09th Nov, 2018-IAS Current Affairs
‘Enemy shares’ (GS3: Indian Economy)
Issue: The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the mechanism and procedure for sale of the enemy shares.
- ‘In principle’ approval has been accorded for sale of enemy shares under the Custody of Ministry of Home Affairs/ Custodian of Enemy Property of India (CEPI), as per sub-section 1 of section 8A of the Enemy Property Act, 1968.
- Department of Investment and Public Asset Management has been authorized under the provisions of sub-section 7 of section 8A of the Enemy Property Act, 1968, to sell the same.
- Sale proceeds are to be deposited as disinvestment proceeds in the Government Account maintained by Ministry of Finance.
Definition of ‘enemy’ in the present context
In the Act of 1968, the definition of “enemy” was as follows: “enemy” or “enemy subject” or “enemy firm” means a person or country who or which was an enemy, an enemy subject or an enemy firm, as the case may be, under the Defence of India Act and Rules, but does not include a citizen of India. In the amendment of 2017, this was substituted by “…. including his legal heir or successor, whether or not citizen of India or the citizen of a country which is not an enemy or the enemy….. who has changed his nationality”.
Impact of this decision
- The decision will lead to monetization of enemy shares that had been lying dormant for decades since coming into force and the Enemy Property Act in 1968.
- With the amendment of 2017, an enabling legislative provision was created for the disposal of enemy property.
- With the approval, now, of the procedure and mechanism for sale of enemy shares an enabling framework has been institutionalized for their sale.
‘Disinvestment’ (GS3: Indian Economy)
Issue: The Cabinet Committee on Economic Affairs chaired by the Prime Minister, Shri Narendra Modi has given ‘in principle’ approval for strategic disinvestment of 100% Government of India’s shares in Dredging Corporation of India Limited (DCIL) to consortium of four ports namely, Vishakhapatnam Port Trust, Paradeep Port Trust, Jawahar Lal Nehru Port Trust and Kandla Port Trust.
Significance of this decision
The approval will further facilitate the linkage of dredging activities with the ports, keeping in view the role of the DCIL in expansion of dredging activity in the country as well as potential scope for diversification of ports into third party dredging. The co-sharing of facilities between the company as well as ports shall lead to savings for ports. This would further provide opportunities for larger investment in DCIL as integration with ports shall help ineffective vertical linkage in the value chain.
What is Disinvestment?
Disinvestment is the action of an organization or government selling or liquidating an asset or subsidiary. Absent the sale of an asset, disinvestment also refers to capital expenditure reductions, which can facilitate the re-allocation of resources to more productive areas within an organization or government-funded project. Whether a disinvestment action results in divestiture or the reduction of funding, the primary objective is to maximize the return on investment (ROI) on expenditures related to capital goods, labor and infrastructure.
Disinvestments, in most cases, are primarily motivated by the optimization of resources to deliver maximum returns. To achieve this objective, disinvestment may take the form of selling, spinning off or reducing capital expenditures. Disinvestments may also be undertaken for political or legal reasons.
‘Airport management’ (GS3: Infrastructure)
Issue: The Union cabinet on Thursday gave its approval for privatization of the management of six airports, including those in Jaipur and Ahmedabad.
The government’s experience of managing five airports in Delhi, Mumbai, Bengaluru, Kochi and Hyderabad through private participation has been encouraging and has led it to adopt a similar method in managing six more airports
Logic behind the move
- Private participation in infrastructure projects brings efficiency in service delivery, expertise, enterprise and professionalism, apart from harnessing the investments in the public sector
- PPP in airport management has helped the government raise sizeable revenue and utilize the model for better air connectivity elsewhere in the country. It hopes the move will bring more foreign investment into airport infrastructure
India’s civil aviation market has been growing at 19% over the last four years and is projected to be the third largest in the world by 2025, after the US and China. The government is targeting an increase in the number of air passengers from 265 million in 2017 to about one billion in 10-15 years, as more people are travelling by air. This calls for massive investments in airports and greater productivity.
‘Australian Infrastructure Financing Facility’ (GS2: International relations)
Issue: The Australian government announced on Thursday that it would establish the Australian Infrastructure Financing Facility for countries in the Pacific region with a $2 billion infrastructure initiative “to significantly boost Australia’s support for infrastructure development in Pacific countries
Possible reason behind the setting up of fund
The Australian announcement comes against the backdrop of increasing Chinese inroads in the Pacific islands, including the establishment of military bases in countries such as Vanuatu and the bagging of contracts to set up undersea telecommunication cable networks.
Concerns with Chinese investments
- China’s lending practices related to its ambitious BRI have raised concerns that poorer countries would not be able to repay Chinese infrastructure loans with India’s southern neighbour Sri Lanka being cited as a case of what could go wrong. In December, China received a 99-year lease for the strategic Hambantota port after Colombo said it would not be able to repay loans.
- There are security issues involved in Chinese firms undertaking telecommunication cable construction, which could aid possible espionage by China
Other players in the region
Australia’s announcement on Thursday comes days after India and Japan outlined development cooperation plans in the Indo-Pacific, with joint projects spanning infrastructure, health, housing, education and electrification.
‘Afghanistan peace talks’ (GS2: International relations)
Issue: India on Thursday said it will participate at a “non-official level” in the multilateral peace talks hosted by Russia where representatives of the Taliban will be present
The talks, known as ‘Moscow format’, which will be held Friday, will be attended by representatives of the Afghan Taliban radical movement and a delegation of the Afghan High Peace Council, which is a government-appointed body overseeing efforts to initiate talks with Taliban.
This is for the second time Russia is attempting to bring regional powers together while discovering ways for establishing peace in war-torn Afghanistan.
‘Competition commission of India (CCI)’ (GS2: Statutory organization)
Issue: Fair trade watchdog CCI has concluded that the business practices of Flipkart and Amazon are not in violation of competition norms and rejected allegations of abuse of market dominance made by a grouping of online vendors.
Competition Commission of India
Competition is the best means of ensuring that the ‘Common Man’ or ‘Aam Aadmi’ has access to the broadest range of goods and services at the most competitive prices. With increased competition, producers will have maximum incentive to innovate and specialize. This would result in reduced costs and wider choice to consumers. A fair competition in market is essential to achieve this objective. Our goal is to create and sustain fair competition in the economy that will provide a ‘level playing field’ to the producers and make the markets work for the welfare of the consumers.
The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws. The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
The objectives of the Act are sought to be achieved through the Competition Commission of India (CCI), which has been established by the Central Government with effect from 14th October 2003. CCI consists of a Chairperson and 6 Members appointed by the Central Government.
It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
‘Beyond Fake news project’ (Facts that could be asked in Prelims)
Issue: The British Broadcasting Corporation (BBC) has devised a new campaign that is aimed at fighting back against disinformation and fake news with a major focus on global media literacy, including workshops and debates in countries like India.
About the project
- The Beyond Fake News project, which officially launches on Monday, will include panel debates in India and Kenya, hackathons exploring tech solutions, and a special season of programming across the BBC’s networks in India, Africa, Asia Pacific, Europe, the US and Central America.
- The BBC has also conducted wide-ranging research into how and why disinformation is shared after users gave its researchers unprecedented access to their encrypted messaging apps in India, Kenya, and Nigeria. The complete findings of the research will be made public next week to coincide with the launch of the Beyond Fake News Season.
‘Tea export’ (GS3: Indian Economy)
Issue: The Chinese tea market is opening up for India. A delegation from the China Tea Marketing Association (CTMA) is planning to visit the country tentatively next month.
China imported 8.3 million kg from India in 2017 at a value of ₹173.9 crore against 5.5 million kg in 2016. Between April and September 2018, China imported 4.35 million kg of tea from India against 3.76 million kg a year ago.
About Indian Tea
India is the world’s largest consumer of tea in the world – and the second largest producer of tea – including the world’s most popular tea varieties – like Assam and Darjeeling tea. However, the growth of tea as an industry in India has been relatively recent.
Historical records indicate the prevalence of tea drinking in India since 750 BC. In the 16th century, a vegetable dish was also being prepared using tea leaves with garlic and oil. However, the credit for rediscovering tea and cultivating it at a commercial level goes to the British.
Tea Cultivation was commercialized by the British in India
Commercial tea cultivation in India was driven by British who consumed tea in enormous quantities, which they bought from China. By 1750, they were purchasing millions of pounds of tea every year from China. Even though the British managed to counterbalance it with opium trade to some extent, they found that their tea consumption was exorbitantly expensive and unsustainable.
This realisation led to a sustained effort by the British to understand tea production – and start tea cultivation in India.
- In early 1774, Warren Hastings, then Governor-General of Bengal, sent a few select samples of tea seeds from China to his British emissary in Bhutan – George Bogle – for planting.
- Noted English botanist Sir John Banks, who was asked to make notes on tea in 1776, concluded that the British must undertake tea cultivation in India.
- Colonel Robert Kyd from the army regiment of the British East India Company also tried to cultivate Chinese seeds at the botanical garden that he founded (now named Indian Botanical Garden at Howrah in present day Kolkata) in 1780.
- In 1823, Scottish explorer Robert Bruce discovered a native tea plant that was growing in the Upper Brahmaputra Valley and being brewed by the local Singhpho tribe. Assamese nobleman Maniram Dutta Barbhandari Baruah (also known as Maniram Dewan) gave this vital information to Robert and his brother. Maniram went on to become the first Indian to undertake private tea cultivation in Assam.
- Although Robert Bruce died before he could get the plant officially classified, his brother Charles Alexander Bruce dispatched the tea samples to the Botanical Garden at Calcutta on Christmas Eve of 1834. On closer analysis, these were officially classified as a variation of the Chinese tea plant (Camellia sinensis var sinensis). This plant was named Camellia sinensis var Assamica (Masters) Kitamura.
Tea Cultivation in India after 1947
Tea production in India has continued to prosper after 1947. The Marwari community played a key role in this regard, as many Marwaris took over tea plantations from British owners.
As per December 2013 figures, India has approximately 563,980 hectares of land under tea cultivation, and its largest tea cultivating states are:
- Assam 304,400 hectares
- West Bengal 140,440 hectares
- Tamil Nadu 69,620 hectares
- Kerala 35,010 hectares
- Tea production increased by more than 250%
- Area under tea plantations increased by 40%
India’s total tea production reached around 1,197.18 million kg in 2014-15. Out of this:
- about 955.82 million kg (79.8%) was produced in North India
- about 241.36 million kg (20.2%) was produced in South India
The genesis of the Tea Board India dates back to 1903 when the Indian Tea Cess Bill was passed. The Bill provided for levying a cess on tea exports – the proceeds of which were to be used for the promotion of Indian tea both within and outside India. The present Tea Board set up under section 4 of the Tea Act 1953 was constituted on 1st April 1954. It has succeeded the Central Tea Board and the Indian Tea Licencing Committee which functioned respectively under the Central Tea Board Act,1949 and the Indian Tea Control Act, 1938 which were repealed. The activities of the two previous bodies had been confined largely to regulation of tea cultivation and export of tea as required by the International Tea Agreement then in force, and promotion of tea Consumption.
The present Tea Board is functioning as a statutory body of the Central Government under the Ministry of Commerce.