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Current Events 4 May 2016



4 MAY 2016 


SC favours trust vote in Uttarakhand

The Supreme Court  affirmed that a “floor test is the ultimate test” to decide who is in power, and asked the Centre to consider having a trust vote in the Uttarakhand Assembly to determine whether the Harish Rawat-led Congress government has a majority.

A Bench of Justices Dipak Misra and Shiva Kirti Singh called the Uttarakhand case out-of-turn and asked Attorney-General Mukul Rohatgi to seek instructions from the government on the court’s suggestion to have a floor test immediately, to end the constitutional impasse.

The court said it would temporarily suspend President’s Rule to facilitate the floor test.

Mr. Rohatgi agreed to return with the government’s response. The court has been suggesting a floor test since the previous hearing on April 27.

‘Dent in democracy’

Both horse trading and airing of sting operation create a dent in democracy. That is why we said that a floor test is the ultimate test,” Justice Misra had observed.

The Bench had suggested that a floor test be conducted immediately after lifting President’s Rule for three days. The results of the exercise could be submitted in court, it had proposed.

Proposal shot down

But this proposal was shot down by Mr. Rohatgi in the last hearing. The A-G instead asked the court to first decide the validity of the proclamation (of President’s Rule) before a floor test was held. “There cannot be a President's Rule and a floor test at the same time,” he had said.

In fact, the Centre, which won a stay in the apex court against a High Court decision on April 21 to lift President’s Rule, had argued that what happened in the legislature on March 18 when the Money Bill was tabled was itself a floor test. 

It contended that the Rawat government was reduced to a minority on that date when the Assembly Speaker refused a division of votes on the Bill, despite the request of a “majority” 35 MLAs (26 BJP MLAs and nine Congress rebels) in the Assembly.


Abolish overtime for Govt. staff, pay panel recommends

The Seventh Pay Commission has recommended that overtime allowance, except for operational staff and industrial employees governed by statutory provisions, should be abolished, after data showed that the expenditure under the head for the Railways and Defence ministries more than doubled in seven years ending 2012-13.

A committee of secretaries headed by Cabinet Secretary P. K. Sinha is reviewing the Commission’s recommendations. Overall, the overtime paid by the Government increased from Rs.797 crore to Rs.1,629 crore in the period, prompting the Commission to observe that government offices need to increase productivity and efficiency; and recommend “stricter” control on the Centre’s expenditure under the head.

Overtime allowance paid in just the Ministry of Railways and to civilian employees in the Ministry of Defence, accounts for more than 90 per cent of all overtime paid by the Centre, the Commission found. While the Ministry of Defence has achieved some success in controlling payment of the allowance, the efforts of the Railways Ministry have not borne fruit as yet. As a percentage of pay, overtime allowance is declining in the Ministry of Defence but is on the rise in the Ministry of Railways. 

Rising faster

Overtime paid to employees in the Railways is rising faster than even their pay. I


Mobiles to help verify beneficiaries

The government is planning to introduce a system wherein verification, at the time of availing public service benefits, can be done through an ordinary mobile phone.

The beneficiary needs to inform the authorities of his or her unique registration number in the government-sponsored scheme following which a one-time password (OTP) will be sent to the beneficiary through SMS on their registered mobile number in Aadhaar to verify the individual’s identity.

To begin with, the government will test this technology in the National Health Protection Scheme (NHPS) that it proposes to roll out soon for under-privileged households. Under the scheme, announced in this year’s Budget, health insurance cover of up to Rs.1 lakh per family will be given in case of serious illness of family members. An additional insurance cover of Rs. 30,000 will be provided for each senior citizen in the family.

Once the family is enrolled under NHPS, its members can go to any of the empanelled hospitals to avail the health insurance benefits. Hospitals having good Internet connectivity will do online authentication of the beneficiary using biometrics of any of the family members. However, in a few hospitals, situated in remote or unconnected areas, where there is a lack of good Internet connectivity, mobile phone numbers registered with Aadhaar will be used to verify the identity of the beneficiary, the official said.


The system would also have safeguards to ensure that no other person can avail benefits by using a genuine beneficiary’s mobile phone.

This will also ensure speedy treatment of the patient in case of medical emergency, the official said.For smart phone users, the government will unveil UMANG (Unified Mobile Application for New-age Governance), which will consolidate about 200 major central and state services under a single unified platform.


LIC comes to the rescue of public sector banks

Life Insurance Corporation of India (LIC), the country’s largest insurance entity, has come to the rescue on numerous occasions when banks were in need of capital. In the last four years, LIC has invested nearly Rs.13,600 crore in Indian banks, mostly government-owned, by way of preferential allotment of equity shares, data collated by Prime Database show.

Public Sector Banks (PSBs) often knock on LIC’s door for funds when facing huge capital needs due to the mounting pressure of bad loans as well as to comply with the Basel-III requirements (a global regulatory framework for banks’ capital adequacy). Banks have to set aside more capital if loans turn non-performing.

Market participants say that LIC is often referred to as the ‘white knight’ of the government and has come to the rescue on various occasions, including helping the government meet its divestment target in the past.

While the government has committed to infuse Rs 70,000 crore in PSBs over four years (2015-16 to 2018-19) that sum is seen as inadequate. Government estimates suggest  banks will need Rs. 2.4 lakh crore by 2018 to meet the Basel-III norms.

Incidentally, the Reserve Bank of India (RBI) is not comfortable with LIC having high stakes in several banks, as it is concerned about contagion risk. The insurance behemoth, however, has maintained that its investments are within the norms prescribed by law. Corporation Bank, in its latest shareholding information disclosed to BSE, pegs LIC’s stake at 21.22 per cent. 


Pay if you want F-16s, US tells Pakistan

In a diplomatic coup for India that sets the stage for Prime Minister Narendra Modi’s visit to the U.S. capital in June, the Obama administration  announced that the U.S. would not be financing the sale of F-16 fighter jets to Pakistan. The administration’s turnaround, by now aligning itself with the bipartisan sentiments expressed in the U.S. Congress against giving aid to finance the deal, also signifies a change in its attitude towards Pakistan.

The original plan was to sell eight F-16s to Pakistan and finance most of the $699 million deal through FMF. Senate Foreign Relations Committee Chairman, Republican Bob Corker and Democratic Ranking Member Ben Cardin, in early March, announced that they would not approve FMF for Pakistan until it demonstrated “behavioral changes” in its support of terrorism and its dealings with India.

India has been strongly protesting the U.S. decision to give these fighter planes to Pakistan, and the matter figured in Foreign Secretary S. Jaishankar’s meetings with U.S. officials last week in Washington. India has said these fighters could be used to threaten India, a concern that many U.S. lawmakers also have raised during a hearing on April 27. Mr. Modi will be addressing a joint session of Congress on June 8.

Pakistan has not been able to get the Taliban to the negotiating table in Afghanistan as it had promised, and the U.S. is increasing its engagement with India on Afghan, including on security related issues, much to the discomfort of Pakistan. 

Contract for Lockheed Martin

Lockheed Martin Corp, manufacturers of F-16s, has been lobbying hard for the Pakistan deal, but the setback coincided with a $1.3 billion contract Pentagon announced  for the F-35 Joint Strike Fighter jet program. The new order is for 13 F-35s, the fifth generation stealth fighters. The Joint Strike Fighter program is estimated to cost $379 billion for adding 2,457 aircraft, the costliest Pentagon acquisition ever.




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