Comprehensive News Analysis - 12 July 2016

A. GS1 Related

B. GS2 Related

Topic: India and Russia

Category: International Relations

Key points:

• The Indian Commerce and Industry minister held talks with her Russian counterpart Denis Manturov on measures to boost bilateral trade and investment ties including in sectors such as high-end engineering
• An official statement on Monday quoted the minister — who is leading a business delegation to Russia — as saying, “There is a strong potential for growth in India-Russia bilateral trade. Be it high-end engineering, or manufacturing, India is moving towards being synonymous to quality, reliability and durability.”
• Indian firms including Bharat Forge, Sun Group, NTPC and NHPC are participants at INNOPROM 2016, the largest annual international industrial trade fair of Russia

Topic: Federalism

Category: Polity

Key points:

• With no let-up in violent clashes, arson and the cycle of death, and with separatist leaders asking Prime Minister Narendra Modi to read “the writing on the wall,” the Centre rushed more troops to the Kashmir Valley and held emergency meetings to take stock of the situation
• The (Ministry of Home Affairs) MHA, which is in constant touch with the State government, has decided to dispatch 800 more Central Reserve Police Force personnel. According to sources, security has also been beefed up and the AmarnathYatra partially resumed
• In the meantime in the Valley, there was no end to the protests even as the death toll climbed to 30
• Just a day after Hurriyat faction leaders, Mirwaiz Umar Farooq and Syed Ali Geelani, asked protesters to “maintain discipline” and “avoid direct confrontation with security forces,” the separatist leaders hardened their stand and extended the call for a shutdown and protests by two more days
• “July 13 (otherwise observed as Martyrs Day) will be observed as Reaffirmation Day,” MrGeelani, the Mirwaiz and JKLF chief YasinMalik said in a joint statement

Topic: India and Kenya

Category: International Relations

Key points:

• India and Kenya signed seven pacts, including in the field of defenceand security and avoidance of double taxation
• India announced extension of a concessional Line of Credit (LoC) of $44.95 million to the African nation to help it in development of small and medium enterprises and textiles
• India will also build a cancer hospital in Kenya to provide quality and affordable healthcare
• India is to deepen security partnership with Kenya including in fields of cyber security, combating drugs and narcotics and human trafficking as terrorism and radicalisation are common challenges for both the countries, the region and the whole world
• The MoU on Defence Cooperation signed will entail staff exchanges, expertise sharing, training, cooperation in hydrography and equipment supply

(The two countries share common interest in security, including in maritime security, since they were connected by the Indian Ocean)

• Besides MoUs in defence and security, revised pact on avoidance of double taxation and two LoCs, the other agreements were in the fields of visa and housing
• “India is Kenya’s largest trading partner, and the second largest investor here. But, there is potential to achieve much more,” said the Indian PM, on the final day of his Kenya visit, that marks the end of his four-nation African tour

Topic: Pakistan

Category: India’s Neighbourhood

Key points:

• “It is deplorable that excessive and unlawful force was used against the civilians who were protesting against the killing of Burhan Wani. Oppressive measures cannot deter the valiant people of Jammu and Kashmir from their demand of exercising their right to self-determination in accordance with the UN Security Council resolutions,” Mr. Sharif said in a statement released from his office
• The earlier statement from the Pakistan Foreign Office had called Burhan Wani a “Kashmiri leader”, and termed his death an “extra-judicial killing”
• Meanwhile, India accused Pakistan of having a “hand” in the recent violence(LeT chief Hafiz Saeed and HizbulMujahiddeen Chief Syed Salahuddin issued a joint statement calling for the Pakistan government to “openly support” Kashmiri protestors, and announcing plans for funeral prayers for Wani on Friday)

C. GS3 Related

Topic: Foreign casualty(South Sudan)

Category: Security

Key points:

• At least 300 Indians have been left stranded as one of Africa’s oldest civil wars reignited on July 7 in Juba, the capital of South Sudan
• Fleeing the fight between the heavily armed rival factions divided on ethnic lines, Indians have taken refuge in various locations, including the Embassy of India
• Indian Ambassador to South Sudan pointed out that law and order had broken down; even the U.N. peacekeeping contingent was busy defending its bases. “There are 2,500 Indian soldiers in the U.N. Mission in South Sudan (UNMISS) and nearly 150 of them are stationed in Juba, but they are unable to help,” he said(as of now the airport is closed and roadblocks [controlled by rival factions] are hindering secure movement)

Topic: South Sudan

Category: Security

Key points:

• South Sudan’s PresidentSalvaKiir ordered a ceasefire on Monday after a new day of heavy fighting in the capital Juba that sent thousands of people fleeing and threatened a return to civil war
• There was no immediate response from rebel leader turned Vice-President Riek Machar whose forces have been battling Kiir’s soldiers on and off since Friday evening
• The United Nations had expressed deep alarm over days of violence between the army and ex-rebels, which has left several hundred people dead and threatens the young nation’s shaky peace
• The current fighting between soldiers loyal to Mr. Kiir, a member of the Dinka tribe, and former rebels backing Mr. Machar, a Nuer, was triggered by a deadly altercation at a checkpoint on Thursday night

Topic: Investment

Category: Economy

Key points:

• The mood among U.S. investors is highly positive towards Indian road and port infrastructure sector, and the negative remarks about the country’s investment climate in a recent report of the U.S State Department would have no impact on investment flow, Union Minister for Road Transport and Highways and Shipping said
• Responding to the concern among U.S investors that the government could not push through changes in the land acquisition law, the Minister said it was no longer a roadblock for infrastructure development
• A McKinsey study estimated 12 lakh crore investment potential in India’s port and highways sector, which global pension funds and other investors find extremely attractive. The Minister said the only unfavourable component was the fluctuation in rupee exchange rates

D. GS4 Related

E. Important Editorials: A Quick Glance

The Hindu

Topic: Federal Relations

Category: Polity

Key points:

• Burhan Wani, the 22-year-old “commander” of the Hizb-ul-Mujahideen gunned down last week by the security forces in Anantnag, was credited with mobilising a new generation of the disaffected in Jammu and Kashmir. In the violent aftermath of his death, however, young men and women have taken the fight to the security forces on the street
• Wani was obviously a prize catch. His engaging manner had turned him into a legend before his death, as he coasted on personal charisma and social media smarts to become the ‘poster boy’ of a new phase of Kashmiri militancy that is homegrown. But having got their man, the security forces failed spectacularly in managing the situation
• After the death of over a hundred Kashmiris in the stone-pelting protests in the summer of 2010, the J&K police and the paramilitary forces were said to have evolved less lethal ways of bringing under control what is essentially political mobilisation. The fact that so many civilians have been killed or injured in the eye this month, with a high percentage having possibly lost vision altogether, suggests that no care has gone into keeping the casualties low
• Faced with an attacking mob, policemen are bound to perceive a sense of siege. But it is imperative that any response should be measured and never grossly disproportionate to the cause of action — forgetting this lesson in Kashmir has time and again led to the fuelling of a further cycle of protests, to attracting more impressionable and aggrieved youngsters to attack symbols of authority
• This is a cycle that cannot be broken by brute force. The Central and State governments have reached out to the Opposition and separatist leaders to dissuade young Kashmiris from street violence. But appeals for calm must be strengthened with a demonstrable capacity for a political conversation
• When tens of thousands of Kashmiris hit the streets in mourning for a fallen militant, there is a spectrum of political opinion that presents itself. They can be dispersed with pellets. But if ‘mainstream’ politics does not speak to them, if their arguments are not heard patiently to be countered or fleshed out, as the case may be, the calm that eventually obtains will be an illusion
• The Valley has been restive for more than a year now. In this period, Wani is not the only militant whose funeral has drawn people in the thousands. But after long, after more than a decade of violence led by foreign militants, he was the rare local boy to be seen in a leadership role. To put his mourners in a with-us-against-us binary would give him a recruiting power from beyond the grave

Topic: Reforms

Category: Economy

Key points:

The rescue team of 1991, of which you were a key member, made a giant leap of faith. There hasn’t been a crisis of the same order, but would you say you have seen as much boldness and courage in economic policy formulation in the 25 years since then?

• As you say, the crisis of 1991 was exceptionally severe and it did require a quick and bold response. We are fortunate that Dr. Manmohan Singh, backed by Prime Minister [P.V.] Narasimha Rao, acted quickly and boldly. He didn’t just act to control the crisis: he used the crisis as an opportunity to make far-reaching structural changes to transform a system that was designed in the mid fifties and sixties and had become quite unsuitable for the times. The problems with the system had been discussed earlier and there was general agreement in the technocracy about the need to reform industrial and trade policy, and the need for a greater role for the private sector and market forces. There was less agreement in the political class and especially not in the Left

How do you feel when you look around and see how much India today is different from the pre-1991 era?

• Of course, India has changed, radically, but you would expect that over twenty-five years. The question to ask is has it changed faster than in the twenty-five years before the reforms, and seen more progress than other countries?
• There is no question it has changed much faster than it did in the preceding 25 years. The rate of growth of GDP between 1955 and 1990 was only around 4 per cent. Per capita GDP grew at only 2 per cent per year. In the 25 years since the reforms GDP growth has averaged about 7 per cent and population growth has slowed down, which means per capita GDP growth has been close to 5.5 per cent. That’s a huge difference. A lot of the changes you see in the structure of the economy are a consequence of the fact that incomes are rising much faster and of course the economy is more open
• Poverty has declined much faster than in earlier years, though of course there are still too many people below the poverty line. More importantly, expectations have changed. The poor don’t just want to be pushed above the poverty line. They want better quality jobs, better access to essential services such as education and health and clean drinking water and sanitation. Our performance in these dimensions needs to be greatly improved
• Comparing India’s performance with that of other countries shows that India’s growth was lower than that of other developing countries in the pre-reform period but it exceeded that of all developing countries except China taken together. China’s performance is clearly outstanding and in a different league

Former Finance Minister P. Chidambaram has said that the fiscal stimulus rolled out by the UPA government in the aftermath of the 2007-08 global financial meltdown ended up contributing to the economic pain. You were one of its architects…

• I was in favour of an initial stimulus to counter the impact of the crisis. That was the right thing to do then, and indeed it is what the G20 were recommending generally. However, having protected GDP growth in 2009-10, the stimulus should have been withdrawn by 2010. I was certainly not in favour of open-ended stimulus. Had we started withdrawing in 2010-11, we would have been in much better shape from a macroeconomic perspective in the next three years

The Planning Commission, Prime Minister Manmohan Singh had said at its final meeting, was in need of reinventing itself. In what ways was the need for the Commission to contemporise itself felt?

• All institutions should periodically rethink their purpose. Dr. Manmohan Singh wanted us to ponder on what an institution like the Planning Commission should do to support government policy in the new economic environment. I had submitted a detailed note to the Prime Minister in the last months of UPA-II but I said action could be left to the next government
• One of the suggestions I made was that the Commission should do more to provide an internal but independent critique of the sector policies and individual programmes implemented by the Ministries. Traditionally the planning process had focussed too much on funding plan and not enough on general sector policy, or even on scientific evaluation of the effectiveness of plan programmes. However, to do a good job the Commission has to be able to draw on professionals with domain knowledge and not just on generalist civil servants drawn from the same pool as the Ministries. In the pre-reform era, about 80 per cent of the knowledge on most things was within the government and only 20 per cent outside. Today, it is the reverse. This is especially so as the private sector now has an active presence in all critical areas. We had no way of tapping outside expertise in a systematic manner. We did set up committees and consultative groups, but that is not the same thing as having experts on the staff. I did move a proposal to allow each member a budget of Rs.2 crore, to hire outside consultants in any of their areas. They welcomed the initiative, but later complained that the administrative procedures for selecting the consultants were so complex that they could not cope!

It’s been over a year since the NITI Aayog replaced the Planning Commission. It’s early days still for the Aayog but is it, in your view, addressing those gaps and the need of the day?

• . We are entering a very critical period, with considerable global uncertainty. Solid analysis and critical advice on policy can make a big difference. And that I understand is the terms of reference of the NITI Aayog

Concerns have been expressed about the Central Statistical Organisation’s GDP and Gross Value Added estimates, including by Mr. Chidambaram. There are doubts if an industrial turnaround has indeed taken place. Commentators are saying that India’s growth doesn’t feel as good on the ground as the data suggest. Where do you stand in this debate? What disconnect could there be between the statistical estimates and the reality on the ground?

• It is not just [Mr.] Chidambaram who has expressed doubts. The Economic Survey itself has expressed puzzlement, so clearly there are unresolved issues. These are mainly on the growth of manufacturing where the new data give a higher growth rate than the earlier indicators would suggest. I thought a committee under Pronab Sen had been appointed to go into these issues. They should release the report as soon as possible. The CSO should also come out as quickly as possible with a time series going back several years using the new method and comparing the result with the older series.

Now that China has slowed down, our growth rate is higher than China. Observers are already saying that even China’s reduced growth rate exaggerates the actual growth. If China’s growth data are being questioned, there will be similar scrutiny of our data, and we would be well advised to share whatever information we have as quickly as possible

The Indian economy is said to be an island of relative calm in a gloomy global scenario. Mainly domestic engines propel it and it has remained relatively insulated from global shocks. Can it remain so? Is India a largely domestic story?

• It is true that we are not dependent on an export-led growth process where expanding exports and a growing export surplus provide the demand that will support growth. But that does not mean we are somehow insulated from global shocks. We are much more open than we were and therefore what happens elsewhere matters to us. In fact, right now we are benefiting from a positive global shock in terms of low oil prices, though this shock has now bottomed out
• I do agree that India’s growth will depend upon domestic factors, notably a big push in infrastructure and a revival in private investment. However this will involve an increase in import and we will need better export performance to manage the balance of payments. FDI is also important for modernising technology in Indian industry and possibly also linking Indian production to global supply chains. That in turn has implications for trade negotiations. All this means there are many things we have to do to manage our interactions with the global economy well. We would ignore the global economy only at our peril

Is the worst yet to come from China?

• There is a lot of nervousness internationally about China’s economic prospects in the near future. They were expected to slow down from the very high rates of growth they recorded in the past thirty years and initially, the slowdown to 6.5 per cent was regarded as commendable. The trouble is, people are now wondering whether China’s growth is lower than that, some say even as low as 4.5 per cent. If it is that low it will generate internal tensions in terms of insufficient growth of employment opportunities. China was able to maintain high growth after the crisis because of a credit-led boom feeding investment in real estate which has led to a number of what are now called ghost towns. This is clearly not sustainable and the traditional Chinese growth engine, which used to be exports, is unlikely to recover soon given the poor prospects in the advanced countries. One can never be sure, but it is reasonable to say there is no upside and quite a lot of downside. Poor performance in China will obviously have ripple effects on others

What does Brexit tell us — will the European experiment succeed or fail? What are the economic implications?

• Brexit was a surprise, although the polls were all pointing in that direction. Many of the underlying tensions that caused Brexit, especially a frustration with the soothing noises being made by the elite for several years which did not lead to visible improvements for the common man, are being felt in other European countries also. And immigration touches a raw nerve everywhere. I do not know whether the U.K.’s exit is now inevitable. The new Prime Minister will have to take a call and it is possible that they may push the decision to a general election. It is too early to judge whether the European experiment will be irreversibly damaged but in the short run, there will be more uncertainty. I don’t see any positive economic implications and one can imagine seriously negative ones

Nationalism seems to be gaining popularity around the world. Is it linked to the economic hardships people faced after the 2007-08 global economic slowdown? By when will the global economy recover? Which economy will lead the recovery?

• The rise of economic nationalism is almost certainly connected with persistent economic hardship and the perception that the establishments in these countries have been making standard reassuring noises that things will soon get better but they haven’t. I don’t think the current year will see an economic recovery for the simple reason that China is still mired in problems, Europe is overwhelmed and Brexit has added to uncertainty, and the U.S. is going through a general election. If developments in each of these regions go well, or at least better than people fear, we could at best expect a weak upturn next year. For us this implies that oil prices are unlikely to shoot up, which is good, but export markets will be challenged, which is bad. We should use this period to set our own house in order and make the kind of structural reforms which will make us look like an attractive destination for FDI when the world has regained its breath

Topic: Uniform Civil Code

Category: Polity

Key points:

• Last month, the Ministry of Law and Justice sent a communication to the Law Commission requesting it to examine and report on all issues pertaining to a Uniform Civil Code
• One of the reports of the 18th Law Commissionrecommended certain amendments to the Special Marriage Act of 1954 to rid it of its discriminatory provisions. The other called for a central law for compulsory registration of all marriages in compliance with the Supreme Court directions in this regard
• Neither of these examined, or reported on, a Uniform Civil Code. On the contrary, the Commission had refused to adopt a third report that urged a revision of the extremely messy Muslim Personal Law (Shariat) Application Act, 1937 which determines the scope of Muslim law. The reason for its rejection was an outcry by some Muslim religious leaders who saw in it an attempt to pave the way for a Uniform Civil Code
• According many the two “hurdles” in the way of the present Commission in examining the feasibility of a Uniform Civil Code are: The Shariat Act of 1937 and a Bombay High Court judgment that gave the Muslims “freedom to opt for the 1937 Act”
• The Bombay High Court ruling — pronounced in a case on the Bombay Prevention of Hindu Bigamous Marriages Act, 1946 — had nothing to do with the Shariat Act.
• Never in the history of the Law Commission has either the issue of Muslim law reform or a Uniform Civil Code been referred to it by any government. In the SarlaMudgal case of 1995 dealing with the issue of bigamy by non-Muslims after a “conversion” to Islam, a Supreme Court judge had advised the government to request the Law Commission to prepare, in consultation with the National Commission for Minorities, a comprehensive report on these matters. However, the advice remained confined to the pages of law reports
• The step taken by the present government in this direction is surely unprecedented. Whatever may be the alleged motive, there is no legal ground for objecting to it. Indeed, the Law Commission exists for the purpose of conducting studies on controversial legal issues, and fixing its terms of reference is the government’s prerogative. In the present case, the Commission has to “examine and report on” the issue of a Uniform Civil Code and not to draft it — drafting of laws in any case is not the Commission’s job. The Law Minister has rightly clarified that “whatever report the Commission gives is its discretion”
• As per Article 44 of the Constitution, the state shall “endeavour to secure for the citizens a Uniform Civil Code throughout the territory of India”. The direction, notably, is not for Parliament to enact such a code straight away but for all organs of the state to make efforts to “secure” uniformity in civil laws
• The apex court of the country has repeatedly reminded the government of this policy directive but has always respected its non-justiciable nature and refrained from issuing any direction. Hopefully, the Law Commission too will keep in mind the true nature and implications of Article 44 while answering the present government’s request
• The note of caution in the apex court’s SarlaMudgal judgment — “the desirability of uniform civil code can be hardly doubted but it can concretise only when social climate is properly built by the elite of the society and the statesmen, instead of gaining personal mileage, rise above and awaken the masses to accept the change” — merits serious thinking by all stakeholders

Topic: Legislation

Category: Polity

Key points:

• In Kolhapur, a couple of years ago, nine sex workers in their 40s were remanded to a rescue home and told to produce parents or family members to whom they could be ‘handed over’. Some of these women did not have living parents, some had left home decades ago, and some had families who did not know they were engaged in sex work. The women were shunted from home to home and finally released after one year
• The episode reveals in a nutshell all the shortcomings in the Immoral Traffic (Prevention) Act (ITPA). One, that it includes the word ‘immoral’, inserting an element of morality when the discussion should be purely legal. Two, that all sex work is assumed to be a result of trafficking with workers needing rescue. Three, that adult sex workers should be put into homes without their consent. Four, that adult women should need to produce families to be released, thus denying them any agency in their lives. And finally, that what is fondly paraded as an act of ‘rescue and rehabilitation’ should actually be incarceration and trauma
• Clearly, there is every reason to desire a better law that can correct the anomalies in the existing one. But the recently minted Draft Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2016 does not do this. On the contrary, it opens up brand new grounds for anxiety
• To begin with, it was fashioned in great secrecy without the kind of wide consultative process one might expect before such important legislation. This is troubling. There is no reason for a Ministry to keep major stakeholders out of the discussion if it is confident of the legitimacy of its suggested provisions
• Next, the Draft Bill tackles trafficking solely through the lens of sex work. The tens of thousands of men, women and children who are routinely trafficked for marriage, domestic labour or bonded labour in fields, mines, and textile and beedi factories are ignored. And even in this limited exercise, the Ministry displays how little it understands the real issues at stake, how paternalistic its attitudes are, how much the state continues to infantilise adult women, and how big a role ‘morality’ plays in the government’s approach to problems
• Take, for instance, the provision in the Draft Bill that allows, among others, any social worker or public-spirited citizen to ‘rescue’ and ‘produce’ a ‘victim’ before the District Anti-Trafficking Committees it proposes to set up. This is unprecedented, opening the door to exactly the kind of moral policing that one begins to suspect the Bill of wanting to encourage. It could lead to harassment of not just sex workers but other ordinary people by overzealous, vigilante citizens
• Or take how, by continuing to conflate “prostitution” with “commercial sexual exploitation”, the Draft Bill goes completely against the grain of what activists are fighting for, namely protecting the rights of adults who stay in prostitution voluntarily
• In 2013, the Verma Committee had specifically clarified that “the recast Section 370 ought not to be interpreted to permit law enforcement agencies to harass sex workers who undertake activities of their own free will, and their clients”. In 2015, a Supreme Court panel had recommended that the law relating to trafficking be read down for consenting adults in sex work and their clients
• The conventional and simplistic approach has been to define ‘prostitution as exploitation’ whereas most reformers today look at the ‘exploitation of prostitution’ as the primary evil that must be addressed. It is important, thus, to treat trafficking in children, adult trafficked labour, and forced sex work as separate categories, but the Draft Bill mixes up everything in its one-size-fits-all approach
• Further, the Draft Bill threatens basic constitutional freedoms of the persons it seeks to rescue. For instance, Article 22 gives a detained individual the right to consult a lawyer and be produced before a magistrate within 24 hours, but the Draft Bill allows persons to be directly produced before the member-secretaries of its District Anti-Trafficking Committees. Second, the Committees can independently recommend that a victim be repatriated to her home State (or another State) for increased protection. This contravenes Article 19, which grants citizens the right to move freely across, and reside anywhere in, the country. Thousands of men and women voluntarily leave hometowns and villages to escape poverty. And what about the women who, even when victims of trafficking, are reluctant to return to homes where they might face further harassment? Adult trafficked persons must be consulted and made aware of their rights so that they can take informed and independent decisions on whether they want to be repatriated
• The enormous power and little accountability that is vested in the proposed District Committees are troubling. They raid and rescue, rescued persons are produced before them, and they are also responsible for post-rescue care. In effect, it would appear that they are policeman, judge and rehabilitator rolled in one. At present, despite its lacunae, the ITPA still has some processes in place. For instance, nobody can enter a brothel without a warrant, and only some categories of police officers have the power to raid a brothel. Now, these guidelines stand to be transgressed
• Overall, this appears to be a carelessly drafted and muddled Bill that does more harm than good. It duplicates several existing (and unimaginative) provisions: Anti Human Trafficking Units already work in districts and States, the ITPA’s present raid-rescue-rehabilitation approach is a dismal failure, and rescue homes today are often the site of fresh exploitation. Thousands of placement agencies continue to be the chief source of human trafficking despite laws. The Draft Bill repeats the need for their registration without explaining how it will ensure it. These are but a few of the many shortcomings the Draft Bill needs to fix. If the Women and Child Development Ministry is serious about wanting to streamline existing anti-trafficking laws, plug the loopholes, and take the discourse ahead, it has to go back to the drawing board. This time, with experts

Topic: SCS Disputes

Category: International Affairs

Key points:

• Tuesday’s ruling on the South China Sea disputes by the Permanent Court of Arbitration (PCA) at The Hague is bound to mark a definitive moment in the evolution of international maritime law and Asia’s geopolitical order. It will also highlight India’s own stakes in promoting peace and stability in the contested waters of the South China Sea
• More than three years ago, the Philippines, which was locked in an escalating territorial dispute with China over the Scarborough Shoal in the South China Sea, decided to go to court. China refused to participate in the proceedings at The Hague and called them a “farce”. Beijing has declared it will not accept the ruling from the PCA
• In anticipation of the award this week, China has launched naval exercises in the South China Sea. It has embarked on a massive political campaign to challenge the legitimacy of the arbitration and defend its expansive claims over the South China Sea
• China’s so-called nine-dashed line in the South China Sea constitutes a claim for nearly 90 per cent of its waters. Its claims clash with those of its neighbours including Vietnam, the Philippines and Malaysia
• Amidst the widespread expectation that the PCA award is likely to go largely against China on a range of legal issues involved, Beijing has warned other powers against meddling in South China Sea affairs. It has pressed many countries, big and small, to express public support for its position on South China Sea
• Maritime disputes are not new in East Asia; they are indeed a legacy from the ambiguous territorial settlements that followed the Second World War. The growing regional economic integration and the normalisation of China’s relations with most Asian countries after the Sino-US rapprochement in the 1970s seemed to create a framework for pragmatic management of disputes. A number of reasons, however, have turned the dormant disputes into dangerous flash points
• For one, the resources of these waters — from fisheries to minerals and hydrocarbons — have acquired greater economic significance. For another, the growing prosperity in Asia has brought forth resurgent nationalism that is willing to aggressively pursue territorial claims rather than find compromises. The shifting balance of military power between China and the US and the expanding naval capabilities across Asia have added to this turbulence
• In the era after the Second World War, most Asian conflicts expressed themselves as land wars — in Korea, in Vietnam, in the subcontinent and on China’s borders with India, Russia and Vietnam. The locus of inter-state conflict has now shifted to the sea and is visible in the intensifying maritime tensions between China and its East Asian neighbours, especially Japan, Vietnam and the Philippines
• These maritime disputes threaten regional peace at precisely the moment when the seas have become lifelines for Asian well-being and prosperity.That South China Sea is one of the busiest maritime thoroughfares in the world underlines the depth of Asia’s economic globalisation
• China’s rejection of the PCA arbitration raises fundamental questions about the future of maritime rule of law in the South China Sea. Some of the core tenets of the law of the sea — for example, the idea that “oceans belong to every one” — emerged in this part of the world amidst the need to regulate the rivalry in the East between the European powers four centuries ago
• That the waters of the South China Sea might be enclosed today by a rising China has sent a chill down the spine of Asia. The hope that regional institutions will help dampen the territorial conflict between China and its neighbours has been dashed. The Association of South East Asian Nations, for example, has become increasingly divided between those who have a direct territorial dispute with China and those who don’t
• The contestation has inevitably drawn in the US. For Washington it is a question of the credibility of its alliances with the Asian neighbours of China and its traditional role in defending the maritime commons. The US Navy has begun to conduct freedom of navigation operations in the South China Sea in the teeth of opposition from China
• Washington has urged Beijing to show respect for international law and abide by the PCA ruling. The US has also pointed to the example of India, which accepted two years ago the award from the PCA in the maritime territorial dispute filed by Bangladesh
• Whether Delhi wants it or not, its reaction to The Hague ruling will be closely watched. Some Chinese analysts worry that India might take a hard line on the South China Sea as a tit for tat response to Beijing’s opposition that stalled India’s quest for membership of the Nuclear Suppliers Group last month. Many in Delhi would want India to speak up; others would say India has no dog in this fight
• The fact, however, is that Delhi in recent years has often affirmed its growing interest in the South China Sea. Delhi’s reaction must necessarily focus on the merits of The Hague award and on the pressing political need to de-escalate the territorial conflict in the South China Sea

The President of India conferred the 51st Jnanpith Award on renowned writer, Dr. Raghuveer Chaudhari today (July 11, 2016) at a function held at Parliament Library Building, New Delhi.

His writings are in Gujarati and Hindi.His novel Amrita (1965) explores the concept of existentialism. His 1975 trilogy titled Uparvas, Sahwas and Antarvas won him the Sahitya Akademi award in 1977. Rudramahalaya (1978) and Somtirth (1996) are historical novels.

His other novels include VenuVatsala (1967), Purvarang, Laagni (1976), SamjyaaVinaaChhutaPadavun (2003) and Ek Dag Aagal Be Dag Paachhal (2009) andAvaran.

Plays

His TrijoPurush is based on the life of Chandravadan Mehta, a Gujarati author.Sikandar Sani is a historical playwhile Dim Light is a street play.

Poetry

Tamasa (1965) is an anthology which explores the idea of intelligence over feelings. Another poetry collection is VahetaVrikshaPavanma published in 1985.

“Special Focus on the Districts where TFR is high” 

“The government will re-strategize and focus on the districts where total fertility Rate (TFR) is high in order to bring down the TFR level in the country. There is a need to do micro-planning for these districts and develop need-based programmes to address TFR.” This was stated by the Union Minister of Health and Family Welfare in a function organised by JansankhyaSthiritaKosh (JSK) to mark the World Population Day(July 11).

On the directions of the Minister of Health and Family Welfare, Ministry of Health launched nationwide “Intensified Diarrhoea Control Fortnight (IDCF)”, today. The Intensified Diarrhoea Control Fortnight (IDCF) will be observed from 11th to 23rd July across the country. The Ministry also unveiled a package of measures putting the Government’s resolve to end child diarrhoea deaths on the overdrive.

ASHAs shall visit all households with children below five years of age for pre-positioning the ORS. They shall also explain the benefits of these. The importance of this activity is that ORS will be available in the household when needed at the time of diarrhea. It is often observed that during critical stages of diarrhoea, ORS is not available in the households. Secondly, all health facilities shall have ORS corners which shall continuously demonstrate the way to prepare the ORS mixture. These corners will also administer ORS and Zinc to children who are in need of these during diarrhoea.There are about 10 crore children below five years of age across the country.

Rural Entrepreneurship Development Scheme was launched in 2015 and it will be effective from 2016-17. It is a new programme to impart opportunities for attaining experience as well as entrepreneurship skills on part of agriculture graduates. Under this scheme, the agriculture graduation students will be granted scholarship at the rate of Rs. 3000 per month.

Topic: Industry

Category: Economy

Key points:

• The implementation of digital technologies, collectively called Industry 4.0, are transforming the manufacturing paradigm of last two decades of 20th century, which saw China become the ‘factory to the world’ on the back of foreign investment and low-cost manufacturing driven export-led strategy
• We are already starting to see a shift to the 21st century paradigm—as evidenced by the recent announcement by Adidas for shifting production from China to Germany as advances in robotics made it cost-effective to do so. This trend will only pick up as the price of industrial robots is projected to drop by 20% over the next decade, while their performance will improve by 5% annually. The biggest beneficiary of this foreign investment cum low labour cost manufacturing paradigm, namely China, is rushing to transform its manufacturing sector for the new century and has become the biggest buyer of robots
• In this new manufacturing paradigm, the future of manufacturing growth and creation of new jobs in India has to go beyond the industrial parks with large-scale labour-intensive plants of the 20th century. The new paradigm will be driven by three key shifts, (i) robotics enabled small-scale, localised manufacturing, (ii) growth of global digital services servicing manufactured products, (iii) and greater share of platform enabled exchange of products transforming supply chains
• We need a Make-in-India 2.0 policy framework that will not only allow India to leapfrog into the digital 21st century and build relevant capabilities and competitiveness, but ensure that we are creating jobs for the 12 million youths who join the job market every year.
• To achieve this, India needs a multi-pronged approach which should have four pillars. First, and foremost is to create jobs. There is no alternative but to make some very specific policy choices. For instance, investing to scale up labour-intensive sectors which are further back on the automation intensity, where global shifts are taking place and/or where India can build a natural competitive advantage. This strategy is obvious, but, the unfortunate fact is that between 2008 and 2013, 80% of production growth and 40% of export growth has been in non-labour intensive sectors like metals, chemicals and plastics
• Take, as an example, textiles and apparel—the second largest employment generator in the country. China is rapidly losing its share of the global textile exports as wages increase. The government, recently, brought out an innovative policy with many firsts (allowing fixed-term employment) and while there is more to be done (tying up market access with FTA with EU), the need of the hour is speedy implementation. Another sector which has similar growth and job creation potential and needs similar focused policy thrust is agribusiness. We are primed for a second green revolution, but can we become the ‘kitchen for the world’? A similar policy thrust to build scale in agricultural production, supply chain efficiency and transforming food, beverage and tobacco processing is needed by de-bottlenecking credit, modernising labour laws, and providing incentives for private investment
• However, what is less obvious is that to sustain competitiveness of these traditional labour intensive sectors in this new manufacturing age, the new investments in these sectors should build ‘future-ready’ facilities which combine labour-cost advantage with new age digital technologies like robotics, and not be copies of plants which served China well in the 20th century
• Second, it is absolutely critical to put renewed focus on SMEs as the new manufacturing paradigm will see the growth of smaller plants to meet local demand driven by shifting economies of scale. The challenge in India is further accentuated by the recent RBI study that shows companies with annualised sales of over R1,000 crore were growing, while SMEs were not. In fact, credit to SMEs, as a share of total lending, is shrinking. We have to re-think our SME strategy, but with a 21st century mindset
• For instance, Singapore announced an industry transformation package of SG$4.5 billion to help companies, especially SMEs, become future ready by building their technology capabilities, developing scale and making them internationalise
• The third, less-obvious strategy of Make in India 2.0 should be to grow digital services. Globally, trade in digital enabled services is growing faster than trade in goods and traditional services. Advances like cheap sensors enabling the IoT and 3D printing allowing for remote manufacture of spare parts are shifting potential life-cycle value from equipment manufacturers to service providers. Large software companies are well-placed to provide these services across a range of industries. However, the digital ecosystem will need to be built and investments in newer technologies like sensors, 3D printing, cloud networks, etc, will need to be made
• Nasscom had recently announced that India is looking to capture 20% of the IoT market, which is projected to be $300 billion by 2020. This is just a starting point. As the value and ambit of digital services grows, we need to leverage the advantage we have built in ITeS globally
• However, estimates suggest India is facing a critical talent shortfall in areas like cyber security and big data analytics. Further, new job roles will get created, e.g, drone coordinator, 3D printing technician, professional triber—who puts together freelance tech teams, etc,—for which we do not, currently, have capabilities. Re-orienting our skilling initiatives towards building the requisite skill-set to win a share of the global digital services pie will be critical
• Finally, large scale sectors like automotive which are further along the automation curve will need a different strategy. They will continue to have key manual processes. Here, a labour advantage over China’s rising wages can be gained by large-scale investments in technology and building capabilities to manage “robot workers”. As the skills performed by humans will become increasingly more complex, the capacity of workers to master these new skills and the availability of programming talent will become drivers of competitiveness
• The digital transformation of global manufacturing in the 21st century need not be a threat. By recognising the opportunities (and challenges), Make-in-India will not only position the country’s manufacturing sector to compete in this new century, it can also help address the challenges of job-less growth we saw towards the end of the previous one

Topic: Trade

Category: Economy

Key points:

• As the Regional Comprehensive Economic Policy negotiations enter the fourth year, contours of the probable final outcome are gradually emerging. Based on the developments after the 13th round of negotiations that took place in Auckland between June 12 and 18, we get a big picture of what industry can hope to get from RCEP
• Firstly, RCEP will not create a large integrated market. Experts are convinced that replacing the current ‘noodle-bowl’ of numerous competing free trade agreements (FTAs) with an overarching RCEP would have simplified trade rules and created stronger production bases in the RCEP area
• To become a large integrated market, RCEP must agree to a zero tariff area among members. However, this ambitious solution was never on the agenda. The next best solution could have been RCEP countries agreeing to a single tariff concession list providing uniform tariffs for products across member-countries. However, even this was not agreeable to all
• Following the negotiations, all current FTAs will continue and RCEP will just be adding numerous new concession lists
• Secondly, RCEP will not slash tariffs substantially in most cases. Large-scale slashing is theoretically not possible among the countries already connected through FTAs. For example, Asean countries and their FTA partners have already opened over 80 per cent trade through existing FTAs. They can, at best, make small incremental offers to each other, under RCEP
• Country groups such as India-China, India-Australia and New Zealand or China-Japan do not have any existing FTA relationship with each other and hence there’s scope for exchanging deeper tariff slashing. However, many countries in the group are not enthusiastic about this, probably due to a tough economic climate. The level of tariff slashing these countries will finally agree upon is yet to firm up
• Thirdly, consensus on adopting common Rules of Origins (ROO) will make movement of goods easier, predictable across the member-countries. However, this is just a framework and product level details for almost 5,200 product sub-headings are yet to be negotiated. ROO criteria determine nationality of goods. For instance, if squash is made in India from Nagpur oranges, the squash obviously originates in India. But what if the squash is made in India from oranges grown in the US? Which is the country of origin for squash here: India or the US?
• There is no standard answer. However, two broad interest groups are visible: Export-driven trading economies such as many Asean countries argue that even minor processing should qualify a product for FTA benefits whereas manufacturing economies such as the US, China or India argue that processing should be substantial else non-FTA country products will enter the domestic market. RCEP will have a tough time balancing the conflicting needs of the stakeholders, comprising a mix of manufacturing and trading economies
• While a few countries are pushing for large MNC-centric rules, RCEP being home to over 100 million SMEs, may struggle to find a balance
• Fourthly, contours of the final outcome are yet to emerge in the area of IPR, services and investments. RCEP will have to reconcile the interests of many conflicting interest groups to ensure that IPR provisions do not compromise on public health issues as it contains 45 per cent of the world population, of which the majority is poor
• Another contentious issue before it is ‘investor-state dispute settlement (ISDS)’ that seeks to enable an investor to sue a foreign government. Detailed provisions of these issues are expected to be debated till the last day of negotiations
• These developments at the RCEP negotiations would broadly translate into the following trends for industry sectors and countries
• RCEP will influence new investment decisions in textiles, leather, processed food, machinery and electronic component sectors. This will happen on account of the common ROO framework and the entry of China as the new FTA partner of Japan, India and Australia. However, no change in business strategy is expected in sectors such as basic agriculture and automotive products as these may not see fresh tariff concessions and face restrictive ROOs. New investment in steel may not happen on account of large over-capacities
• Intra-Asean trade will come down. This trade for intermediate products such as integrated circuits accounts for over 60 per cent of Asean import of these. Much of this trade may relocate to one or two Asean countries or even to China on account of the common ROO framework and to achieve economies of scale
• China’s exports to India may increase. Today, China exports to India at full duty as it does not have an FTA with India. But for products where duty differential matters, it needs to set up joint ventures in Thailand or Malaysia from where products can be exported to India at zero duty under the Asean-India FTA. With RCEP, many such facilities will not be required as China will export directly to India. While China’s exports to India may increase, most of these will be at the expense of Asean’s exports to India. However, China and Asean’s combined exports to India may not see much change
• India may emerge as an attractive investment destination for China. To offset the increasing labour costs, Chinese firms have been relocating labour-intensive manufacturing to Vietnam, Cambodia, Thailand and Indonesia. By setting up manufacturing joint ventures in India, China can effectively reach India’s domestic market and also a large European market once India signs an FTA with the European Union. If this story plays out, India’s trade deficit with China will come down as well
• RCEP may still take over a year to conclude. We may use the intervening period to tie up loose ends. The Cabinet’s decision on June 22 on introducing labour reforms for the textiles and apparel sector may prove to be a welcome grand step in this direction

Topic: Judiciary

Category: Polity

Key points:

• India’s 24 high courts should have 1091 judges. As many as 470 positions are vacant. The justice system is caught in a tussle between the committee of supreme court justices and the government over who has the final say on appointing judges
• The two decade old system of a collegium, a group of justices in a closed room, deciding who gets to don the robe is an Indian innovation created in the name of judicial independence. In reality it has produced is an opaque legal justice system. It is time to change
• The selection process of judges has to be transparent and fair. The junior-most judges can be chosen from a national judicial service. Vacancies at all levels—district/sessions court, High Court, and Supreme Court—should be made public, with clearly spelt out eligibility criteria, to enable members from the judicial service and the bar to apply
• All applications must be reviewed by a committee comprising judges of the high court/Supreme Court and the highest law officer, the state advocate general for district/sessions courts and the high court and the Attorney General, for the Supreme Court. All discussions of and recommendations by the committee must be recorded
• From a short list produced by the committee, the government should nominate candidates who should be ratified by a multiparty committee of the legislature, state assembly or Parliament, as appropriate, taking into account all recorded materials on the candidates. In a representative democracy, the final say on appointments must rest with the appropriate legislature. If the legislative committee rejects the candidate, then the next name on the shortlist could be considered. This system would strengthen, rather than erode, judicial independence
• The opacity in the appointment of judges has allowed for covert manipulation. It has also meant that often the best legal minds are left out of the judicial system. A transparent, fair, and open system of appointment is central to ensuring that people have faith in the legal system, which is essential for functional democracy, doing business, and ensuring development

The Chief Minister of Kerala told the State Assembly on Monday that 21 persons declared missing in the State are suspected to be in the camps of the Islamic State (IS) in Syria or Afghanistan, as per news reports. They include 17 persons from Kasargod and four from Palakkad. Informed sources told that the National Investigation Agency is expected to take over the probe after the State police registers cases under the Unlawful Activities Prevention Act.

Sales of passenger vehicles, which include cars, utility vehicles and vans, grew for the 12th straight month in June to over 2.23 lakh units, up 2.68 per cent from year-ago period. For the first quarter of the current fiscal, passenger vehicles grew 6.66 per cent year-on-year. Auto industry body SIAM expects growth of over 6-8 per cent in passenger vehicle sales in the current fiscal, driven by good monsoon and implementation of the 7th Pay Commission recommendations.

SIAM had earlier revised downwards the growth forecast for the segment to 11 per cent in March and then to 6-8 per cent in April this year citing higher taxes and a ban on the sale of some diesel cars in Delhi as the main reasons.

Sun Pharmaceutical Industries Ltd has announced the roll-out of Gemcitabine Infu SMART, the world’s first licensed, ready- to-administer bag for oncology treatment in Europe.“Until now, compounding of oncology products was done at compounding centres or (were) compounded in hospital pharmacies, an extra step before the medicine can be administered to patients,” the company said in a statement.

A defiant China has warned the U.S. not to apply the Monroe doctrine in the South China Sea—hours before an international arbitration panel is to deliver its ruling, sought by the Philippines, on Beijing’s maritime claims in these waters. It warned that the U.S. should not confuse the South China Sea with the Caribbean, where its dominance has been repeatedly implanted by military force.

Filipino troops have killed about 40 Abu Sayyaf rebels in offensives on southern islands over the past week, the military said on Monday, as a new government intensifies operations to wipe out one of Asia’s most formidable kidnap gangs.

Battles on Basilan and Sulu islands since Wednesday killed one soldier and also wounded some two-dozen members of the al-Qaeda-linked Islamist group, which gained in notoriety over the past few months with its beheading of two Canadian hostages.

Human Rights Watch says the Turkish government is preventing independent investigations into alleged mass abuses against civilians across south eastern Turkey. Large swaths of the region plunged into violence last summer after a tenuous 2—year cease—fire between the Turkish state and Kurdish militants unravelled. The rights group says the alleged abuses include “unlawful killings of civilians, mass forced displacement, and widespread unlawful destruction of private property.” It urged the government to grant the U.N. human rights office access to conflict-stricken areas to probe the allegations.

India may make the calendar year, instead of April-March, as its new financial year from as early as 2018 as part of its efforts to align the accounting system with the most prevalent practice in the world, sources said.(Shankar Acharya Panel recommendation)

The move is part of three major budget-related initiatives including merger of railway budget with the general budget (likely in 2017-18), and dropping of Plan and non-Plan distinction (certainly from 2017-18) in allocation of resources, an official said.Most of the major economies in the world, barring the notable exception of the US, have January-December as their financial year. Besides, most of the large global firms use calendar year for data reporting. Similarly, multilateral agencies such as World Bank, International Monetary Fund and Asian Development Bank use calendar year as financial year.

The Central government today set-up a high-level committee headed by chief economic adviser Arvind Subramanian to consider increase in minimum support price for pulses and bonus for farmers. The govt plans to increase the buffer stocks of the country from 8 lakh tonnes to 20 lakh tonnes.The Subramanian committee has been asked to submit its report in two week.

US defence major Lockheed Martin has firmed up its plans to produce the latest version of its iconic F-16 fighter jets only in India under the ‘Make in India’ programme.

The multi-billion dollar deal was “finalised” during the recent visit of Lockheed Martin’s Chairman, President and CEO last week.The F-16 project is a government-to-government deal that will be conducted through the Foreign Military Sales (FMS) route.

Lockheed Martin is likely to co-produce the F-16s in collaboration with the Tata Advanced Systems Ltd., which has been its partner for other defence and aerospace programmes such as the C-130 cargo plane.

It is currently scouting for land to set up its manufacturing unit.

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

• The Immoral Traffic (Prevention) Act (ITPA)
• CRPF
• AmarnathYatra
• Article 44
• ICA, Hague
• SCS Disputes
• Jnanpith Award
• ORS
• Rural Entrepreneurship Development Scheme
• RCEP
• Rules of Origin
• F16 Fighter Jets

G. Fun with Practice Questions 🙂

Question 1: Which of the following is/are the terms included in the Immoral Traffic (Prevention) Act, 1956 (ITPA)?

Question 2: Which of the following statements is/are correct about the Central Reserve Police-CRPF ?

Question 3: Which of the following statements is/are correct?

Question 4: Which of the following statements is/are correct about the Chilcot Committee Report?

Question 5: Which of the following statements is/are correct ?

H. Archives:

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5th July 2016: Daily News & Current Affairs Analysis

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1st July 2016: Daily News & Current Affairs Analysis

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