28th December – Editorials/Opinions Analyses

Contents

1. DECISIVE SHIFT  IN DEFENSE ADMINISTRATION
2. HOW NOT TO COUNTER ECONOMIC STAGNATION
3. RBI REPORT: GROSS NPAs MAY RISE TO 9.9% BY SEPTEMBER, 2020
4. WHY THIS WINTER IS EXTRA COLD?
5. MGNREGA TRENDS

DECISIVE SHIFT  IN DEFENSE ADMINISTRATION

Why in News?

Union Cabinet has approved the creation of the post of CDS with an aim to strengthen India’s collective defense capabilities. Cabinet committee on security (CCS) has approved the recommendations of several expert panels, including the Kargil Review Committee.

Need of such post

• To usher in reforms in the higher defence management Centre
• For a more streamlined system of reporting and decision making
• Changing combat operations like, tripartite struggle

Who is CDS?

• CDS will be a four-star general and will act as principal military adviser to defence minister on all tri services matters.
• He will also head the department of military affairs
• CDS was recommended by  Kargil review committee after Kargil war.
• In 2017, intelligence and security officials had said that the absence of a CDS was hampering India’s combat capabilities

Functions of CDS

• Procurement for defence services other than capital acquisitions.
• Charter says that, in 3 years, jointness in operation, logistics, maintenance, communication, repairs should be effective.
• CDS heads the department of military Affairs, and will also be the permanent chairman of the Chiefs of Staff Committee.
• CDS will not exercise any military command including over three service chiefs.
• Rationalization of man power in military.

HOW NOT TO COUNTER ECONOMIC STAGNATION

Why in News?

• The Centre and the States are so short of their resources that their, fiscal deficit is burgeon­ing.
• The Prime Minister, at a function of the Associated Chambers of Commerce and Industry of India recently, was optimistic but the Reserve Bank of India (RBI) Governor was less positive, admitting that the country’s economic problems are also structural

Current situation

• An RBI report suggests that business confidence, consumer confidence and capacity utilization are down.

• Corporate tax cuts have impacted the revenue of central government.
• Public investment is crucial to boost the economy at the present time, and government is facing the shortfall of resources.
• Income tax cut will only effect 2% of people who are wealthier, and is not expected to boost demand.
• Fall in GST revenues has impacted center and government has shown apprehension about paying GST compensation to states. This reduces the spending capacity of states as well
• Automobile sector which was a huge contributor to GST, has seen a decline.

RBI REPORT: GROSS NPAs MAY RISE TO 9.9% BY SEPTEMBER, 2020

Why in News?

• The gross non­performing asset (GNPA) ratio of banks may increase to 9.9% by September 2020 from 9.3% in September 2019, according to an RBI report
• The report said state ­run banks’ GNPA ratios may increase to 13.2% by September 2020 from 12.7% in September 2019, whereas for private banks it may climb to 4.2% from 3.9%, under the stress scenario.

WHY THIS WINTER IS EXTRA COLD?

Extreme Cold temperatures, rainfall and intense fog in the months of December and January are not something new for North and North-west India. And yet, this December  north India is feeling the cold much more than earlier.

How Low have the temperatures been, and why?

What is usual, what is different?

• Every year, in the second half of December and the first half of January, temperatures routinely drop to 2-4°C at some point of the day in many places in North and Northwest India.
• In December the maximum daily temperature does not rise beyond 16-18°C in most of Punjab. Haryana.

• Himachal Pradesh and Western Uttar Pradesh, in Delhi and northern Rajasthan daily maximum temperatures are usually not over 20°C-22°C for most of December
• This winter in many parts of the region maximum temperature on someday have been nearly 10°C below normal

• In Delhi, the average maximum temperature for December has been less than 20°c until December 27.

• This has happened only four times in the last 118 years, and the IMD has said this month would most likely become the second coldest December for Delhi since 1901.
• The maximum temperature had averaged 17.3 In December 1901.
• Delhi has docked 14 consecutive cold days at a stretch between December 14 and 27.
• This is already the longest such spell for December since 1997.
• That December, consecutive “cold days” lasted for 13 days, out of a total of 17 such days during the month.

How cold is cold?

• A cold-day condition is said to prevail when the maximum temperature during the days at least 4.5°Below normal. If the maximum temperature is at least 6.5°C below normal, it is classified as a severe cold day.
• Cold-day conditions prevailed in the north since December 15, and intensified after December 21.
• The most intense cold day when maximum temperatures fell 7°C to over 12°C below normal – was on December 25 over Punjab, Haryana, Chandigarh, Delhi, Uttar Pradesh, north Rajasthan and some isolated areas in Bihar And Madhya Pradesh.

Conditions not unusual

• The cold wave usually arrives from the west, through the Western Disturbance wind system.
• This system is also responsible for causing rains in northern and northwestern parts, after having picked up moisture on its way from the Mediterranean Sea.
• The intensity of the cold also depends on the amount of snow fall that happens in Jammu and Kashmir, Ladakh, Himachal Pradesh and nearby areas.
• All these factors have their annual variabilities. They combine in different ways to produce different kinds of winter conditions.
• The climatic conditions this year, no special set of circumstances is visible at the macro level that can be held responsible for causing extreme cold.
• That can imply that the extreme cold being witnessed is just one of the outlying cases of natural variability that varies from year to year.

• A Cold-wave condition now prevails in east north of Jammu And Kashmir, in northern Afghanistan, Tajikistan, Uzbekistan, Turkmenistan and parts of Northern Iran.
•  In all these areas, average temperatures have been 1 to 5°C below normal for the last few days. This could add to the chill bring brought about by the Western disturbances.
•  North central China and Mongolia are also experiencing similar conditions.

Causes

• CLIMATE CHANGE
• WESTERN DISTURBANCES
• LOW CLOUDS
  • This Extended cold spell has been triggered due to low stratus clouds present over a large geographical area
  • Formation of such clouds over Indo Gangetic plain and has been observed from 1997 only
  • These clouds are generally 300-400 m above the surface, they largely block the day’s sunlight.

MGNREGA TRENDS

The trends raise the question whether all this is linked to lack of funds. For 2019-20, the Modi government has allocated Rs 60,000 crore towards MGNREGA.

Jobs generated under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have shown a dip compared to last year after July. This comes even as 2018-19, the year that preceded the Lok Sabha elections, saw a record number of households demanding as well as being provided employment under the flagship rural public works programme.

Reading the numbers

Chart 1 shows the total number of households whose demand for work was registered by the gram panchayat authorities concerned and also the number that were actually provided work (MGNREGA is supposed to guarantee 100 days of total employment to adult members of any rural household that “demands” such employment). In 2018-19, demand was registered from 5.88 crore households, and 5.27 crore of them were provided work. These numbers were the highest, at least during the last five years of the present government. Even in terms of person-days of work generated, the numbers rose from a mere 165.64 crore in 2014-15 (the first year of the Narendra Modi government) to 267.99 crore in 2018-19.

The current year, however, has witnessed a clear dip in the person-days of employment under MGNREGA, which is visible after July. Significantly, in all the months before, including those leading up to the elections of April-May, the work provided exceeded the corresponding levels for 2018 (Chart 2). According to government officials, the fall in MGNREGA employment after July has been largely due to the onset of the southwest monsoon. Rainfall during the monsoon season (June-September) this year was 10% above the historical long-term average — the highest since 1994 — whereas it was 9.4% below average in 2018. An above-normal monsoon meant there was lower demand for MGNREGA work.

However, from Chart 3, it can be seen that the gap between the number of households demanding MGNREGA work and the number who were provided work has been the highest in 2019-20. This indicates that even if demand fell, supply of work fell even more.

Lack of funds

The trends raise the question whether all this is linked to lack of funds. For 2019-20, the Modi government has allocated Rs 60,000 crore towards MGNREGA. But out of this budgeted sum, Rs 9,493.80 crore would be required for clearing the liabilities of wages, material and administrative costs for previous years. Nikhil Dey of the advocacy group Mazdoor Kisan Shakti Sangathan claimed that in 2018-19, the Centre had asked some state governments to pay wages to workers for February and March in advance and treat this as “loan” that the Centre would repay the states in the new financial year.

The cost of providing a day’s work to a single person has been taken at an average of Rs 249.86 for 2019-20. For 270.21 crore person-days of work that was approved, the MGNREGA labour budget alone for this fiscal worked out to roughly Rs 67,514.67 crore. But the total budgetary allocation, which also includes provision towards material and administrative expenses, has been only Rs 60,000 crore, out of which Rs 55,829.62 crore was already spent as on December 24. Meanwhile, the Centre has revised upwards its original plan of providing 260 crore person-days of work for 2019-20 to 316.73 crore person-days, following a decision to augment the number of days of employment per household under MGNREGA from 100 to 150 in flood-affected districts of states such as Karnataka.

Other support schemes

It is not MGNREGA alone that is witnessing a deceleration of activity this fiscal. The same goes for the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), the Modi government’s farm income support scheme that was launched in December 2018, ahead of the Lok Sabha elections. In the first instalment released for December 2018 to March 2019, as many as 8.05 crore farmers were covered, with each of them receiving Rs 2,000. Those numbers fell to 7.43 crore in the second instalment (April-July 2019) and further to 5.91 crore in the third (August-November). In all, the total amount disbursed under the income support scheme in the year 2019-20 is Rs 32,320.86 crore, which is significantly short of the Rs 75,000 crore budgeted for it. Further, of the total Rs 95,000 allocated for the scheme since its inception, Rs 48,421.65 crore has been spent up to December 2019, which is roughly half the allocated sum.

Even the number of rural houses built under PM Awas Yojana-Gramin — which had recorded a sharp rise from 11.96 lakh in 2014-15 and 18.22 lakh in 2015-16 to 32.13 lakh, 44.55 lakh and 47.33 lakh during the following three fiscals — has seen a drop to just 7.2 lakh so far in 2019-20. A senior government official clarified, however, that the process of registration, geo-tagging, etc has already started, and more houses will be built later in the year. The official also cited a target of building 60 lakh houses under the PM-AY Gramin by June 2020. Up to 55 lakh new homes are under construction, and 7 lakh have been completed.