Comprehensive News Analysis - 18 July 2016

A. GS1 Related

B. GS2 Related

Topic: Health

Category: Governance

Key points:

• Almost one-third (31 per cent) of those who claimed to be allopathic doctors in 2001 were educated only up to the secondary school level and 57 per cent did not have any medical qualification, a recent WHO report found, ringing the alarm bells on India’s healthcare workforce
• The situation was far worse in rural India, where just 18.8 per cent of allopathic doctors had a medical qualification, the study titled ‘The Health Workforce in India’, published in June 2016, revealed
• Ignoring those who don’t have a medical qualification, the number for India fell to 36 doctors per lakh population. As for nurses and midwives, India had 61 workers per lakh population compared to 96 in China. The number reduced tenfold to 6 per lakh population, if only those with a medical qualification were considered
• Laws and regulations are so weak that even if the frauds are caught and arrested, they get bail on the following day and start practicing again

Topic: Federal Relations

Category: Polity

Key points:

• Despite stringent security measures and curfew, fresh violence left four civilians injured in Kashmir valley on Sunday. The Congress meanwhile has alleged that disproportionate force has been used against civilians and demanded an all-party meet on the issue
• Preliminary reports suggest an army unit was attacked by stone-throwing protesters and retaliated by firing at the crowd
• Meanwhile, Hurriyat faction chairman Syed Ali Geelani has written to United Nations Security Council (UNSC) permanent members (United States of America, The United Kingdom, China, France and Russia), European Union, Organization of Islamic Countries (OIC), South Asian Association of Regional Countries (SAARC) and Association of Southeast Asian Nations (ASEAN)
• Demanding Confidence Building Measures (CBMs), Mr. Geelani has asked India to “accept the disputed nature of J&K”, announce demilitarization process from population centers, repeal of laws like AFSPA and Public Safety Act, release of all political prisoners, and allowing UN Special Rapporteurs and all international human rights and humanitarian organisations to work in the State

Topic: Turkey

Category: International Affairs

Key points:

• Turkish authorities were on Sunday rounding up dozens of generals as well as senior judges and prosecutors accused of supporting a failed military coup aimed at ousting President RecepTayyip Erdogan
• The entire investigation is being led by Ankara prosecutors and those arrested are suspected of belonging to the group the US-based preacher FethullahGulen who Turkey accuses of masterminding the coup. Gulen denies the charges
• Turkey accuses Mr. Gulen of leading a group called the “Fethullahci Terror Organisation (FETO)” that has created a parallel state. Mr. Gulen’s supporters say their group which they call Hizmet (Service) is entirely peaceful

Topic: China

Category: India’s Neighbourhood

Key points:

• Bunkers have been drilled into barren hills, battle tanks have been readied over 14,000 feet, and additional troops are stationed on newly built roads to beef up military capabilities to match China’s wide-ranging transformation across the border are finally becoming a reality
• Augmenting rapid airlift capabilities, India operationalised the Advanced Landing Ground (ALG) at Daulat Beg Oldi (DBO) located at over 16,000 feet. Work is now on to improve road connectivity to this critical area
• In addition several other roads along the route are being upgraded and strengthened which will facilitate the movement of heavy vehicles
• A much-criticised policy after the humiliation of 1962 war had resulted in India deliberately neglecting infrastructure even as the Communist neighbour transformed the mountainous and disputed border into a showcase of its economic might with all weather roads running up to frontline military posts.

Topic: State Legislature

Category: Polity

Key points:

• A Speaker should refrain from deciding the disqualification of MLAs for defection under the Tenth Schedule of the Constitution if he himself is facing the prospect of removal, the Supreme Court has held in the judgment on the Arunachal Pradesh crisis recently
• A Constitution Bench observed that the ruling was a safeguard against a Speaker using the disqualification proceedings of legislators for his own political ends
• Article 179(c) provides that a Speaker (or Deputy Speaker) “may be removed from his office by a resolution of the Assembly passed by a majority of all the then members of the Assembly”
• The judgment points to the phrase “all the then members of the Assembly” to conclude that the composition of legislators should remain the very same while deciding whether a majority in the House wants the Speaker to continue or not

C. GS3 Related

Topic: Terrorism

Category: Security

Key points:

• More than a year after a new technological solution used by terrorists began causing headache to the Army in Kashmir, no breakthrough has been made to crack it
• Terrorists infiltrating from Pakistan have been using smartphones paired with very high frequency (VHF) radio sets to communicate with one another, resulting in a drop in communication intercepts and adversely affecting military efforts to deal with them
• The concept of pairing mobile phones with radio handsets originated in the wake of Hurricane Sandy in New York in 2012. This mode of sending mobile communications without using mobile towers is of great help for rescue operations during calamities, but is now among the key technology deployed by terrorists to avoid the security forces while crossing the Line of Control

Topic: Logistics

Category: Economy

Key points:

• Logistics industry is projected to grow at a compounded annual growth rate of 15-20 per cent between 2015-16 and 2019-20 that will get a further boost if GST is rolled out from this year, which can trim costs by 20 per cent, says a report
• The much-delayed GST rollout can help boost the GDP by 100-200 bps as this will help faster and cheaper movement of goods across the country with a uniform taxation structure, said a report by Care Ratings
• A one-nation-one- tax GST structure can massively reduce the long and winding queues at border check-points and other entry points within and between the states

Topic: Nonotechnology

Category: S &T

Key points:

• T. Pradeep from the Department of Chemistry, Indian Institute of Technology, Madras has signed the final agreement with Nanoholdings based in Connecticut, U.S. wherein Nanoholdings will provide his team venture funding of $18 million (about Rs.120 crore) to further develop its nanomaterials-based water technology that is currently used in India to remove arsenic from drinking water called Amrit
• Amrit (Arsenic and Metal Removal by Indian Technology), installed in 750 locations in West Bengal, Uttar Pradesh, Bihar and Karnataka provides arsenic-free drinking water at a cost of less than 5 paisa per litre to nearly 500,000 people. It functions without electricity or running water; all it requires is gravity. It requires less than a minute of contact time for Amrit to purify the water of arsenic
• In December last year, the Ministry of Drinking Water and Sanitation had recommended the replication of the nanotechnology-based purifier in all States where drinking water is contaminated with arsenic. Punjab has just initiated steps to procure filters for the State
• With this venture funding, Amrit will soon dot many locations across the world as arsenic is a global problem. Besides purifying arsenic-contaminated drinking water, Nanoholdings wants the technology to be able to filter fluoride, natural iron and industrial pollutants such as lead, mercury, cadmium, and copper

(Prof. Pradeep’s basic research was funded by the Nano Mission of the Central government)

Topic: Heritage

Category: Environment/Culture

Key points:

• UNESCO on Sunday listed Franco-Swiss architect Le Corbusier’s works — including the city of Chandigarh which he planned in the 1950s — among its World Heritage Sites
• Khangchendzonga National Park in Sikkim has also been included in the list
• The park exhibits one of the widest altitudinal ranges of any protected area worldwide. It boasts of a unique diversity of lowlands, steep valleys and snow-clad mountains, including the world’s third highest peak, Mt. Khangchendzonga, besides numerous lakes and glaciers
• The park combines the religious and cultural practices of Buddhism as well as the ecological significance of the region, and stands out as an outstanding example of traditional knowledge and environmental preservation. It is also a unique example of coexistence and exchange between different religious traditions and people
• The park qualified as a mixed site under the Operational Guidelines of WHC for its “exceptional testimony to a cultural tradition or to a civilisation which is living or which has disappeared”

D. GS4 Related

E. Important Editorials: A Quick Glance

The Hindu

Topic: Federal Relations

Category: Polity

Key points:

• The return of a Congress government, albeit with a different Chief Minister, restores a semblance of political stability in Arunachal Pradesh, which was caught in a political and constitutional crisis. In a clever and unexpected twist, the Congress retained power by backing 36-year-old Pema Khandu as Chief Minister after it became evident that former Chief Minister NabamTuki would fail to command a majority
• The credit must primarily go to the Supreme Court for reinstating the Tuki regime purely on grounds of constitutional propriety, despite serious doubts about whether he commanded a majority. The numbers in the legislature tell an interesting tale. Out of the 47 MLAs with the Congress, 14 were disqualified by the Speaker in December, while two were told that their resignations had been accepted. The game-plan was to give the impression that the rebels had 31 MLAs, a clear majority. When KalikhoPul, the rebel faction head, was sworn in as Chief Minister in February, he claimed the support of 29 Congress MLAs. (Orders disqualifying 14 MLAs had already been stayed.) He declared that his 30-strong group had ‘merged’ with another party
• The strategy was to claim that two-thirds of the Congress Legislature Party had merged with another party, the only situation in which an act of defection is permitted under the law. After Mr. Tuki’s regime was reinstated after the Supreme Court verdict, he stood no chance of surviving a floor test
• This impending embarrassment appears to have goaded the Congress to shake off months of lethargy. It salvaged the situation by recognising the dissidents’ grievances, offering the leadership to a more acceptable candidate and winning back the entire rebel faction
• Earlier, the Congress leadership had ignored the deep divisions within the legislature party and the extent of dissatisfaction within its own ranks, which resulted in Mr. Tuki no longer enjoying the confidence of the House
• Using this situation, the Governor intervened by arrogating to himself the power to advance a duly convened Assembly session and seeking to set the agenda for it. The BJP responded to the unfolding crisis with cynical opportunism by backing a rebel faction in the Congress and playing along with, if not encouraging, overreach by the Raj Bhavan
• Now that the Supreme Court has reemphasised the limits of the Governor’s role, the political class needs to show that it has learnt the right lessons, a significant one being that parties should not seek to use individual ambitions for political ends
• There is a stronger case than ever before for greater care in the appointment of Governors and the manner of their functioning. Guidance is available in abundance — the reports of the Sarkaria and Punchhi Commissions, for instance

Topic: Turkey

Category: International Affairs

Key points:

• Turkey’s is a classic case of a coup-prone political system. The military is a relatively autonomous and popular institution. It has in the past toppled civilian governments four times. There had always been tension between the ruling elite and the military establishment. But the relatively stable rule of the Justice and Development Party since 2002 and the popularity of its leader RecepTayyip Erdogan had projected a picture of military coups having become a thing of the past
• The developments that unfolded on Friday and Saturday bust this myth. Even President Erdogan didn’t foresee the attempt. His success in taking back the reins of government is good for both Turkey and the larger West Asian region. Turkey is important for regional security at a time when West Asia is in turmoil. Instability here is in nobody’s interest
• However, the failed coup exposes the weakness of Mr. Erdogan’s regime. The fact that it was not a minor revolt by a few soldiers, but an uprising by thousands of troops, raises serious questions about the coherence of the Turkish state. Mr. Erdogan has contributed to the weakening of the state in many ways: his disastrous foreign policy that has worsened the security situation; forced Islamisation that has sharpened the contradiction between the Islamist and secular sections; and the push to rewrite the Constitution to award more powers to himself
• The coup-plotters may have sensed they would get support from the anti-Erdogan masses and the secular political class. Sections of the population have problems with Mr. Erdogan’s politics. At Istanbul’s Gezi Park, thousands braved his brutal police force in 2013. Despite the government crackdown on liberal academia, opposition, media and social networks, Turkey still has a thriving public sphere where anti-Erdoganism is a common theme for mobilising people
• But they don’t want the soldiers to “solve” their problem through force. That is why thousands thronged the streets to defend the government they had elected. That is why even Mr. Erdogan’s fiercest critics in the opposition denounced the coup. The question now is how the fissures that have been exposed will impact Turkey. It depends, in large measure, on the choices Mr. Erdogan makes
• He could see the people’s commitment to democracy and use the crisis as an opportunity to reconsider his dictatorial policies. Or he could use the military revolt as a pretext to purge more of his enemies and get what he always wanted, which is a more powerful executive presidency. His choice will guide the future of Turkey’s democracy

Topic: Nepal

Category: India’s Neighbourhood

Key points:

• Nepal has once again been plunged into political uncertaintywith the Maoist party — the Communist Party of Nepal (Maoist-Centre), or CPN (M-C) — withdrawing support from Prime Minister K.P. Sharma Oli’s coalition, reducing to a minority the government led by the Communist Party of Nepal (UML), or CPN (UML). CPN (M-C) leader Pushpa Kamal Dahal ‘Prachanda’ announced last week that Mr. Oli had not fulfilled the commitments made earlier in May leaving him with no option. The following day, on July 13, ano-confidence motion against the government, carrying 254 signatures, was tabled in the National Assembly. The Speaker has fixed July 21 as the date for taking up the motion for consideration, followed by voting, unless Mr. Oli chooses to resign
• These developments have been expected. On May 4, Mr. Prachanda had carried out the same threat, expressing unhappiness with the Oli government’s performance on post-earthquake reconstruction and the lack of progress on the constitutional amendments process. Then too, he had announced that he would lead a new government which would be supported by the Nepali Congress (NC) and Madhesi groups and urged the UML to join in so that a national consensus government could be set up. However, Mr. Prachanda’s real source of unhappiness was that the cases registered against the Maoist cadres during the decade-long insurgency had not been withdrawn despite repeated assurances by Prime Minister Oli
• Predictably, Mr. Oli has blamed India for his problems. Invoking Nepali nationalism, he has suggested that he is being removed because he had refused to listen to India’s suggestions on the Constitution. He claimed that meetings to remove his government have been “remotely controlled”, a claim that he had also made in May, and described the current impasse as “a sad situation for the country”
• Addressing a national security seminar on July 14, in a barely veiled reference to India, Mr. Oli said, “Maintaining good relations with neighbouring countries is an important aspect of national security but we cannot jeopardise national security for the sake of maintaining good neighbourly relations”
• In a pugnacious mood, he declared that he would not quit “at any cost”, preferring instead to face the no-confidence motion in the Assembly. As it stands, the numbers are against him. In the 598-member House, the no-confidence motion needs only 300 positive votes. The NC and the Maoists together account for 290 seats; the Madhesis can add another 40 votes, making Mr. Oli’s exit a certainty
• Oli’s nine-month tenure has been a sorry one. As Prime Minister he was unable to reach out to the agitating groups who had felt short-changed by the new Constitution. Even when he relented and the government carried out constitutional amendments to partially address the demands of the Madhesis, it was never with a sense of generosity. His constant refrain of Nepali nationalism led to a downturn in Nepal’s ties with India and like other Left leaders, Mr. Oli too fell prey to overplaying the China card
• Governance took a back seat even as Mr. Oli donned his nationalist mantle. Most tragic was his inept handling of the post-earthquake relief and reconstruction effort, squandering the goodwill and sympathy of the international community which had pledged $4.4 billion at the international conference held in Kathmandu a year ago. To date, not even 10 per cent of the pledged amount has come to the National Reconstruction Authority where key appointments were held up on account of political jockeying
• According to the understanding between the Maoists and the NC, Mr. Prachanda will take over as prime minister for the next nine months, following which he will hand over the prime-ministership to NC leader Sher Bahadur Deuba. The local body elections will be conducted during Mr. Prachanda’s tenure and the provincial and general elections will take place under Mr. Deuba, possibly in November 2017
• According to most political observers, a NC-Maoist combination could be a more stable political combination than a UML-Maoist combine because the two Left parties essentially compete for the same vote bank. Whether this calculation turns out to be correct will nevertheless depend on the maturity of the two leaders, Mr. Prachanda and Mr. Deuba
• From all accounts, Mr. Prachanda is wiser today than in 2008-9 when his coalition collapsed on account of his decision to sack the then Army chief, General RookmangudKatawal. He now publicly acknowledges that it was a political mistake. He too had blamed India for his debacle but now has his task cut out to restore bilateral ties. The NC can be helpful in this too. Mr. Deubahas been prime minister thrice before but will have to be pragmatic in accommodating the Madhesi and Tharu demands on federalism and representation in a more generous manner than Mr. Oli did
• Out of the concessional funds amounting to $1.65 billion pledged by India during the last two years, the utilisation has been a meagre $150 million. From the grant assistance of $250 million pledged last year, $100 million has been allocated for construction of 50,000 dwelling units for the quake affected but the PPP model has yet to be worked out. The balance grant amount remains to be committed. In addition, $750 million was promised for the Kathmandu-Nijgadh highway but the Oli government sought to review the project after the contract was awarded to an Indian consultant. Other development partners have accumulated similar experiences. Getting implementation of long stalled projects back on track should be the priority for the new government
• The Indian government too needs to introspect as to how its much vaunted ‘neighbourhood first’ policy went wrong. The problem of too many interlocutors, claiming to act on behalf of the political powers in Delhi and often conveying conflicting messages, always existed with Nepal but has become more acute during the last two years. Hopefully, this can now be curbed
• A positive turn in relations with India will work to Nepal’s advantage in reviving the sentiment that was generated when Prime Minister Modi visited Nepal in August 2014, of a friendly and caring India, sensitive to Nepal’s concerns and generous in seeking mutually beneficial partnerships

Topic: Agriculture

Category: Governance

Key points:

• In a rather bold move on June 20, the government opened several key sectors such as defence, pharmaceuticals, civil aviation and food products to 100 per cent foreign direct investment (FDI)
• The objective behind this FDI policy is to attract higher investments, better technologies in manufacturing, commerce, and the agri-food space to promote growth, jobs, and incomes of people
• By allowing FDI in trade, including e-commerce, of food produced or manufactured in India (call it “Made in India”), government seems to be inching towards FDI in retail, albeit through the approval route, and only for “made in India” food. Although, it is somewhat puzzling that while large domestic retailers (like Big Bazaar) can sell imported food, foreign retailers won’t be permitted to do so under the new FDI policy. Imports need to be governed by trade policy and not retail policy. Nevertheless, FDI in food is a welcome move
• The key question is: How much difference can it make in promoting efficiency in food value chains? In this regard, it will be good to see what happened in the food processing sector when 100 per cent FDI was allowed through the automatic route. The answer in brief is that it attracted more FDI, though with much volatility: For instance, while in FY2011 FDI in food processing was $190 million, it jumped to $400 million in FY13 and to almost $4 billion in FY14, and then came down drastically to about $500 million in FY16
• The new FDI policy in trade for food can have a similar or even bigger impact by attracting big players like Walmart, Tesco, Amazon, Alibaba, etc. They can help build more competitive and inclusive value chains by investing in procurement, storage and distribution networks
• Innovation lies in mainstreaming small holders on the procurement side and small kirana stores and vendors on the other side of these food value chains. But where are such players likely to invest? Business models would suggest investing where demand is growing fast, and good infrastructure is lacking, which leads to large wastages. This is the case of high-value perishable food, particularly, fruits and vegetables, milk, meat, fish, etc
• The economic worth of food so lost is estimated to be around Rs 92,651 crore. The new FDI policy can help reduce these losses but is unlikely to be a game-changer by itself — the government must change the rules of the game and clear up the policy environment holistically to attract FDI in much needed infrastructure
• Two major roadblocks are the Agricultural Produce Market Committee (APMC) Act and the Essential Commodities Act, which do not allow procuring directly from farmers in most states or holding large stocks by big corporations. This hampers their efficiency and dissuades them from large investments, defeating the very purpose of the FDI policy. This should encourage the policymakers to reform the APMC and ECA, for a magnified effect of the new FDI policy
• In any case, what are the emerging food demand trends in India in the recent past, say, between 2004-05 and 2011-12, which may attract FDI for building efficient value chains? Interestingly, Indians are progressively turning towards non-vegetarianism, and consuming more eggs, meat, and fish
• The household consumption data of NSSO suggests that non-veggies have increased from 58.2 per cent in 2004-05 to 62.3 per cent in 2011-12. The rise in the meat-eating population has come mainly from poultry-meat eaters, that increased by about 68 per cent. The increase is not just in the number of people but also in the level of consumption — monthly per capita consumption of chicken has grown by a staggering 224 per cent compared to just 10.7 per cent in milk, 28.3 per cent in fish and 93 per cent in eggs between 2004-05 and 2011-12. Poultry is clearly the favourite meat among Indians. Interestingly, supply has also commensurately responded to the growing demand for poultry especially as they are beyond the purview of the APMC Act
• The classic unorganised backyard production model has been mostly replaced by organised large-scale poultry farms rearing hundreds of thousands of birds. Still, the sale of poultry meat has remained confined to wet markets and open roadside slaughter houses. Processed chicken meat accounts for not more than 5-10 per cent of the total poultry meat production in the country. Apart from cultural biases, the absence of well-developed reliable cold-chains is to blame. Efficient value chains are the need of the hour
• The challenge is to bring in foreign investment in ways that help compress the value chain by taking on board small players both at the back-end and front-end. Dairy is leading by example where domestic cooperatives like AMUL and multinationals like Nestle have incorporated even small-holders into their model for procuring milk and local kirana stores for their distribution network
• Having the same for fruit, vegetables and meat that are registering much higher growth in demand than dairy, needs a non-restrictive environment for foreign firms to function and scale up their operations many fold
• In China, e-commerce is growing fast and food is a major part of the business — about 45 million people are regularly buying foods online. Big e-commerce companies like Alibaba and JD Online are dedicated to rural expansion. Apart from the push of cost and convenience factors, direct procurement from producers and availability of sophisticated supply chains have enabled online sale of standardised and fresh food in China
• If India wants its FDI in food to deliver, it must clear up the institutional mess that regulations such as the APMC and ECA have created. To this effect, permitting FDI through the automatic route (rather than through approval) will be a much desired and well-awaited annexure to the new policy prescription. Efficient, integrated, well-developed and reliable value chains for high value perishable agri-commodities will reduce food losses and improve the stakes of small players in the value chain. It is high time India worked towards becoming not just an open economy but also a competitive and inclusive one

A meeting of the Inter-State Council took place here today. The Prime Minister chaired the meeting. Union Ministers participated in the meeting along with the Chief Ministers and Administrators of States and Union Territories.

This meeting has been held after a gap of 10 years.

The Union Home Minister welcomed the Members of the Council and mentioned about the importance of cooperative federalism and how this Government was committed to the ideal of Centre-State cooperation. The completion of all the Zonal Council meetings in 2015 was a reflection of this commitment, he added.

The Prime Minister, in his inaugural address mentioned, that the Inter State Council is the most significant platform for strengthening Centre-State and Inter-State relations. He observed that the Council should discuss matters which are of concern to large segments of our population. It is with that intention that the agenda subjects for discussion in the Council have been chosen. So far 102 crore Aadhaar cards have been distributed and today the Aadhaar card has become a symbol of empowerment. He added that India’s greatest assets are the youth of the country and, therefore, they should be equipped with the skill and ability to think logically and work creatively. He emphasized the need to focus on intelligence sharing and ensure greater coordination among agencies, so as to strengthen the internal security of the country.

The recommendations of the Commission on Centre-State relations headed by Justice M.M. Punchhi, retired CJI, will be first referred to the Standing Committee and with their recommendations be placed before the Council. On the issue of Aadhaarenrollment and using Aadhaar as an identifier for direct benefit transfers, the State Governments assured that they will provide maximum support in completing the enrollment and also in setting up DBT (Direct Benefit Transfer) cells. The consensus view that emerged in the Council with regard to improving the quality of education and learning outcomes was that there has to be an improvement in the pupil-teacher ratio and in the training of teachers. Besides, focus also needs to be there on improving classroom processes and in the quality of school infrastructure. All these should be achieved in a time-bound manner. The need for modernizing the police force with better equipment and training was also emphasized.

Many Chief Ministers lauded the Government of India for convening the meeting of the Inter-State Council and requested that such meetings should be convened more frequently.

In his concluding address the Prime Minister mentioned that Aadhaar seeding should be attempted to the maximum extent possible in the implementation of welfare schemes. While expansion of educational facilities for school education was the only area of priority focus earlier, today we should, in addition focus on the quality of education and learning outcomes also. Technology can greatly help in this. We should proactively take steps to bridge the disparities in the standards between the better endowed and poorly endowed schools.

There should be better coordination and interaction between the police departments of the States and ‘Smart Policing’ should be practiced and in this, technology and focus on training of the police personnel in matters relating to cyber crimes should be important points of emphasis.

CCI to sell cotton stock to spinning mills in MSME category only

The recent spurt in cotton prices has resulted in higher input costs for the spinning sector in India. In view of this situation, the Government reviewed the situation and decided the following:

Cotton Corporation of India will sell its existing stock, purchased under MSP, to spinning mills in the MSME category only. This would be for such MSME spinning textile units registered with the Office of Textile Commissioner.

Topic: Global Economy

Category: Economy

Key points:

• Though Brexit is the latest threat to globalisation, the seeds of the destruction of the era of hyper-globalisation—exports-to-GDP rose to over 25% in 2008 as compared to 18% in the 1980s boom—lay in the fact that this phase coincided with what he called the weakening West and the rising rest
• Between 2005 and 2014, the latest McKinsey report points out, real incomes in advanced economies were either flat or fell for 65-70% of the population while they rose for all but 2% of the population in these countries in the 1993-2005 period. The slowing of global trade and increasing protectionism is a logical consequence. In the glory days of 2004-07, when global GDP was growing at 5% per annum, global exports grew at 9-10%—by contrast, they contracted 13% in 2015; in volume terms, the growth was a mere 2.8%
• While deeper integration of the EU-type is under siege, shallower globalisation of trade and capital flows would continue
• Nonetheless, there are important policy implications of the new global order
• For one, India simply cannot get a sustained 8% growth without significant export-growth. Not only has all growth of China and Asian tiger economies been driven by high exports-growth, even India’s own high growth years saw 24%+ export-growth. Can India get this growth and is the world ready for another China-style export behemoth? The latter, surprisingly, may not be too difficult since China’s exports add up to 3.3% of global GDP which is small compared to the global exports-to-GDP ratio of 27.3%. Since India’s share is a mere 0.5% and China’s rising wages and exchange rate will force it to vacate some of this space, the question is whether India will capture it?
• Keep in mind that, in the 2005-12 period which was supposed to benefit India, our apparel exports rose just 3.7% a year versus 18% for Vietnam, 15.7% for Bangladesh and a healthy 6.9% for China which already had a very large export base by 2005. Certainly, the new textiles policy which brings in fixed-term jobs and tax breaks could help, but a lot more will be required
• China’s competitiveness didn’t lie in just its low labour costs or a cheap currency, it lay in it being an integral part of all global manufacturing chains while India is not a part of most manufacturing chains. Getting into this position requires India to aggressively woo FDI and shedding what, in an analogous context, the prime minister called the ‘hesitations of history’
• While there has been progress, recent experience with Apple or even the so-called 100% FDI in the new aviation policy show India isn’t fully ready—half-steps are better than no-steps but it is not clear how much they really move the needle
• Trade pacts have to be a significant part of India’s exports strategy. With incomes stagnating in the West, it is unlikely India will get away with anything less than full-reciprocity. So, while the US may have unfairly blocked access to some of its markets, it is unlikely to fix this unless India gives it more access

1. Terror networks or ‘lone wolves’ at work?

Topic: Terrorism

Category: Security

Key points:

• Coming in such quick succession, the Orlando (June 12), Dhaka (July 1-2) and Nice (July 14) terror attacks are confounding and it further solidify the widely prevalent distrust of law enforcement’s ability to prevent further carnage. While the offenders in Orlando and Nice are said to have had psychiatric problems, there is no such report on the five involved in the Dhaka carnage. Three of the latter were actually bright young men from affluent families. In effect, the stereotype image of a terrorist — an impoverished, uneducated youth with no calling — does not hold water any longer
• The same is true of talks of radicalisation of youth online or in mosques. Some recent offenders have had no record of attending exhortation sessions at a mosque or elsewhere. There is no evidence either of access to online indoctrination. What’s nearer the mark seems to be the identified suspect’s generally unstable behaviour at home or work, coupled with an unhappy marriage
• The ‘lone wolf’ theory — an individual operating on his own without organisational support — has gained strong currency. This was the case both in Orlando and Nice, and earlier (December 2, 2015) in San Bernardino (California), where a Muslim state employee (of Pakistani origin) was the aggressor
• It is in this context that there is a live debate on the role of al Qaeda (AQ) and its offshoot, the Islamic State of Iraq and Syria (IS) in giving leadership to terrorist operations. First, there is a credible report of discord between the two outfits. They operate independently, and sometimes against each other. While the AQ has been outshone by the IS, especially in West Asia, the latter’s hegemony in parts of Iraq and Syria is getting whittled down because of fierce attacks by the coalition forces. Forced to flee from occupied territory, particularly in Iraq, the IS is credited with the strategy of seeking new pastures, specifically in Asia. (Bangladesh is one example. The Dhaka authorities deny the IS hand and attribute the attack to home-grown terrorists.)
• The impression that both organisations have an identifiable hierarchy and any major incident is pursuant to directions from a central leadership, is fallacious. The IS’s propensity to take credit for any savagery anywhere in the world is grotesque. This is showmanship to disseminate the misleading propaganda that there is a hierarchy in control of IS sympathisers. There is nothing to suggest that either AQ or IS has a firm channel of communication through which instructions are passed down the line. Channels are actually often ad hoc and fragile
• There is, however, credible evidence of the IS’s continued magnetic appeal to the youth. It has attracted to its fold young volunteers from more than 20 countries; they have clandestinely exited their homes to go to Iraq and Syria. The IS’s recent reverses may have reduced the number of such youths, but the traffic cannot be said to have stopped. Parents have invariably no clue of their wards having taken up the IS cause. This came to notice in the Dhaka episode. We cannot say that the desertions were from broken homes. Stable families have also yielded volunteers to the ‘cause’
• There is undeniable anxiety over how to erode the credibility of the AQ, IS and such outfits. There is first the need to highlight the hardships and risks involved in enlisting under these banners. There was a recent story of how some IS deserters were pushed into a cauldron and boiled in water. Reports like these could act as a deterrent to prospective entrants. The IS has also been unable to act on the promise of monetary incentives, because of dwindling income from oil-fields in its control and from extortion. Nothing less than massive propaganda by the state or its auxiliaries will work to cut down the inflow of misguided youth into terror bodies
• What does all this mean for India? We may not be fertile ground for terror recruitment. Nevertheless, there are reports from time to time of young men abandoning their jobs or education to jump into the IS fray. We do not have an idea of how many have done so. Intelligence outfits alone can keep a track. It is for parents and citizen groups to contribute to this crucial endeavour to cut down influx into the IS and other terrorist bodies. Or else we may have a Nice or an Orlando misadventure being happen right here, on our soil

Topic: Skill India

Category: Governance

Key points:

• The pace of rolling out the Skill India Mission launched by Prime Minister Narendra Modi last July needs to pick up. The government set a target of skilling 400 million persons by 2022, so far it has only skilled 10 million people. At this pace, the 2022 target appears to be a far cry. Worse still is the low rate of training to job transition
• The mission comprises four initiatives and the Pradhan Mantri Kaushal VikasYojana (PMKVY) is the flagship. In its first phase, the government trained some 1.97 million people against a target of 2.4 million, and the skilling to placement ratio is low. The government has stepped in to improve accountability of the scheme through a quarterly review of outcomes and direct payment systems
• The Rs 12,000-crore package approved by the Cabinet for providing skill training and certifying 10 million persons over the next four years, which marks the second phase of the programme, seeks to address the gaps
• In the new version of the scheme, the government will also focus on training people to work overseas, including Europe and Central Asia. But increased funding and training options alone will not help. The true test of the initiative is ensuring a smooth transition to jobs. This will require measures to incentivise employers to offer apprentice schemes that ensure skill training programmes are in sync with industry’s requirements
• India faces a severe shortage of trained workers—2.3 per cent of India’s work force has formal skill training compared to 68 per cent in the UK, 75 per cent in Germany, 52 per cent in USA, 80 per cent in Japan and 96 per cent in South Korea. Success of the Make-in-India manufacturing push depends, among other things, on availability of the requisite skilled manpower. Industry councils must become more proactive, as well, in skilling potential recruits

Topic: GST Bill

Category: Taxation

Key points:

• All hopes are pinned on this monsoon session of Parliament for the passage of the much-delayed Goods and Services Tax (GST) law with the government and Congress trying to find a middle ground

Issues

1 per cent Tax on interstate movement of goods

• Proposed to compensate manufacturing states such as Tamil Nadu for potential loss of revenue.

Congress Demand

• Rightly demanded tax be dropped as it will create distortions.

Government Stand

• Willing to let go; ready to compensate manufacturing states which wanted this tax.

Dispute settlement mechanism

• The proposed structure provides that the Centre and states settle dispute through the GST council. The voting structure ensures no side has undue powers.

Congress demand

• Independent dispute: settlement mechanism.

Government stand

• GST council should decide it; most states are also in favour.

GST RATE

• This is the most contentious issue.

Congress demand

• Put a cap on the tax rate in the Constitution itself.

Government stand

• Government rightly not relenting on this; it will make the law rigid and difficult to change quickly.
• Government maybe open to keeping it in the GST law.

POSSIBLE TIE-BREAKERS

Agree to GST rate in constitution

• The limit is set in Constitution but so high that it is meaningless and gives government flexibility For instance, a rate of 25 per cent.

Put the rate in GST law

• This should satisfy Congress as change in GST rate will still not be easy.
• Changes in rate will need to be approved by the GST council.

Prescribe a band

• Agree to a band of rate of GST that can be changed through notification with an appropriate ceiling.

The United Nations Industrial Development Organization (UNIDO)in association with the New and Renewable Energy Ministry, is preparing a road map for 100 MWConcentrated Solar Thermal capacity in India to promote CST in the non-conventional energy segment.“UNIDO will provide USD 1.8 million for demonstration projects and to support manufacturing of CST component in India,” he said.

About Rs 18,000-20,000 investment is needed for a square metre of CST area with single and double axis collector and Rs 12,000 is the estimated cost for non-imaging collector.

One sqmt of CST produces 3.5-kilo calories. Solar themal’s efficiency is around 40-50 per cent while the same for solar PV is about 15 per cent. Land requirement for CST project is one third of solar PV project.

Based on a comprehensive analysis done over the last six months across more than 2,500 important train stations across the country, RailYatri.in, a mobile app for rail users, reports that the nationwide Train Delay Average has fallen by nearly 30 per cent since the start of 2016.

However, the same analysis also reveals that the average National Train Delay Index still remains high at 35.03 minutes at the end of June.

The Centre is launching 50 India International Skill Centres (IISC) across the country, which will support the youth in getting foreign placement.

It introduced 15 centres today in Uttar Pradesh, Kerala, Jharkhand, Bihar, Andhra Pradhesh/Telangana, West Bengal, Maharashtra, Punjab and Rajasthan, Ministry of Skill Development & Entrepreneurship said in a statement.

Leading ayurvedic FMCG firm Dabur has tied up with DRDO to promote sustainable cultivation of high-altitude medicinal plants in Ladakh. Dabur India has signed a pact with DRDO’s unit Defence Institute of High Altitude Research (DIHAR), Leh, under which both organisations will educate farmers in the cold desert area.

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

• Defence Institute of High Altitude Research (DIHAR)
• AFSPA
• 1962 Indo-China War
• Art 179
• UNESCO World Heritage Sites
• The APMC Act
• The Essential Commmodities Act
• Sarkaria Commission
• Punchhi Commission
• Skill India
• UNIDO
• GST Bill
• Concentrated Solar Thermal Technology

G. Fun with Practice Questions 🙂

Question 1: Which of the following sites was/were included in the UNESCO World Heritage List in 2016?

Question 2: Which of the following is/are correct about Arsenic and Metal Removal by Indian Technology (AMRIT)?

Question 3: Which of the following is/are correct about Concentrated solar systems?

Question 4: Which of the following statements is/are correct?

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

H. Archives:

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

17th July 2016: Daily News & Current Affairs Analysis

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11th July 2016: Daily News & Current Affairs Analysis

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3rd July 2016: Daily News & Current Affairs Analysis

2nd July 2016: Daily News & Current Affairs Analysis

1st July 2016: Daily News & Current Affairs Analysis

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