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Editorial Notes

Editorial Notes 13th July 2016

Monetary Policy Framework Agreement; ‘Fat Tax’; Women’s Safety In Cities; India-Africa relations; etc.
By By IT's Editorial Notes Team
July 13, 2016

Contents

Polity & Governance

  • Slowing down fast food

Social Issues

  • Women’s safety in smart cities

Economy

  • Inflation targeting and credibility
  • Fixing suburban rail travel

International Relations

  • Towards a continental shift

 

Polity & Governance

GS (M) Paper-2 Topic: “Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.”

 

Slowing down fast food

Introduction:

  • The Kerala government has proposed a 14.5 per cent ‘fat tax’ on burgers, pizzas and other junk food served in branded restaurants.
  • The notion of using tax as a tool to alter consumer food preferences cannot be faulted in principle. Let’s find out to what extends this kind of tax be succeeded in their objectives? Any alternatives available?

Critical analysis:

  • Such calorie-rich food items sold by branded restaurants, consumed by the higher middle and upper classes, are a very tiny part of the problem of poor food choices for the State’s population.
  • If the principal purpose was to tax some multinational food chains, then the decision is understandable. But ignoring a wide variety of high-calorie food items and focussing on a few is no more than tokenism.
  • The revenue that Kerala hopes to mop up from this — Rs.10 crore — is also meagre.

Case of Mexico:

  • Mexico provides us with proof that levying additional taxes on non-essential food items that are rich in fat or calories can effectively alter food choices. The country witnessed a 5.1 per cent dip in consumption levels in foodstuff that had more than 275 kcal/100 g energy density following the imposition of an 8 per cent levy in 2014. Sugar-sweetened drinks saw a 12 per cent drop in intake at the end of the very first year the tax was introduced.

Alternative measures:

If the State is serious about reining in consumption of unhealthy food, then there are several measures it should quickly adopt.

  • The first is to set a threshold limit for fat and/or calorie and tax all foods items that are above this limit.
  • Bringing sugar-sweetened drinks and refined products under the taxable product list should be a priority.
  • Taxing ‘bad’ foods should be accompanied by cross-subsidies of healthy and wholegrain food items.
  • There is no reason why packaged food items that have high salt content should not be additionally taxed. Indians are known to consume a few times more than the World Health Organisation’s recommended limit of 5 grams a day and most of it comes from packaged food items. The case can be same for food items that contain trans fats.

Only a holistic approach such as this will be effective in making a real change in our food consumption behaviour.

Trans fats:

  • Trans fatty acids, made through the process of hydrogenation of oils, which improves the stability or shelf life of the foodstuff that contains them, pose serious coronary risks.
  • There are a number of food items sold in India that contain as high as 35-40 per cent of trans fats.
[Ref: Hindu]

 

Social Issues

GS (M) Paper-1 Topic: “Urbanization, their problems and their remedies”

 

Women’s safety in smart cities

Introduction:

The rapid pace and nature of urbanization throughout the world has thrown up new challenges for governments, and their populations. Urban spaces provide new opportunities for people to build their homes and lives, but also pose many problems for their citizens.

Concern about women’s safety:

There is increasing concern about women’s safety in cities over the past few years.

  • The fear of violence in public spaces affects the everyday lives of women as it restricts their movement and freedom to exert their right as citizens of the city—freedom to move, study, work, and leisure.
  • Women face the fear of sexual violence as a constant threat to their ability to move around, to work and their general well-being.

True definition of smart city:

There is great variation in what is being seen as a smart city. In some cities, it means a focus on technology whereas in others there is a clear vision of the changes it will bring about.

  • Smart agenda include looking at a range of aspects of cities including water, electricity, sanitation, housing, health, education and safety.
  • One aspect of smart cities is in seeking new solutions to these problems which build on technological innovations and improve governance.

According to the author,

  • Smart cities should build on the idea that technology must enrich society and the lives of people in ways that are practical.
  • It is essential to create a dialogue between smarter and safer cities.
  • Safety cannot only be about CCTV cameras and greater surveillance. It must focus on how people can feel safer and how they are able to feel more ownership and engagement with urban processes.
  • Citizen participation in governance is often mentioned in smart city documents and this must be realised as a two-way process of engagement.

Technological innovations addressing women’s safety in cities:

  • In the past few years, many mobile apps have come up in the market. Many of them are emergency apps which support women in situations of danger or crisis by providing link to the police and others who can help them.
  • Further there are now people building wearable devices that provide the same services.
  • Recently, a mobile application, Safetipin, which collects information about public spaces was developed.

About the ‘Safetipi’ mobile app:

  • It is a tool to create safer and more inclusive public spaces in cities.
  • At the core of Safetipin is the safety audit that measures nine parameters, including lighting, the state of the walk path, as well as the presence of people and specifically women on the streets, the availability of police, public transport and ‘eyes on the street’.
  • Each audit appears as a pin on the map and is used to compute the safety score of an area.
  • Women (and men) can see the safety score of any place in the city and can also use it when they visit new cities.
  • For the city authority, Safetipin provides large-scale data and a platform for interaction with citizens on their safety concerns.
  • Thus the app is able to show dark areas, unsafe areas, deserted areas and how these can be improved.

Conclusion:

  • If smart cities are defined merely by technology and infrastructure, it will remain an alien idea. It is by seeing it within the context of living in a city and the citizen that we can humanise the concept. Along with smart cities, we also need safe, caring and shared cities where more people feel a sense of ownership.
[Ref: LiveMint]

 

Economy

GS (M) Paper-3 Topic: “Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.”

 

Inflation targeting and credibility

Introduction:

It is constructive to calmly look at the future of the flexible inflation-targeting monetary framework. This was agreed to by the Narendra Modi government and RBI early last year. The benefits of this path-breaking reform continue to be under-appreciated or misconstrued.

About the Monetary Policy Framework Agreement:

The finance ministry and the RBI had in February 2015 signed the monetary policy framework agreement, under which the central bank is expected to bring down inflation to six per cent by April 2016 and thereafter keep it at 4 per cent from 2016-17 with a band of (+/-) 2 per cent.

  • Under the agreement, the RBI will be seen to have failed the inflation target if it is at more than 6 per cent for three straight quarters from 2015-16 onwards or less than 2 per cent for three straight quarters from 2016-17 onwards.
  • In such a case, the RBI will be expected to submit a report to the government on reasons for failing to meet the target.
  • The monetary policy framework agreement stems from the recommendations of the Urjit Patel committee report.
  • The government would have to amend the RBI Act to constitute a monetary policy committee, which will decide on the central bank’s stance.
  • The new framework makes RBI more accountable as now it will have to explain to the government if it fails to meet the inflation targets. This will put India on a par with other nations in terms of flexible inflation targeting.

In views of the author: ‘Flexible Inflation-Targeting Monetary Framework’

  • The flexible inflation-targeting monetary framework isn’t at risk.
  • The absence of the inflation target range in the amendment to the RBI Act and a categorical signal that the inflation target will be only for five years—not even one complete business cycle—suggest that the discipline of an inflation-targeting framework isn’t fully appreciated.
  • Our current inflation target range of 2-6% is the widest among the main Asian inflation targeters. For example: Indonesia (3-5%), the Philippines (2-4%), Thailand (1-4%) and South Korea 2%.
  • Revision of inflation target every five years could offer room for some future government to live with higher inflation in anticipation of slightly better near-term growth, especially if it is worried about its political longevity.
  • In this scenario, a key focus of investors will be revision—if any—in the current inflation target and/or its range. These will dictate whether the MPC will be a paper tiger or a reform taken seriously by the government.
  • Politicians and bureaucrats keen to justify more monetary easing might argue that the higher 5% inflation is acceptable as it is still within the 2-6% inflation target range. Consequently, according to this view, RBI should still be able to cut policy rates.
  • However, given the high volatility in India’s food inflation, frequent jumps in food prices could risk the upper end of the inflation target range being breached, resulting in a loss of the recently enhanced credibility.

Suggestions by the author:

  • Instead of further compromising the credibility of the monetary framework to facilitate lower interest rates, the government should step up its supply-side efforts to deliver low and stable inflation. This has the potential to offer a win-win combination of lower trend inflation and higher sustained economic growth.
  • The way to a significant and lasting downshift in interest rates, which in turn will boost growth, is a sustained decline in inflation, not forcing voters to live with higher-than-promised inflation.
[Ref: LiveMint]

 

GS (M) Paper-3 Topic: “Infrastructure: Energy, Ports, Roads, Airports, Railways etc.”

 

Fixing suburban rail travel

Introduction:

  • In suburban railway, train passengers remain vulnerable in terms of their personal safety and security.
  • Here are the suggestions given by author for safe and secure railway journey.

Safety and security issues on suburban railway systems:

  • Suburban passenger traffic accounts for about 13 per cent of the total passenger traffic on the Indian Railways. It also accounts for about 85 per cent of deaths and maiming injuries while on the system.
  • These accidents and deaths are not due to collisions between trains or derailment. Rather, they are on account of a dysfunctional railway system that is unable to ensure facilities for smooth, quick, comfortable travel and the safe entry, exit and movement of passengers across platforms.
  • There are two categories of accidents and deaths.
  1. The first is when people are hit by trains while crossing tracks and at midsections. Although this includes people who commit suicide, they form a small portion of the total number of deaths.
  2. The second is when passengers either fall from a train while travelling or when hit by a pole near the tracks while travelling close to or hanging out near the door due to the heavy rush as there are no coach doors to protect them.
  • There is no easy and comfortable access to entry and exit routes and interconnected railway systems with escalators, lifts and walkalators.
  • Although there are foot overbridges to move across platforms, their use is rare. Most people prefer to cross tracks in an emergency, when late or when there is a lot of luggage to carry.

Suggestions:

  • While the second category is easy to address by providing closed-door trains, it is the first category that needs a rethink. To address this, new structures have to be developed in stations throughout the suburban network for safe passenger movement.
  • The solution does not lie in adopting a piecemeal approach like providing a random escalator in some station here or a closed door on a train there. The solution has to be complete and holistic.
  • In this the Indian Railways has two choices.
  1. The first lies in changing the behaviour of all people who come in contact with the railway system every day, but this involves time, money and effort.
  2. The second is to create an ecosystem that does not require people to change their behaviour but still be able to connect with the system safely. It is wise and practically feasible for the Indian Railways to choose and implement the second option.
  • The Railways should take the risk in making a huge investment and raise fares substantially. People won’t mind paying more if the fare hike means a superb travel experience.

Example of Delhi Metro:

While comparing with the Mumbai suburban system, the Delhi Metro is more safe. Barring cases of suicides, no passenger was killed in Delhi. Even if Delhi expands its network to match that of Mumbai’s, its exemplary safety record is bound to continue.

  • This is because Delhi has focussed on complete passenger safety by providing safe and faster entry, crossings and exits and a safer journey with closed-door coaches.
  • It is also true that the Delhi Metro is either elevated or runs underground so the issue of crossing tracks is much less. More than all this, it is the complete ecosystem around the Delhi Metro ensuring safety which makes the crucial difference.
[Ref: Hindu]

 

International Relations

GS (M) Paper-2 Topic: “Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests”

 

Towards a continental shift

Introduction:

  • India-Africa relationship is centuries old, bolstered by trade across the Indian Ocean and a million-strong diaspora across Africa.
  • This year, after President Pranab Mukherjee’s visit to Ghana, Ivory Coast and Namibia in West Africa in June, and Vice-President Hamid Ansari’s visit to Morocco and Tunisia in North Africa in May, Prime Minister Narendra Modi visited key states in South and East Africa: Mozambique, South Africa, Tanzania and Kenya.

Let’s find out India’s efforts to strengthen ties with Africa and critical analysis of these efforts.

India’s efforts to strengthen ties with Africa:

  • Recent high-profile visits from India this year to African nations show a momentum in India’s efforts to strengthen ties with Africa.
  • Last year, India hosted the third India-Africa Forum Summit with great fanfare. With this mega event, India was signalling its readiness to step up its engagement with Africa.
  • India today has growing stakes in Africa. India’s focus over the last few decades has largely been on capacity-building on the continent.
  • India has provided more than $1 billion in technical assistance and training to personnel under the Indian Technical and Economic Cooperation (ITEC) programme.
  • India has committed $7.5 billion to African infrastructure, covering 137 projects in more than 40 countries. It has also offered duty-free market access to Africa’s least developed countries.
  • With the Indian Ocean acquiring new salience in global politics, India is keen to regain its regional strategic space. The Indian Navy has been tackling piracy to protect the sea lanes of communication in the Eastern African coast and India is ready to explore joint defence manufacturing with key African states.

Critical Analysis:

  • India’s sustained and systematic outreach to all parts of Africa is a welcome move after years of only intermittent attention to a continent.
  • Recent engagements are the only way to allay the concerns of Africa with which India has enjoyed substantive ties since Independence, but which now no longer views India as a priority nation and often complains of indifference on the part of India.
  • Despite serious efforts, India’s trade with Africa at around $72 billion remains far below potential.
  • Though India has committed considerable resources to Africa, actual delivery on the ground and implementation of projects have been far from satisfactory.
  • Recent attacks on African nationals have maligned India’s image with some in the region questioning India’s openness to outsiders. This also underscores that despite government’s efforts to build ties with Africa, this relationship has suffered because of a perception of Africa being a far-off land for ordinary Indians.

India vis a vis China in relation with Africa:

With its annual trade of around $200 billion with Africa, China is a much bigger player, but India has its own strengths in its dealings with Africa.

  • India’s democratic traditions make it a much more comfortable partner for the West compared to China in cooperating on Africa-related issues.
  • India is viewed as a more productive partner by many in Africa because Indian companies are much better integrated into African society and encourage technology transfers to their African partners.
  • However, China’s sustained overtures to the region have led it to emerge as Africa’s largest trading partner. China’s trade and investment ties with the continent are one reason why parts of Africa are growing so rapidly. India has to find a way to raise its profile and ensure that its age-old ties with Africa get a modern imprimatur.

Conclusion:

  • Unless the larger populace and the Indian private sector decide to take Africa seriously, the Modi government’s outreach is unlikely to yield the results it is perhaps hoping for. And Indo-Africa relations will struggle to reach their full potential.
[Ref: Hindu]

 

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