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Editorial Notes

Editorial Notes 12th October 2016

World Bank’s “Doing Business” report and Insolvency and Bankruptcy Code (IBC), 2016; HIV Bill; Yemen crisis; Artificial Intelligence (AI) and Ethical concerns.
By IT's Editorial Notes Team
October 12, 2016


Polity & Governance

  • It isn’t enough to focus on Doing Business rankings
  • HIV Bill offers steps to end discrimination and ensure equality for affected groups

Bilateral & International Relations

  • Yemen shames them all

Science & Technology

  • The ethics of our AI-enabled future


Polity & Governance

GS (M) Paper-2: “Important aspects of governance, transparency and accountability”

It isn’t enough to focus on Doing Business rankings


  • The Indian government has taken great interest in addressing the problems of doing business in the country and improving India’s rank in the World Bank’s “Doing Business” report.
  • One parameter evaluated in this report is “resolving insolvency”. India ranks 136 in the world in the ease of “resolving insolvency” and 130 overall.
  • The enactment of the Insolvency and Bankruptcy Code (IBC), 2016 is likely to change this. Passing the law is a big step forward. It will result in the ancillary benefit of improving India’s score in the Doing Business.


Insolvency and Bankruptcy Code (IBC), Will it be enough?

  • It itself will not create a framework for effective insolvency resolution in India. The key now is implementation and this will require time, planning and building adequate State capacity.

India on “Strength of insolvency framework index”:

The “resolving insolvency” parameter in the report consists of two indicators: the “recovery rate” and “strength of insolvency framework index”.

  • The “strength of insolvency framework index” is calculated based on the provisions of the law.
  • It analyses the strength of the legal framework applicable to insolvency proceedings and tests whether a country has adopted internationally recognized good practices in the area of insolvency resolution.
  • A simple calculation based on the provisions of IBC shows that the enactment of the law can improve India’s “strength of insolvency framework” index from 6 to 12.
  • The corresponding score for OECD (Organisation for Economic Cooperation and Development) high-income countries is 12.1.
  • This will place India ahead of developed economies such as Canada, France, Hong Kong, New Zealand, Netherlands, Norway, Singapore, and the UK, emerging economies such as China, Colombia, Indonesia, Malaysia, Mexico, Peru, Russia, Thailand, Turkey and Vietnam, and on a par with Australia and Sweden.
  • This improvement will come about merely because the law has been passed, even though it has not been implemented yet.

de jure status or de facto outcome?

  • According to new research, there is no correlation between the findings recorded in the “Doing Business” report and the ground realities of doing business.
  • Large gaps often exist between laws and regulations on paper, and the manner in which these are enforced, especially true of developing countries.
  • In reality, the filing process may be cumbersome in the absence of a good enabling infrastructure. This may distort creditors’ incentives to trigger insolvency proceedings.

Four institutional pillars:

Successful implementation of IBC is contingent upon four institutional pillars:

  1. A private competitive industry of information utilities
  2. A private competitive industry of insolvency professionals
  3. Effective adjudication infrastructure and
  4. well-functioning regulator.

While the law has proposed setting up this infrastructure, the related provisions lack clarity and are often inadequate.


  • Excessive focus on a de jure ranking may divert attention from what is needed now, which is proper implementation of the law.
  • The success of the bankruptcy reforms should be measured by well-defined outcomes in the context of credit market development.
  • The specific outcomes to look out for are higher values of leverage, financial debt share in total debt, non-bank debt share in financial debt and share of unsecured borrowing in total debt. – These are the metrics against which the success of IBC should be assessed—not the “Doing Business” ranking.
[Ref: LiveMint]


GS (M) Paper-2:
“Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections”
“Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.”

HIV Bill offers steps to end discrimination and ensure equality for affected groups



  • Recently HIV Bill has been approved by the cabinet is a welcome step. Hopefully, it will be passed by Parliament in the coming winter session with the support of all parties, it being non-partisan from the beginning.
  • The Bill has had a tortuous journey for over 10 years, shuttling between health and other ministries, apart from being kept in limbo in the law ministry for a long period. Nevertheless, the approval by the cabinet of the Bill is a milestone.

Latest changes in the Draft bill:

Some changes were made by the government to the last draft that was made public on demand of the People Living with HIV (PLHIV) community.


  • Old: Anti Retroviral Treatment (ART) would be available to PLHIV “as far as possible.”
  • New: The Bill now provides that “ART treatment would be provided to all PLHIV as needed”. [Indian generic companies supply ARVs to all PLHIV in developing countries. It would have indeed been ironical for the law not to do that for PLHIV in India.]


  • Old: No protection to the Lesbian, Gay, Bisexual, Transgender and Intersex (LGBTI) community.
  • New: The protection to the LGBTI community was included in the draft Bill as it is understood that it is because of their vulnerability and lack of protection for them in the law that HIV also spreads.

The Bill and its significance:

  • There are about 21 lakh PLHIV in India and PLHIV are routinely discriminated. So, the HIV Bill is much needed.
  • Apart from the provisions of preventing discrimination against PLHIV, it is the first time that the law will address discrimination in the private sector.
  • The Constitution provides for addressing discrimination in the “state” sector, unlike in the private sector where discrimination is rife, whether in health, employment, education, renting property, insurance, standing for office or otherwise. The New Bill tackles that.
  • The HIV Bill provides that a PLHIV under 18 years has the right to reside in a shared household.
  • The Bill also recognises the autonomy of PLHIV in terms of testing and treatment and also for confidentiality on testing. No person can be compelled to disclose his or her status except with informed consent or by an order of a court of law. Entities disclosing the status of PLHIV would be liable under the Bill.
  • Provisions of redressal in case of denial of treatment to a PLHIV person, both at the institutional level and at the local district level.
  • Discrimination is rife in the health sector, especially in surgeries involving PLHIVs. If the surgery required is not done immediately, a PLHIV can first approach the appropriate authority in the health care facility. If that fails, the PLHIV can approach the local ombudspersons, to provide the required treatment, even on an emergency basis and/or in a time-bound manner.
  • Ombudspersons are required to be set up at the district level to allow for grievances to be redressed.
  • The HIV Bill, for the first time, mandates the authorities to provide a “safe working environment” to healthcare workers. Only with that kind of environment will doctors not hesitate to treat patients who would otherwise pose a significant risk to them.


  • The success of the Bill is partly guaranteed because of the PLHIV community, which has the highest stake, has been involved at each turn the Bill has taken.
  • However, its success will have far-reaching impacts on other health legislations that need to be enacted.
[Ref: Indian Express]


Bilateral & International Relations

GS (M) Paper-2: “Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.”

Yemen shames them all


  • There’s every likelihood that the war in Yemen will intensify, visiting yet more tragedy upon the people.
  • This week, Yemen returned briefly to the spotlight, to remind us of the shame it has brought to all the parties involved in the conflict.

India’s Operation Raahat:


  • In March last year, Yemen crisis occurred leaving 4,000 Indians stranded there.
  • Indian Government launched Operation Raahat, a highly successful airlift that won New Delhi international attention and kudos.

Yemen crisis: How did the war start?

  • Yemen, one of the Arab world’s poorest countries, has been devastated by a war between forces loyal to the internationally-recognised government of President Abdrabbuh Mansour Hadi and those allied to the Houthi rebel movement.
President Abdrabbuh Mansour Hadi
President Abdrabbuh Mansour Hadi
  • The conflict has its roots in the failure of the political transition that was supposed to bring stability to Yemen following an uprising that forced its longtime authoritarian president, Ali Abdullah Saleh, to hand over power to Mr Hadi, his deputy, in November 2011.
Ali Abdullah Saleh
Ali Abdullah Saleh
  • Mr Hadi struggled to deal with a variety of problems, including attacks by al-Qaeda, a separatist movement in the south, the continuing loyalty of many military officers to Mr Saleh, as well as corruption, unemployment and food insecurity.
  • The Houthi movement, which champions Yemen’s Zaidi Shia Muslim minority and fought a series of rebellions against Mr Saleh during the previous decade, took advantage of the new president’s weakness by taking control of their northern heartland of Saada province and neighbouring areas.
  • Disillusioned with the transition, many ordinary Yemenis – including Sunnis – supported the Houthis and in September 2014 they entered the capital, Sanaa, setting up street camps and roadblocks.
  • In January 2015, the Houthis reinforced their takeover of Sanaa, surrounding the presidential palace and other key points and effectively placing Mr Hadi and his cabinet ministers under house arrest.
  • The president escaped to the southern port city of Aden the following month.
  • The Houthis and security forces loyal to Mr Saleh then attempted to take control of the entire country, forcing Mr Hadi to flee abroad in March 2015.
  • Alarmed by the rise of a group they believed to be backed militarily by regional Shia power Iran, Saudi Arabia and eight other mostly Sunni Arab states began an air campaign aimed at restoring Mr Hadi’s government.
  • The coalition received logistical and intelligence support from the US, UK and France.


War calamities:

  • For Yemen, the war has been calamitous. Already one of the world’s poorest nations, it has been reduced to abject destitution.
  • More than 3,600 people have been killed. Millions have been made homeless.
  • The World Food Programme has warned that the country is on the brink of famine, and Amnesty International reckons that 83% of the population depends on humanitarian assistance for survival.
  • The Houthis, for whom this conflict had begun as a quest for greater autonomy in the country’s northern part, now find themselves responsible for a desperate population.
  • Human-rights agencies have repeatedly complained that the coalition pays little heed to the rules of war.


Why should this matter for the rest of the world?

  • What happens in Yemen can greatly exacerbate regional tensions. It also worries the West because of the threat of attacks emanating from the country as it becomes more unstable.
  • Western intelligence agencies consider AQAP the most dangerous branch of al-Qaeda because of its technical expertise and global reach, and the emergence of IS affiliates in Yemen is a serious concern.
  • The conflict between the Houthis and the elected government is also seen as part of a regional power struggle between Shia-ruled Iran and Sunni-ruled Saudi Arabia.
  • Gulf Arab states have accused Iran of backing the Houthis financially and militarily, though Iran has denied this, and they are themselves backers of President Hadi.
  • Yemen is strategically important because it sits on the Bab al-Mandab strait, a narrow waterway linking the Red Sea with the Gulf of Aden, through which much of the world’s oil shipments pass.

Dangerous new turn:

  • The US navy said one of its destroyers off the coast of Yemen had been attacked by two missiles, fired from Houthi-controlled territory, the missiles fell harmlessly into the sea.
  • Saudi media said another missile was fired at one of its airbases. There are no reports of casualties.
  • The Houthis have not previously been known to possess such firepower. Inevitably, fingers will be pointed at their patron, Iran.
  • The US will also worry about the potential for these weapons to fall into the hands of Al-Qaeda’s Yemeni operation.


There’s every likelihood that the war in Yemen will intensify, visiting yet more tragedy upon the people—and still more shame upon all the protagonists.

[Ref: The Hindu, LiveMint, BBC]


Science & Technology

GS (M) Paper-3:
“Science and Technology- developments and their applications and effects in everyday life”
“Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights.”

The ethics of our AI-enabled future


  • The Google has organised an event in San Francisco last week on Google Assistant, the company’s artificial intelligence (AI), a beefed up version of a prior attempt, Google Now. And that raises a number of questions that are proliferating increasingly at the intersection of technology and ethics.


What is Artificial intelligence (AI)?

  • The theory and development of computer systems which are able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.
  • Some example includes Apple’s Siri and Microsoft’s Cortana—which have been common place for a few years now.
  • AI able to respond to voice input anywhere in the house, sophisticated enough to understand natural language and context and carry on a conversation with the user in the process of offering information and performing tasks such as scheduling appointments or locking the door.

Privacy Issue in AI is a big talk now

How Privacy will affect?

  • For consumer AI to offer the ease of use that will make it attractive, it must offer as close a facsimile of having a conversation with another person as possible.
  • This is immensely difficult; the ability to understand natural language conversation in context rather than predetermined commands is the holy grail. So two components are necessary: sophisticated algorithms and vast amounts of data. And that includes every scrap of personal data possible.
  • Lack of privacy and surrendering personal data is a fair price to pay for more convenient lifestyles.

Is this necessarily a negative?

  • That depends on the best practices tech companies develop—Apple, for instance, is focusing on protecting users’ data in order to differentiate its products—and on the outcome of their ongoing tussles with governments around the world that demand access to user data for legal purposes.

Tackling the ethical issues:

The industry is well aware of these questions relating to privacy concerns.

  • Thus, Amazon, Facebook, Google’s DeepMind division, IBM and Microsoft founding a new organization called the Partnership on Artificial Intelligence to Benefit People and Society that aims to initiate a wide dialogue about the nature, purpose and consequences of AI.

Issues other than Privacy:

  • Imagine, for instance, a bank using AI to recommend or screen loan applicants, and the algorithm using causal relationships to discriminate on the basis of gender or caste or race.
  • Or, for that matter, the multiple implications of AI deployed in a military context or controlling driverless vehicles—or the issue du jour, employment.

These are also eminently plausible scenarios.


  • It’s an inevitable future; technological genies can never really be put back in the bottle.
  • The rise of AI cannot be left to the Tech industry alone; it demands the involvement of everyone from social scientists to ethicists and philosophers. Social and technological paradigm shifts are rarely painless, after all.
[Ref: LiveMint]


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