Comprehensive News Analysis - 03 March 2016

A. GS1 Related

1. Kondane cave art depicts myth and daily life

Topic: Indian Heritage and Culture

Category: Indian culture- salient aspects

Location: The Hindu, Page 22

Key Points:

• 40 rock paintings have been recently discovered in the Kondane caves in Raigarh district in Maharashtra.
• The depictions in the 40 rock paintings include, a hunter standing poised with a bow and arrow, and a barasingha (swamp deer) standing nearby. There were also footprints, palm impressions and some trees.
• The images were found in both natural caverns and man-made caves. The man-made caves also feature Buddhist architecture such as a ‘chaitya’ (prayer hall) and a monastery.
• Maharashtra was absent on the rock art map of India before 2003. However, detailed surveys by the Deccan College Post-Graduate and Research Institute in Pune led to the discovery of several rock art sites in the Chandrapur and Nagpur regions of Vidarbha.
• The rock paintings, in red and black hues, were found in the corners and the ceilings of the caves.
• A striking image found was that of a mythical figure, perhaps a demon. Other paintings reflected everyday life and occupations such as hunting deer.
• The style and articulation of these paintings suggest that they have been drawn during the late historical period of second century B.C. onwards
• Specialists in Buddhist studies are familiar with the Kondane caves. An unfinished Buddhist chaitya and a vihara were found in two man-made caves in the group. A chaitya is a Buddhist prayer hall with a stupa at one end. A vihara is a monastery. The Buddhist rock-cut architecture found in these caves belongs to the Hinayana phase of Buddhism.

B. GS2 Related

— Nothing here today, folks! —

C. GS3 Related

1. ‘Tackling terror takes priority over dialogue’

Topic: Internal Security

Category: Role of external state and non-state actors in creating challenges to internal security.

Location: The Hindu, Page 01

Key Points:

• The Ministry of External Affairs admitted that dealing with the Pathankot attack took precedence over the Foreign Secretary talks at present.
• Indian, Pakistan Foreign Secretaries will meet will be at the SAARC consultations in Kathmandu on March 14-15.
• External Affairs Minister Sushma Swaraj is expected to meet her counterpart Sartaj Aziz at the same event on March 16-17, ahead of an expected meeting between Prime Ministers Narendra Modi and Nawaz Sharif in Washington at the end of March.
• Foreign Secretary S. Jaishankar said at the Ministry of External Affairs’ ‘Raisina Dialogue’ in Delhi on Tuesday that the governments of India and Pakistan had remained in touch at different levels including through regular telephone conversations between National Security Adviser Ajit Doval and his Pakistani counterpart Nasir Janjua, the Foreign secretaries, and Mr. Modi and Mr. Sharif, calling it a “picture of parallel processes.”

2. Cameras help detect woodcutters’ movement

Topic: Environment and Ecology

Category: Conservation

Location: The Hindu, Page 08

Key Points:

• The installation of high-end cameras at vulnerable entry and exit points abutting Seshachalam hills detected movement of woodcutters, which helped combing parties rush to the area
• 80 red sanders logs worth over Rs. 4 crore were seized at two locations in the S.V. National Park, Balapalle range, in Kadapa district.
• In the last two days, over one hundred personnel of the Red Sanders Anti-Smuggling Task Force (RSASTF), forest, and police personnel have been extensively combing the Seshachalam hills in the Balapalle and Kodur ranges following heavy influx of woodcutters from Tamil Nadu.
• Steps are under way to install 250 more cameras at vulnerable stretches all over the Seshachalam hills in a phased manner.
• In a combined effort, the task force, the Chittoor police, and the forest personnel launched flash checks (nakabandi) on 20 vulnerable routes crisscrossing Chittoor district and neighbouring Tamil Nadu, including the national highways towards Chennai, Vellore, and Hosur.
• The main objective was to sensitise the people about the red sanders smuggling activity and warn the smugglers and woodcutters to desist from the clandestine trade. The checks in the border areas would help detect mass movement of woodcutters sneaking into the district and operation of vehicles for transporting the logs by using fake number plates.

3. Alappuzha backwaters to get India’s first solar ferry

Topic: Science and Technology

Category: Renewable Energy, Developments and their applications and effects in everyday life

Location: The Hindu, Page 09

Key Points:

• A 75-seater solar-powered passenger ferry, the first of its kind in the country, is quietly taking shape at Aroor in Alappuzha district.
• The boat is expected to be commissioned within the next three months.
• The boat is being built by NavAlt, which is a Kochi-based joint venture, in collaboration with a French company.
• Construction of the hull has been completed and the superstructure is being worked on now. The battery and motor console, which have undergone testing, are to be flown in from France.
• The 20 metre long, 7 metre wide boat, with a maximum cruising speed of 7.5 knots, is to be deployed in the backwaters of Alappuzha by the Kerala State Water Transport Department (KSWTD).

Advantages

• The boat, which would cost around Rs.1.7-crore, will make no noise nor cause any pollution, unlike the diesel powered ones.
• It may work out to be a cheaper option too. An ordinary boat, made of steel and with a carrying capacity of 75 passengers, may cost around Rs.1.9 crore. The solar powered boat, obviously, will cost nothing to operate for the most part.
• The solar boat will also be eligible for subsidy from the Union Ministry of New and Renewable Energy. The boat will be capable of plying the waters for 5-6 hours on normal sunny days. It will have an alternative power system to meet emergencies.
• Its battery will be charged by plugging on to the normal electric circuit at the end of the day’s journey.

4. Why the WTO is right in the solar panel dispute

Topic: Indian Economy

Category: Technology missions

Location: The Hindu, Page 13

Key Points:

 

• A World Trade Organisation (WTO) panel recently found that the domestic content requirement imposed under India’s national solar programme is inconsistentwith its treaty obligations under the global trading regime.
• The ruling has been described as yet another instance of archaic trade rules trumping important climate imperatives. However, this criticism is not entirely justified.

Violation of global trading rules 

• India’s national solar programme, which was launched in 2010, aims to “establish India as a global leader in solar energy, by creating the policy conditions for its diffusion across the country as quickly as possible”.
• To incentivise the production of solar energy within the country, the government under the programme agrees to enter into long-term power purchase agreements with solar power producers, effectively “guaranteeing” the sale of the energy produced and the price that such a solar power producer could obtain. Thereafter, it would sell such energy through distribution utilities to the ultimate consumer.
• However, a solar power producer, to be eligible to participate under the programme, is required compulsorily to use certain domestically sourced inputs, namely solar cells and modules for certain types of solar projects. In other words, unless a solar power producer satisfies this domestic content requirement, the government will not ‘guarantee’ the purchase of the energy produced.
• In 2013, the U.S. brought a complaint before the WTO arguing that the domestic content requirement imposed under India’s national solar programme is in violation of the global trading rules.
• Specifically, it said, India has violated its “national treatment” obligation by unfavourably discriminating against imported solar cells and modules.
• The panel, in its 140-page report, examined in detail the submission of the parties and rightly concluded that India, by imposing a mandatory domestic content requirement, had violated its national treatment obligation. In so far as the government procurement derogation was concerned, the panel found that the product being subject to the domestic content requirement was solar cells and modules, but the product that was ultimately procured or purchased by the government was electricity.
• The domestic content requirement was therefore not an instance of “government procurement”.

Use of clean energy

• The ruling, however, has come under intense criticism, particularly from environmentalists, as undermining India’s efforts towards promoting the use of clean energy.
• However, there appears to be no rational basis for how mandatory local content requirements contribute towards promoting the use of clean energy. If the objective is to produce more clean energy, then solar power producers should be free to choose energy-generation equipment on the basis of price and quality, irrespective of whether they are manufactured locally or not.
• In fact, by mandatorily requiring solar power producers to buy locally, the government is imposing an additional cost, usually passed on to the ultimate consumer, for the production of clean energy. The decision may therefore stand to benefit the interest of the ultimate consumer.
• India must resist the temptation of adopting protectionist measures such as domestic content requirements which are inconsistent with its international obligations.
• Domestic content measures, despite their immediate political gains, have a tendency to skew competition. Manufacturers must remain free to select inputs based solely on quality and price, irrespective of the origin. The Government of India must continue working towards building a business and regulatory environment which is conducive to manufacturing. This would require systemic changes in the form of simpler, transparent and consistent laws and effective dispute resolution mechanisms.

5. Wait for the good days got longer

Topic: Indian Economy

Category: Indian Economy and issues relating to planning, Government Budgeting

Location: The Hindu, Page 13

Key Points:

• Even in the best of times, formulating the Budget in India is a challenging task for the Finance Minister. This year, it was particularly daunting as it had to address a number of problems.

Prevailing Issues while Budget was presented

• The difficult global environment has caused a continuous decline in exports.
• Propelling the sagging manufacturing sector and combating the poor investment climate required special efforts.
• The successive droughts have been a cause of much distress and a dampener of rural demand.

These had to be addressed while providing adequate resources for the social sector, meeting demands of the government employees for pay and pension revision and the implementation of the ‘One Rank, One Pension’ scheme.

It goes to the credit of the Finance Minister that he stuck to the fiscal consolidation path despite serious compulsions to abandon it. In fact, not only does the Budget propose to contain the fiscal deficit at 3.5 per cent of the gross domestic product (GDP), but this will be done by reducing both the revenue and primary deficits.

Little room for private play

• The RBI has a difficult problem at hand.
• It is not just the fiscal deficit number that matters, but the entire public sector borrowing. Although the fiscal deficit is proposed to be capped at 3.5 per cent, there is additional borrowing by the special purpose vehicles for infrastructure and that includes 31,300 crore to be mobilised by National Highways Authority of India, Power Finance Corporation, Rural Electrification Corporation, Indian Renewable Energy Development Agency and National Bank for Agriculture and Rural Development in addition to Rs.76,000 crore by the Railways as internal and extra-budgetary resources (IEBR) for investment.
• The household sector’s financial saving is just about 7.6 per cent, and with the Union and State governments borrowing about 6 per cent of GDP (3.5 per cent and 2.5 per cent respectively), cleaning up the balance sheets of discoms claiming another 1 per cent, and additional off-Budget borrowing for infrastructure, there is hardly any savings left to lend to the private sector.
• Even if RBI Governor Raghuram Rajan reduces the policy rate, there is hardly any lending space to transmit this by the financial system.
• As the government seeks to review the FRBM Act, it is perhaps appropriate to move over to the concept of public sector borrowing requirements in addition to focussing on setting the targets in terms of a range to meet countercyclical targets.
• A slew of measures could have been taken to weed out unproductive revenue expenditures to augment capital expenditures.
• In particular, the country can ill-afford the subsidy amount of Rs.2.5 lakh crore even when oil prices are at record low levels. It is surprising that the government refuses to take a bold decision on increasing the price of urea, which has remained unchanged for over 10 years. Despite the distortion in terms of discouraging the nutrient-based intake, pilferage of cheap urea to neighbouring countries and diversion to other uses as inputs, the reluctance to increase the prices has continued. Similarly, much more drastic surgery is needed in pruning the food subsidies, if public investment has to be augmented.

Muddied GST road map

• The third major thrust one expected was to see how serious the Union government is in preparing itself to implement the much-vaunted Goods and Services Tax (GST).
• While the controversy over capping the tax rate in the GST Bill is raging, the Budget adds an additional half a per cent surcharge on the service tax to make it 15 per cent. If the GST general rate will have to be capped at 18 per cent, will the Union government vacate the space by reducing the rate to 9 per cent so that the States can levy the tax at 9 per cent? Of course that is possible, but the Budget speech was silent on the issue.

6. Huge budget cut for ICDS

Topic: Indian Economy (GS Paper III), Social Justice (GS Paper II)
Category: Government Budgeting (GS Paper III), Welfare schemes for vulnerable sections of the population (GS Paper II)
Location: The Hindu, Page 14

Key Points:

• The Integrated Child Development Scheme (ICDS) has seen a 7 per cent reduction in fund. The scheme, implemented by the Women and Child Development (WCD) Ministry, is the country’s flagship intervention to improve child nutrition in the country.
• This is the largest programme in the world for children and the ICDS is fundamental to marginalised children in India.
• The National Family Health Survey (NFHS)-4 data for 15 States shows that 37 per cent of children under the age of five are stunted; 22 per cent are wasted while 34 per cent under the age of 5 are under weight.

7. U.S. push for joint patrols in Indo-Pacific region

Topic: Internal Security (GS Paper III), International Relations (GS Paper II)

Category: Maritime/Coastal Security (GS Paper III), Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests (GS Paper II)

Location: The Hindu, Page 15

Key Points:

• The United States continues to push India towards joint naval patrols and multilateral groupings in the Indo-Pacific region.
• A senior U.S. Admiral on Wednesday called upon to convert the increasingly complex naval exercises between the two countries into coordinated patrols.
• He echoed U.S. Ambassador Richard Verma’s vision: “In the not too distant future, American and Indian Navy vessels steaming together will become a common and welcome sight throughout Indo-Asia-Pacific waters, as we work together to maintain freedom of the seas for all nations.”
• Admiral Harris revealed that in the first ever trilateral dialogue between India, Japan and Australia held last year, the three sides discussed “maritime security — including freedom of navigation patrols — and trilateral cooperation” in the Indian and Pacific Oceans.
• This development is significant as all three countries have been traditionally reluctant to take any measures that could antagonise China.
• “An idea to consider is perhaps expanding this trilateral to a quadrilateral venue between India-Japan-Australia and the United States,” he said adding that “we are all united in supporting the international rules-based order.”
• The Malabar bilateral naval exercises have been last year expanded to trilateral format including Japan.

8. Two more AWACS from Israel

Topic: Internal Security (GS Paper III), International Relations (GS Paper II)

Category: Bilateral agreements involving India and/or affecting India’s interests (GS Paper II)

Location: The Hindu, Page 15

Key Points:

• Ahead of Prime Minister Narendra Modi’s visit to Israel later this year, a first by an Indian Prime Minister, the Cabinet Committee on Security (CCS) has cleared the purchase of additional surveillance aircraft from Israel.
• The CCS, chaired by Mr. Modi, cleared the proposal to acquire two more Phalcon Airborne Early Warning and Control Systems (AWACS) at a cost of Rs. 7,500 crore under a tripartite agreement with Israel and Russia.
• The AWACS are advanced radars mounted on an aircraft to give 360 degree coverage to detect incoming aircraft and missiles at long ranges.
• India had procured three Phalcon AWACS, Israeli radars mounted on Russian IL-76 transport aircraft, in 2003 at cost of $1 billion.
• Indo-Israel ties got a major boost after Mr. Modi came to power.

9. Foreign exchanges’ higher holdings to benefit BSE, NSE

Topic: Indian Economy

Category: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Location: The Hindu, Page 18

Key Points:

• The Government of India has decided to allow foreign exchanges to hold up to 15 per cent stake in Indian bourses has come as a shot in the arm for entities like the BSE and the National Stock Exchange (NSE) that are planning to become listed entities.
• This will enhance global competitiveness of Indian stock exchanges and accelerate adoption of best-in-class technology and global market practices.
• The current regulations allowed only a few categories of entities such as insurance companies, domestic exchanges, depository, clearing corporation and banks to hold up to 15 per cent in an Indian stock exchange.
• The government decision has come at a time when both the exchanges have publicly expressed their desire to get listed themselves. While BSE has already filed its draft document with the Securities and Exchange Board of India, NSE recently formed a Listing Committee to “to accelerate the process of listing.”

D. GS4 Related

E. Important Editorials : A Quick Glance

1. Blow for reformists in Iran

Topic: International Relations

Category: Effect of policies and politics of developed and developing countries on India’s interests

Location: The Hindu, Page 12

Key Points:

• Moderates have clinched a resounding political victory in Iran’s February 26 elections to Parliament.
• In the 290-seat Parliament, the reformist allies of President Hassan Rouhani won at least 85 seats, while the moderate conservatives secured 73 seats. Together they will control the House.
• This was the first election after Mr. Rouhani secured the historic nuclear deal with world powers last year, ending the country’s isolation in return for giving up its nuclear programme.
• The hardliners were opposedto the nuclear deal. Even the Supreme Leader, Ayatollah Ali Khamenei, had warned the political leadership several times against any rapprochement with the West. The hardliners had also opposed Mr. Rouhani’s plans to open up the country’s economy and reach business deals with overseas companies, including those from the West.

Significance of this Election

• If the moderates suffered an electoral setback, it would have been a major blow to Mr. Rouhani’s reform agenda.
• With this election, it is now evident where the popular support lies. And with his allies controlling Parliament, the President could push his legislative and economic agenda at ease.
• Second, the election of more moderate candidates into the Assembly of Experts than hardliners is a significant achievement for the reformist movement. The Assembly is an important clerical body in Iran’s Islamist establishment which can, technically, choose the next Supreme Leader.
• If the clerics elected to the body work in coordination with the moderate politicians, that could change the balance of power in Iran’s complex polity. However, to anticipate any dramatic change in the system would be overriding the mandate. Those who call for rapid improvement in the human rights situation in Iran and for the weakening of the role of the clergy in politics will continue to be disappointed.
• The system is too complicated, with direct checks on the powers of everyone but the Supreme Leader. As long as the Supreme Leader backs the hardliners, Mr. Rouhani is unlikely to take any radical initiatives.
• Nevertheless, the election results represent a clear step forward in Iran’s gradualist transformation from a rigid Islamist theocracy into a broader religious democracy.
• Rouhani’s challenge is to build on the electoral momentum and strengthen the moderate currents in Iran’s politics and society, and thereby expedite the pace of transformation.

2. The loss of hope

Topic: Social Justice

Category: Issues relating to development and management of Social Sector/Services relating to Health

Location: The Hindu, Page 12

Key Points:

• Despite a mountain of evidence testifying to the huge toll of suicide in our youth and the knowledge of effective interventions to prevent suicide, there remains no coordinated effort to address suicide as a public health issue in India.

Recent Incidents:

• The recent suicides of three young women studentsin a medical college in Tamil Nadu citing the appalling conditions in their institution add to the mounting toll of suicides among young Indians in the past year.
• Consider just a few examples that have hit our headlines: the suicide attempts by four female athletesin a sports facility in Kerala; the 29 suicides of youth preparing for national entrance exams in coaching institutions in Kota; the suicide of Rohith Vemula in Hyderabad; and the most recent loss of Saira Sirohi, a national-level swimmer, in Ghaziabad.
• Each of these events has been extensively dissected as discrete events
• Commentators have emphasized the relationship of the deaths of these young people to the particular social problems they found themselves struggling with.
• Some of the reasons attributed range from caste-based oppression and gender discrimination to the pressures of academic performance and the abject failure of the systems intended to hold private institutions accountable for the quality of their education.
• One common thread running through all of these suicides has escaped our collective attention: the loss of hope in the young educated victims trapped in a system that had failed them.

 

The vulnerability of youth

• Numerous reports, from the National Crime Records Bureau as well as independent investigations of mortality, which show that suicide is a leading cause of death in young people.
• The latest government data suggest about 60,000 deaths of youth each year; with independent studies showing that these data underestimate up to a third of youth suicides by misclassifying them as accidents — the true figure may even approach 1,00,000 a year.
• To be sure, suicide is also a leading cause of death among young people in other countries. The reason why youth is a vulnerable period for suicide globally is because this is the phase of life which is characterised by impulsive behaviours, is associated with dramatic changes in one’s self-image and aspirations, and is when some of the most important life decisions related to education and relationships are made.
• This is why suicide attempts in youth, unlike suicide in older adults, are often impulsive — triggered by acute disappointments such as a poor examination result or the loss of a romantic relationship
• A convincing body of research has shown that the epicentres of youth suicide are in the most developed States of India, for example in the south of the country. One may speculate that a key reason for this is the growing gap between the aspirations of educated youth, for example to freely choose their life partner or live a life free of social prejudices, and the reality of a harsh, inflexible, and uncertain society in which they find themselves trying to find a foot.

 

Suicide is preventable

• Other countries have implemented a range of interventions which target not only the social circumstances that trigger the hopelessness that leads to suicidal acts, but also the more immediate individual interventions to help young people recover their hope to live.
• These countries have shown that though the feelings of hopelessness are universal, suicide is also preventable.
• Despite this mountain of evidence testifying to the huge toll of suicide in our youth and the knowledge of effective interventions to prevent suicide, there remains no coordinated effort to address suicide as a public health issue in India.
• Thus it comes as no surprise that the suicide rates in young people in India are among the highest in the world.

Strategies to stem suicides

These strategies should be the following,

• An open dialogue to challenge the stigma surrounding mental health
• The building of life skills in schools to strengthen emotional regulation, which can help build resilience to cope with the periods of loss of hope that are inevitable in the transition from childhood to adulthood
• Parenting interventions to reduce the pressures on young people to perform academically and to choose their intimate partner
• Ensuring freedom from violence, gender discrimination, and social exclusion of youth, not least in campuses
• A campaign to ensure the safe storage of pesticides, the most commonly used method for suicide
• Easy access to trained personnel to deliver psychological treatments in educational institutions and health-care facilities.

3.  Provident fund reform needs more clarity

Topic: Indian Economy

Category: Government Budgeting

Location: The Hindu, Page 12

Key Points:

• The Budget proposal to tax a part of the accumulated corpus in the Employees’ Provident Fund (EPF) upon withdrawal is seen to hurt particularly the salaried middle class.
• The Finance Minister proposed tax exemption for withdrawal of up to 40 per cent of the corpusat the time of retirement in the case of the National Pension Scheme (NPS). In the case of superannuation funds and recognised provident funds, including the EPF, the same norm of 40 per cent of the corpus being tax-free would apply to contributions made after April 1, 2016. From a larger social security perspective, Mr. Jaitley’s intention to lay the groundwork for a “pensionised society” is laudable.
• In an ideal environment, there is a justifiable case for prescribing a level-tax treatment for similarly positioned pension plans. However, in the pursuit of a principled taxation policy, the government should have imposed a similar provision for its own employees’ retirement savings in the General Provident Fund. But as things stand, they will continue to get a tax-free lump sum for their sunset years from the GPF apart from a pension, albeit on a defined contribution basis through the NPS for those who joined service after 2004.
• The government should have also tried to distinguish between a regular pension scheme and a provident fund (that also provides a pension). Why should it force EPF subscribers to get two pension cheques, which once credited to their account would form part of their taxable income? The point is, the reform needs to be carefully calibrated.
• Besides the tax benefits it fetches, EPF is often seen as a reliable tool to force-save for the future. It has been, in a way, playing a critical role in inculcating the habit of saving in a country with a very limited social security net. In a sense, individual contributions to EPF could also be construed as a way of enabling a corpus to meet critical lifetime event expenditures. In any case, the contribution of employees to the provident fund is not tax exempt beyond the annual ceiling of Rs.1.5 lakh.
• Therefore, the tax on withdrawal will be tantamount to double taxation. For, one would have paid tax at the time of contribution as well. If the intention is to prod people to plan for pension, the government would do well to invigorate the Employee Pension Scheme, which exists today as a component of the EPF. The limited annuity product option also does not help the cause of force-driving people into a pension system. The government appears to have put the cart before the horse in this instance.

Others:

The Indian Express

4. ‘Centre-RBI duet’:

Topic: Indian Economy

Category: Indian Economy and issues relating to planning

Location: The Indian Express, Page 14

Key Points:

• One of the most striking things in Budget 2016 is the perceptible convergence of views of the RBI and the government — reflected best in the decision to stick to the path of fiscal consolidation and not indulge in adventurism.
• In the run-up to the budget, RBI Governor Raghuram Rajan had cautioned the government not to deviate from the roadmap for fiscal consolidation and warned about the potential loss of credibility.
• The government has been mindful about this, acknowledging the negative fallout of higher government borrowing on private investments, and has restricted its borrowings in 2016-17 to Rs 4.2 lakh crore. The markets have welcomed this.
• Since Friday (before the budget was presented), the Sensex has climbed 1,089 points or 4.7 per cent in anticipation of interest rate cuts by the RBI. Ten-year government bond yields have fallen from 7.9 to 7.6 per cent. This, coupled with an agreement on the composition of the MPC, and the RBI’s decision to ease rules on capital requirements for banks, clearly shows that India’s central bank and government are acting in concert — a huge positive both from the point of view of investors and the market, and also from an institutional and policy-credibility perspective.

F. Concepts-in-News: Related Concepts to Revise/Learn:

i.    Fiscal Consolidation

ii.   National Family Health Survey (NFHS)

iii.  FRBM Act

iv.  Employees’ Provident Fund (EPF)

v.   National Pension Scheme (NPS)

G. Fun with Practice Questions 🙂

To be Updated

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