Comprehensive News Analysis - 05 August 2016

A. GS1 Related

Nothing here today folks!

B. GS2 Related

Category: Indian Polity

Topic: Affirmative Action, Article 16 

Key Points:

• The Gujarat High Court on Thursday quashed an ordinance providing 10 per cent reservation for the economically backward among the upper castes in education and government jobs.
• The court held that no quota can be granted on the basis of economic criteria because it is not provided for in the Constitution, which allows quotas on socially backward castes and Scheduled Castes and Tribes.
• The court observed that the ordinance promulgated by the State government is against the spirit of the Constitution and fundamental rights.
• The ordinance was in “direct conflict” with the judgment of the apex court that a State cannot provide more than 50 per cent reservation, and that reservation could only be allowed on “ground of social and educational backwardness and not poverty per se”.
• Before granting reservation to the economically weaker sections, The State authorities have to identify and measure quantifiable data by showing backwardness of the economically weaker sections (EWS) in general category and inadequacy of representation of a class in public employment under the state.

2. HC says L-G is Delhi’s administrative head

Category: Indian Polity

Topic: Education

Key Points:

• The Delhi High Court has held that the Lieutenant Governor is the “administrative head” of Delhi and that it “continues to be a Union Territory.
• The High Court also set aside the AAP government’s contention that the L-G was supposed to act “only on the aid and advice of the Ministers”
• The Bench interpreted Article 239 A, 239AA of the Constitution and the provisions of the Government of National Capital Territory of Delhi Act and the Transaction of Business Rules to rule that Delhi continues to be a Union Territory even after the Constitution (69th Amendment) Act, 1991 inserting Article 239AA making special provisions with respect to Delhi.

3. Securing the Indus water treaty

Category: International Relations

Topic: India-Pakistan, Indus Water Treaty

Key points:

• Water sharing, transparency and collaboration are the pillars on which the unique Indus Waters Treaty was erected in 1960.
• Islamabad’s plan to haul India again before an international arbitral tribunal is a testament to how water remains a source of discord for Pakistan despite a treaty that is a colossus among existing water-sharing pacts in the world.
• In Asia, most of the transnational river basins have no water-sharing arrangement or any other cooperative mechanism. India, however, has water-sharing treaties with both the countries located downstream to it, Pakistan and Bangladesh (on Indus and Ganges respectively). India’s treaties with Pakistan and Bangladesh are the only pacts in Asia with specific water-sharing formulas on cross-border flows.The 1996 Ganges treaty set a newstandard in international water law by guaranteeing delivery of specific water quantities in the critical dry season.
• The Indus treaty stands out as the world’s most generous water-sharing arrangement by far, in terms of both the sharing ratioand the total volume of basin waters for the downstream state. It is the first and only treaty that goes beyond water sharing to partitioning rivers. It drew a virtual line on the map of India to split the Indus Basin into upper and lower parts, limiting India’s full sovereignty rights to the lower section and reserving for Pakistan the upper rivers of Jammu and Kashmir — the so-called “western rivers.”
• Given that water is J&K’s main natural resource and essential for economic development, the gifting of its river waters to Pakistan by treaty has fostered popular grievance there.Demands in the J&K legislature for revision or abrogation of the Indus treaty are growing since a resolution seeking a treaty review was passed in 2003. This has prompted New Delhi to embark on several modestly sized, run-of-the-river hydropower projects in J&K to address chronic electricity shortages.
• Run-of-the-river projects are permitted by the Indus treaty within defined limits. But Pakistan wants no Indian works on the three “western rivers” and seeks international intercession by invoking the treaty’s dispute-settlement provisions, which permit a neutral-expert assessment or the constitution of a seven-member arbitral tribunal.By capitalizing on this Pakistan wishes to further its strategy to foment discontent and violence there.
• Pakistan dragged India into international arbitration on the Kishenganga and Baglihar

Hydro power projects and has potentially affectedthe commercial viability of all future run-of-the-river projects in J&K.

• In 1960, India thought it was trading water for peace by signing the treaty. Within five years of the treaty’s entry into force, Pakistan launched a war to grab the Indian part of J&K in 1965 and now it is pushing for new arbitration proceedings over the Kishenganga and Ratle projects.
• Pakistan’s water relationship with India is becoming murkier due to China’s construction of dams in Pakistan-held Kashmir.
• Pakistan, by waging a constant propaganda battle against India on the waters issue, risks undermining the Indus treaty.

C. GS3 Related

Category: Indian Economy

Topic: Agriculture

Key Points:

• Golden Rice is an orange-yellow-coloured rice, genetically modified to produce beta-carotene, the precursor of Vitamin A.
• Advocates claim it is a powerful way to combat Vitamin A deficiency, the cause of diseases like childhood blindness, and deaths, particularly among the poor in Africa, South and Southeast Asia.
• Golden Rice was first developed around 1999 by two European scientists, Ingo Potrykus and Peter Beyer.
• The transnational agribusiness corporation Syngenta currently holds commercial rights to it. Moved apparently by humanitarian sentiments, Syngenta decided in 2004 to sub-license it free of charge (subject to several conditions, not all of which are straightforward) to agricultural research institutions in developing countries.
• The project of taking Golden Rice to developing countries is housed within the International Rice Research Institute (IRRI) in Philippines.
• As IRRI itself admits on its website, Golden Rice is not ready for farmers, yet.
• At least two conditions need to be met for Golden Rice to work as hoped:

1. it should be suitable for cultivation by farmers; and
2. it should be bio-available, that is, the digestive system should be able to extract the beta-carotene and make it available to the body, thus improving Vitamin A levels.

 Category: Indian Economy

Topic: SEZ’s , e-governance

Key Points:

• The Commerce Ministry will shortly roll out an online platform for SEZs to help developers and units raise all their concerns on doing business, including a withdrawal or reduction of minimum alternate tax (MAT) imposed on Special Economic Zones (SEZ).
• The imposition of 18.5 per cent MAT on SEZ units & developers in the FY’12 Budget was the main factor that led to a fall in investments in SEZs.Finance Ministry had rejected various requests to reconsider it on the ground that MAT exemption would lead to revenue loss.
• The web-based platform will help SEZ units and developers raise such concerns with the concerned authorities so that there is a constant dialogue and transparency in the resolution of issues.
• The online platform would be similar to the Project Monitoring Group in the Cabinet Secretariat.
• The issue of utilization of available SEZ capacity by allowing SEZ units to carry out job works for units in Domestic Tariff Area (or DTA, area outside the SEZ) has also been taken up and the Commerce Ministry has raised with the Finance Ministry the proposal to allow exports from special economic zones to DTA at the concessional tariff rates as given to India’s free trade agreement partner countries.

Category: Science & Technology

Topic: Strategic and High Tech Minerals

Key Points:

• India will be woefully short of critical minerals necessary for developing clean-energy applications, infrastructure for its solar mission and for manufacturing high-technology products in the future. The country will be heavily dependent on China in the coming years to source these materials for its manufacturing sector.
• 12 minerals out of 49 that were evaluated have been identified as ‘most critical’ for India’s manufacturing sector by 2030. These are beryllium, chromium, germanium, limestone, niobium, graphite, rare earths, rhenium, strontium, tantalum and zirconium. Other minerals like limestone and graphite, while currently abundantly available in India, are deemed ‘critical’ because extractable resources could be scarce in the future.
• India is 100 per cent import-dependent for seven out of 12 identified critical minerals and does not have any declared resources for them, except light rare-earths (found along with monazite sands) and beryllium. Rare earths are a group of 17 minerals necessary for making everything from nuclear reactors to flat-screen televisions, and, China currently controls 94 per cent of their global supply.
• India thus needs to firm up diplomatic trade channels and long-term supply contracts.
• Though India is endowed with vast mineral resources — it is among the top five nations with reserves of rare-earth minerals — its potential is untapped.
• Many of these high tech minerals are generally recovered as a by-product during the processing of primary ores. India has high production for these primary metals, yet no sign of by-product recovery [except tin] is evident so far.This is a lost opportunity, and demands suitable R&D interventions and policy support.
• National Mineral Exploration Policy, 2016 (NMEP) also talks about these shortages and possible solutions.

D. GS4 Related

E. Important Editorials: A Quick Glance

Category: Indian Economy

Topic: Banking Consolidation, Mergers

Key Points:

• The proposed merger of the State Bank of India with its five associate banks and the BharatiyaMahila Bank is a long-delayed and welcome move on the path to banking consolidation.
• SBI’s takeover of its five subsidiaries and the three-year-old niche provider of banking services for women will, once completed, vault the merged entity higher up the rankings ladder on the global banking stage.
• Merits:
• The increased balance sheet size will enable the bank to obtain better pricing on both internationally sourced funds and domestic deposits, thus helping it lower lending rates and improve profitability.
• The added branch network and customer base will also help it expand reach and enable the lender to rationalize resources across the board.
• It will also lead to potential cost savings and reduction in cost-to-income ratio.
• The lender’s increased size, in terms of assets, will also give it the requisite muscle to take on new competition from larger banking entities that are likely to be created by consolidation in the banking industry.

• Challenges:

• The scale of the task is substantial given the total staff strength. With more than two lakh employees, the parent will add close to one-fifth that number by way of additions posing a huge test in terms of integration of roles, salary, perquisite and pension structures and, no less importantly, work cultures.
• Customers of the smaller, community or regional market-focussed subsidiaries such as the State Bank of Travancore may be discomfited by having to deal with a larger, more impersonal lender, one where the size of their accounts may be viewed as comparatively marginal.
• For regulators, the new entity will throw up interesting oversight issues. Already identified by the Reserve Bank of India as the country’s key Domestic Systemically Important Bank, or too big to fail in simple terms, the enlarged SBI’s capital adequacy norms will climb and may require far more by way of infusion of funds than the Centre has committed so far.

But such challenges must not be used to undermine the obvious benefits of merger.

Category: Indian Economy

Topic: GST

Key Points:

• GST regime heralds truly transformational reform in India. It will not only aid the ease of doing business but also re-engineer business processes of companies.
• The abolition of Entry 52 of List II (Under Schedule VII) of the constitution would do away with entry tax. This, combined with the abolition of octroi and purchase tax, would create a truly common market.
• There will be a free movement of goods and services across the country. It would also have the effect of expanding the market
• The impact of this would be similar to the impact that the de-materialisation of shares had on the capital markets: By eliminating the hassle of material transfer of shares, the move encouraged more investors to enter the share market.
• GST would most positively impact the organised manufacturing and the Make in India campaign for goods.It is likely to bring down the present incidence of taxation on goods from 26.5 percent to 15-20 per cent. The removal of the inter-state barriers facilitating the free flow of goods and services is likely to reduce the logistics costs faced by the industry.
• Negative protectionism faced by Indian industry will come down as the countervailing duty is likely to fully compensate the domestic duties faced by the Indian industry.
• As a destination-based tax, GST has an equity dimension. The developing states of India being consumption -oriented are likely to benefit from the introduction of the tax. This will aid in bringing greater investments in the social and economic sectors.
• GST will also have a political dimension: It will bring the Centre and states together in new arrangements of fiscal engagement by creating organisational structures in the form of a GST secretariat in each state which will bring together senior officers of the Central Board of Excise and Customs and state tax officers.

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

• Indus Water Treaty
• Golden Rice
• Rare Earth Minerals and Strategic Minerals
• National Mineral Exploration Policy, 2016
• SEZ, MAT and Domestic Tariff Area (DTA)

G. Fun with Practice Questions 🙂

Question 1: Consider the following statements?

Question 2: Consider the following statements?

Question 3: Consider the following statements,

Question 4: Consider the following statements,

Question 5: Consider the following statements,

H. Archives:

You can check out some more recent News Analysis sections to build even more context

4th August 2016: Daily News & Current Affairs Analysis

3rd August 2016: Daily News & Current Affairs Analysis

2nd August 2016: Daily News & Current Affairs Analysis

1st August 2016: Daily News & Current Affairs Analysis

List of all DNA Articles

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