Daily News Analysis 1st November 2018

Daily News Analysis (Prelims + Mains) – 1st November 2018

General Study – III

Topic:

Indian Economy and issues relating to planning, mobilization, of resources, growth, development and
employment

Context: RBI autonomy is ‘essential’

What was issue?

Finance Ministry officials said three letters have been sent to the RBI citing Section 7, without actually implementing it.

1. Centre’s desire for the power sector’s non-performing assets to be reclassified.
2. The issue of RBI’s dividends to the Centre
3. The government’s desire for the Prompt Corrective Action norms to be eased so as to increase lending to the MSME sector.

Section 7 of RBI

• Subject to any directions, the general superintendence and direction of the affairs and business of the Bank shall be entrusted to a Central Board of Directors which may exercise all powers and do all acts and things which may be exercised or done by the Bank

Central Board of Directors,  as per the Act, comprises a

1.    Governor and

2.    Deputy Governors to be appointed by the Centre [not more than four]

3.    Four Directors to be nominated by the Centre

4.    One government official nominated by the Centre.

Way Forward:

• The autonomy for the Central Bank, within the framework of the RBI Act, is an essential and accepted governance requirement,”
• The Government and the Central Bank, in their functioning, have to be guided by public interest and the requirements of the Indian economy.
• Extensive consultations on several issues take place between the Government and the RBI from time to time
• Government of India has never made public the subject matter of those consultations. Only the final decisions taken are communicated.
• The Government, through these consultations, places its assessment on issues and suggests possible solutions

Topic for Prelims

Ease of Doing Business

The World Bank released its latest Ease Doing Business Report in New Delhi.

India at 77 Rank among 190 countries in World Bank’s Doing Business Report.

India has recorded a jump of 23 positions against its rank of 100 in 2017.

Last year India had improved its rank by 30 places from 130 to 100, a rare feat for any large and diverse country of the size of India.

The Doing Business assessment provides objective measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle.

A nation’s ranking on the report is based on the average of 10 indicators:

• Starting a business – Procedures, time, cost and minimum capital to open a new business
• Dealing with construction permits – Procedures, time and cost to build a warehouse
• Getting electricity – procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse
• Registering property – Procedures, time and cost to register commercial real estate
• Getting credit – Strength of legal rights index, depth of credit information index
• Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
• Paying taxes – Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit
• Trading across borders – Number of documents, cost and time necessary to export and import
• Enforcing contracts – Procedures, time and cost to enforce a debt contract
• Resolving insolvency – The time, cost and recovery rate (%) under bankruptcy proceeding

India has improved its rank in 6 out of 10 indicators and has moved closer to international best practices (Distance to Frontier score) on 7 out of the 10 indicators.

The DBR ranks countries on the basis of Distance to Frontier (DTF), a score that shows the gap of an economy to the global best practice. This year, India’s DTF score improved to 67.23 from 60.76 in the previous year.

The most dramatic improvements have been registered in the indicators related to ‘Construction Permits’ and ‘Trading across Borders’.

• In grant of construction permits, India’s rank improved from 181 in 2017 to 52in 2018, an improvement of 129 ranks in a single year.
• In ‘Trading across Borders’, India’s rank improved by 66 positions moving from 146 in 2017 to 80in 2018.

The changes in six indicators where India improved its rank are as follows:

Along with national ranking there exists state wise ranking of Ease of Doing Business.

Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, releases the final rankings of States in Ease of Doing Business in New Delhi.

UNWTO Executive Council

The Minister of State for Tourism presides over the Program and Budget Committee meeting of 109th session of United Nations World Tourism Organization (UNWTO) Executive Council in Manama, Bahrain.

The Executive Council discussed several topics on the agenda that are related to the development of global Tourism sector.

India to chair the Programme and Budget Committee of UNWTO Executive Council till 2021.

World Tourism Organization (UNWTO)

The United Nations World Tourism Organization – was founded in 1925 but it was not until 2003 that it was established as a specialized agency of the UN.

The UNWTO secretariat and headquarters are located in Madrid.

It encourages the implementation of the Global Code of Ethics for Tourism, to maximize tourism’s socio-economic contribution while minimizing its possible negative impacts.

It is committed to promoting tourism as an instrument in achieving the Sustainable Development Goals (SDGs), geared towards reducing poverty.

The UNWTO’s Executive Council represents the Organization’s governing body whose task is to take all necessary measures in consultation with the Secretary-General, for implementation of its own decisions and recommendations of the Assembly and report thereupon to the Assembly.

The Council meets at least twice a year, the next to be held in Bahrain.

The council consists of 35 Full Members elected by the assembly in proportion of one member for every Five Full Members, in accordance with the Rules of Procedure laid down by the Assembly with a view to achieving fair and equitable geographical distribution.

UNWTO has celebrated World Tourism Day as international observances on September 27 since 1980.  This date was chosen as on that day in 1970, the Statutes of the UNWTO were adopted. The adoption of these Statutes is considered a milestone in global tourism.

World Tourism Day aims to foster awareness among the international community of the importance of tourism and its social, cultural, political and economic values.