further said that growth in India last year fell to a decade low, as its economic leaders struggled to improve the country’s wide fiscal and current account deficits.

Positive aspects of India:

  • The outlook for India’s long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy.
  • Investors’ perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilisation of the rupee.

Other Countries’ Rankings:

  • Denmark topped the list of the 144 nations on the Best Countries of Business in 2015 list by Forbes.
  • The United Kingdom and Japan both moved up three spots to No 10 and No 23 respectively.
  • Germany improved two places to No 18 and China rose from No 97 to No 94.
  • South Africa is ranked 47th on the list followed by Mexico (53), Kazakhstan (57), Zambia (73), Ghana (79), Russia (81), Sri Lanka (91), Pakistan (103) and Bangladesh (121).

[Courtesy: The Hindu]

Textiles Minister Launches ERP System to Boost Handloom Industry

In line with the Digital India initiative of Government of India, National Handloom Development Corporation Ltd. (NHDC) has decided to implement Enterprise Resource Planning (ERP) system for its commercial activities for the benefit of handloom weavers.

  • The Union Textiles Minister has launched the ERP system in Varanasi.
  • The ERP system will improve productivity, increase efficiencies, decrease costs and streamline supply of raw material processes in NHDC.
  • NHDC has thus become the first PSU under the Ministry of Textiles to have an ERP system.

What is Enterprise Resource Planning (ERP)?

Enterprise resource planning (ERP)is a category of business-management software—typically a suite of integrated applications—that an organization can use to collect, store, manage and interpret data from many business activities, including:

  1. product planning, cost
  2. manufacturing or service delivery
  3. marketing and sales
  4. inventory management
  5. shipping and payment
  • ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system.
  • ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll.
  • The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data.

Benefits to Handloom Weavers from ERP System:

  • The ERP system will significantly benefit the weavers, who are the primary beneficiaries of the yarn supply scheme of Government of India; weavers will gain from quicker delivery of NHDC material.
  • It will also result in higher transparency and accountability, making the corporation’s activities visible for all stakeholders.
  • All processes – such as indenting, purchase order generation and invoice generation – will be performed through the ERP system itself. This reduces the lead time and also makes the system transparent.
  • Any delay in the chain can be identified by the weaver, and by all other stakeholders.
  • The elimination of paperwork and streamlining and transparency of the process will improve the efficiency and responsiveness of the supply chain.
  • Procurement, inventory management and demand forecasting will also improve, resulting in high quality customer service.

The key benefits that would accrue from implementing the ERP system are the following:

  • By making the procurement process transparent, yarn will be available at the best price to the weavers across the country.
  • The weavers will be able to access information anytime through the mobile app.
  • They can view the stock of the material in yarn depots.
  • They can place their indents.
  • They can check the status of their indents.
  • They can get the details of the dispatched material via SMS.
  • The weavers would not have to visit NHDC office or send indent by post, saving time and money.
  • ERP will be available in Hindi and local languages for the benefit of weavers.
  • Calculation of freight and depot subsidy will be done by the system, bringing in transparency and faster claim submission.
  • In addition to NHDC, all other stakeholders such as mills, transporters, societies, weavers, Office of Development Commissioner (Handlooms), will have direct access to the information in the ERP system. The system will provide real-time information on NHDC activities occurring in all the parts of the country.

The principles of Digital India such as scope enhancement, process reengineering, use of integrated and interoperable systems and deployment of emerging technologies like cloud and mobile have been considered in developing the ERP system.

[Courtesy: PIB, Wikipedia]

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