Comprehensive News Analysis - 13 February 2017

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. South Kashmir seethes after 7 die in Kulgam

2. No action yet on proposal to hike President’s pay

3. North Korea test fires ballistic missile

C. GS3 Related:

1. Frost & Sullivan report

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

The Hindu

1. Solar power breaks a price barrier

Economic Times

1. CAG should audit GSTN, leave internal working to its board

Business Line

1. A bankable idea


1. President of India Congratulates DRDO on the Successful Test-Firing of the PRITHVI Defence Vehicle Interceptor Missile

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


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A. GS1 Related

Nothing here for Today!!!

B. GS2 Related
1. South Kashmir seethes after 7 die in Kulgam

Category: Internal security
Topic: Internal security


  • Kashmir is in turmoil since the killing of Burhan Wani.

Key Points:

  • “Two militants belonged to Hizbul Mujahideen and two others were associated with the Lashkar-e-Taiba (LeT),” said Brigadier Chakarwarty. “Their death is bound to impact the morale of the terrorists.”
  • Opposition National Conference leader asked “Why was the Standard Operating Procedure (SOP) not followed?”
  • The state’s constituent assembly was empowered to recommend the articles of the Indian constitution to be applied to the state or to abrogate the Article 370 altogether.
  • After the state constituent assembly has dissolved itself without recommending abrogation, the Article 370 was deemed to have become a permanent feature of the Indian constitution.
2. No action yet on proposal to hike President’s pay

Category: Indian Polity
Topic: President

Key Points:

  • For over six months now, President Pranab Mukherjee has been drawing less salary than a Joint Secretary in the Government of India as a proposal to increase the salaries of the President, the Vice-President and Governors has been gathering dust in the Prime Minister’s Office (PMO).
  • The Home Ministry had proposed an increase in the salary of the President from the current ₹1.5 lakh to 5 lakh per month. Similarly for the Vice-President, the proposal was to increase the salary from 1.1 lakh to 3.5 lakh per month.
  • Though the file to increase the salary of the two constitutional posts was moved six months ago, it was stuck in the PMO, an official said. Queries to the PMO went unanswered.
  • The boost in salary is commensurate with the recommendations of the Seventh Pay Commission, implemented last year.
  • The Commission gave its report to the government in 2016 and proposed an average increase of 14% in salaries of all government employees. The Commission submits its report once every 10 years.
  • “When we realised that the President is drawing a salary less than even a Director-level officer in the Government of India, we calculated the hike to be ₹5 lakh. The Cabinet Secretary, the seniormost in the government hierarchy, gets ₹2.5 lakh currently,” said a senior government official.
  • An official said the delay in processing the proposal could be due to a similar proposal to hike the salaries of parliamentarians — as recommended by a joint committee on salaries and allowances of members of Parliament — meeting with severe criticism. The committee headed by BJP MP Yogi Adityanath had recommended a hike in salary of the MPs from current 1.4 lakh a month to 2.8 lakh a month.
  • “Once the PMO clears the files pertaining to the President’s salary, it will be sent to the Parliament for approval before getting a sanction from the union Cabinet,” said the official.
3. North Korea test fires ballistic missile

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

Key Points:

  • Japan calls it ‘absolutely intolerable’; U.S. President Donald Trump assures Tokyo of full support.
  • North Korea fired a ballistic missile into the sea early on Sunday, the first such test since U.S. President Donald Trump was elected, and his administration indicated that Washington would have a calibrated response to avoid escalating tensions.
  • The launch marks the first test of Mr. Trump’s vow to get tough on an isolated North Korean regime that last year tested nuclear devices and ballistic missiles at an unprecedented rate in violation of United Nations resolutions.
  • Once fully developed, a North Korean ICBM could threaten the continental United States, which is about 9,000 km from North Korea.
  • The Trump administration is also likely to step up pressure on China to rein in North Korea, reflecting Mr. Trump’s previously stated view that Beijing has not done enough on this front, the official said, speaking on condition of anonymity.

Chinese Angle:

  • China is North Korea’s main ally but has been frustrated by Pyongyang’s repeated provocations, although it bristles at pressure from Washington and Seoul to curb the North and its young leader, Kim Jong Un.

US’ Response:

  • Mr. Trump and his aides are likely to weigh a series of possible responses, including new U.S. sanctions to tighten financial controls, an increase in naval and air assets in and around the Korean peninsula and accelerated installation of new missile defence systems in South Korea, the administration official said.
  • But the official said that given that the missile was believed not to have been an ICBM and that Pyongyang had not carried out a new nuclear explosion, any response will seek to avoid ratcheting up tensions.
  • Mr. Trump has pledged a more assertive approach to North Korea but given no clear sign of how his policy would differ from Mr. Obama’s so-called strategic patience.


C. GS3 Related
1. Frost & Sullivan report

Category: Indian Economy
Topic: Issues in Indian economy


  • India’s foreign trade strategy and policy is currently being piloted predominantly by the Prime Minister’s Office and External Affairs Ministry.

Report Findings:

  • The report — prepared by the global consultancy firm Frost & Sullivan and submitted on December 23, 2016, to the commerce & industry ministry — also makes a strong case for a higher profile for the Indian Trade Service (ITS) in matters of trade policies & systems.
  • At present, the officials belonging to the Indian Administrative Service, Foreign Service and Revenue Service evidently have a relatively superior role over ITS cadre regarding decisions on crucial trade policy matters.
  • The report proposed that “… a dedicated ministerial arm under Department of Commerce will deal exclusively with trade-related policy inputs, their formulation and their rollout with the bulk of implementation work handled by a digital platform.”
  • The Frost & Sullivan report advocated that “the operational implementation of the Foreign Trade Policy (FTP) should reside with the department of commerce providing the trade community one single entity to deal with.”
  • The FTP should be considered a “dynamic document,” according to the report.
  • It added that any change necessitated with respect to the ongoing requirements must be approved by the (commerce) departmental arm responsible for policy-making.
  • “Once approved by all ministerial stakeholders including the Department of Commerce, Department of Revenue and Ministry of External Affairs, a single communication should be issued by the departmental arm dedicated to FTP,” it stated.


  • The report mooted that a transformed DGFT should be made accountable for all trade promotion activities for India — providing services such as trade representation in foreign countries, research & development, market intelligence, business matchmaking services as well as public relations, advertising and marketing services.
  • Noting that the DGFT needs to re-skill its resources to be successful, the report said: “Future recruitment should focus on professionals with experience and qualifications in trade and commerce from reputed institutions.”


D. GS4 Related

Nothing here for today!!!

E. Important Editorials: A Quick Glance
The Hindu
1. Solar power breaks a price barrier

Category: Environment
Topic: Renewable energy

Key Points:

  • In another barrier-breaking development, the auctioned price of solar photovoltaic (SPV) power per kilowatt hour has dropped below 3 to 2.97 in Madhya Pradesh, providing a clear pointer to the future course of renewable energy.
  • The levellised tariff — factoring in a small annual increase for a given period of time — for the 750 MW Rewa project over a 25-year period is ₹3.29, which is less than half the rate at which some State governments signed contracts in recent years.
  • The progress of this clean source of energy must be deepened with policy incentives, for several reasons.
  • Arguably, the most important is the need to connect millions of people without access to electricity. A rapid scaling-up of solar capacity is vital also to meet the national goal of installing 100 gigawatts by 2022, a target that is being internationally monitored as part of the country’s pledges under the Paris Agreement on climate change.
  • It will also be transformational for the environment, since pollution from large new coal-based power plants can be avoided. There is everything to gain by accelerating the pace of growth that essentially began in 2010, with the Jawaharlal Nehru National Solar Mission.
  • Yet, performance has not matched intent and the target of installing 12 GW solar capacity in 2016-17 is far from attainable, since it fell short by almost 10 GW as of December.


  • A glaring lacuna in the national policy on renewables is the failure to tap the investment potential of the middle class.
  • While grid-connected large-scale installations have received maximum attention, there is slow progress on rooftop solar.
  • Clearly, adding capacity of the order of more than 10 GW annually over the next six years towards the 100 GW target will require active participation and investment by the buildings sector, both residential and commercial.
  • Despite frequent international criticism, successive governments have thrown their weight behind the settlement lobby.

Way Forward:

  • This process can be kick-started using mass participation by citizens, with State electricity utilities being given mandatory time frames to introduce net-metering systems with a feed-in tariff that is designed to encourage the average consumer to invest in PV modules, taking grid electricity prices into account.
  • The experience of Germany, where robust solar expansion has been taking place over the years, illustrates the benefits of policy guarantees for rooftop installations and feed-in tariffs lasting 20 years.
  • SPV costs are expected to continue to fall, and tariffs paid both for large plants and smaller installations require periodic review. At some point, significant subsidies may no longer be necessary. That scenario, however, is for the future.


  • Currently, India needs a lot more good quality power, which renewables provide. Solar power is an emissions-free driver of the economy, generating growth in both direct and indirect employment. A lot of sunlight remains to be tapped.


Economic Times

1. CAG should audit GSTN, leave internal working to its board

Category: Indian Polity
Topic: Constitutional Bodies

Key Points:

  • Should the Comptroller and Auditor General audit the Goods and Services Tax Network (GSTN), which is the nodal body to which indirect tax payments (other than Customs duty) by all producers and suppliers of goods and services will file their tax payments, once GST kicks in, and will reconcile input tax credit claims with tax receipts? The government holds only a minority stake of 49% in GSTN, but the company would process more than half the nation’s tax receipts.

Why GSTN Should be a private body:

  • The whole point of setting up GSTN as a private company was to make it fleet of foot and efficient, with the operational freedom to keep functional an information network to which billions of tax payment receipts and input tax credit claims would be uploaded and which must process these filings at top speed to find reconciliation or spot tax liability.
  • To build multiple rounds of redundancy, and maintain and upgrade its server capacity and speed, GSTN needs to be free from the time-consuming and suboptimal rules and procedures of government procurement and recruitment.
  • As the principal shareholder, the government has the opportunity to appoint the kind of directors to the GSTN board who would ensure good corporate governance and expenditure control, aided by the normal audit process.
  • There is no reason for the CAG to audit the internal working of GSTN and raise objections that might be procedural rather than substantive in nature but could still serve to raise needless controversy over GSTN’s functional integrity.
  • But when it comes to the work done by GSTN, there is every reason for the CAG to be involved. In fact, the scrutiny and audit of tax filings of a sample from the total filings is an integral part of the GST process, meaning that this part of GSTN’s work is open to scrutiny by revenue officials, in any case.

Way Forward:

  • GSTN opposes the idea of a CAG audit, but the CAG and some other parts of the government feel otherwise. The solution to this budding controversy is fairly straightforward: GSTN’s own finances should be audited like a private company’s while the CAG must audit the tax collection work.


Business Line

1. A bankable idea

Category: Indian Economy
Topic: Banking


  • The crackdown on high-profile defaulter Vijay Mallya may be making headlines, but there can be no escaping the urgent need to stem the rising tide of gross non-performing assets (at 9 per cent of bank lending or 4.5 per cent of the GDP, it amounts to 6.75 lakh crore and mounting).
  • These have applied the breaks on lending by banks and investment by the indebted corporates concerned. Private investment had actually started to shrink by 2015-16 and in 2016-17 “so far it seems to have contracted by more than 7 per cent”, the Economic Survey 2017 notes.

Earlier attempts to reduce NPAs:

  • It appears that earlier efforts to clean up the mess and start on a clean slate — the 5/25 scheme, strategic debt restructuring and S4A (or Scheme for Sustainable Structuring of Stressed Assets) and private asset reconstruction companies — have not helped enough.
  • PARA is expected to clean up the balance sheets of banks, leaving them free to lend without encumbrance, even as they are recapitalised to the extent of the write-downs.
  • It appears that the Budget set aside only ₹10,000 crore for bank recapitalisation, against last year’s ₹25,000 crore, with a view to arriving at greater clarity on the problem before committing the money. RBI deputy governor Viral Acharya has observed that a ‘bad bank’ will have to be “designed right” for it to work.
  • There are over 20 asset reconstruction companies (ARCs) in operation, many of them private players. Private ARCs, according to the Survey, have not picked up more than 4-5 per cent of the book value of the NPAs.

Way Forward

  • The RBI governor has rightly pointed to the need for “pragmatism” in dealing with the fraught issue of NPAs. This entails the recognition, as spelt out in the Survey, that NPAs are “an economic problem, not a morality play”, the shenanigans over Mallya notwithstanding. Ultimately, the objective should be to get credit growth back to double digit rates, with checks and balances to deal with irregularities.



1. President of India Congratulates DRDO on the Successful Test-Firing of the PRITHVI Defence Vehicle Interceptor Missile

Category: Science and Technology
Topic: Defence

Key Points:

  • India now joins a select group of nations having such an effective Ballistic Missile Defence System.
  • This is a significant milestone in boosting India’s defence capabilities and will provide enhanced security against incoming ballistic missile threats.
F. Concepts-in-News: Related Concepts to Revise/Learn
  • Article 370
  • Prime Minister’s Office (PMO)
  • Indian Trade Service (ITS)
  • Frost & Sullivan Report
  • Comptroller and Auditor General (CAG)
  • Goods and Services Tax Network (GSTN)
  • Asset Reconstruction Companies (ARCs)
H. Fun with Practice Questions 🙂
Question 1: Consider the statements about CAG of India:

1] The Comptroller and Auditor-General shall not be eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office.

2] The CAG shall be appointed by the President.

Which of the above statements is/are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2

Question 2: Recently, India successfully test fired PRITHVI Defence Vehicle 
Interceptor Missile. Consider the following statements:

1] It is indigenously developed.

2] PDV (Prithvi Defence Vehicle) mission is for engaging the targets in the exo-atmosphere region at an altitude above 50 km of earth’s atmosphere.

Which of the above statements is/are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2

Question 3: Which country has filed a case against India in solar case in WTO?
    a) USA b) Canada c) Germany d) Pakistan
Question 4: Consider the statements about 7th Pay Commission:

1] Central Pay Commissions in India are constituted every five years to review the principles and structure of emoluments of central government employees and recommend changes.

2] It is headed by A K Mathur

Which of the above statements is/are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2

Question 5: Consider the following statements:

1] President appoints Chairman and other members of UPSC and Joint Public Service Commissions

2] President appoints Attorney General of India.

Which of the above statements is/are correct? a) 1 Only b) 2 Only c) Both 1 and 2 d) Neither 1 nor 2


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