A new cast of crabs in Western Ghats
Scientists elated as they discover Karkata, a fresh genus, and six species from Kerala
•The Western Ghats biodiversity hotspot is in the spotlight once again, as scientists have discovered a new genus and six new species of freshwater crabs in these mountainous forests.
•With the recent finding in Kerala, freshwater crab diversity in the State has risen to 34 species, the highest in the country. Nearly 50% of crabs in the Western Ghats (27 of 47 species) occur here.
•All six species were discovered on the Kerala side. The researchers including S.K. Pati and P.M. Sureshan from Zoological Survey of India, L. Rajesh, Smrithy Raj and A. Biju Kumar of the Department of Aquatic Biology and Fisheries, University of Kerala and V.U. Sheeja, Holy Cross College, Nagercoil published the find in Journal of Natural History .
•Karkata, which stands for crab in Sanskrit, has been given a separate genus, indicating a higher order of distinctive features. It is endemic to the Western Ghats.
•One of its species, Kar k ata ghanarakta , was collected from the Thattekad bird sanctuary in Ernakulam district while the second, Karkata kusumbha was reported from Mankulam in Idukki district. The species name ghanarakta is derived from the Sanskrit for maroon, reflecting the colour of the crab.
•The word kusumbha (Sanskrit for safflower) refers to the orange-red colours of the creature that resemble the floral hues.
•The researchers found two new species in the genus Pilarta .
•While Pilarta aroma inhabits cold water mountain streams in the Agasthyamala Reserve in Thiruvananthapuram, Pilarta punctatissima was collected from Ovumkal in the Thattekad sanctuary.
•One new species, Cylindrotelphusa longiphallus, came from deep burrows along paddy fields at Kuzhikattusseri, Thrissur.
•The name is derived from the Latin ‘longi’ for long and the Greek ‘phallus’, a reference to long male gonopods of the animal. Another new discovery,Cylindrotelphusa breviphallus, is from Ponmudi in Thiruvananthapuram.
•Dr. Pati said the discoveries reaffirmed the unique diversity of crab fauna of the Western Ghats. Of the 34 species of freshwater crabs in Kerala, 23 are endemic. Dr. Sureshan said the forested tracts of the southern Western Ghats may be home to more species that are as yet unknown to science.
•The discovery highlights the need to document the freshwater diversity of the state, Dr. Kumar said.
Only PSUs may be let to make Oxytocin
Hormone known to cause side effects
•After being banned in retail markets, the Drug Controller will soon restrict manufacturing of controversial hormone drug Oxytocin to public sector undertakings (PSUs). The drug is used by diary owners and farmers to boost milk production and make vegetables look bigger and fresher.
For childbirth
•Oxytocin is a hormone known to trigger a wide variety of physical and psychological effects and is commonly used to facilitate childbirth. The Government of India banned retail sale of the hormone in 2014 after it was found that indiscriminate use of Oxytocin in milch animals and by farmers was causing irreversible hormone damage. “We want to restrict the manufacturing of active pharmaceutical ingredient [API] to PSUs. The Health Ministry’s idea is to restrict everything is to public sector and as the drug regulator, we agree with the government’s thinking. This will be done at the earliest,” said G.N. Singh, Drug Controller General of India.
Maneka’s proposal
•The move has been proposed by animal rights activist and Women and Child Development Minister Maneka Gandhi. “Misuse of Oxytocin is leading to early sterility in milch animals at an unprecedented rate. Despite it being a Schedule H drug, it is impossible to prevent its manufacturing at registered private factories. Implications to human health are humongous, from reproductive complications to hormonal imbalances. One major reason for such blatant misuse of this drug is the absence of robust veterinary services in India. It would be in the interest of the dairy industry and consumers to restrict manufacture and import of Oxytocin as has been directed by the Himachal Pradesh High Court,” said Gauri Maulekhi, animal rights activist and a close associate of Ms. Gandhi.
HC order
•In March 2016, the Himachal Pradesh High Court directed the Central government to “consider the feasibility of restricting the manufacture of Oxytocin only in public sector companies and also restricting and limiting the manufacture by companies to whom licences have already been granted.”
•The manufacture and sale of Oxytocin without a licence is a cognisable.
Recipients of India’s first uterine transplants leave hospital
•Three weeks after the successful completion of India’s first uterine transplants, both patients — one from Solapur and another from Gujarat — were discharged on Thursday. The transplants were performed by the doctors at the city-based Galaxy Care Laparoscopy Institute (GCLI).
•The woman from Solapur, who suffers from congenital uterus absence, was fitted with her mother’s womb, which was retrieved mainly through laparoscopic or minimally invasive surgery after a nine-hour operation on May 18. The second womb transplant, of a woman from Baroda with a dysfunctional uterus and suffering from Asherman’s Syndrome (adhesions or internal scar tissues), was achieved in even lesser time the following day. “Two doctors each in Gujarat and Solapur have been asked to monitor the women,” said Dr. Shailesh Puntambekar, Medical Director, GCLI, who led the team which performed the surgeries.
•“Both patients are in good health. After internal tests, we find that the inner lining of the uterus in both cases has thickened while the blood parameters are within normal range. Menstruation is expected by day 40 since the conclusion of the operation,” said Dr. Puntambekar, He said the pregnancies in the future would be in-vitro fertilization as opposed to natural conception.
•The cervical biopsy tests to gauge organ rejection after the uterus transplant carried out on both patients in the first and second weeks after the operation showed no signs of organ rejection, said Dr. Sanjeev Jadhav, a cardiovascular thoracic surgeon who played a major role in the operations.
•Dr. Puntambekar said that sperms had been taken from the respective husbands of the patients and that eight embryos had been frozen. “We will have to wait for another six months at least before the embryos would can be implanted in the transplanted wombs.”
•Both women expressed happiness that the surgeries were successful and hoped they would be able to become pregnant in the near future. The hospital has received more than 80 applications since the transplants. Most cases are those of women with congenital uterus absence. About 20 uterine transplant operations have been performed around the world to date.
World’s oldest fossil mushroom discovered
The specimen had gills under its cap
•The world’s oldest fossil mushroom — dating back to about 115 million years — has been discovered in Brazil, according to researchers who hailed the finding as a “scientific wonder”.
•The mushroom has been namedGondwanagaricites magnificus and belongs to the Agaricales order, researchers said.
•About five centimetres tall, the mushroom had gills under its cap, rather than pores or teeth, structures that release spores and that can aid in identifying species, they said. “Most mushrooms grow and are gone within a few days,” said Sam Heads, from the University of Illinois at Urbana-Champaign in the US.
•“The fact that this mushroom was preserved at all is just astonishing,” said Mr. Heads, who discovered the mushroom when digitising a collection of fossils from the Crato Formation of Brazil.
•Around 115 million years ago, when the ancient super-continent Gondwana was breaking apart, the mushroom fell into a river and began an improbable journey, researchers said.
•Its ultimate fate as a mineralised fossil preserved in limestone in northeast Brazil makes it a scientific wonder, they said.
Modi to meet Xi to repair bilateral ties
Differences over China’s Belt and Road project, Dalai Lama’s visit to Arunachal have put relations under strain
•Prime Minister Narendra Modi will meet Chinese President Xi Jinping in Astana, Kazakhstan on Friday on the sidelines of a major security summit. The meeting follows the deterioration of ties in the past year, especially after India boycotted China’s Belt and Road Forum in mid-May and a verbal spat broke out between New Delhi and Beijing over the Dalai Lama’s visit to Arunachal Pradesh in April.
•Sources said the meeting had been agreed upon in principle, and a “time was being coordinated”.
•The meeting comes at a crucial time for India as it is keen on membership of the Nuclear Suppliers Group, the plenary session of which is being held in Geneva on June 19, and also because of the June 30 deadline for the U.N. Security Council committee to designate Masood Azhar a terrorist. China has been blocking both.
SCO membership
•Mr. Modi landed in Astana on Thursday to attend the summit of the Shanghai Cooperation Organisation (SCO), where India and Pakistan will be inducted as members. Mr. Modi and Pakistan Prime Minister Nawaz Sharif attended a welcome banquet to the small grouping that currently comprises China, Russia, Uzbekistan, Kazakhstan, Kyrgyzstan and Tajikistan. Officials have practically ruled out a bilateral meeting between the Indian and the Pakistani Prime Ministers, with the Ministry saying a meeting had “not been sought by either side”.
•In a statement prior to his departure, Mr. Modi said he looked forward to “deepening India’s association with the SCO which will help [India] in economic, connectivity and counter-terrorism cooperation, among other things.”
•“We have long-standing relations with SCO members and look forward to progressing them further through the SCO for mutual betterment and growth of our countries and our people.”
•The current SCO grouping, which China and Russia initiated in 2001, focusses on security cooperation between its members.
Pakistani stand
•On Thursday, the Pakistan Foreign Ministry spokesperson sidestepped questions about how tensions between the two countries would play out at the regional summit, saying that it would fulfil its obligations on the SCO charter “as per the Shanghai spirit”, a reference to ‘good-neighbourliness’, which is considered an SCO mandate.
Are cattle trade rules good in law?
Question before Supreme Court is whether they override animal cruelty Act
•One of the primary questions the Supreme Court will have to settle when it starts hearing the challenge to the government’s new notifications banning the sale and trade of cattle in livestock markets for slaughter and animal sacrifices is whether these rules override the Prevention of Cruelty to Animals Act of 1960.
•The court has agreed to hear Mohammed Abdul Faheem Qureshi, a Hyderabad-based lawyer and president of All-India Jamiatul Quresh Action Committee, who contended that the restrictions are “unconstitutional” and outside the purview of the 1960 Act. He has argued that the Centre is only empowered by the Act to notify rules which are in furtherance of the purposes of the 1960 Act, cardinally that no animal — not just cattle — is caused unnecessary pain and suffering.
•The Supreme Court has consistently said that rules that contravene or rewrite the parent law, in this case the 1960 Act, should be rendered invalid for arbitrariness and unreasonableness. However, the burden to disprove the presumption that these rules are constitutional and valid lies with the petitioner. Mr. Qureshi has to prove that the government lacked legislative competence to make the subordinate legislation. That the rules are a violation of the guaranteed fundamental and constitutional rights. The petitioner has to prove that there was a failure on the part of the Centre to conform to the 1960 Act and the rules are repugnant to the laws of the land.
Caution required
•“Where a Rule is directly inconsistent with a mandatory provision of the statute, then of course the task of the court is simple and easy. But where the contention is that the inconsistency or non-conformity of the Rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the Parent Act, the court should proceed with caution before declaring invalidity,” the Supreme Court observed in its State of Tamil Nadu versus P. Krishnamoorthy judgment.
•In the Indian Express Newspapers case, the court held that “a piece of subordinate legislation does not carry the same degree of immunity enjoyed by a statute passed by a competent legislature”.
•In the Employees Welfare Association case, it held that Rules are liable to be declared invalid if they are manifestly unjust, oppressive, outrageous, violative of the general principles of the law, vague, unreasonable or discloses bad faith.
Water Quality Index set to be announced soon
Committee formed from various States
•A certain and easy way to find out pollution levels in water will be introduced in the coming weeks.
•Based on the proposal of the Telangana State Pollution Control Board (TSPCB), the Central Pollution Control Board (CPCB) is working on coming up with a Water Quality Index, on the lines of Air Quality Index (AQI). A committee has been formed with senior environment scientists from Telangana, Rajasthan, Uttar Pradesh, Karnataka, Madhya Pradesh and other States to formulate models to assess the water quality.
Three models
•The members felt that the present classification was not rational. The committee, which met twice till now, has closely studied similar models existing in Australia and Canada. Taking four perimeters into consideration, the committee has developed three different models.
•“Initially, we tried to develop models with several parameters but failed. We decided to limit the parameters to only four. Since developing an index for water quality is complex than air quality, we decided to have three different models for lakes and rivers, ground water and coastal waters. The parameters that will be considered will differ for each of the model,” said a senior scientist of the Telangana State Pollution Control Board.
•The Pollution Control Boards of various States are at present testing the models and checking for the accuracy of the output. By this month end, the final draft of the Water Quality Index will be ready and it will reviewed by the Chairman of the CPCB after which it will be made public.
•The pollution boards will use the formulae developed by them to check for the quality of the water bodies and upload it on their websites. The committee members also want to classify the lakes, groundwater and the coastal waters across the country based on the Water Quality Index.
Terror in Tehran
Heightened Iran-Saudi Arabia tensions put regional security in West Asia at further risk
•Wednesday’s attacks in Tehran targeted the two most significant symbols of the 1979 Revolution — the Parliament and the tomb of Ayatollah Khomeini, the founder of the Islamic Republic. The terrorists clearly wanted to send a message to the Iranian state, and they retained the element of surprise. Though it is involved in the fight against the Islamic State in Iraq and Syria, Iran has so far largely remained insulated from the regional crises. The attack, the first major terror incident in Iran in many years, suggests that even the formidable security cover put in place by the elite Revolutionary Guards can be breached by terrorists. The IS immediately claimed responsibility for the attack that killed 12 people. For the IS, Iran is the main adversary in West Asia, for both ideological and strategic reasons. The IS has thrived on anti-Shia sectarianism and persistently attacked Shia Muslims, mainly in Iraq and Syria. For it, Iran is the embodiment of Shia power in the region. Further, Iran is directly involved in the anti-IS fight — in Iraq, Iran-trained Shia militia groups are in the forefront of the battle for Mosul which has almost liberated the second largest city from the IS; and in Syria, Iran is propping up the regime of Bashar al-Assad which the IS wants to overthrow.
•But the attacks and the Iranian reaction must also be seen in the context of heightened Saudi Arabia-Iran rivalry. The Iranian Revolutionary Guards has said in a statement that Saudi Arabia and the U.S. are involved in the attack. This is a serious allegation to make, and risks escalating tensions between Riyadh and Tehran. The attack is yet another reminder that no country in West Asia is free from the threat posed by terrorists, and that the region has a collective responsibility to fight them. Unfortunately, what is happening is just the opposite. There is a coordinated attempt under way in West Asia, led by Saudi Arabia, to isolate Iran. Saudi Arabia’s deputy crown prince, Mohammad bin Salman Al-Saud, had said last month that Riyadh would take the battle into Iran. This anti-Iran approach was endorsed by U.S. President Donald Trump during his visit to Riyadh in late May. The Trump administration has repeatedly called Iran a state sponsor of terrorism, and has openly aligned itself with the Saudis against Iran. Such increasingly hostile rhetoric that is perceived to be playing on a Sunni-Shia face-off is an opportunity for terrorists to exploit. And the Tehran bombing suggests they are at it. Unless such crises are handled with extreme caution, they could ignite regional tensions on sectarian lines. The last thing West Asia needs today is a Shia-Sunni sectarian conflict. Both Iran and Saudi Arabia should stand down from this mutual hostility and join hands in the cause of regional security if they are serious about the public claims they make.
Getting back on the growth track
A big push on private investment is needed. But social harmony is also a prerequisite for faster growth
•The National Income numbers for 2016-17 have been released. What do they convey? What do they hold for the immediate future? Briefly, this is the picture. Recent revisions in the Index of Industrial Production and Wholesale Price Index do not alter the annual growth rates for the recent years.
•The differences are in one or two decimal points. The growth rate for 2015-16 is estimated at 8%. The growth rate for 2016-17 is 7.1%, which is the same as forecast a few months ago.
Impact of demonetisation
•It is the numbers for the fourth quarter of 2016-17, that is, for the quarter January-March 2017, which has attracted much attention. The numbers are being scanned with a critical eye to know what impact demonetisation had on the economy. The overall growth rate of GDP is 6.1%, which is nearly 1% below the growth rate for the previous quarter at 7%. The year-on-year decline is, however, steep.
•In analysing the January-March quarter numbers, we need to keep in mind three factors. First, a decline in growth rate has been seen from the beginning of the year. The growth rate of every quarter has been sliding from the previous quarter. Second, during Quarter 4, the only two sectors which have shown strong growth are agriculture and public administration. Public administration, defence and other services have shown a sharp increase of 17%. But for this, the overall growth rate would have declined steeply. Third, the sectors that have shown a sharp decline are construction and trade, hotels, transport and communication. These are the sectors which use cash extensively. In the case of construction, output actually declined by 3.7% as compared to a rise of 3.4% in the previous quarter. However, the decline in construction should be interpreted carefully.
•Obviously the liquidity crunch brought about by inadequate availability of currency consequent upon demonetisation must have halted a lot of construction activity immediately. But the decline is also partly due to ‘shock effect’. After all, the construction and real estate sectors are notorious for their cash transactions and dealings which are not above board. There is a paramount need for the participants to adjust.
•It is naive to pretend that demonetisation would not have had a short-term disruptive effect which would adversely affect growth. The long-term benefits in terms of a change in mindset and behaviour of people and greater use of technology-driven payments system are in the future. They need further actions.
•Fast remonetisation will help to eliminate the adverse effects caused by shortage of currency. The authorities also need to augment the supply of Rs. 500 notes in a big way.
•While decreased use of currency is a desirable goal, the authorities should not proceed on the assumption that it is actually happening and therefore the supply of currency can be reduced. While the adverse effects of demonetisation on GDP are clearly seen, it is difficult to decipher how much of the decline in growth rate in the January-March quarter is due to demonetisation and how much due to the underlying declining trend. Now that the disruptive effects of demonetisation are behind us, we need to explore the other factors that may be holding growth back. The most disturbing aspect of the data just released is the continuing decline in the Gross Fixed Capital Formation (GFCF) rate, that is, GFCF as a proportion of GDP. It has been steadily declining and in 2016-17 it fell to 29.5% from 30.9% in 2015-16.
Role of new investment
•In the days of high growth, it hovered around 33%. In recent years an attempt has been made to raise public investment. In fact, this effort, combined with some improvements in the efficiency in the use of capital, has led to significant improvements in the output of coal, power and roads. This is necessary and must be continued. But the ultimate answer lies in the pickup in private investment.
•There is a general concern that despite reasonably high growth (the average growth of GDP for the three years beginning 2014-15 is 7.5%), job creation has been modest. Growth can happen because of greater utilisation of existing capacity or new investment. Job creation in the first case will only be modest as is happening currently in India.
•It is only new investment that will push growth and that will generate greater employment. Obviously, there are many other factors such as technology that play a key role in determining the level of employment.
•For sustained high growth, we need new investment and policymakers must shift their focus towards this. In fact, foreign direct investment has been very high. Despite this, the rate of growth of fixed capital formation has been weak. The sentiment, it is generally believed, has changed. The reform agenda has been pushed forward. The Bankruptcy Code has become operational. The Goods and Services Tax will very soon come into force. The FDI rules have been considerably relaxed. All these are welcome steps. It will, however, take some time before the impact of the first two is felt on investment and growth.
Burden of debt
•Perhaps one of the reasons for investment not picking up is the burden of debt under which Indian businesses are suffering. The banking system is also under stress. The health of the banking system is closely aligned to the health of the private sector business, both corporate and non-corporate.
•The sooner we resolve the problems of the banking system, the better for the economy. It is the resolution of the NPA (non-performing assets) problem that will enable the banks to restart their lending programme in a big way and help business to embark on new investment. The macroeconomic stability parameters are in good shape. Prices are under control. The Central government fiscal deficit is adhering to the road map laid out in the Budget. The balance of payments situation is also under control.
•The monsoon is expected to be normal in the current year. This is the appropriate time to convert sentiment to firm action with a big push on private investment. Like law and order, social harmony is also a necessary prerequisite for faster growth. Ignoring this will bring to naught all other economic initiatives.
Is the Paris Agreement necessary?
The U.S. withdrawal is an opportunity to make the rules of the Paris Agreement stronger and more ambitious
•Candidate Trump had called climate change a “hoax”. President Trump followed this up with anti-climate policies since assuming office. So the June 2 announcement was just a formality. But with this formality, he has made the Paris Agreement meaningless.
Long U.S. reluctance
•For many of us who followed the negotiations closely, this was coming. The Paris Agreement was designed for and pushed by the U.S. for its own convenience. As it didn’t want to take full responsibility and do its part, the U.S. pushed for an agreement that was a ‘common minimum denominator’. It made the commitments voluntary and the accord non-legally binding and non-punitive.
•All this because President Barack Obama didn’t want this agreement to be ratified by his Senate. Once this happened, we knew that the Republicans would not accept it. Then it was all about who would win — Hillary Clinton or Donald Trump.
•But the fact is even if Ms. Clinton would have been the President, the U.S. would have done little to help solve the climate change conundrum. It committed minimum emissions reduction: 26-28% below 2005 levels by 2025.
•If we consider 1990 as baseline, the U.S. would have cut emissions by a mere 23% by 2030. In comparison, the then 28-nation European Union’s commitment was to reduce emissions 40% below 1990 levels by 2030.
•This is the crux of the issue: whether Democrats or Republicans, the U.S. doesn’t want to take “fair and equitable” share of responsibilities.
•This is because there is a fundamental belief in the U.S. that negotiating climate change is “negotiating American lifestyle”. This is why Bill Clinton agreed to the Kyoto Protocol (after diluting commitments), but George W. Bush did not ratify it; and Mr. Obama ratified the weak Paris Agreement, but Mr. Trump junked it.
•The U.S. is historically the largest contributor to climate pollution. It is currently the second-largest polluter in the world, and has one of the highest per capita emissions.
Surging ahead without U.S.
•So, how do we deal with the “climate-problem” country?
•Some commentators have alluded that other countries should step forward and share the burden left by the U.S. This is a very simplistic way of looking at the problem. The world — the U.S. and us — cannot combat climate change without changing the way we drive, build homes or consume goods.
•One of the unintended consequences of Mr. Trump’s decision is that it has unified the world on climate change. This is an opportunity to strengthen the Paris Agreement.
We can do this by:
(a) Refusing to renegotiate Paris Agreement to reduce the commitments of the U.S. since any dilution of the agreement will make it worthless.
(b) Isolating the U.S. during negotiations, since it remains a member of the agreement for the next four years and can potentially destroy it from within.
(c) Making the rules of the Paris Agreement, being negotiated now, stronger and ambitious.
•While other countries must step up their commitment to cut emissions, they should also put punitive measures, including economic and trade sanctions, to ensure that countries such as the U.S. don’t walk away.
Critical period
•It is time to call a spade a spade: U.S. obduracy on climate change has ensured the world today is in the danger zone and will go critical soon. Since 1992, when the United Nations Framework Convention on Climate Change (UNFCCC) was signed, the U.S. has played offence — finger-pointing at others and justifying its own lack of action. It is time the rest of us stopped playing defence.
2 States breach 3% fiscal deficit target
‘We can only advise them, caution them, but can do nothing to stop them,’ RBI tells analysts
•While the Reserve Bank of India (RBI) had specifically cautioned seven States not to breach the 3% fiscal deficit target, two States had already breached that threshold, RBI officials told analysts and researchers in a teleconference post the monetary policy review.
•Several analysts and researchers who had participated in the teleconference on Wednesday told The Hindu that central bank officials had said that the RBI lacked the constitutional backing to stop States from breaching the 3% fiscal deficit mark.
Patel attends
•RBI Governor Urjit Patel along with the deputy governors interacted with analysts and researchers during the teleconference.
•“We can only advise them, caution them, but can do nothing to stop them,” an analyst cited an RBI official as having said on the call. RBI had asked seven States not to breach the mark, excluding the expenditure for the UDAY scheme.
•While the Fiscal Responsibility Budget Management Act prescribes a fiscal deficit threshold of 3% of gross state domestic product, States can take permission from the Centre for exceeding the 3% mark.
•Farm loan waivers, implemented by some States and contemplated by others, have compounded the problem, according to the RBI.
Slippage risk
•“The risk of fiscal slippages, which, by and large, can entail inflationary spillovers, has risen with the announcements of large farm loan waivers,” the central bank had said in the second bimonthly monetary policy review of 2017-18.
•In its report on State finances released last month, the central bank noted the consolidated finances of States had deteriorated in recent years, with the gross fiscal deficit to GDP ratio averaging about 2.5% in the five-year period (2011-12 to 2015- 16) as compared with 2.1% during the previous quinquennium.
•The report said the GFD-GDP ratio in 2015-16 (RE) had breached the 3% ceiling of fiscal prudence for the first time since 2004-05. Information on 25 States indicates that the improvement in fiscal metrics budgeted by the States for 2016-17 may not materialise.
•“It is expected that States will take necessary steps to consolidate their fiscal position,” according to the report.
Resource crunch
•The central bank observed that State governments face severe resource constraints as their non-debt receipts were often insufficient for fulfilling their developmental obligations.
•As a result, States resorted to market borrowings to bridge the resource gap.
•“Over a period of time, such borrowings may result in the accumulation of debt liabilities which, if unchecked, could pose major challenges for macroeconomic and financial stability,” according to the report.
DGFT may come under Revenue dept
Foreign trade agency likely to move from commerce ministry for easing export and import processes
•The Centre is considering a proposal to shift the entire Directorate General of Foreign Trade (DGFT) office to the Department of Revenue (DoR) from the Department of Commerce (DoC) — as part of measures to simplify processes relating to export and import.
•The suggestion — billed as a major trade facilitation measure and in line with the Centre’s ‘Ease of Doing Business’ initiative — was mooted recently by the Central Board of Excise and Customs (CBEC) in the DoR within the Finance Ministry.
Specialist cadre
•The DGFT’s role includes Foreign Trade Policy (FTP) formulation and implementation — to in turn boost India’s exports. It is manned mainly by the Indian Trade Service (ITS) cadre officials, but is usually headed by an Indian Administrative Service (IAS) officer.
•If the proposal, that the CBEC put forward in a recent inter-ministerial meeting convened by the Cabinet Secretariat, is accepted, the DGFT will be placed within the DoR and staffed entirely by Indian Revenue Service (IRS) officials, official sources told The Hindu .
•To enable an IRS official to head the DGFT, a new post — Principal/Chief Commissioner (Foreign Trade) equivalent to Additional Secretary to Government of India (the rank of the official currently heading the DGFT) — will be created, they added. The proposal will be taken up again soon, most probably in the first week of July.
•This development follows the DoC recently seeking to hive off non-core areas including FTP implementation. This is to better utilise the DoC’s resources (including ITS cadre officials) in ‘core focus areas’ such as FTP formulation as well as in India’s trade negotiations.
•The DoC wanted to retain the DGFT as an office attached to it for FTP formulation.
•The CBEC, however, is learnt to have said that it was getting several complaints from those in the foreign trade sector saying the current division of trade facilitation-related work between DoC and DoR was resulting in ‘red tapism’ and delays.
Trade facilitation
•Therefore, to ensure greater ease of doing business, it will be better if the entire trade facilitation work is brought under a single interface, the CBEC said. India is currently ranked 130th out of 190 countries in the World Bank’s (ease of) Doing Business report (2017) and further lower at 143rd when it comes to ‘trading across borders’.
•The shifting of DGFT office would require amendments in the concerned laws — the Foreign Trade (Development & Regulations) Act and the Customs Act. Another factor that could strengthen the CBEC's proposal is that it (CBEC) currently houses the Secretariat of the inter-ministerial National Committee on Trade Facilitation (NCTF), which was established in August 2016, consequent to India ratifying the WTO's Trade Facilitation Agreement (TFA) in April 2016.
•The TFA has provisions to help ease flow of goods across borders. The pact has measures to ensure effective cooperation between customs and other concerned authorities on trade facilitation and customs compliance issues.
•The NCTF is chaired by the Cabinet Secretary and comprises Secretaries of the departments concerned with trade issues including DoR and DoC.
