Comprehensive News Analysis - 13 July 2016

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. Huge disconnect between J&K government, people: Owaisi

2. PM asks security forces in J&K to exercise ‘restraint’

3. Army ready to increase force levels, says Parrikar

4. U.S. and U.N. press for peaceful resolution

5. China rejects Hague tribunal ruling as “null and void”

C. GS3 Related:

1. Premature deaths will rise minus air quality norms: IEA

2. Centre ready to evacuate Indians from South Sudan

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

The Hindu

1. This time in Africa

2. Slowing down fast food

3. Towards a continental shift

4. Regain the peace, swiftly

The Indian Express

1. Govts must explain, explain, explain. Potential beneficiaries of reforms are unorganised, they don’t know they will ultimately benefit: Arun Shourie, former minister,MP,economist with the World Bank, consultant to the Planning Commission


1. PIB

a) Ministry of Home Affairs reviews the security of Indo-Bangladesh Border in view of the recent incidents in Bangladesh

b) China Railway Construction Corporation Limited Keen to Participate in NHAI Projects

c) Chief of the Naval Staff commissions INS karna – Marine Commandos get a new Base at Visakhapatnam

d) Road shows to be held in the USA and Canada to promote Discovered Small Fields Bid Round 2016; Shri Dharmendra Pradhan to launch Houston Road-Show

2. The Financial Express:

a) From pump-pricing economy to launching agri fund, Centre eyes mega push

3. The Business Line:

a) On a railroad from Russia to Iran

b) Making RCEP work

4. Quick Bits and News from States

a) Two more IS suspects arrested in Hyderabad

b) Centre plans unified science syllabi

c) HAL, Safran to set up MRO venture

d) Retail inflation at 22-month high in June; industrial output up 1.2% in May

e) Promote labour-intensive industries: NITI Aayog

f) ‘Flat fee optimal for spectrum use’

g) India seeks market access for sesame seeds in Japan

h) China sank fishing boat in the disputed region: Vietnam

i) Suresh Prabhu-led Indian Railways banks on ‘Tri-Netra’ to avoid train accidents

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



Useful News Articles

A. GS1 Related


B. GS2 Related


1. Huge disconnect between J&K government, people: OwaisiTopic: Federal Relations

Category: Polity

Key points:

Possible reasons for the recent unrest in Kashmir

  • Lack of governance (inexplicable delay in formation of government after the ex-CM’s death)
  • Alienation of people(Perceived threat to minority)
  • Corruption
  • Inflation(economic causes)
  • Unemployment
  • Ambiguity in Kashmir issue
  • Recent flood-lackadaisical relief
  • Excesses of army


2. PM asks security forces in J&K to exercise ‘restraint’Topic: Federal Relations

Category: Polity

Key points:

  • The Prime Minister chaired a high-level meeting on Tuesday on the ongoing unrest in the Kashmir Valley following the killing of HizbulMujahideen terrorist Burhan Wani (22) last week
  • After the meeting, security forces deployed in the Valley were asked to exercise “absolute restraint” even as the number of people killed in clashes with security forces went up
  • The Prime Minister is learnt to have expressed concern over some sections of the media projecting Wani as a “poster boy” and “hero,” which was influencing many Kashmiri youths to come out on the streets in violent protests, the official said
  • In a detailed presentation, Mr. Modi was informed by Home Ministry officials that Wani had 12 terror-related cases registered against him, and he was working towards “disintegration of the country”


3.  Army ready to increase force levels, says ParrikarTopic: Federal Relations

Category: Polity

Key points:

  • At the high-level review meeting on Kashmir here , Prime Minister Narendra Modi was informed that over 100 Central Reserve Police Force (CRPF) personnel were injured in stone-pelting by mobs
  • The CRPF personnel have been cautioned not to be provoked easily and practise absolute restraint. Security forces were also asked to ensure the security of Amarnath pilgrims and enhance vigil along the border to check fresh attempts of infiltration from across the border
  • 13th July is commemorated as Martyrs Day in Kashmir and Friday is Jummekinamaaz. The Centre is wary about the situation in these three days (13,14,15 July ). Intel inputs suggest that Pakistan-supported groups would try to incite violence in the Valley
  • The defence minister said that army was ready to provide any assistance like increasing force levels in any area required
  • Meanwhile, in the wake of the ongoing tension in the Valley, the Home Minister postponed his official trip to the U.S. till September this year. He was to leave for a week-long visit on June 17 to attend the Homeland Security meeting there


4. U.S. and U.N. press for peaceful resolutionTopic: India-US-The UN

Category: International Relations

Key points:

  • The U.S. and the U.N. have expressed concern over the violence in Jammu and Kashmir and called upon all parties to show restraint


5. China rejects Hague tribunal ruling as “null and void”Topic: South China Sea Disputes

Category: International Affairs

Key points:

  • China on Tuesday rejected an international ruling on the South China Sea, which went in favour of the Philippines, as “null and void” and devoid of any “binding force”
  • The Chinese response follows the ruling by the 5-member international tribunal, which rejected the legal validity of the nine-dash line—the demarcation line underlying Beijing’s claim to most of the South China Sea
  • The court opined that the 1982 U.N. Convention on the Law of the Sea superseded China’s “Nine-dash line” – the locus of China’ 69-year-old claim to nearly 85 percent of the South China Sea(Beijing claims most of the South China Sea, even the waters approaching the neighbouring countries, as its sovereign territory, basing its arguments on Chinese maps dating back to the 1940s marked with a so-called “nine-dash line”)
  • Besides, the court slammed China for damaging parts of the ecosystem in the Spratly islands — a contested archipelago– on account of overfishing and development of artificial islands
  • “China had violated the Philippines’ sovereign rights in the exclusive economic zone by interfering with Philippine fishing and petroleum exploration, by constructing artificial islands and failing to prevent Chinese fishermen from fishing in the zone,” the (Permanent Court of Arbitration) PCA said
  • Manila — which had lodged the suit against Beijing in 2013 — welcomed the ruling
  • Hours after China lost the case on its “historic rights” on the South China Sea in an international court, India joined Japan and the U.S. indicating that the verdict shows strengthening of the “international law”
  • “India supports freedom of navigation and over-flight and unimpeded commerce, based on the principles of international law, as reflected notably in the UNCLOS (UN Convention of the Law of the Sea). India believes that states should resolve disputes through peaceful means without threat or use of force and exercise self-restraint in the conduct of activities that could complicate or escalate disputes affecting peace and stability,” said the Ministry of External Affairs in a statement


C. GS3 Related


1. Premature deaths will rise minus air quality norms: IEATopic: Pollution Control

Category: Environment

Key points:

  • Less than one per cent of India’s population lives in areas that meet World Health Organisation air quality guidelines. But if stringent air pollution regulations are in place, this could increase to almost 10 per cent by 2040, says a study by the International Energy Agency (IEA).
  • The “Energy and Air Pollution, World Energy Outlook Special Report”, released in June, assesses the role of energy in air pollution and makes emissions projections for 2040 based on two scenarios
  • Transport is the major contributor of nitrates, power sector for sulfates and residential sector for particulates. While power plants have installed control technologies for nitrates and sulfates, they are often suboptimal or operate inefficiently
  • Without policy efforts, sulfates and particulates would roughly double by 2040 and nitrates would grow almost 2.5 times.
  • But due to new power sector regulation, SO2 is likely to be restricted to around 10 per cent relative to today’s. NOx emissions growth could be contained to 10 per cent in 2040 by new passenger car standards. Further, efforts to promote access to clean cooking facilities for poor households have to be continued to moderate PM2.5 rise to around 7 per cent. But even with all existing policies, absolute growth in emissions (especially PM2.5), coupled with strong population growth, means the number of premature deaths linked to outdoor air pollution will still grow significantly, says the report
  • The existing policy scenario includes policies adopted or announced by the government, and the clean air scenario highlights what could be achieved through stronger action
  • ‘Clean Air Scenario’ involves three key areas of action
  • First, set an ambitious long-term WHO-benchmarked air quality goal. Second, a clean air strategy for the energy sector: Avoid pollutant emissions, Innovate to reduce pollution abatement costs and Reduce emissions. Third, it calls for effective monitoring, enforcement, evaluation and communication using reliable data
  • The Clean Air Scenario could cut down PM2.5 emissions by almost 80 per cent relative to the existing policies scenario, NOx emissions by half and SO2 emissions by 70 per cent. This will lower average life expectancy loss by eight months compared to the existing policy scenario and cut premature deaths linked to outdoor and household air pollution


2. Centre ready to evacuate Indians from South SudanTopic: Foreign Casualty

Category: Security

Key points:

  • The Union government has made arrangements for the evacuation of Indians from South Sudan and set up a task force to monitor developments in the war-torn country, the External Affairs Minister said
  • The Minister said there were 600 Indians in South Sudan, 450 of them in the capital city of Juba


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


The Hindu


  1. This time in Africa

Topic: India and Africa

Category: International Relations

Key points:

  • Drawing a link between Indian and South African cultures during his four-nation visit to Africa, Prime Minister Narendra Modi referred to the journey from “Gujarat to Durban” as one “through the spirit of VasudhaivaKutumbakam (globalism) to Ubuntu”, the last a Zulu word that expresses the core of humanism. The evocative reference imbues the historical links between India and African nations with a unique warmth
  • The PM outlined his focus areas: energy, food and maritime security. His stops at Mozambique, South Africa, Tanzania and Kenya were accompanied by discussions on securing lines of coal and natural gas and funding capacity-building in energy production
  • In Tanzania and Mozambique, in particular, there were discussions on enhancing the export of pulses to India to meet a demand shortfall
  • As he travelled along the southern coast of Africa, Mr. Modi spoke to his hosts in detail about shoring up maritime ties as part of the Indian Ocean Rim Association (IORA), and linking India’s own “Sagar-Mala” outreach for Indian Ocean islands with the South Africa-authored “Operation Phakisa”, that focusses on Africa’s combined strengths in blue economies and ocean governance
  • India has been slow to upgrade ties with Africa, and it must chart its own trajectory without competing with, or being inhibited by, China’s formidable presence in the continent. China’s current hold in trade and investment in Africa is three times India’s, and South Africa, for instance, has a key role in promoting the Maritime Silk Route programme as part of the One Belt One Road initiative
  • Modi’s visit to these four countries in southern and east Africa should, therefore, be seen as a work in progress. Africa is a continent of 54 countries, and each has diverse reasons to improve ties with India — from sharing low-cost technologies and pharmaceuticals, building on the Solar Alliance and renewable energies, and growing markets for each other’s goods
  • For instance, 84 per cent of India’s imports from the Sub-Saharan region still come from raw materials and natural resources, not consumer or processed goods
  • However, if there was one message that Mr. Modi could have emphasised more, it was the concern over racism in India that students and others from Africa often face. As he spoke in Durban to the Indian community on the history of racism that Indians and Africans had fought together for many decades, a line about India’s commitment to fight the remaining vestiges of racism domestically would not have been out of place. The omission is, in fact, also a reminder that the outreach to African countries needs to be sustained back home in Indian cities too, in the true spirit of “Ubuntu”


2. Slowing down fast foodTopic: Health

Category: Governance

Key points:

  • The notion of using tax as a tool to alter consumer food preferences cannot be faulted in principle. Mexico provides us with proof that levying additional taxes on non-essential food items that are rich in fat or calories can effectively alter food choices. The country witnessed a 5.1 per cent dip in consumption levels in foodstuff that had more than 275 kcal/100 g energy density following the imposition of an 8 per cent levy in 2014. Sugar-sweetened drinks saw a 12 per cent drop in intake at the end of the very first year the tax was introduced
  • In this context, Kerala’s decision to slap a 14.5 per cent tax on certain calorie-rich food items such as pizzas, doughnuts and pasta sold in branded restaurants may seem like a step in the right direction. But it bears the stamp of being little more than a political gimmick. For once, such foods sold by branded restaurants, consumed by the higher middle and upper classes, are a very tiny part of the problem of poor food choices for the State’s population. If the principal purpose was to tax some multinational food chains, then the decision is understandable. But ignoring a wide variety of high-calorie food items and focussing on a few is no more than tokenism. The revenue that Kerala hopes to mop up from this — Rs.10 crore — is also meagre
  • If the State is serious about reining in consumption of unhealthy food, then there are several measures it should quickly adopt. The first is to set a threshold limit for fat and/or calorie and tax all foods items that are above this limit
  • Bringing sugar-sweetened drinks and refined products under the taxable product list should be a priority
  • There is no reason why packaged food items that have high salt content should not be additionally taxed. Indians are known to consume a few times more than the World Health Organisation’s recommended limit of 5 grams a day and most of it comes from packaged food items
  • Similarly, what excuse can there be for not charging a very high rate of tax on food items that contain trans fats? There are a number of food items sold in India that contain as high as 35-40 per cent of trans fats. Trans fatty acids, made through the process of hydrogenation of oils, which improves the stability or shelf life of the foodstuff that contains them, pose serious coronary risks
  • Taxing ‘bad’ foods should be accompanied by cross-subsidies of healthy and wholegrain food items. Only a holistic approach such as this will be effective in making a real change in our food consumption behaviour


3. Towards a continental shiftTopic: India and Africa

Category: International Relations

Key points:

  • ndia today has growing stakes in Africa. With some of the fastest growing nations in the world, the needs of regional states are divergent and their strengths are varied
  • India’s focus over the last few decades has largely been on capacity-building on the continent, providing more than $1 billion in technical assistance and training to personnel under the Indian Technical and Economic Cooperation (ITEC) programme. India has committed $7.5 billion to African infrastructure, covering 137 projects in more than 40 countries. It has also offered duty-free market access to Africa’s least developed countries
  • But India’s trade with Africa at around $72 billion remains far below potential
  • It is a fallacy to pit India against China in so far as their ties with Africa are concerned. With its annual trade of around $200 billion with Africa, China is a much bigger player, but India has its own strengths in its dealings with Africa. Its democratic traditions make it a much more comfortable partner for the West compared to China in cooperating on Africa-related issues
  • India is viewed as a more productive partner by many in Africa because Indian companies are much better integrated into African society and encourage technology transfers to their African partners. New Delhi will have to leverage its own strengths in making a lasting compact with Africa and regain its lost presence on the continent
  • The PM has quite rightly offered billions of dollars in credit, and development financing, to build a “partnership for prosperity” for Africa, underscoring that India’s focus remains on human development through trade, rather than the extraction of resources. But, though India has committed considerable resources to Africa, actual delivery on the ground and implementation of projects have been far from satisfactory. That’s the area India will have to work on if it is serious about gaining the trust of its African interlocutors
  • There was a strategic dynamic to the PM’s tour as well, with all four countries on his itinerary connected to India via the Indian Ocean. With the Indian Ocean acquiring new salience in global politics, India is keen to regain its regional strategic space. The Indian Navy has been tackling piracy to protect the sea lanes of communication in the Eastern African coast and India is ready to explore joint defence manufacturing with key African states. India’s role as a regional security provider is an important one that New Delhi is keen to leverage
  • It is also pertinent to recall that recent attacks on African nationals have maligned India’s image with some in the region questioning India’s openness to outsiders. This also underscores that despite government’s efforts to build ties with Africa, this relationship has suffered because of a perception of Africa being a far-off land for ordinary Indians
  • Unless the larger populace and the Indian private sector decide to take Africa seriously, the government’s outreach is unlikely to yield the results it is perhaps hoping for. And Indo-Africa relations will struggle to reach their full potential


4. Regain the peace, swiftlyTopic: Federal Relations

Category: Polity

Key points:

  • For the security forces the situation in Kashmir is very difficult. With few tools at hand, they need to exercise maximum restraint. Protesters are setting fire to police stations and attacking security installations; the police are not in a position to deter them with effective barricades, tear gas or water cannon. The pellet guns that were acquired in 2010-11 as ‘non-lethal’ weapons are, when fired in proximity, lethal
  • The Central and State governments need to take a very serious look at what other means they have to ensure that no more deaths or grievous injuries ensue
  • Should the Army work with the police forces to deter attacks through more effective barricades? Unfortunately, with limited retraining or equipment for their new tasks and operating in a political and administrative vacuum, the police were hapless. It is worth exploring whether the Army can undertake the limited role of advising and aiding the police forces to exercise maximum restraint, provided such a role would be restricted to the present situation alone
  • Undoubtedly the most important step that can be taken is to seek public engagement in halting the cycle of protest-death/injury is de-escalating public anger. But it will take more than appeals. In 2010, the visit of an all-party parliamentary delegation and the subsequent appointment of a group of interlocutors, began the thaw, but the absence of follow-up after our mission was completed in late 2011 soon vitiated the fragile peace that had been achieved
  • But there is an upcoming opportunity — Parliament will soon be in session and the situation in Jammu and Kashmir should surely be discussed, with Mr. Modi and Ms. Mufti briefing MPs on necessary steps to be taken, especially outreach. An all-party MPs’ delegation could be asked to visit the Valley immediately and report to Parliament. Though there will be cynicism about such a visit, given that few of the MPs followed up on their 2010 all-party visit, Kashmiris will be open to reversing this opinion if there is follow-up this time
  • In the aftermath of the terrible deaths in 2010, the government did take steps to address challenges that were present then. The Rangarajan Committee’s recommendations resulted in a large number of training and employment programmes for Kashmiri youth, but the programmes were implemented with so little knowledge or regard for the Kashmiri cultural and political background that they proved to be a costly failure and, moreover, they actually increased the Kashmiri sense of alienation exponentially
  • Looking back, there are three major lessons to be learnt from the past 15 years. First, from Prime Minister Atal Bihari Vajpayee, that empathy and symbolism are key to a breakthrough in Kashmir. Second, from Prime Minister Manmohan Singh, that raising expectations for a peace process and then failing to follow through will further exacerbate the situation. And third, from the past two years, that neglect is never benign in situations like the one in J&K
  • Applying these three lessons to the present crisis would require taking the following three steps: first, a statement of empathy from the heart by Mr. Modi; second, follow-through on the coalition’s Common Minimum Programme; and third, visible, close and ongoing cooperation between the coalition partners towards a resolution of the Kashmir issue. Though influential groups in Pakistan will continue to impede all such initiatives, their powers to do so will progressively weaken if the Indian government perseveres. Can the political will be summoned this time?


The Indian Express


1. Govts must explain, explain, explain. Potential beneficiaries of reforms are unorganised, they don’t know they will ultimately benefit: Arun Shourie, former minister,MP,economist with the World Bank, consultant to the Planning Commission(Excerpts from interview )

Topic: Reforms
Category: Economy

Key points:

  • Over the last 25 years, since the start of the reforms programme, how much ground have we covered?
  • Compared to the 1980s, there has been substantial change, but far, far less than what could have been done, and should be done. In the 80s, China’s national income and per capita income was below that of India. But today, it is four-and-a-half or five times more. They started reforms in the late 70s, and we waited for a breakdown. They persevered. We have done it in fits and starts
  • You had charge of the Telecom Ministry and Disinvestment when the Telecom sector was in turmoil. How was the mess sorted out?
  • By the time I took charge of the Telecommunications Ministry, the sector had collapsed. But the government had already taken a decision to move towards a revenue sharing regime — which was then described as a big scam. But if that single decision had not been taken, we would not have had the kind of growth, the revolution, in the telecom sector
  • What are the lessons from that experience of changes brought about 15 years ago?
  • One lesson is that governments must explain, explain, and explain. That is because the potential beneficiaries of such reforms are scattered and unorganised, and they don’t know that they will ultimately benefit from such reforms. And those who are hit will be better organised. The second lesson is that the worst obstacles to reform come from incumbents. The telecom sector benefited tremendously from competition, unlike the power sector. The other important lesson for Indians is to go back and read the calumny against reformers during each round of reforms, and assess whether there was any basis to such calumny. Just look at telecom and disinvestment
  • Over the next 25 years, what should be on the agenda of governments?
  • The most important thing is to think of the tectonic changes that would have taken place by then. We must imagine 25 years from now and engineer it to back what we should be doing now. Look at the Make in India hype. It is about brick and mortar. Unfortunately, we are doing more of the brick-and-mortar when all that is becoming obsolete with nano technology, robotics, artificial engineering and 3D printing. China is today the largest buyer of robotics. All these will render the current model obsolete. The underlying philosophy of reforms is to reduce the role of the state and enhance the role of the society. But now they are increasing the role of the state to almost choke society. The direction of reforms is being reversed in a basic way


a) Ministry of Home Affairs reviews the security of Indo-Bangladesh Border in view of the recent incidents in Bangladesh A meeting was held in the Ministry of Home Affairs here today with senior officials of 5 bordering States on Indo-Bangladesh Border i.e. Assam, West Bengal, Tripura, Meghalaya and Mizoram. The meeting was chaired by the Secretary (Border Management).An Institutional Mechanism was agreed according to which DGPs of all bordering States will hold monthly meetings with IGs of BSFs in charge of that State regularly for effective coordination at State level to enhance security along the Indo-Bangladesh Border (IBB). This forum will ensure that FIRs are lodged by State police based on the complaints filed by BSF leading to arrest, investigation, charge sheet & conviction in border crimes.


b) China Railway Construction Corporation Limited Keen to Participate in NHAI Projects A high level delegation from the China Railway Construction Corporation Limited (CRCC), a Government of China Enterprise, led by its Chief Economist Mr Zhao Jinuha met the Chairman, National Highways Authority of India and a team of NHAI officers in New Delhi. CRCC is one of world’s largest integrated engineering contractor and construction group with over 100 billion US Dollars of revenue and a market capitalization of around 250 billion US Dollars.

The NHAI Chairman explained that they have projects lined up for upgradation of 2-lane National Highways totaling 50000kms, various special expressway projects of around 15000km and a part of the National Highways Development Programme (NHDP) over the next few years. NHAI is also looking at various other connectivity projects in India for bypasses and ring roads around major cities contributing towards the Smart Cities Projects. CRCC expressed keen interest to participate in the upcoming projects of NHAI under Engineering, Procurement and Construction (EPC) and Hybrid Annuity Model.

Note: Hybrid Annuity Model: The government will contribute to 40% of the project cost in the first five years through annual payments (annuity). The remaining payment will be made on the basis of the assets created and the performance of the developer. Here, hybrid annuity means the first 40% payment is made as fixed amount in five equal installments whereas the remaining 60% is paid as variable annuity amount after the completion of the project depending upon the value of assets created



d) Road shows to be held in the USA and Canada to promote Discovered Small Fields Bid Round 2016; Shri Dharmendra Pradhan to launch Houston Road-Show Road shows in Houston, United States of America and Calgary, Canada will be held as part of process of promoting the Discovered Small Fields Bid Round 2016. Houston road show is scheduled on 14th and 15th July, 2016 while the Calgary road show will be held on 18th and 19th July, 2016.

Discovered Small Fields bidding was launched in New Delhi on 25th May, 2016. Subsequently, Road-Shows for this round were held in Mumbai and Guwahati. Under this round, 67 DSF of ONGC and Oil India Ltd, which could not be monetized during previous years, are being offered for international bidding. Progressive administrative and fiscal procedures have been introduced in this bidding process in sync with best international practices.


The Financial Express:


a) From pump-pricing economy to launching agri fund, Centre eyes mega pushTopic: Miscellaneous

Category: Economy

Key points:

  • In the wake of sluggish spending by private sector, the government has stepped up its spending. The Plan expenditure in the first couple of months of FY17 stood at Rs 90,000 crore. The expenditure for the full year is estimated at Rs 5.5 lakh crore, a 15.3% increase over the budgeted target ofRs 4.65 lakh crore last fiscal
  • The government is all set to launch a mega irrigation fund through the special purpose vehicle (SPV) route—Water Resources Development Authority. Of the initial Rs 20,000 crore corpus, some of it will come from the budgetary allocation, Rs 12,000 crore will be raised through bonds by NABARD and Rs 6,300 crore as bonds to be repaid by the government
  • In a bid to raise funds for special infrastructure projects in rural Maharashtra and Mumbai, the state government is planning a $10 billion infrastructure fund. Since some countries have sought guarantees for the protection of their investment, the state is urging the Centre to provide a ‘comfort letter’ for certain projects
  • According to CMIE data, private investment has remained muted despite some improvement in investment sentiment and uptick noticed in some sectors. The value of stalled projects reportedly remained at the Rs 12 lakh crore level, even though the number of stalled projects did not increase during the quarter
  • India has locked horns with the US at the WTO on India’s preference for local sourcing of solar equipment. While the initial WTO judgement has gone against India, the government is appealing against it. In the meantime, it is looking at ways to encourage domestic manufacture of solar panels
  • The government is all set to launch a subsidiary of Pawan Hans Helicopters Ltd that will operate flights out of Guwahati and connect all state capitals in the Northeast. The move is aimed at increasing regional connectivity.
  • With the aim of showcasing the first phase of Ganga cleaning project in October this year, the government has launched as many as 231 projects simultaneously at 104 locations across five states—Uttarakhand, Uttar Pradesh, Bihar, Jharkhand and West Bengal—and also along the Yamuna in Haryana and Delhi


The Business Line:


a) On a railroad from Russia to IranTopic: Trade

Category: Economy

South Transport Corridor

Key points:

  • The commencement of operations on the International North-South Transport Corridor project — connecting Bandar Abbas port in Iran to St Petersburg in European Russia — is of great import to India
  • Beginning August, Indian containerised cargo for St Petersburg, bordering Scandinavia on the Baltic, may not set out for a 40-day sail around the world through the crowded and expensive Suez
  • The traders may instead opt for a shorter sail to Bandar Abbas, from where the cargo will travel nearly 1,800 km by road to the rail head at Astara in Azerbaijan for forward journey up north, touching upon the Azeri capital of Baku on the Caspian and Port Olya in the Volga delta
  • The project is designed in such a manner that a little nudge here and there may see goods travelling to a host of former Soviet republics in Europe and Central Asia, including the energy rich Kazakhstan and Uzbekistan with whom India now shares minimum trade relations
  • Russia promises to make the deal sweeter next year. According to a series of reports in the State-sponsored Russia Beyond the Headlines, Moscow is expecting to connect the entire 5,000-km stretch by rail in 2017
  • Conceived by Russia, Iran and India in 2002; the rail connectivity is already established up to Azerbaijan. The Iranian part of the project was delayed due to decade-long UN sanctions that that was recently lifted. Recent reports suggest work is progressing rapidly to bridge the logistics gaps
  • As evidenced by a trial run by Indian freight forwarders early this year, multi-modal operations may reduce the travelling time between St. Petersburg and JNPT Mumbai to 20 days — exactly half the all-sea travel time. The inter-continental rail link should reduce the time to 14 days
  • The cost of transportation is estimated at $3,000 for a 40-foot container, lower than the $4,000 sea freight. The actual cost will be known once the operation starts and the participating nations decide on concessions
  • But there is little doubt that Indian participation is key to make the route popular and competitively priced. New Delhi alone is expected to contribute half the projected five million tonne cargo in the first phase of the project
  • That said, it does not necessarily mean that the project is free from ifs and buts. Ideally train and road travel costs more than sea freight. Moreover, delays in completing the Iranian part of the rail project and failure to ensure customs cooperation between nations might work against the interest of traders
  • But what’s working in favour of the project is the strong political will of all stakeholders. Oil-and-gas-rich Azerbaijan, for example, is pinning hopes on Indian ambition to reach out to convert Baku into a logistics hub. They recently entered an agreement with Russia for through tariff
  • Teheran will not miss this opportunity to overcome the infrastructure gap created by years of sanction (beginning with the US sanction in 1995). The project will not only be useful for Iran to import food and consumables from Russia directly to the consumption centres in North Iran but will also help attract investment, particularly from India
  • New Delhi stood by Iran in the trying times and Tehran is now happy to return the favour by granting India the right to build Chabahar port and SEZ in the South, closer to the China-controlled Pakistani port of Gwadar
  • Moscow, on its part, is keen to grab a share of the Iranian car market that is now dominated by the Chinese. Also, the connectivity will grant it easier access and a strategic foothold in West Asian markets
  • But more importantly, Russia wants a remedy to its dwindling trade volumes with India that has dropped from $11 billion in 2013 to $7.83 billion over the past three years. And the way to reach that goal is rejuvenating the Indo-Russia strategic ties
  • India has already built a 240-km road corridor connecting Afghanistan with Iran. Next on agenda is to build a rail corridor connecting Iranian ports with the India-promoted $11-billion Hajigak iron and steel project in central Afghanistan
  • This will bring cargo to Bandar Abbas or Chabahar and free Kabul from its dependence on Pakistan to reach the outer world


b) Making RCEP workTopic: Trade

Category: Economy

Key points:

  • In a major shift of tack, India may reconsider its offer of zero tariffs in its talks with members of the China-led mega trade bloc in the making, the Regional Comprehensive Economic Partnership (RCEP). India had earlier put out a three-tier tariff deal for RCEP countries: zero duty on over 80 per cent of its tariff lines in the case of the Asean countries, a similar offer for about 65 per cent tariff lines in the case of Japan and Korea with whom it has FTAs, and about 42 per cent zero tariff lines for non-FTA countries, namely, China, Australia and New Zealand
  • The latest move to withdraw the zero duty offer seems to have been prompted by a troubling disconnect between the ‘Make in India’ programme and an increasingly liberalised, post-FTA import regime. What’s worse, India’s experience with respect to both Asean and Chinese imports has not exactly been positive. Both, the commerce ministry and theEconomic Survey 2015-16 have expressed their reservations on the impact of FTAs with Asean
  • TheSurvey observes: “Increased trade has been more on the import than export side, most likely because India maintains relatively higher tariffs and hence had larger tariff reductions than its FTA partners.” Generally speaking, plantations and fisheries lost, while pharma, textiles and apparel gained
  • Going forward at RCEP, the key for India is to avoid repeating the mistakes of the FTA talks. It would have to strike a fine balance between opening up the economy and ensuring that industries and livelihoods are not disrupted in the bargain. Whether the proposed move to withdraw the zero duty offer stalls progress at the talks or not depends on how India goes ahead with its market access proposals
  • Unlike in the FTA talks, India has decided not to unbundle goods and services at RCEP. It seems that the idea is to use services as a bargaining chip to secure market access in other areas. Hence, India is keen on securing free movement of IT professionals, while putting a price on opening its e-commerce, education, accountancy, law and financial services sectors
  • India should have a well thought-out plan at RCEP, and yet not be obdurate about it. It makes more sense for India to go along with RCEP than the US-led Trans-Pacific Partnership (TPP). This is because the latter is based on a ‘WTO-plus’ agenda which includes labour and environment standards, an IPR template that could hurt domestic producers and consumers, and liberalisation of farm markets
  • RCEP, with its share of LDCs and emerging economies, is likely to stick to the Doha Round template on IPR and agriculture. India needs to be clear on industries that require protection and those that need markets to realise their competitive potential. There is scope for opening up services such as law, accountancy, entertainment, higher education and e-commerce. We have a great market to offer the world. The skill lies in doing so on our terms, and to our advantage


Quick Bits and News from States


a) Centre plans unified science syllabiThe Union government has set the ball rolling on bringing about a convergence in the core syllabi of science subjects and question paper designs across State and central boards.Board examination marks now get weight in the IIT-JEE, though this will go from the next year. Many feel that the lack of parity may deny a level-playing field to students from across the country in any admission that counts Class XII marks.


b) HAL, Safran to set up MRO ventureHindustan Aeronautics Ltd. and France’s Safran Helicopter Engines announced that they will jointly set up a helicopter engines maintenance, repair and overhaul (MRO) centre to service Indian and foreign customers using Safran’s aero engines.

The location of the centre is slated to be announced in the coming months and the companies did not disclose the investment or the equity stakes in the venture.

The centre will provide MRO services for Safran TM333 and the co-developed Shakti engines that are used in helicopters built by HAL.


c) Retail inflation at 22-month high in June; industrial output up 1.2% in MayA sharp jump in the prices of vegetables drove up food costs and fanned consumer price inflation to its fastest pace in 22 months, government data released on Tuesday showed.

The 5.77 percent reading in June was marginally higher than May’s 5.76 per cent and compared with the 5.40 per cent in June 2015. The figure is likely to be transitional in nature and should see some downward movement post-August when new supplies of vegetables hit the market.According to another set of data released by the statistics ministry, industrial output showed an uptick in May. The Index of Industrial Production (IIP) recorded a 1.2 percent year-on-year growth – helped by a six percent growth in the output of consumer durables such as washing machines, televisions and refrigerators.


d) Promote labour-intensive industries: NITI AayogIn a meeting with central trade unions and industry bodies,the  NITI Aayog Vice-Chairman  stressed upon the need to promote labour-intensive industries in the country in a bid to create jobs.This was the first time that the government think-tank held a meeting with the trade unions.


e) ‘Flat fee optimal for spectrum use’The Telecom Regulatory Authority of India (TRAI) on Wednesday said the weighted average formula, as suggested by the telecom department, for calculating the annual charge that operators pay to use airwaves “is at best a temporary solution”.The new formula takes into account the ‘bid values’ by telecom service providers (TSPs) for each band. The authority reiterated “its consistent position that the SUC regime must transition from a slab based regime to a flat ad valorem regime. The ease of implementation, level playing field and encouragement to bidders to participate in the auction are key rationales for such a position being taken.


f) India seeks market access for sesame seeds in JapanIndia will seek greater market access in the Japanese market for its farm products such as sesame seeds as well as for its services professionals including nurses, when senior officials of both the countries meet on July 28 in New Delhi.The July 28 meeting will be that of the (India-Japan) Joint Committee — a panel set up following the signing of the bilateral Comprehensive Economic Partnership Agreement (CEPA) in 2011. The committee’s functions include reviewing the CEPA and suggesting amendments to the pact to boost bilateral trade and investment.

The focus on sesame seeds is because Japan is the world’s second largest importer of the item


g) China sank fishing boat in the disputed region: VietnamVietnam has accused the Chinese coastguard of sinking a fishing boat near a disputed island chain, authorities said on Tuesday


h) Suresh Prabhu-led Indian Railways banks on ‘Tri-Netra’ to avoid train accidentsIndia will be the first country to use Terrain Imaging for Diesel Drivers- Infrared Enhanced Optical and Radar Assisted or ‘Tri-Netra’ in railways for monitoring obstructions on tracks to prevent mishaps, claims Indian Railways.

This device will alert the drivers of any physical obstruction on railway tracks ahead and thus avert accidents. This will prove to be more useful during nights and in foggy conditions when drivers have to constantly look outside the locomotive to assess the condition.


F. Concepts-in-News: Related Concepts to Revise/Learn:
  • South China Sea Disputes
  • UNCLoS
  • Art 370
  • IEA
  • Transfat
  • Hybrid Annuity Model
  • RCEP
  • NSTC
  • Hajigak Iron and Steel Project
  • Spectrum Usage Charges


G. Fun with Practice Questions 🙂
Question 1: Which of the following countries is /are member states in the North South Transport Corridor Project?
  1. Turkey
  2. Oman
  3. Azerbaijan
  4. Afghanistan

a) 1 and 3 only

b) 3 and 4 only

c) 1 ,2 and 3 only

d) All the above


Question 2: Which of the following statements is/are correct?
  1. Transport is the major contributor of nitrates to the atmosphere in India
  2. Power sector is the major contributor for sulphates to the atmosphere in India
  3. Residential sector is the major contributor for particulates to the atmosphere in India

a) 1 only

b) 2 only

c) 3 only

d) All the Above


Question 3: Which of the following statements is/are correct about the Engineering, Procurement and Construction (EPC) model of Public-private partnership?
  1. Government invites bids for engineering knowledge from the private players
  2. Procurement of raw material and construction costs are met by the government

a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2


Question 4: Which of the following statements is/are correct?
  1. Partial hydrogenation of unsaturated fats like vegetable oils can yield Trans fats
  2. Trans fats have better shelf life than the vegetable oils from which they are made
  3. Consumption of Trans fats has shown to increase the risk of coronary heart disease
  4. Trans fats are uncommon in nature

a) 1 only

b) 2 and 3 only

c) 1 and 3 only

d) All the Above


Question 5: Which of the following statements is/are correct about the Water Resources Development Authority(WRDA)?
  1. ARs 20,000 crore irrigation fund will be set up through it
  2. The fund to be mobilized by WRDA will be raised from budgetary allocation of the Ministry of Water Resources, bonds raised by Nabard to be repaid by the Government of India and bonds raised by Nabard on its own

a) 1 only

b) 2 only

c) Both 1 and 2

d) Neither 1 nor 2


Check Your Answers

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