CAO Daily Editorial analysis for UPSC IAS 16-September, 2017

Current Affairs Only Daily Editorial Analysis for Competitive Exams

16th September


1.Understanding the slowdown (The Hindu)


In this article the reason for slowdown of economy has been explained

Why In news?

GDP growth has lost momentum in each quarter since the one ending March 2016. With every passing quarter

Reasons given for economy slowdown

As a transitory phenomenon or as happening for reasons beyond the government’s control

  • Deficient rains
  • The sluggish world economy
  • Due to demonetisation and
  • Goods and services tax (GST).

Four engines powered the economy

  • Exports
  • Government investments
  • Private consumption
  • Private investments

During the United Progressive Alliance’s (UPA) tenure  government investments and private consumption were still running

At the time the National Democratic Alliance (NDA) took office. The other two were, and remain, out of steam.

Official numbers have captured the weakness consistently — in exports for the past three years, and in private investments for more than five years. Yet, the debilitating impact of these on growth has received inadequate policy attention.

Growth in government investments and private consumption started slowing down in the quarter ending June 2017. 

Government investments and private consumption depend on how well the economy is doing. As incomes improve, private spending and tax collections pick up. Let’s look at exports and investments.

How can Indian economy improve?

India’s economic future can improve significantly with investments-led growth. The share of investments, the principal growth engine in the economy, in the GDP has declined steadily for the past five years.

Why are investments on hold?

  • The returns-risk projections of projects are not favourable.
  • Companies are not convinced that new factories will be sufficiently profitable.
  • Among the variables that affect investment decisions are costs and availability of finance, land, labour, technology, logistics, and taxation.
  • Market prices, or consumer prices inflation, is also a determinant of profitability.

 Reversible trend

Indian economical situation is not irreversible.

The ill-informed idea of demonetisation and the GST rollout demonstrate the growing disconnect between policy tools and objectives.

2. Going digital (Indian Express)


The Supreme Court has declared the Right to Privacy a fundamental right, In this context, the role of Aadhaar in transforming India will surely be debated.


India’s cash-to-GDP ratio is around 12 per cent, among the highest in the world. The share of digital payments is said to be about five per cent of total personal consumption or even lower at two per cent of total transactions, which are among the lowest in the world.

How can aadhar help us in going digital?

  • Aadhaar will help India leapfrog traditional payment systems such as cheques, drafts, debit cards, POS (point-of-sale) devices and transition to modes of digital payments not seen even in the most advanced countries.
  • BHIM with UPI was launched by the prime minister on December 30, 2016.
  • UPI will have a far-reaching impact because it is India’s own internet of digital payments.
  • Merchants can also use the Bharat QR Code to receive payments.

Issue with majority of population in Indian

  • There are 300 million Indians living in rural and urban areas, who do not have credit cards, debit cards, smartphones or feature phones or who are not financially literate to handle PINs, passwords etc.
  • For them, BHIM-Aadhaar, launched by the prime minister on April 14, will prove to be convenient. In this mode, a retail corner shop would not need an expensive POS device such as a debit or credit card swipe machine.
  • He can use his own smartphone with a fingerprint scanner, which costs around Rs 2,000, install the BHIM-Aadhaar app and link it to his bank account. Customers can pay small amounts upto Rs 2,000 without needing a debit or credit card.

Security of Aadhar based transactionImage result for upi bhim

  • The Aadhaar-based payment system has been robust and secure, which is evident from the track record of the Aadhaar Enabled Payment System (AEPS).
  • The AEPS provides doorstep banking through more than 1,30,000 banking correspondents to people living in remote villages and enables them to withdraw or deposit money using their fingerprints on Aadhaar-based micro-ATMs.
  • In the last four years, more than 700 million transactions have been carried out without a single case of financial loss due to fraud or identity theft.
  • Further, three major reforms happened in the last six months, which would make UPI and Aadhaar-based payment systems even more secure.

3. India’s pharmaceutical research problem (Livemint)


In this article education and lack of funds has been stated as the problems in India’s pharmaceutical research

Why in news?

The recent agitation by scientists, asking for more allocation of funds, underlines the need to focus on science and innovation as a priority area.


  • One of the biggest constraints to advancing scientific research is the lack of sufficient funding and inadequate allocations by the government.
  • At 0.83% of gross domestic product (GDP), India is among the countries with the lowest investment in scientific research.
  •  New medicines, devices, diagnostics, patient aids and monitoring tools are mostly imported, often coming to India several years after they are available to patients in the developed world.

India ranked No.19 in a 28-nation survey of biomedical investment attractiveness of countries, with an overall score of 59 out of 100.

The education system is to blame as well, imparting theoretical knowledge with no emphasis on product development and application of theory.

This leads to the deterioration of the knack for problem-solving and innovation.

How can innovation in medical field improved?

  •  In order to support consistent innovation, investment has to increase substantially before any tangible outcomes can be envisioned.
  •  More regulatory changes are required and Indian pharmaceutical companies need to be supported with more financial and social capital if we are to see meaningful drug research that can address the healthcare needs of India.
  •  A strong patent system and robust intellectual property rights environment is required to encourage research and to enable foreign pharma companies to bring new products to the market.
  • Short-term populist measures like imposing price ceilings do not contribute to improving patients’ access to innovative life-saving medicines and devices; a more holistic approach is needed.

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