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Comprehensive News Analysis - 21 November 2016

Table of Contents:

A. GS1 Related:
B. GS2 Related:

1. Centre may ease rules to attract officers to north-east

2. Religion has claimed more lives than politics, says CJI

3. Post G-20, China sees India as partner to boost global economy

C. GS3 Related:

1. Financial terrorism targeting youth via drugs, warns Modi

2. Centre-state stalemate over GST jurisdiction continues

3. DRDO still aims for Kaveri in LCA

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

The Hindu

1. Getting real on climate

2. Rising dollar, falling rupee

3. Hitting the refresh button

Business Line

1. Battling black money

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



Useful News Articles

A. GS1 Related

Nothing here today folks!

B. GS2 Related
  1. Centre may ease rules to attract officers to north-east

Category: Polity and Governance

Topic: Government Initiatives    

Key Points:

  • Recently, to tackle the problem of IAS and IPS officers’ reluctance to accept a posting in the north-eastern states, the Centre has proposed a new policy.
  • The Government has decided to modify the existing policy for inter-cadre transfer/deputation for north east cadres.
  • It is important to note that under the existing policy, if an officer borne on a cadre other than a north-east cadre opts to go on inter-cadre deputation to the north-east, then, the condition of completion of nine years of service in his/her own cadre and of his/her not having been promoted to the super time scale may be relaxed.
  • But, under the new policy, the nine-year requirement has been further relaxed.
  • The new policy states, “If an officer borne on a cadre other than a north-east cadre opts to go on inter-cadre deputation to either his home State or any other State in the north-east, he may be allowed such deputation after completion of seven years instead of nine years of his service.”


2. Religion has claimed more lives than politics, says CJI

Category: Polity and Governance

Topic: Judiciary

Key Points:

  • Recently, Chief Justice of India T.S. Thakur observed that the manner which a person chooses to practise his religion is between him and God and no third person has any business to interfere.
  • Justice Nariman, also recently observed that only fraternity can bring unity in a multi-religious country, and that Fraternity is a cardinal value of our Constitution.


3. Post G-20, China sees India as partner to boost global economy 

Category: International Relations

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

Key Points:

  • Recently, a major brainstorming exercise marshalled by the Communist Party of China (CPC) was held in China. This was a two-day intensive exercise and included invitees from major national and international think-tanks, as well as political parties across a wide cross-section of the globe.
  • At this two-day intensive exercise, two separate sessions focussed on Africa and countries along the Mekong River, signalling China’s intent to include the Global South in its blueprint to lift the global economy.


India and China

  • China has been advocating greater participation of the Global South and the emerging countries in the world economy.
  • It is important to not forget the big picture that by 2050 China will be the first and India will be the second largest economies in the world, with very complementary type of demographic and supply chain structures.
  • It is important that India insists on a long-haul relationship with China, that is focussed on joint ventures, allowing India’s “smart engineers” to absorb advanced technology.
  • One of the biggest things India can learn from China is in the arena of infrastructure. The Chinese are a powerhouse of infrastructure.
  • It has been advocated that India should build solid economic foundations with China, which, would reinforce strong mutual interest. This would help India manage her differences with China.
  • Also, as a consequence, Pakistan as a factor in Sino-Indian ties would gradually recede to the background.


C. GS3 Related
  1. Financial terrorism targeting youth via drugs, warns Modi

Category: Internal Security

Topic: Challenges to Internal Security

Key Points:

  • The Prime Minister recently reiterated that the current demonetisation exercise would benefit the common man.
  • He also raised the issue of ‘financial terrorism’ from across the border.
  • The Prime Minister believes that on the one hand the sponsored terrorism from across the border kills our soldiers, on the other hand the financial terrorism from across the border targets our youngsters through drugs.
  • Financial terrorism seeks to destroy our economy by printing fake currency.
  • It is important to note that the entire business of drugs sustains in cash. Crores and crores of fake currency was smuggled in the country.
  • The Prime Minister also maintained that in just ten days now over 5,000 crore rupees have already been deposited in banks. Banks will invest that money in the market and give people loans with that money.
  • Importantly, the PM also formally launched the ‘Housing for All’ in rural areas under which the government proposes to provide an environmentally safe and secure pucca house to every rural household by 2022.


  1. Centre-state stalemate over GST jurisdiction continues

Category: Indian Economy

Topic: Taxation 

Key Points:

  • The stalemate between the Centre and states over administrative control under the proposed goods and services tax (GST) regime continues.
  • States have been unrelenting on their position of being given right to control all assessees with up to Rs 1.5 crore annual turnover.
  • This issue has remained a contentious one even during the previous two GST Council meetings.
  • It is important to note that any disagreement at the next meeting holds the potential of derailing the rollout of the GST from the targeted April 1, 2017.


  1. DRDO still aims for Kaveri in LCA

Category: Science and Technology

Topic: Indigenization of technology

Key Points:

  • As was originally planned, the Kaveri, the indigenous aeroengine, may after all fly on the indigenous LCA fighter.
  • France’s engine maker Snecma, is seen as a candidate to revive Kaveri, remove its shortcomings and get it certified to safely power the fighter.
  • In other developments, LCA Tejas will undergo the remaining three or four mandated tests up to March and will go in for certification as battle-ready or ‘FOC’ by mid-2017.


D. GS4 Related
E. Important Editorials: A Quick Glance
The Hindu
  1. Getting real on climate

Category: Environment and Ecology

Topic: Climate Change   

Key Points:

  • It is important to note that the UN conference on climate change held in Marrakech, is significant as it provided an opportunity to communicate concerns about the future climate policy of the U.S.
  • The UN conference on climate change held in Marrakech laid an emphasis on raising the commitment of all countries to reduce greenhouse gas (GHG) emissions.
  • The U.S. accounts for a quarter of all cumulative fossil fuel emissions.
  • It would be untenable for the U.S. to renege on its promise to assist vulnerable and developing nations with climate funding, technology transfer and capacity-building under Donald Trump’s presidency.

Indian Context

  • India is faced with a difficult situation as it has the twin challenges of a) growing its economy to meet the development aspirations of a large population, and b) cutting emissions.
  • National GHG levels are small per capita in India, but when they are added up they put India in the third place.
  • It is important to note that India has no historical responsibility for accumulated GHGs, but smaller, and more vulnerable countries such as island states and Bangladesh are demanding action to cut emissions.
  • Thus, a strategy that involves all State governments will strengthen the case for international funding, and spur domestic action.


  1. Rising dollar, falling rupee

Category: Indian Economy

Topic: International Trade   

Key Points:

  • In the wake of Donald Trump’s surprise win in the U.S. presidential elections, the dollar  has soared against most currencies, including the rupee.
  • This rise is based on the expectation that his economic policies will spur growth and inflation in the world’s largest economy.
  • The rupee, slumped 2.3 per cent from its 66.62 a dollar close on November 8.
  • It is important to note that the flight of capital from emerging market assets has inflicted significant pressure that has been exacerbated by the Centre’s recent decision to withdraw higher denomination currencies.


How does the macro picture look like in India?

  • With demonetisation infusing a surge of liquidity into the banking system, domestic interest rates are expected to decline.
  • This would make the rupee less attractive to investors seeking to benefit from an interest rate arbitrage.
  • Plus, with consumption and broader economic activity predicted to take a hit on account of the shortage of cash in the wake of the currency move, GDP growth may slow sharply.


  1. Hitting the refresh button

Category: Indian Economy

Topic: Government Policy, Fiscal Policy

Key Points:

  • The strength of India’s policy and institutional frameworks have been one of the most distinguishing features of India’s emergence as a preferred investment destination in recent years.

Decisions such as:

a) e-auctioning of natural resources,

b) A rule-based framework for Indian monetary policy, insolvency and bankruptcy code,

c) The goods and services tax, etc. have aimed at enhancing the credibility of policy and institutional frameworks

 Further, gradual changes in the conduct of fiscal policy, have also been a crucial contributor towards improving India’s growth and investment potential.

Background of FRBM:

  • The FRBM Act was first introduced in India in December 2000.
  • This was done to rein in rising government deficits both at the Centre and in the States.
  • Enacted in 2003, the FRBM Act institutionalised fiscal discipline.

Recent Events and Initiatives

  • It is important to note that this year, in the 2016 Budget speech, the Finance Minister instituted a committee to review the contours of the FRBM Act in the light of current domestic and global dynamics.
  • This was done in a bid to reinforce the commitment to fiscal consolidation.

The Way Forward

  • A rule-based system with room for independent advisory and oversight can transform India’s fiscal architecture.
  • This is particularly important as we are at a juncture where most developed economies are struggling with their government’s balance sheet to support the economy.


Business Line

  1. Battling black money

Category: Indian Economy 

Topic: Government Initiatives   

Key Points:

Impact of recent demonetization on certain sections:

  • The informal sector in rural and urban India, accounting for 45 per cent of the GDP and 80 per cent of total employment, has been badly hurt by the withdrawal of 86 per cent of the value of currency in circulation.
  • Rabi sowing and kharif marketing and harvesting operations have been hit.
  • Economists and market analysts expect GDP growth to contract by 50 basis points or more this fiscal — owing to a collapse in the circulation of currency in a cash-dominated economy.


Issue of Black Money

  • For Black Money to recede into significance, it would require a multi-pronged approach that attacks not just the stock of black money, but also its flow.
  • Black money is an integral aspect of activities concerning elections, realty, mining and bullion and even capital markets.
  • It is important to note that the Centre has announced a drive against benami holdings.
  • Looking forward, it is crucial that the Centre implements electoral reforms.
  • It is important to address the loopholes in the Representation of the Peoples Act, which include not questioning donations under ₹20,000 and allowing exemptions to a candidate’s expenditure limits, among other things.

F. Concepts-in-News: Related Concepts to Revise/Learn:
  • Fiscal Consolidation
  • FRBM Act
  • GST Council


The Constitution (122nd Amendment) (GST) Bill, 2014

H. Fun with Practice Questions 🙂
Question 1: The Economic Survey is compiled by:
a) Office of Economic Advisor

b) Central Statistical office ( CSO )

c) National Sample Survey Organization (NSSO)

d) Department of Economic Affairs

Question 2: The Three Gorges Dam is located in which of the following countries?
a) China

b) Malaysia

c) Vietnam

d) Cambodia

Question 3: Consider the following statements,
  1. The Mekong river flows through China, Myanmar, Thailand, Laos, Cambodia, and Vietnam.
  2. The Mekong river empties into the South China Sea at the Mekong Delta in Vietnam.

Which of the following statements is/are correct?

a) 1 Only

b) 2 Only

c) Both 1 and 2

d) Neither 1 nor 2

Question 4: The term ‘narrow banking’ is best described as:
a) Banks acting only as payment banks

b) Banking by non-banking financial companies

c) Limited areas of operation by banks

d) Banks lending only to risk free sectors

Question 5: An economy pursuing an expansionary fiscal policy can witness:
  1. Increase in fiscal deficit
  2. Increase in wages of labour
  3. Increase in rate of income tax

Select the correct answer using the codes given below.

a) 1 only

b) 1 and 2 only

c) 1 and 3 only

d) 1,2 and 3

Check Your Answers

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