Comprehensive News Analysis - 19 May 2016

A. GS1 Related

1. Cyclonic storm over Bay of Bengal to intensify: IMD

Topic: Geography

Category: Cyclone

Location: The Hindu

Key points:

• IMD said the torrential downpour in Tamil Nadu, Karnataka and Kerala was due to a cyclonic depression that could well bring the season’s first cyclone
• The depression has moved towards Andhra Pradesh coast and will intensify into a cyclonic storm by Thursday, after which it is likely to move towards the Northeast and off north Andhra Pradesh and Odisha coasts in the subsequent 48 hours
• There would be rains for two more days and then it will reduce as the depression moves towards Myanmar

B. GS2 Related

1. EC constitutes panel to probe cash distribution

Topic: Polity

Category: Elections

Location: The Hindu

Key points:

• The Election Commission (EC) has constituted a seven-member committee to look into the causes that led to large-scale distribution of cash and gifts in Aravakurichi and Thanjavur constituencies, where polling has been deferred to May 23

2. Maldives cuts ties with Iran

Topic: International Relations

Category: India’s Neighbourhood

Location: The Hindu

Key points:

• The Maldives has terminated its four-decade-old diplomatic ties with Iran. Iran’s policies are “detrimental to peace and security in the region (West Asia), which, in many ways, is also linked to stability, peace and security of the Maldives”, a statement hosted on the website of the Ministry of Foreign Affairs said
• A month ago, the 13th Summit of the Organisation of Islamic Cooperation in Istanbul, Turkey, deplored “Iran’s interference” in the internal affairs of West Asian States
• Expressing “deep concern” over the announcement, the Maldivian Democratic Party, the principal Opposition party, said “this kind of irrational adventurism in foreign policy decisions will have serious negative repercussions on the security of the Maldives

3. State involved with terror groups, says Pakistan Minister

Topic: International Relations

Category: India’s Neighbourhood

Location: The Hindu

Key points:

• In an interview to BBC Urdu, Punjab Law Minister was asked why legal action has never been taken against anti-India groups in the province which were close to the “establishment.”
• The Minister ruled out the possibility of any legal action against the groups saying, “How can you prosecute a group with whom the state itself has been involved with?”
• India accuses Pakistan of patronising terror groups like JuD and JeM who carry out attacks in the country. Pakistan however denies the charge calling them “non-state actors” who are not in its control

4. Kabul reaches deal with militants

Topic: International Relations

Category: India’s Neighbourhood

Location: The Hindu

Key points:

• Afghanistan signed a draft agreement on Wednesday with the Hezb-e-Islami militant group in a move the government hopes could lead to a full peace accord with one of the most notorious warlords in the insurgency
• The group has played only a minor role in the Taliban-led insurgency in recent years and the deal is unlikely to have any immediate practical impact on security.
• But with little sign that the Taliban are ready to join peace talks, the deal offers the government a concrete sign that it is making headway in drawing insurgent groups away from the battlefield and into the political process

C. GS3 Related

1. Prithvi-II test-fired successfully

Topic: S & T

Category: Defence

Location: The Hindu

Key points:

• India on Wednesday successfully test-fired its indigenously developed nuclear capable Prithvi-II surface –to-surface missile as part of a user trial by the army from a test range at Chandipur in Odisha
• With a strike range of 350 km, the Prithvi-II is capable of carrying 500 kg to 1,000 kg of warheads and is thrusted by liquid propulsion twin engines. It uses advanced inertial guidance system with manoeuvring trajectory to hit its target.
• The missile trajectory was tracked by the DRDO radars, electro-optical tracking systems and telemetry stations located along the coast of Odisha Inducted into Indian armed forces in 2003
• the nine-metre-tall, single-stage liquid-fuelled Prithvi-II is the first missile to be developed by the DRDO under the Integrated Guided Missile Development Programme

D. GS4 Related

E. Important Editorials: A Quick Glance

The Hindu

1. North by Northeast

Topic: International Relations
Category: India’s Neighbourhood

Key points

• India’s self-image is that of a benign democracy, but it is somewhat less so from the Himalayan perspective, if you consider the absorption of Sikkim or the low-burn interventionism in Nepal and Bhutan
• A turnaround in New Delhi’s Himalayan doctrine would lead to an easier relationship with the sovereign neighbours, helping their evolution into stable democracies. It would also contribute to making India’s own Himalayan hinterland, from the Northeast to Kashmir, more part of the national mainstream
• The Chinese challenge is real, but the ground has shifted with advances in the transport, infrastructure and geopolitics of High Asia, enough to demand a policy departure. New Delhi will have to calibrate its position between competing with, engaging, and strategically challenging Beijing. In doing so, it should consider the advantages of the planned trans-Himalayan infrastructural connections, which will ultimately help India’s economy link to the Chinese mainland
• It was the five-month-long blockade following the promulgation of the Constitution that gave the government of Nepal the public backing to conclude agreements with China on matters which had earlier been India’s exclusive domain — third-country transit, high-volume trade, and cross-border highways, railways, optic cables and transmission lines
• The arrival of Qingzang Railway from the Chinese mainland to the Tibetan plateau in 2006 has been the game changer, and the line has already been extended to Shigatse town and is ploughing westward and closer to Nepal’s border points. The railway makes the transfer of goods from the mainland economically feasible in a way that had never before been contemplated. It is set to create new commercial dynamics, especially as the lacking southward highways are constructed through Nepal’s mid-hills
• Nepal and China have agreed to complete the Kyerung Highway starting northwest of Kathmandu, which would allow descent from the Tibetan plateau to the Gangetic plain in less than a day. There is also agreement to build the Kimathanka Highway down the Kosi river valley in eastern Nepal, which would bring the Shigatse/Lhasa railheads close to Bangladeshi and Indian ports
• What all this means is that India would do well to add economics and commerce to its strategic vision of the Himalayan region. If New Delhi loosens up on Nepal with this understanding, it may be surprised to find that it retains Kathmandu as a steadfast partner while gaining market access to Tibet and the east Asia mainland through Nepal’s all-weather routes.
• The march of economy, and the metaphorical reduction of the geostrategic height of the Himalaya, requires New Delhi to update its Himalayan doctrine. The new ‘Nepali-Chiniya bhai-bhai’ atmospherics, which is largely the result of New Delhi’s own recent obduracy, can actually be turned to advantage in formulation of the new policy
• Leaving Nepal free to develop its international outreach, as a country that can never afford to go against India’s security interests, would be a great way to begin to define the new doctrine. The Himalayan region today represents a realm of opportunity more than competition, which requires New Delhi to be able to compartmentalise the commercial and the geostrategic

Bottomline: The links between Nepal and China can provide opportunities to India economically(market access to Tibet and east Asia).India can reap benefits from the new infrastructure projects if Nepal is left free to develop its international outreach, as a country that can never afford to go against India’s security interests

2. Rebooting ties with Iran

Topic: International Relations

Category: Indo-Iran Relations

Key points:

• The removal of sanctions on Iran following the nuclear deal has ended its isolation, and enabled its return to the economic and diplomatic mainstream
• PM’s trip on May 22-23 is expected to bridge the trust deficit in bilateral cooperation and boost energy and trade ties while expediting India’s connectivity plans
• Strong ties with Iran are vital for India. The key factor is energy. Till sanctions were imposed on Iran, it was India’s second largest source of crude oil after Saudi Arabia. Once the Chabahar port in Iran is developed, it will offer India alternative access to landlocked Afghanistan, bypassing Pakistan
• Despite these shared interests, bilateral ties took a beating during the sanctions years. India had voted against Iran at the International Atomic Energy Agency over its clandestine nuclear programme and, under pressure from the U.S., slashed oil imports from the country by up to 40 per cent during the period
• New Delhi had also backed off from a pipeline project that aimed to bring natural gas from Iran to India through Pakistan
• But with sanctions removed and foreign countries and companies rushing back to Tehran to seize business and economic deals, it is important for India to reboot relations. Iran also seems keen on pursuing stronger ties with India
• While it will pursue good ties with the Sunni Gulf for energy supplies, Iran would act as a gateway to Central Asia besides enhancing India’s energy security
• Israel remains one of India’s top defence and technology suppliers. The success of this policy depends on New Delhi’s capacity to do the balancing act
• The Iran visit is an opportunity to restore equilibrium in India’s foreign policy, which, of late, was seen to

3. Tamil Nadu’s direct cash transfers

Topic: Polity

Category: Elections

Key Points

• Given the situation on the ground, coupled with the EC’s own grim portrayal of the widespread electoral malpractice, deferring the election in Aravakurichi and Thanjavur by a week is a grossly inadequate response
• Given the situation on the ground, coupled with the EC’s own grim portrayal of the widespread electoral malpractice, deferring the election in Aravakurichi and Thanjavur by a week is a grossly inadequate response
• A well-oiled cash distribution system was undoubtedly in place. Some cases have been registered, but the candidates remain untouched. Hence the widespread scepticism about the EC’s claim that with the seven-day postponement the “vitiating effect” of the money and gifts distributed would “lose its intensity”
• In India’s electoral history, there has been any number of allegations of attempts to influence voters. However, Tamil Nadu is acquiring a reputation for its well-oiled cash economy of electioneering, with every vote seen to be on auction. This dynamic, in part, explains why Assembly elections in the State are becoming so lacklustre, with the essential democratic outreach through manifestos and programmes replaced by competing rosters of freebies and, behind the scenes, the promise of payment for votes
• The EC has used its enormous powers effectively to end most malpractices across the country. It has worked successfully to increase turnouts and opened up access to polling booths to all sections. However, it has clearly failed to contain money power, especially in Tamil Nadu. That is only to be expected
• The EC cannot wage this battle alone — efforts to curb the flow of cash in election campaigns need to be embedded in a wider cleaning up of the account books of political parties. Campaign finance remains anachronistically opaque, and the distortions include not just “money power” at election time, but also corruption in administration and in, say, the use of local area development funds. The only cause for cheer in this grim scenario is that voters do not necessarily vote for the highest bidder

4. A work in progress

Topic: Economy

Category: State of Indian Economy

Key Points:

• Computing development and well-being is an ongoing project. Introducing the Social Progress Index at the sub-national level can be a game changer
• GDP has been used to measure the economic performance of a nation, and has been shaping the debate on the performance of countries for the past 80 years or so. Today, almost every country maintains GDP statistics.
• However, a question that often arises is what are the relative merits and demerits of GDP and has it outgrown its utility?
• It is not a difficult question to answer. GDP growth over time enables central banks and policymakers to evaluate whether the economy is in recession or inflation. In that sense it is still required. Also, GDP has held significance as a universal metric over the years
• However, with rapid globalization and technology-oriented integration among countries, this metric has become outdated and does not accurately take into consideration other aspects like the wellbeing of the residents of a country
• The most significant weakness of GDP is its exclusion of voluntary market transactions. GDP as a measure of economic growth fails to account for productive non-market activities, like a mother taking care of her child, a homemaker doing household chores, a homeowner doing maintenance of his house, leisure (paid vacation, holidays, leave time), improvement in product quality, etc
• GDP also ignores important factors like environment, happiness, community, fairness and justice. To be fair, it was not intended to measure these. But these are important aspects of development. Thus, there is a need for alternative measures which can take into consideration other key factors like hunger and malnutrition, safety parameters, literacy rate and tolerance
• It is where some of the recent approaches have tried to go beyond GDP and incorporate most of these factors into the measurement of the well-being within the society. Some of these include GINI coefficient, HDI (Human Development Index), and GNH (Gross National Happiness). GINI coefficient which was introduced in 1912 by Corrado Gini and adopted by World Bank, and measures the income inequality among a country’s citizens — but it fails to measure social benefits or interventions that reduce the gap or inequality between rich and poor. GNH, which was introduced in the 1970s by the king of Bhutan similarly measures the happiness levels of the citizens in a country while it ignores other important elements like gender equality, quality education and good infrastructure.
• HDI, devised and launched in 1990 by Pakistani economist Mahbub ul Haq, is computed and published by the United Nations Development Programme and overcomes most of the shortcomings of the Gini coefficient and GNH
• After this, Millennium Development Goals and Sustainable Development Goals were also built along various dimensions based on the work done in understanding human development. However, HDI, as a measure, falls short in its capture of the unequal distribution of wealth within the country and the level of infrastructural development.Many prospects of a healthy society, such as environmental sustainability and personal rights, are not included in HDI. It is not successful in tracking the apparent progress of countries, nor is it sufficiently factorised into primary level parameters to indicate many important areas of policy. These are some of the limitations of the approaches in finding a composite measure of well-being to date
• The next stage in the measurement of well-being went into creating what is termed as the Social Progress Index (SPI). It goes beyond the traditional measure of GDP and has most parameters that are required to fulfil SDGs. SPI is based on three fundamental pillars: basic needs for survival; access to the building blocks to improve living conditions, and access to opportunity to pursue goals and ambitions
• One significant difference between GDP and SPI is that SPI focusses on outcomes rather than inputs that are used in GDP. For example, the quality of life and longevity are measured instead of spending on health care, and people’s experience of discrimination is looked at instead of focussing on whether there is a law against discrimination
• SPI also reframes the fundamentals about development by taking into consideration not just GDP but also inclusive, sustainable growth that will lead to a significant improvement in people’s lives. SPI can best be described as a complementary index to GDP and can be used along with GDP to achieve social progress
• This brings us to the measurement and present scores on the index. If the world is considered as one country, it would score 61.00 on the SPI on a population-weighted basis. India ranks 101 with a social progress score of 53.06 among 133 countries, according to SPI 2015. One significant find is that all countries doing well in GDP/capita are not always the ones at the top of SPI. For example, New Zealand has GDP per capita almost half that of the top performing nations, according to GDP per capita figures, but performs better than most nations on SPI .West Asian economies like Kuwait, the United Arab Emirates and Saudi Arabia perform contrary to this pattern as they have high GDP per capita, but secure significantly inferior positions in SPI
• In conclusion, SPI can bring substantial betterment in the policy discourse on development. With the move to getting it introduced at a sub-national level, the index is expected to help development practitioners and other stakeholders in analysing well-being in a better manner. Ideally, the development project should start with a bottom-up approach, from a grass-root level to city, then from district to State and, finally, to the national level. SPI, when introduced in India — a beta index will be launched in September — can this way lead to a better understanding of well-being and prosperity within the country

The Indian Express:

1. To Read: Understanding silica, the ‘dust of death’

Others:

1. PIB

a). Mineral Production during March 2016 (Provisional)  

The index of mineral production of mining and quarrying sector for the month of March(new Series 2004-05=100) 2016 at 148.8, was 0.1% lower as compared to March 2015. The cumulative growth for the period April- March 2015-16 over the corresponding period of previous year stands at (+) 2.2%.
The total value of mineral production (excluding atomic & minor minerals) in the country during March 2016 was Rs. 22341 crore

b) Eastern Fleet Ships on deployment to South China and North West Pacific

In a demonstration of its operational reach and commitment to India’s ‘Act East’ policy, the Indian Navy’s Eastern Fleet sailed out for a month long operational deployment to the South China Sea and North West Pacific
During this overseas deployment, the ships of Eastern Fleet will make port calls at Cam Rahn Bay (Vietnam), Subic Bay (Philippines), Sasebo (Japan), Busan (South Korea), Vladivostok (Russia) and Port Klang (Malaysia)

2.The Business Line: Ends and means

Topic: Economy

Category: Exit Policy

Key Points

• As businessmen know, and politicians rarely understand, the inability to exit from a failing business can be a big damper on investment and risk taking. Look at the dismal French data on business creation and you will see the footprints of their laws that have made it difficult to exit business, change work rules or layoff staff
• The US is a pioneer when it comes to dealing with bankruptcy. Already liberal, when its bankruptcy code was revised in 1978, it was made unnecessary for a business to show that liabilities were greater than assets to file for reorganisation.
• Thus, the conventional stigma associated with bankruptcy and market reputation changed to that of reorganisation and restructuring by a company in difficulty. By filing under Chapter 11 of the Bankruptcy Code, a company seeks the protection of the court from debtors. The company has to file a recovery plan that a debtors committee will have to approve; the management continues to run the business, and fresh loans can be made to the company that receive superior debt status
• The process generally lasts one and half years, and creditors recover about 80 per cent of the money
• While not there yet, the new changes to the Indian bankruptcy laws that were approved in parliament would provide some protection to debtors and ease bankruptcy in India.
• The Insolvency and Bankruptcy Code Bill sets up a time bound plan — 180 days to resolve the issues of a defaulting firm and another 90 days if 75 per cent of the creditors agree on the revival plan. Otherwise, the firm gets liquidated. There is jail time for concealing property or defrauding creditors. World Bank estimates suggest that, prior to this law, the process usually takes about four years in India and debtors recover only about 26 per cent.
• The new law would give employees first right followed by secured creditors in the resolution process. It is also aimed at bringing under one framework the various disparate rules and regulations under different laws
• The new law has boosted another kind of business already. Global investors, who are into debt resolution and asset reconstruction, have taken note of the new opportunities in ‘Indian failure’
• They buy distressed debt, gain control of the firm, and either try to revive it or recover more from the breakup. The government disclosed that the top 50 defaulters of public sector banks owed ₹1.21 lakh crore as of December 2015. The IMF estimates that 40 per cent of corporate debt in India is at risk. Thus, there is enough business to go around
• To further the objectives of business creation, the government needs to now re-examine the labour laws in the country. That would certainly boost the ‘Make in India’ campaign
• The new bankruptcy regulations should now give a further boost to entrepreneurial activity and encourage many more individuals to get into angel and venture funding.

3.Business Standard: Explaining the gender pay gap

Topic: Society
Category: Women’s Issues
Key Points

• The observations made in the Monster Salary Index report on India’s gender pay gap have few surprises, except that the gap is as much as 34% in the information technology sector which is supposed to employ relatively better-skilled people. What is even more alarming is that the pay gap in this sector has increased from around 29% a year earlier.
• Many lay the blame on mindset issues in India Inc’s C-suites: many institutions prefer male employees over female employees and promote a higher number of male employees to supervisory positions even though there are hardly any evidence to suggest that a woman will compete less than a man if the right cultural incentives are in place
• But that’s only a part of the story. Companies say such gender pay gap exists because of divided work-family loyalties as women take more time off from work to care for their families, leading to long career breaks. By the time they come back into the job market, they have often missed the bus. Evidence exists that women lose out through voluntary termination of service at a rate two or three times faster than men once they have attained the experienced, mid-career level of their careers.
• India, in fact, sees the maximum drop in women representation from junior to middle-level positions, unlike in many other Asian countries where such a drop occurs from middle- to senior-level positions
• This, in turn, impacts the supply line for higher levels. Data also showed almost one-third of women employees have not resumed work in the absence of a support system at home to take care of the child
• This in turn disproves the hypotheses that organisations have any control over women’s decision to exit/re-enter the workforce. Flexible work policies or extended leave can, at best, be a minor enabler for those who possess career aspirations in a situation where close to 78% of eligible female graduates choose not to participate in the organised workforce.
• This is reflected in the fact that India has one of the lowest female labour force participation (FLFP) rates— typically measured as the share of women that are employed or seeking work as a share of the working-age female population — among emerging markets and developing countries, according to an International Monetary Fund working paper published last year. At around 33% at the national level in 2012, India’s FLFP rate is well below the global average of around 50% and East Asia average of around 63%. A FLFP rate of 33% implies that only 125 million of the roughly 380 million working-age Indian females are seeking work or are currently employed
• the United Arab Emirates has a reverse pay gap. Women at the same level, company and function actually earn 2% more than their male counterparts partly because fewer women (13%) participate in the labour force, and those that do tend to have higher levels of education. This makes the continued high pay gap in the Indian IT sector even more intriguing

4.To Read:

The Economic Times

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

1. Cyclone
2. Prithvi II
3. Social Progress Index
4. Insolvency and Bankruptcy code
5. Taliban
6. Election Commission

G. Fun with Practice Questions 🙂

Question 1: Which of the following statement(s) is/are correct about Social Progress Index(SPI)?

Question 2: Which of the following statement(s) is/are correct?

Question 3: Which of the following statement(s) is/are correct?

Question 4: Which of the given below statement(s) is/are correct Prithvi II?

Question 5: Which of the following statement(s) is /are correct?

H. Archives:

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