Today’s important articles/news in various newspapers (27th April)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you

1. Outcome-based financing for development in India

It would signal the government’s interest in promoting innovative and evidence-based programmes in line with current policy priorities.

Outcome based budgeting is a practice of suggesting and listing of estimated outcomes of each programmes or schemes designed.

Outcomes are the end products and results of various Government initiatives and interventions, including those involving partnership with the State Governments, Public Sector Undertakings, autonomous bodies and the community.

An interesting feature of outcome based budgeting is that the outcomes of programmes are measured not just in terms of Rupees but also in terms of physical units like Kilowatt of energy produced or tonnes of steel produced.



Innovative financing instruments: How it works?

  1. Innovative financing instruments such as social and development impact bonds and innovation funds stand out as promising instruments for addressing various policy challenges
  2. In these arrangements, non-government investors cover the upfront costs necessary to set up the interventions implemented by service providers,
  3. while the government or development agency commits to pay a return on investment if predefined desired outcomes are reached
  4. When investment is tied to outcomes, rather than activities, service providers gain greater flexibility to innovate and improve their programmes
  5. Governments and taxpayers transfer the risks of programme performance to the private sector, and enhance the value for money of a given intervention-
    by clearly specifying the cost of the measurable outcomes, instead of the inputs, of any programme ex-ante

Social impact bond

  1. A Social impact bond, also known as Pay for Success Financing, a Pay for Success Bond or a Social Benefit Bond  or simply a Social Bond, is a contract with the public sector in which a commitment is made to pay for improved social outcomes that result in public sector savings
  2. The term was originally coined by Geoff Mulgan, Chief Executive of the Young Foundation
  3. The first Social Impact Bond was launched by UK-based Social Finance Ltd. in September 2010
  4. Social Impact Bonds are a type of bond, but not the most common type. While they operate over a fixed period of time, they do not offer a fixed rate of return
  5. Repayment to investors is contingent upon specified social outcomes being achieved
  6. Therefore, in terms of investment risk, Social impact bonds are more similar to that of a structured product or an equity investment.

2. World Bank loan for Biopharma Mission

About National Biopharma 

  1. The pharmaceutical industry holds a promising future for India, and the National Biopharma Mission is anticipated to be the game changer for Indian Pharmaceutical Industries
  2. The mission aspires to create a conducive ecosystem to encourage entrepreneurship and indigenous manufacturing in the sector by strengthening technology transfer capabilities in the private and the public sector.
  3. It aims to make India a hub for design and development of affordable, novel and effective biopharmaceutical products and solutions
  4. The mission strives to encourage entrepreneurship to transform the health standards of the people of India through affordable medicines
  5. A Public Sector Undertaking of Department of Biotechnology(DBT) – Biotechnology Industry Research Assistance Council (BIRAC) is involved in the implementation of the mission

3. ‘States unable to implement farmer price support schemes’

  • The Centre’s proposals to decentralise price support schemes for farmers are not viable as State governments do not possess the infrastructure or the willingness required to implement them, said additional managing director of the National Agricultural Cooperative Marketing Federation of India (NAFED).
  • NAFED is responsible for the procurement of oilseed, pulses and copra under the current Central price support scheme. The Centre declares minimum support prices (MSP) for 23 crops.
  • While paddy and wheat farmers can depend on the Food Corporation of India (FCI) to procure their crops at the MSP rates, the system is less widespread for other crops, as State governments must request the Centre to step in and procure the harvest when prices fall below the MSP.
  • States fail to maintain a revolving fund from which they can pay farmers over the 10-day window before they receive payment from the Centre; some also lack storage space, adequate number of procurement centres, and trained surveyors.
  • The new proposals, made by Niti Aayog and communicated to States last month, shift the responsibility of procurement of oilseeds, pulses and coarse cereals from the Centre to the States.

4. Anatomy of a reset

There is now a mutual recognition in both India and China that a posture of hostility has undermined their interests

Build-up of negativity:

  1. For India, China’s attempt to raise its economic and political profile in the subcontinent was seen as an encroachment on, and an affront to, Indian authority in the neighbourhood.
  2. For China, India’s pursuit of deeper military engagement with the former’s main strategic rivals — the U.S. and Japan — was viewed as a serious challenge to its future security.
  3. India tilted closer to the U.S., China towards Pakistan, and on a scale not witnessed even during the Cold War years.
  4. On a range of issues – the Nuclear Suppliers Group membership, Pakistan-sponsored terror and hydrological cooperation being the most prominent — India failed to receive any give from China.
  5. Beijing also noticed that New Delhi was beginning to openly involve external powers to collaborate with it in an anti-China strategy in South Asia and the Indian Ocean.
  6. Such unbridled competition and rising costs to Indian and Chinese interests — and Doklam was the tipping point — appears to have persuaded both Prime Minister Narendra Modi and Chinese President Xi Jinping that their policies were producing zero-sum outcomes and required some kind of a course correction.

Course correction:

  1.  it is becoming apparent to the realists inside the government that an adversarial relationship with China brings no advantages and amplifies security problems that India can neither solve on its own nor address with the assistance of external powers who have shown little inclination to deflect Chinese influence in the subcontinent and its littoral.
  2. Second, India-China friction enhances Pakistan’s ability to shape Beijing’s South Asia hand even though the latter itself would prefer a more balanced regional posture and a constructive equation with New Delhi.
  3. Third, a contentious India-China relationship also reduces India’s bargaining leverage vis-à-vis the U.S. and Japan.
  4. New Delhi must have also noticed that despite their differences with Beijing, both the U.S. and Japan truly value their interdependence with China.
  5. Sino-American cooperation on the Korean nuclear question and efforts to transform North East Asian geopolitics is just one example.
  6. Japan, with a $300 billion trading relationship with China, too wants to ensure it remains engaged with the world’s second largest economy. Recently, Tokyo has even endorsed the prospect of a “case-by-case” cooperation with the BRI.

5. ‘Shield India from anti-Russia sanctions’

American defence companies and business bodies are lobbying lawmakers and the Donald Trump administration to take measures to ensure that India is not caught in the crossfire of anti-Russia sanctions.

At the heart of the debate is a recent piece of legislation, Countering America’s Adversaries Through Sanctions Act (CAATSA), which requires the Trump administration to punish entities engaging in significant transactions with the defence or intelligence sectors of Russia.

India has significant defence cooperation with Russia and is currently negotiating the purchase of five S-400 air defence system from it at an estimated cost of $4.5 billion.

Way forward

  • The words significant transactions remain undefined and the President has the authority to waive secondary sanctions that are authorised by the law.
  • But the uncertainty and ambiguity triggered by these words could negatively affect the booming bilateral cooperation between India and the U.S. in defence.
  • American defence giants such as Boeing and Lockheed Martin that have significant interest in Indian defence markets are lobbying the administration and lawmakers to make amends.
  • Sources in New Delhi said India has already lodged a strong protest with the U.S. government against any plans to implement the CAATSA provisions.
  • Indian officials said the trend of India’s defence purchases should be seen over a decade, where much of its defence procurement has diversified and some has moved from Russia to the U.S.
  • The officials also told U.S. State Department and Pentagon officials that it must be noted that no equipment bought from Russia or energy trade directly threatens the U.S.’s interests.

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