Comprehensive News Analysis – 09 June 2016

Table of Contents:

A. GS1 Related:

1. Monsoon forecasting to get a high-tech makeover

B. GS2 Related:

1. De-link religion from terror, Modi tells U.S. Congress

2. Officials hope for a repeat of 2008 at NSG meeting

3. Court has held that scissors cannot curb creative freedom

4. China-U.S. strategic dialogue was ‘marginally helpful’

5. To Read: RTI, RTE and rising aspirations

C.GS3 Related:

1. India eyes uranium from Africa

2. Inflation to average 5 % in 2016-17: Crisil

D. GS4 Related
E. Important Editorials : A Quick Glance

The Hindu

1. Never in Punjab

2. Tempering economic ebullience(high spiritedness)

3. Quest for another holy grail

4. ‘Civil society in India remains vibrant’

Indian Express

1. The India-US Joint Statement: Nuclear regimes, security, reactors, counter-terror

2. India-US Joint Statement- Defence: Sorting a few legacy issues, framing a new agenda

Others:

1. PIB

a) Uday , Sufficient RE Generation Capacity & Increased Coal Production – Keys to Achieve One Nation One Grid One Price : Shri Piyush Goyal

2. The Financial Express:

a) Lots of cheap electricity, few takers, large power cuts; check out why that is

b) ‘Fake’ to ‘Jumla’ expletives on national income: When discrepancies happen

3. The Business Line:

a) What we need is digital disruption

4. The Economic Times:

a) Tangible gains to India’s nuclear bid

5. Quick Bits

a) Centre to evolve norms to enhance product quality

b) World Bank cuts 2016 global growth forecast to 2.4%

c) RBI retains retail inflation target at 5% with upward bias

F. Concepts-in-News: Related Concepts to Revise/Learn:
G. Fun with Practice Questions 🙂
H. Archives

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Useful News Articles

A. GS1 Related

 

  1. Monsoon forecasting to get a high-tech makeover

Topic: Geography

Category: Monsoon Forecasting

Location: The Hindu

Key points:

  • Doing away with the statistical method introduced under British colonial rule in the 1920s, the meteorology office is preparing to introduce a dynamic model spending $60 million on a new supercomputer to improve the accuracy of one of the world’s most vital weather forecasts in time for next year’s rains
  • The new system, based on a U.S. model tweaked for India, requires immense computing power to generate three-dimensional models to help predict how the monsoon is likely to develop
  • The existing model uses historical relationships between rainfall and six to eight predictors such as sea-surface temperatures and south-easterly winds over the Indian Ocean
  • The India Meteorological Department (IMD) issues forecasts for the country as a whole and five regions, though does not give separate ones for the country’s 29 states
  • Experts say better forecasting could help India raise its farm output by nearly 15 per cent, by helping farmers tweak the best time to sow, irrigate or apply fertiliser to crops and if rains fail plan state-wide measures

(The IMD, set up in 1875, produced its first monsoon forecast in 1886 after the famine of the 1870s)

 

Note: Monsoon has hit the shores of Kerala and Tamil Nadu after a delay of one week

 

B. GS2 Related

 

  1. De-link religion from terror, Modi tells U.S. Congress

Topic: International Relations

Category: Indo-US Relations

Location: The Hindu

Key points:

  • Modi became the fifth Indian Prime Minister to address a joint session of the U.S Congress
  • The Indian PM called for deepening U.S. – India security cooperation to tackle global terrorism, based on a policy that “delinks religion from terrorism.”
  • Modi, however, diplomatically and emphatically drove home the message that New Delhi could have its own priorities and convictions. “As we deepen our partnership, there would be times when we would have differing perspectives. But since our interests and concerns converge, the autonomy in decision-making and diversity in our perspectives can only add value to our partnership,” Mr. Modi said

 

2. Officials hope for a repeat of 2008 at NSG meetingTopic: International Groupings

Category: NSG

Key points:

  • The session at Vienna, called ahead of the annual NSG plenary in Seoul on June 23-24, is looking specifically at the applications from India and Pakistan for membership to the 48 member nuclear export control regime
  • S. Secretary of State John Kerry had made a plea to NSG members that were not keen on India’s membership to “agree not to block consensus on Indian admission”
  • China’s objections have been three-fold, articulated again since India applied formally for NSG membership on May 12 this year: that India is not a signatory to the Non-Proliferation Treaty; that no “country-specific” exemption could be given, given Pakistan’s application for NSG membership a week after India; and that the NSG decision should not change the “South Asian balance”
  • There is an opinion that India will have to work out the NSG issue with China through direct talks and not expect that U.S. can swing it on its own due to the change in power balance
  • The present application from Pakistan could be a spoiler. Many countries are wary of Pakistan’s terrible record on nuclear proliferation and terrorism. And this could turn even those favourably disposed towards India from admitting either as a new member

 

3. Court has held that scissors cannot curb creative freedomTopic: Polity

Category: Freedom of Expression

Key points

  • Supreme Court judgments that champions filmmakers’ freedom of expression by holding that censors cannot prevent open discussion on a social evil even if it is found embarrassing or hateful to the state’s interests:
  • The  Rangarajan versus P. Jagjivan Ram case,1989

The case concerned the censor board’s refusal to give a certificate for the exhibition of the Tamil film Ore OruGramathile, which criticised the reservation policy

SC’s observations:“Censors should not have an orthodox or conservative outlook, but must be responsive to change and must go with the current climate”

  • The  A. Abbas vs Union of Indiacase, 1970

The judgment concerned the censor board’s refusal to certify a documentary, A Tale of Four Cities, which portrayed the contrast between the life of the rich and the poor in the four principal cities of the country

The Supreme Court’s observation:“our censors must make a substantial allowance in favour of freedom …” thus leaving a vast area for creative art to interpret life and society with some of its foibles along with what is good.”

  • The Bobby Art International &Ors vs. Om Pal Singh Hoon&Ors (1996)

The judgement concerned the demand to snip rape scenes depicting Phoolan Devi’s nudity in the movie Bandit Queen

SC’s observation: “Adult Indian citizens can be relied upon to comprehend intelligently the message and react to it, not to the possible titillation of some particular scene,”

  • The SC in a 1992 case reprimanded Doordarshan for refusing to air an award-winning film on the Bhopal gas tragedy. It was held that merely because a film was critical of the State government, DD could not deny selection and publication of the film
  • No film that extols or encourages a social evil is permissible. But a film that carries the message that a social evil is evil cannot be made impermissible on the ground that it depicts the social evil,” the apex court held while directing Doordarshan in 2006 to air AnantPatwardhan’s documentary Father, Son and Holy War on the question of sexual violence in religion
  • Under the Cinematograph Act, the limited grounds for denying certification to a film are: if the work is against the interest of the sovereignty and integrity of India, the security of the state, friendly relations with foreign states, public order, decency, or involves defamation or contempt of court or is likely to incite commission of any offence

 

4. China-U.S. strategic dialogue was ‘marginally helpful’Topic: India’s Neighbourhood

Category: China

Key points

  • The China-U.S. Strategic and Economic Dialogue (S&ED) dialogue ended on Tuesday, following weeks of spiraling tensions
  • There were implications that Beijing could impose an Air Defence Identification Zone (ADIZ) in the SCS
  • The possibility that China may enforce an ADIZ, in turn, was fueled by the U.S. conduct of “freedom of navigation” patrols in the SCS, which evoked a robust response from China. In May, the U.S. launched its third “freedom of navigation” operation, in the disputed Spratly Islands, followed by the flight of a U.S. EP-3 Aries surveillance aircraft, which was challenged by two Chinese fighter jets
  • The back and forth between the U.S. and China, mirrored China’s vocal response in the SCS to President Barack Obama’s “Pivot to Asia” doctrine, which plans to position nearly 60 per cent of U.S. military forces in the Pacific
  • No less challenging was the economic dialogue between the two countries, where the debate over Chinese overcapacity flooding the markets of the West, and , presumably, weakening economic recovery there, had pitted U.S against China

 

 

C. GS3 Related

 

  1. India eyes uranium from Africa 

Topic: Economy

Category: Energy sector

Key points

  • On the sidelines of its campaign for membership in the Nuclear Suppliers Group (NSG), India is likely to ask African countries to relax commitment to the Pelindaba Treaty which controls supply of uranium from key mineral hubs of Africa to the rest of the world
  • President Pranab Mukherjee would begin the process by trying to convince Namibia next week, during his June 15-18 trip, to implement a bilateral treaty with India and supply uranium to Indian nuclear energy projects
  • India and Namibia signed two MoUs on Cooperation in the field of geology and mineral resources and Cooperation in peaceful uses of nuclear energy during the visit of President Hifikepunye Lucas Pohamba to India in 2009
  • However, diplomats pointed out that Namibia’s membership of the Pelindaba Treaty has prevented it from ratifying the agreements. Namibia is the fourth largest producer of uranium

 

2. Inflation to average 5 % in 2016-17: CrisilTopic: Economy

Category: Inflation

Location: The Hindu

Key points

  • A normal monsoon this year will help reign in food inflation and offset rising pressures from crude oil prices and ‘persisting services inflation,’ according to rating agency Crisil.
  • “inflation would therefore average five per cent in fiscal 2017,” according to a Crisil report
  • However, the report said that the sensitivity of crops to rainfall signals the need for improvement in irrigation facilities, change in cropping patterns, harnessing of rainwater, adoption of water conservation techniques and availability of stable electricity. Also, efficiency of water usage needs to improve

 

D. GS4 Related
E. Important Editorials: A Quick Glance

The Hindu

 

  1. Never in Punjab

Topic: Polity

Category: Freedom of Expression

Key points

  • Udta Punjab is not the first film that the Central Board of Film Certification has sought changes in. And as in several previous instances of censorship, its demand has no rational basis and violates the constitutional guarantee of freedom of expression
  • The plot line of the film is anchored in Punjab’s widespread drug addiction, a problem that has been extensively researched and detailed. It is widely known that drugs are laying waste the people of the State
  • Ironically, the CBFC wants “Punjab” expunged from the title along with edits so that the drama could be read as taking place anywhere in the country, not specifically in Punjab. Depictions of live issues and events are usually introduced with the caveat that resemblance to real persons is accidental, and it would be logical to assume that this is where the Board should have left it
  • The reasons for its censorious zeal are not difficult to guess. Assembly elections in Punjab are less than a year away, and the ruling party which leads a coalition with the party ruling at the centre, is being cornered most acutely on drug abuse. It is accused not only of failing to check the drug trade, but also of turning its eyes away from the involvement of well-connected individuals
  • The film’s producer has taken the matter to court, and one must await further legal developments to know the fate of the film. But in his inordinate enthusiasm in talking down Udta Punjab, the CBFC chief has only brought the issue of drug consumption in Punjab back into the spotlight
  • It is just as well that the matter of certification has been taken to the courts. As film-makers scope the landscape for realistic depictions of immediate issues, they face resistance in the form of CBFC recommendations or outright threats of violence from assorted groups. From Bombay in the Nineties to Vishwaroopam more recently, the right of producers to screen their films is often negotiated politically
  • There have been many efforts to secure the freedom of expression — for example the D. Khosla report in 1969 recommended independent members on the Board, then called the Central Board of Film Censors. “Independence” has remained elusive — and even if full autonomy of the Board is ensured, there is no guaranteeing that the institution would be any less scissor-happy
  • Perhaps the ShyamBenegal Committee set up early this year by the Information and Broadcasting Ministry has offered a more practical solution: the CBFC should only certify a film and its scope should be restricted to categorising the suitability of the film according to the audience group for which it is intended

 

2. Tempering economic ebullience(high spiritedness)Topic: Economy

Category: State of Indian Economy

Key points:

 

  • The Central Statistics Office’s (CSO) provisional estimates for the Indian economy for 2015-16 have created a buzz. The estimates show the Indian economy growing at 7.6 per cent in 2015-16, with a surge of 7.9 per cent in the last quarter. This has led some to conclude that 8 per cent growth is around the corner
  • We need to put the celebrations on hold. In the short run, our growth prospects are constrained by global factors and fiscal consolidation at home. The medium-term story is jeopardised by continued weakness in the world economy, the problems in our banking sector and the fall in the investment rate
  • There are three puzzles to the growth story
  • First, manufacturing has grown at 8.1 per cent at current prices. This is not matched by the growth in the Index of Industrial Production (IIP), which is only 2.4 per cent
  • Second, it is hard to explain how manufacturing growth has been so strong when exports as a whole have contracted
  • Third, as the Centre for Monitoring Indian Economy has pointed out, a big chunk of the growth in 2015-16 has come from an item called ‘discrepancies’ in the CSO’s statistics (in plain language, an item about which we know little)
  • Of the growth of 7.6 per cent in 2015-16, 2.4 percentage points were accounted for by ‘discrepancies’. In 2014-15, the same item accounted for 0.1 percentage points out of growth of 7.2 per cent. Compare 2014-15 and 2015-16 after leaving out ‘discrepancies’ and the growth rate figures are: 7.1 per cent and 5.2 per cent. It is hard to be jubilant about something you don’t quite understand
  • What about 2016-17? The upbeat view is that we can expect a boost to growth in the coming year from three sources: rural consumption (thanks to better monsoons), urban consumption (thanks to the impending Seventh Central Pay Commission award), and increased government capital expenditure projected in the Budget for 2016-17
  • Alas, this upbeat view assumes that all other factors in the economy will remain constant. They will not. To grasp this, we need only to look at the analysis presented by the Mid-Year Economic Analysis (2015-16) and the Economic Survey (2015-16)
  • A key factor boosting India’s growth in 2015-16 was the decline in world oil prices. Lower oil prices translate into higher private consumption. The mid-year review estimated the boost to growth from higher private consumption at 1-1.5 percentage points, assuming that oil prices through the year would average $50 per barrel. The Economic Survey estimated that this benefit would continue to accrue to the economy in 2016-17, albeit to a lesser extent. It estimated oil prices for 2016-17 to be $35 per barrel. The gain to India’s economic growth on this account, it said, would be about half that in 2015-16
  • This assumption threatens to be undone. Oil prices have already moved up to $50 per barrel. If they stay at this level, there is every prospect that the gains in 2015-16 on account of falling oil prices would be absent
  • The Pay Commission hike could contribute about 0.6 per cent of the GDP depending on how much of it is fully paid out in 2016-17. A better monsoon could add about 0.3 percentage points
  • The net effect of private consumption on economic growth relative to last year would thus be minus 0.6 per cent (minus 1.5 percentage points due to the gain from lower oil prices being absent, plus 0.6 per cent due to the Pay Commission package, plus 0.3 percentage points due to the monsoon’s effect on rural demand). The recent rise in oil prices could thus overwhelm potential gains from better monsoons and the pay hike
  • The mid-year review saw higher exports in 2016-17 as fully compensating for the loss in private consumption. It arrived at a projection of demand for India’s exports by estimating the weighted average growth of India’s trading partners. This proxy for export demand declined from 3 per cent in 2014 to 2.7 per cent in 2015
  • The mid-year review expected that it would go back to 3 per cent in 2016, which would translate into exports contributing 1.3 percentage points to GDP. This projection too has been overtaken by adverse global trends. The Economic Survey expects that the proxy for export demand will improve only marginally to 2.8 per cent. Given global uncertainties, even this could prove to be optimistic. Thus, export growth can at best contribute 0.4-0.5 percentage points to GDP relative to 2015-16
  • The third factor to be taken into account is government spending. Most analysts have got carried away by increases in capital expenditure projected in the last Budget. However, as the mid-year review correctly points out, in estimating the impact on aggregate demand, we should be looking at the fiscal deficit. The fiscal deficit factors in not just increases in capital expenditure but also declines in other government expenditure as well as higher taxes. Fiscal consolidation planned for 2016-17 means that demand will shrink by 0.4 percentage points of the GDP
  • Lastly, we cannot expect private investment to pick up given that corporate balance sheets are stressed and real interest rates very high. Adding up the pluses and minuses estimated above, we get a fall in GDP growth relative to the growth rate of 7.6 per cent in 2015-16 of 0.5 percentage points. This means that growth is likely to end up closer to 7 per cent in 2016-17, the lower end of the band of 7-7.75 per cent projected by the Economic Survey
  • And this is without factoring in the potential for upheaval arising from Brexit, a rise in U.S. interest rates and a further slowing down in China.
  • The medium-term prospects are not very encouraging either. Part of the problem is India’s increased integration with the world economy. The Economic Survey points out that as a result, the correlation between India’s economic growth and world economic growth has risen from 0.2 in 1991-92 to to 0.42 in 2015-16. It says that if the world economy continues to grow at around 3 per cent (which is what the World Bank and International Monetary Fund project until 2018), India’s growth rate is fated to remain in the range of 7-7.75 per cent
  • The second problem is the state of the banking sector. Sorting out the bad loan problems, strengthening public sector banks and getting loan growth to industry to revive strongly will take another two to three years at the very least. A banking crisis, which is the failure of multiple banks, can derail an economy from its growth path for several years. We do not have a banking crisis but we do have a stressed situation. Getting out of it is not easy
  • Third, the investment rate has fallen steeply. Gross fixed capital formation, which is a measure of productive assets in the economy, has fallen from 34.3 per cent of GDP in 2011-12 to 30.8 per cent in 2014-15. We need to increase the rate to 34-35 per cent.
  • Raising the growth rate to over 8 per cent in the next two or three years is a huge challenge. It’s a challenge that certainly cannot be overcome as long as we operate within the present straitjacket of fiscal consolidation and inflation targeting, policies that tend to reduce growth in the medium-term. Can the government summon the courage to think very differently?

 

3. Quest for another holy grailTopic: International Groupings

Category: NSG

Key Points

  • India’s 30-year-old effort to secure a permanent seat on the UN Security Council has been characterised as the pursuit of a diplomatic holy grail. The chance of success in that pursuit has been receding like a mirage, though there have been signs of progress
  • A similar, but less intense effort is on to seek admission to the Asia-Pacific Economic Cooperation (APEC), a body which should have included India in the first place. Here again, there is no sign of India being invited, even as the 10-year moratorium on new membership has expired
  • India has now embarked on another quest, this time to seek membership of the Nuclear Suppliers Group (NSG). It is surprising that India is investing much diplomatic effort on this issue when there is little chance of India being invited to the group
  • India seeking membership of the NSG is like Russia seeking membership of North Atlantic Treaty Organisation: the NSG was invented to prevent Indian advance towards possession of nuclear weapons after the technology demonstration test of 1974
  • If India joins it, the very nature of the NSG will change and dilute its fundamental position that all members should be signatories to the Non-Proliferation Treaty (NPT). Though the U.S. has stated repeatedly that it would like to see India in the NSG, it cannot be expected to be a party to the fundamental alteration of the NPT regime
  • Interestingly, it was a U.S. think tank which brought up the topic in a Track II discussion with India in 2007. The suggestion was not that India should be given membership of the NSG, but that India should join all multilateral export control regimes like the NSG, Missile Technology Control Regime (which it is set to join later this year), the Wassenaar Arrangement for control of conventional weapons and the Australia Group for control of chemicals that could contribute to chemical and biological weapons
  • It appeared then that the whole proposal was to drag us into Wassenaar Arrangement and the Australia Group by presenting them as a package. We had refrained from joining both, though they were open for us from the beginning, for our own reasons
  • Indian response to the U.S. proposal was guarded as India did not want a bargain on all the groups together. India did, however, emphasise that India’s membership of the NSG would be helpful as it had received an exemption from the NSG guidelines. As a member of the group, we could contribute to the discussion if it sought to amend the guidelines in any manner. In other words, it was not an Indian initiative to press for admission to the NSG
  • S. President Barack Obama formalised the proposal in 2010, as though it was a concession to India, in his bid to win various contracts, including nuclear supplies. Perhaps, he was aware that a decision on the NSG was not in his hands, but promised to take up the matter with the others just to win some goodwill in the process
  • As was expected, the fundamental requirement that every member should be a signatory to the NPT was brought up not only by China but several others. There was similar opposition in the case of the exemption from NSG guidelines at the time of the nuclear deal also, but our bilateral efforts and heavy lifting by the U.S., resulted in the exemption. The strength of the argument was that this would be a one-time exemption with no strings attached
  • Interestingly, the NSG is an informal grouping, which is referred to in the International Atomic Energy Agency documents only as “certain states”, and there is no precise procedure for seeking admission. But since the group takes all its decisions by consensus, it follows that new members should also be by consensus
  • For those outside the group, there is an outreach programme which is being pursued vigorously. The outreach programme is meant merely for conveying information and not for consultation. New Delhi hosted an outreach meeting a few years ago, but it was found that the exercise was not of much use in influencing the guidelines
  • The pursuit of membership of the NSG by India at the highest level has aroused suspicion that India is aiming to be in the group to deny entry to Pakistan. Such an interpretation is the result of lack of any clarity as to the benefits that will accrue to India by joining the NSG
  • In fact, membership of the group will not immediately open up nuclear trade as India has already pledged not to transfer nuclear know-how to other countries. If we attempt to dilute the guidelines to liberalise supply, it will be resisted by the others
  • Membership of the NSG will only mean greater pressure on us to sign the NPT and the Comprehensive Nuclear-Test-Ban Treaty (CTBT) and commit in advance to a Fissile Material Cut-off Treaty, which would impose restrictions on existing stockpiles of fissile materia
  • China has given scant attention to the NSG guidelines and has violated them in the case of Pakistan by claiming to act under an agreement reached before China joined the NSG. Unlike India, Pakistan has not even sought an exemption from the NSG
  • To say, therefore, that India and Pakistan should be equated on nuclear matters is unreasonable, to say the least. But the NSG did not even challenge the supply of two new reactors to Pakistan by China. The NSG’s ineffectiveness in countering proliferation makes it even less attractive as a group India should join
  • Membership of the MTCR, which restricts the weight and range of missiles, is being projected as clearing the way for NSG. This is not likely because of China except that we can now threaten to veto China if it applies for membership of the MTCR
  • When India is not anywhere near the permanent membership of the Security Council and even APEC membership remains elusive, the high-level pursuit of NSG membership may give the impression that India is unrealistic in its expectations from the international community. Support by Switzerland and Mexico will not make any difference as there will not be a vote on the issue
  • The U.S. may reiterate its support, but the objection will come from China and even some others. It will be better for India to concentrate on one or two fundamental objectives rather than fritter away our diplomatic resources on matters of marginal interest

 

4. ‘Civil society in India remains vibrant’Topic: Polity

Category: Civil Society

Key Points:

  • The Central government has acted against a number of NGOs in India in the past two years for allegedly violating the Foreign Contribution (Regulation) Act
  • In a recent analysis report, the UN Special Rapporteur on rights to freedom of peaceful assembly and of association said the FCRA regulations in India do not meet the International Covenant on Civil and Political Rights’ (ICCPR) proportionality requirement
  • What measures can India take in this regard?
  • There are three possibilities. The first is to be more permissive in interpretation of the law. The second, which would take legislative action, is to repeal the law. The third is for a domestic court to find the law unconstitutional or in violation of international law

 

Indian Express
  1. The India-US Joint Statement: Nuclear regimes, security, reactors, counter-terror

Topic: International Relations

Category: Indo-US Relations

Key Points:

  • On Tuesday, India and the United States issued a 50-paragraph Joint Statement on bilateral cooperation. A curation of its key points, and how they compare with what the two countries said on the same issues when President Barack Obama visited India in January 2015:
  • On NSG, MTCR, and other n-regimes
  • 2015: US backs India seat on nuclear high table

President Obama and Prime Minister Modi committed to continue to work towards India’s phased entry into the Nuclear Suppliers Group (NSG), Missile Technology Control Regime (MTCR), Wasenaar Arrangement and the Australia Group. Obama reaffirmed the US position that India met MTCR requirements and was ready for NSG membership, and that it supported India’s early application and eventual membership in all four regimes

  • 2016: US calls for support to India’s NSG bid

Recalling their shared commitment to preventing proliferation of weapons of mass destruction and their means of delivery, the leaders looked forward to “India’s imminent entry” into MTCR. Obama welcomed India’s application to join NSG, and re-affirmed that India was ready for membership. The US called on NSG participating governments to support India’s application when it came up at the NSG Plenary later this month. It also re-affirmed its support for India’s early membership of the Australia Group and Wassenaar Arrangement

  • On Asia Pacific partnership
  • 2015: Joint Strategic Vision to guide engagement

Recognising the important role the countries play in promoting peace, prosperity, stability and security in the Asia Pacific and Indian Ocean Region, and noting that India’s ‘Act East Policy’ and the US rebalance in Asia provided opportunities for working closely, the leaders announced a Joint Strategic Vision to guide engagement in the region

  • 2016: India and US resolve to be “priority partners”

The leaders applauded the completion of the roadmap for cooperation under the 2015 US-India Joint Strategic Vision for the Asia-Pacificand Indian Ocean Region, which will serve as a guide for collaboration in the years to come. They resolved that the US and India should look at each other as “priority partners” in the Asia Pacific, and in the Indian Ocean region

  • ‘Major Defence Partners’ now
  • 2015: Need for two-way engagement

The leaders acknowledged the need for a two-way defence engagement to include technology cooperation and collaboration, co-production and co-development.

  • 2016: US support for modi’s ‘Make In India’

Noting that US-India defence relationship can be an anchor of stability, and given the increasingly strength of the defence cooperation, the US recognised India as a “Major Defence Partner” — it will continue to work toward facilitating technology sharing to a level commensurate with that of its closest allies and partners. India will receive licence-free access to a wide range of dual-use technologies in conjunction with its commitment to advance export control objectives. In support of ‘Make In India’, the US will continue to facilitate export of goods and technologies, consistent with US law, for projects, programmes and joint ventures. New Defence Technology and Trade Initiative (DTTI) working groups will include items covering naval systems, air systems, and other weapons systems

On cybersecurity and Internet governance

  • 2015: Cooperation on sharing threat information

The President and the PM noted the serious risks to national and economic security from malicious cyber activity and agreed to cooperate on enhancing operational sharing of cyber threat information, examining how international law applies in cyberspace, and working together to build agreement on norms of responsible state behaviour.

  • 2016: Commitment to open, secure Internet

The leaders emphasised that cyberspace enables economic growth and development, and reaffirmed their commitment to an open, interoperable, secure, and reliable Internet, underpinned by the multistakeholder model of Internet governance. They committed to deepen cooperation on cyber security and welcomed the understanding reached to finalise the framework for the US-India Cyber Relationship in the near term. They committed to enhance cyber collaboration on critical infrastructure, cyber crime, and malicious cyber activity by state and non-state actors, capacity building, and cyber security research and development, and to continue discussions on all aspects of trade in technology and related services, including market access

  • On terrorism cooperation
  • 2015: Call for action against Pak-based groups

The leaders reaffirmed the need for joint and concerted efforts to disrupt entities such as Lashkar-e-Toiba, Jaish-e-Mohammad, D-Company and Haqqani Network, and reiterated their call to Pakistan to bring the perpetrators of the November 2008 Mumbai terror attacks to justice.

  • 2016: Pathankot mentioned, but not Haqqanis

The leaders committed to strengthen cooperation against al-Qaeda, Daesh, Jaish, Lashkar, D-Company, and directed officials to identify specific new areas of collaboration at the next meeting of the Counterterrorism Joint Working Group. They also asked Pakistan to bring perpetrators of the 26/11 and 2016 Pathankot attacks to justice

  • On civil nuclear cooperation
  • 2015: Looking forward to progress ‘at the earliest’

Noting that the Contact Group set up in September 2014 to advance implementation of bilateral civil nuclear cooperation had met three times in December 2014 and January 2015, the leaders welcomed the understandings reached on civil nuclear liability and administrative arrangements for civil nuclear cooperation, and looked forward to US-built reactors contributing to India’s energy security at the earliest.

  • 2016: Work to begin immediately on 6 reactors

The leaders welcomed the start of on-site preparatory work for 6 AP 1000 MW reactors to be built by Westinghouse, and noted the intention of India and the US Export-Import Bank to work together for competitive financing. The two sides welcomed the announcement by NPCIL and Westinghouse that engineering and site design work will begin immediately, and they will work toward finalising contractual arrangements by June 2017

  • On travel between the two countries
  • 2015: Visa-on-arrival, Global Entry Programme

India’s introduction of visa-on-arrival for US citizens and convening of technical discussions to advance India’s membership in the US Global Entry Programmeare initiatives aimed at easing travel between India and the US and strengthen people-to-people ties

  • 2016: Global entry scheme procedure in 3 months

The leaders applauded the strong bonds of friendship between the 1.5 billion peoples of India and the US. They resolved to facilitate greater movement of professionals, investors and business travelers, students, and exchange visitors, and welcomed the signing of anMoU for Development of an International Expedited Traveler Initiative (or Global Entry Programmes) and resolved to complete within 3 months procedures for India’s entry into the programme

  • NEW ELEMENT: YOGA
  • The 2016 Joint Statement noted the urgent need to promote healthy lifestyles, control sugar and salt intake, promote physical activity especially among children and youth, and strengthen efforts to curb tobacco use. The leaders reiterated the importance of holistic approaches to health and wellness, and of promoting the potential benefits of synergising modern and traditional systems of medicine, including yoga

 

  1. India-US Joint Statement- Defence: Sorting a few legacy issues, framing a new agenda 

Topic: International Relations

Category: Indo-US Relations

Key Points

  • Excerpts from the India-US Joint Statement, The United States and India: Enduring Global Partners in the 21st Century related to Defence
  • LEMOA
  • LEMOA or Logistics Exchange Memorandum of Agreement is another name for Logistics Support Agreement (LSA), an agreement the US has with many of its allies. But this has been especially tailored for India, following negotiations for over a decade. During Secretary of Defence Ashton Carter’s visit in April, Defence Minister Manohar Parrikar announced an in-principle approval to sign the LEMOA, pending a final exchange of drafts. Those have now been exchanged, and the Joint Statement says the LEMOA text has been finalised by the two sides. It will be signed once India completes its process, which is mainly about approval by the Cabinet Committee on Security.
  • LEMOA allows each military to avail logistics support facilities — fuel, spare parts, mechanics, etc. — of the other while on joint training, Humanitarian Assistance and Disaster Relief (HADR), and port calls. The agreement lays out the procedure for billing for these facilities as part of a larger accounting transaction, and details are contained in the clarifying protocols annexed to LEMOA.
  • Under LEMOA, while Indian logistics support will be available to the US military, Indian armed forces will benefit from access to a large number of US military bases globally, particularly while undertaking HADR missions in a diaspora crisis. It will allow India to respond promptly to emerging situations or humanitarian crises, and will expand Indian military’s operational environment globally.
  • Major Defence partner
  • The US has recognised India as a Major Defence Partner (MDP). This follows a long-standing Indian demand to provide predictability and transparency in the US system that approves transfer of military equipment and technology. MDP is not an established category, and this nomenclature has been especially created for India, because a legislative amendment to bring a change in India’s status would have been a long-drawn and difficult process
  • By recognising India as an MDP, the White House is signalling its system to expedite Indian defence licences. Coupled with India’s entry into the MTCR, this is going to help India get modern defence technology from the US by moving to the approved category of the Arms Control List. But as it is neither a Presidential Directive nor a legislative amendment, the robustness of the process will be brought out by the outcomes
  • White Shipping Agreement
  • The Statement welcomes the conclusion of a technical arrangement for sharing “White Shipping” information. The countries signed the White Shipping Agreement (WSA) last month, which enhances their maritime domain awareness and fits in with the Maritime Security Dialogue, the only 2+2 dialogue(involving both foreign and defence secretaries) that India has with any country
  • The WSA establishes an information network protocol that allows the two navies to exchange information about ships in their waters. Ships are usually classified into white (commercial ships), grey (military vessels), and black (illegal vessels). After signing the WSA, the two sides will be able to exchange information about white ships, which may not be known to the other side. The Navy’s Information Management and Analysis Centre (IMAC) at Gurgaon will be the nodal centre for WSA
  • Information Exchange Annex
  • India is constructing an indigenous aircraft carrier (IAC-1) at its shipyard in Cochin, and has plans for a second aircraft carrier (IAC-2) in the near future. For availing technologies available with the US, an agreement and protocol for sharing information — maintaining its confidentiality and integrity — was needed to be signed. The Information Exchange Annex is that protocol. Since then, a team of senior US Navy officials has visited the shipyard at Cochin last month to help with some issues in the IAC-1

 

Others:
  1. PIB

 

a) Uday , Sufficient RE Generation Capacity & Increased Coal Production – Keys to Achieve One Nation One Grid One Price : Shri Piyush Goyal While launching an energy & infrastructure sectors web portal at a media event, Shri Goyal said, “We have to take power to every home, to different hamlets. We have to ensure that a child in rural remote village gets 24 hour power”
On the feasibility of achieving One Nation One Grid One Price , Shri Goyal said that to make this happen there are three key elements namely UDAY enabling Discoms to increase volume of power purchase , planning sufficient Renewable Energy generating capacity in all regions and reducing coal imports by increasing coal production in the country . To strengthen the interstate transmission lines, the government has initiated an ambitious programme,he added

 

2. The Financial Express:

 

a) Lots of cheap electricity, few takers, large power cuts; check out why that isTopic: Economy

Category: Energy sector

Key Points

  • The fact that power is now available in the country’s power exchanges at reasonable rates of around R2.5 per unit come as more than a bit of a surprise considering the long power cuts in most areas of the country every day
  • While it is true the Central Electricity Authority (CEA) took everyone by surprise when it said that India would be power surplus in FY17 with a peak surplus of 3.1%—the east, north-east and north, though, have a deficit—what is not clear is whether India has licked its power problem or whether they are symptomatic of a deeper malaise
  • With an average of 1,621 million units of power available on the spot market every month, this can more than cover the deficit of most of the big states. Uttar Pradesh, which has the largest deficit of 846 million units per month just buys 22 million units per month. Karnataka, with a 239 million unit shortage purchases a mere 5 million units; Rajasthan with a 27 million unit shortage buys just 3 million units. It is only Bihar which has a shortage of 21 million units that buys 309 million units from various power exchanges
  • While the improved coal situation—local production, which is far cheaper than imports, was up 42 million tonnes, to 536 million tonnes in FY16—has played a big role in electricity availability rising, the collapse of industrial demand is probably a bigger factor
  • The larger reason, though, is a near complete mismatch between demand and supply creation. Buoyed by the growth of earlier years, generating capacity has increased 105% between FY09 and FY16 while demand has risen just 39%—to that extent, even increased industrial demand may not reverse the power surplus situation, more so if there is more gas available for power plants; indeed, the reason why spot power is priced so low is that generating firms are desperate to sell so that at least part of the capex can be amortised
  • Despite this, the main reason why state electricity boards (SEBs) do not buy much spot electricity is that it is just not viable to do so. For one, most have expensive PPAs (Power Purchase Agreements) already tied up, so the actual cost of buying spot power is not the R2.3-2.5, but has to include the capital charge that will have to be paid to generating companies being asked to back down
  • In many areas, there is a shortage of adequate transmission and distribution capacity, so while it is profitable to buy spot power and supply it to customers, the grid simply cannot handle it—this is where Deen dayal Upadhyaya Gram Jyoti Yojana and Integrated Power Development scheme comes in, but it will take at least a few years for it to be fully rolled out
  • While the UDAY scheme has played a big role in reducing SEB debt, in cases like Uttar Pradesh, there are still huge outstandings to suppliers which makes further borrowing to buy spot power difficult
  • By far the biggest reason, though, is that with 40-50% power theft levels, the real cost of the spot power works out to around R5 per unit, a rate which is much higher than that paid for by a very large proportion of customers—in which case, SEBs are being rational in preferring to restrict supplies instead of just generating more losses
  • It would do well not to declare victory till UDAY actually fixes these issues—right now, the only progress to report is that banks have been arm-twisted into taking a 5-6 percentage point hit on SEB loans

 

b) ‘Fake’ to ‘Jumla’ expletives on national income: When discrepancies happenTopic: Economy

Category: GDP data

Key points:

  • There are three ways to compute national income—summing production, summing income (value of inputs) and summing expenditure. Conceptually, whichever way we aggregate, the answer should be identical
  • Because of multiple reasons, different sources of data being one, they differ. This isn’t an Indian problem. It occurs in every country, USA included. We have recently had a hue and cry about “discrepancies” in Q4 FY16 GDP estimates. If those discrepancies hadn’t been there, real growth would have been 3.9%, not 7.9%
  • What are discrepancies? GDP has been computed using the product approach, the production or supply-side. It is now computed using the expenditure approach, a bit like the demand-side. The gap between the two numbers is called “discrepancies”.
  • Notice that just because you are unable to explain how some income was spent, that income doesn’t vanish into thin air.There is no dispute about those goods and services (their value) having been produced. Notice that a country like the US also has such gaps, except that in the US, the expression used is “statistical discrepancy”. Perhaps the use of the adjective “statistical” lends legitimacy in the eyes of our commentators
  • In Q4 of FY16, how large were these discrepancies? R143,210 crore in constant prices and R172,106 crore in current prices. Indeed, national income is calculated at current prices and then converted into constant price numbers (and real growth) using deflators
  • An impression has also been conveyed that Q4 of FY16 is special, because of discrepancies. Discrepancies in current prices were R139,540 crore in Q4 of FY12 and R130,419 crore in Q4 of FY13. Nothing special about FY16
  • Naturally, it’s best to express discrepancies as a percentage of GDP, since nominal figures are involved. For Q4 of FY16, that high current price figure converts to 4.7% of GDP. In quick estimates in Q4 of FY13, the share was 6.2% and in revised estimates in Q4 of FY14, the share was 5.9%. This is hardly a case of FY16 being an outlier. Why do we have such high discrepancies?
  • After all developed countries may have discrepancies, but they aren’t this large. That’s because our expenditure data is bad and remember, “discrepancies” simply mean a residual category
  • Expenditure has categories of private final consumption expenditure, government final consumption expenditure, gross fixed capital formation, change in stocks, valuables and net exports. Of these, we have some information on government final consumption expenditure, gross fixed capital formation and net exports. The rest of it, including private final consumption expenditure, is pure guesswork, particularly when quarterly data is concerned (We weren’t really equipped, statistically speaking, to start a quarterly GDP series.)
  • Therefore, as we go through the cycle of revised estimates and quick estimates under the old GDP series, and provisional estimates and first revised estimates under the new GDP series, those “discrepancy” numbers themselves change. To give one instance, under revised estimates, in Q4 of FY14, discrepancy/GDP ratio was 5.9% and became 0.7% in quick estimates. It is bound to be no different in Q4 of FY16 too. Once we have a full year’s data, we shouldn’t bother about quarterly GDP numbers any longer. They are not robust. In current (and constant) prices, we also have FY16 GDP data for the full year, not just quarters
  • This is the one that showed 7.6% real GDP growth for the entire year. This is also the one which shows discrepancies of R9,135 crore for the full year (0.1% of GDP). If a full year is superior to quarterly data, why didn’t commentators pick FY16, instead of fourth quarter of FY16?
  • “It is a capital mistake to theorise before one has data.But the evidence suggests that even if one has data, one can twist facts to suit theories

 

3. The Business Line: 

 

a) What we need is digital disruption
Topic: EconomyCategory: ICT InterventionKey points:

  • New waves of technologies are transforming the industrial, business and governance landscape. Sample how the Delhi government is engaging with citizens through its e-governance app. Everything from reporting on dirty streets to water meter readings is getting digitised
  • Banks and software industry together can build a business model to enable digital and mobile commerce and for that banks are seeking to drive more, and deeper, relationships with technology houses
  • Even as companies embrace digital technologies, commonly referred to as SMAC (social, mobile, analytics and cloud), leveraging them for business gains of various hues, the next generation of technologies is getting ready to roll. Unlike SMAC, the six new gen technologies, or innovation accelerators, are going to impact businesses’ operating processes and paradigms, driving deeper transformation
  • Internet of Things (IOT) is the label given to a connected world where inanimate objects ‘talk’ to each other, exchanging information without human intervention, and triggering business processes
  • For instance, a trucking company in Delhi has used IoT to track its vehicles while monitoring essential indicators such as speed, fuel consumption and the general health of the vehicle, using an integrated system of sensors which feed data into a mobile-network-connected device. This kind of application can save the company anywhere between 10-15 per cent of operating costs through reduced pilferage, prevention of unauthorised stops and preventive maintenance
  • By 2020, we expect more than 30 billion devices to be connected on to one single “new” internet
  • Augmented and virtual reality, the next accelerator, has already invaded the gaming ecosystem. However, if you are a healthcare provider, you’ll soon be using visors to virtually train key frontline medical staff. Or, if you happen to be the Army, virtual battlefields will enable safe and effective training of soldiers
  • We also see applications in R&D, product development and in industries as disparate as interior design, retail and chemical manufacturing. For consumers, it would completely transform the ecommerce experience soon as you buy from a virtual supermarket while wearing your visor and pay at the virtual self-service checkout. Technology vendors such as Samsung, Facebook and many others are racing to develop next generation devices which enrich our experiences
  • 3D printingis already being used to produce artificial body parts where organ replacements are required. A leading brand is launching a custom-fit, 3D-printed shoe which is ‘manufactured’ in the store. 3D-printed prototypes are replacing clay models whilst enabling far more detail and accuracy in product development labs and time savings to the tune of 60-70 per cent
  • 3D printing can, and will, revolutionise supply chains, inventory management practices, product development and R&D methods and healthcare. It would lead to the rise of hyper-local, micro-factories which democratise manufacturing, changing it forever.
  • Next generation robots come in two flavours: real and virtual. Physical robots can now execute tasks that are extremely intricate. Swiss firm ABB recently showcased a robot folding a paper aeroplane and launching it into the air, demonstrating the next level of robotic dexterity, programmatic sophistication and versatility
  • Robots will replace humans in all kinds of repetitive or dangerous tasks: from factory shopfloors to uranium mines. The day is not far when hotel housekeeping and even engineering functions see robots playing a bigger role
  • Security, thought systems
  • The final two innovation accelerators are not just important in themselves but also have a pervasive impact on the four above, and on a much wider ecosystem
  • The tragedy of the digital age is the increasing incidences of cyber-crime — from individuals suffering phishing attacks and stolen passwords to large organisations losing confidential customer data. We are in a perpetual battle with cyber-criminals, rogue countries and malevolent employees seeking to hack, steal and sell.
  • Next-generation security will blend the physical and digital. CCTV cameras with face recognition technology built in ensure that if a bad actor enters the premises, the cameras can instantly trigger alarms and activate relevant business processes.
  • On another front, projects are on to make passwords redundant. Using a combination of biometrics and behaviour tracking, new age security systems will identify you with more certainty. The paradigm of security is also being extended to protect new age robots, IoT networks and virtual reality systems. Success is an imperative: failure will halt the onset of the digital age in its tracks
  • No doubt, cognitive systems will be the most pervasive accelerator going forward. The fundamental notion is that machines can self-learn, improve and deliver superior outcomes over a period of time. This is possible due to breakthrough technologies manifested in machine learning systems, artificial intelligence platforms and big data systems. The possibilities in smart traffic management in cities are also phenomenal with cognitive systems which learn from historical traffic patterns and can, for example, automatically change the rhythm of traffic lights, or indeed dynamically set parking charges
  • It is imperative that you understand implications of these emerging technologies
  • Given the breakneck speed of evolution, coupled with the worsening skills shortages, it is not an easy or predictable ride. The promise of transformation can only be realised with visible, sustained leadership from the top, a culture that pardons innovation failures, the ability to stretch old business models and a discrete innovation investment fund

 

4. The Economic Times:

 

a) Tangible gains to India’s nuclear bid Topic: Economy

Category: Energy sector

Key points:

  • Prime Minister Modi has a tangible gain to show for his external exertions. All hurdles to its membership of the34-nation Missile Technology Control Regimehave been cleared. It has now got Switzerland’s backing for membership of the Nuclear Suppliers Group, and the United States, which has been strongly endorsing India’s case, reiterated its full support for India’s membership of the NSG, Australia Group, and the Wassenaar Arrangement. PM Modi will hope to pick up Mexico’s endorsement when he meets with its president
  • However, China continues to oppose India’s NSG aspirations. Washington’s backing will prove to be crucial in countering Beijing. The joint statement gives clear indication of US support for India
  • Even though there is no reference to the South China Sea, a concession to Chinese sensibilities, it refers to India and the US as priority partners in the Asia Pacific and Indian Ocean
  • The agreement between the two militaries to facilitate mutual logistics support including port visits and joint exercises, and the forward movement on nuclear power are the other indications
  • Its import has not been lost on China which responded by downplaying the India-US relationship. China’s opposition to India has been couched in terms of India’s refusal to sign the Non-Proliferation Treaty, and parity with Pakistan. But the real reason for Beijing’s opposition is the access to technology that India will gain via entry to the nuclear club, giving it new economic and strategic benefits
  • This was the prime consideration that had driven the US to enter into a civil nuclear agreement with India, breaking the technology denial regime to which India had been consigned after its nuclear tests

 

5. Quick Bits

 

a) Centre to evolve norms to enhance product quality
The Commerce Ministry will soon bring out a five-year ‘National Standards Strategy Paper’ to weed out substandard products from the domestic market and boost India’s exports of high quality goods.The government is mulling improving regulations to ensure that India moves gradually towards adoption of more mandatory standards (also called technical regulations) that are harmonised with international standards.It would also help prevent flooding of domestic market with unsafe/sub-standard imports which adversely affect consumers and domestic industry

 

b) World Bank cuts 2016 global growth forecast to 2.4%The World Bank has lowered its forecast for the global growth in 2016 to 2.4 per cent in its Global Economic Prospects Report, saying that the world economy is facing stronger headwinds.According to the report, developing economies are forecast to expand by 3.5 per cent in 2016, 0.6 percentage point lower than its January’s projection; advanced economies are expected to grow 1.7 per cent this year, 0.5 lower than its January’s forecast

 

c) RBI retains retail inflation target at 5% with upward biasThe RBI today retained January 2017 retail inflation target at 5 per cent, though with an upward bias, amid a sharper-than-anticipated upsurge in inflationary pressures due to food items and firming oil prices

Consumer Price Index (CPI) based retail inflation excluding food and fuel edged up in April. Services inflation also remained elevated on account of house rents, water charges, tuition fees and taxi/auto fares.“The inflation surprise in the April reading makes the future trajectory of inflation somewhat more uncertain,” the statement said 

 

G. Fun with Practice Questions 🙂
Question 1: 1.	Which of the following statements is/are correct?
  1. The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies) is a multilateral export control regime
  2. The Australia Group is an informal group of countries to help member countries to identify those exports which need to be controlled so as not to contribute to the spread of chemical and biological weapons

a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2

 

Question 2: According to the Foreign Contribution (Regulation)Act,2010 ,who among the following cannot receive foreign contribution:
  1. Election candidate
  2. News Broadcaster
  3. Member of Legislature
  4. Government Employee

a) 1,2 and 3

b) 1,2 and 4

c) 2,3 and 4

d) All the Above

 

Question 3: Which of the following statements is/are correct?
  1. Monsoon forecasting by dynamic model is done by generating three-dimensional models requiring immense computing power
  2. The statistical model of monsoon forecasting uses historical relationships between rainfall and predictors such as sea-surface temperatures and south-easterly winds over the Indian Ocean

a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2

 

Question 4: Which ofthe following is/are objective(s) of the Deen Dayal Upadhyaya Gram Jyoti Yojana?
  1. To provide electrification to all villages
  2. Feeder separation to ensure sufficient power to farmers and regular supply to other consumers
  3. Improvement of Sub-transmission and distribution network to improve the quality and reliability of the supply
  4. Metering to reduce the losses

a) 1,2 and 3

b) 1,2 and 4

c) 2,3 and 4

d) All the Above

 

Question 5: Which of the following countries have not brought the Comprehensive Nuclear Test Ban Treaty to force?
  1. United States of America
  2. China
  3. Pakistan
  4. Russia

a) 1 and 4

b) 2 and 4

c) 1,2 and 3

d) All the Above

 

Check Your Answers

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