Comprehensive News Analysis - 25 May 2016

A. GS1 Related

Nothing here for today folks!

B. GS2 Related

1. Envoys to boycott Africa Day fete today

Topic: International Relations

Category: Indo-African relations

Location: The Hindu

Key points:

• Frequent attacks on African youths in India triggered a diplomatic downturn  with African diplomats announcing that they are likely to recommend to their governments “not to send new students to India” because of “stereotypes and racial prejudice against Africans in India”.

• The African Group of Heads of Mission declared that it would not join the May 25 Africa Day celebrations, in solidarity with a Congolese student who was killed last week in Delhi

C. GS3 Related

1. Govt. targets 120 mn tonne capacity addition in ports

Topic: Economy

Category: Ports

Location: The Hindu

Key points:

• The government has set an ambitious target of capacity addition at 12 major ports by 120 million tonnes in 2016-17. These ports had added the highest-ever capacity of 94 million tonnes in 2015-16.

• As per the targets, the operating margin (ratio of operating income to revenue)for the major ports is set to increase to 44 per cent, compared to 39 per cent during 2015-16

• As of March 2016, the total capacity of major ports increased to 965 million tonnes from 871 million tonnes in March 2015

2. Indian Ocean Rim nations to boost cooperation on SEZs

Topic: Economy

Category: Exports

Location: The Hindu

Key points:

• India and several other nations bordering the Indian Ocean have decided to evolve a regional mechanism for cooperation on Special Economic Zones (SEZ) – or duty-free enclaves with tax holidays — to boost exports.

• The first-of-its-kind meeting between SEZ authorities from these Indian Ocean Rim (IOR) nations was held on May 19-20 at Chabahar, Iran, which houses a Free Trade Zone (FTZ) – a synonym for SEZs

• Participants at the Chabahar meet also considered a proposal to form a “joint FTZ” among the IOR Association (IORA) member countries since most of these FTZs are situated or are being built in coastal regions

3. ISRO to test rocket that takes its fuel from air

Topic: S&T

Category: space

Location: The Hindu

Key points:

• After successfully testing a technology demonstrator of a reusable launch vehicle, Indian Space Research Organisation (ISRO) is planning to test an air-breathing propulsion system, which aims to capitalise on the oxygen in the atmosphere instead of liquefied oxygen while in flight

• Generally, vehicles used to launch satellites into space use combustion of propellants with oxidiser and fuel. Air breathing propulsion system aims at use oxygen present in the atmosphere up to 50 km from the earth’s surface to burn the fuel stored in the rocket

• This system, when implemented, would help in reducing the lift-off mass of the vehicle since liquefied oxygen need not be carried on board the vehicle

D. GS4 Related

E. Important Editorials: A Quick Glance

The Hindu

1. Raising the stakes with Chabahar

Topic: International Relations

Category: Indo-Iran Relations

Key points

• A trilateral transport corridor project, inked in Tehran this week by India’s Prime Minister and the leaders of Iran and Afghanistan, has the potential to alter the geopolitical map of South and Central Asia

• The PM’s visit also put an end to years of ambivalence on the development of Iran’s Chabahar port on the Gulf of Oman, the focal point of the corridor project. New Delhi and Tehran had agreed in 2003 to develop the port, near the Iran-Pakistan border. But the project did not take off, mainly owing to international sanctions against Iran over its nuclear programme, but also on account of inertia in Delhi

• The removal of sanctions after Iran’s nuclear deal has provided New Delhi an opportunity to revitalise bilateral ties. The road, rail and port development projects, once implemented, will change the way India, Afghanistan and Iran do business. For India, the projects have specific economic and strategic significance. India and Afghanistan have failed to realise the full economic potential of their friendship owing to connectivity problems. The Pakistan link between India and landlocked Afghanistan has been an obstacle, given Islamabad’s tense diplomatic ties with both New Delhi and Kabul, and sometimes with Tehran too

• Once the Chabahar port is developed, Indian ships will get direct access to the Iranian coast; a rail line to the Afghan border town of Zaranj will allow India a route around Pakistan. This will surely boost trade with Iran and Afghanistan

• Besides, the proposed free trade zone in the Chabahar area offers Indian companies a new investment destination at a well-connected port city. India has already said its companies will set up “plants in sectors such as fertilizers, petrochemicals and metallurgy” in the zone. It will also supply $400 million worth of steel rails to Tehran to build the railway link

• From a strategic point of view, Chabahar is situated just 100 km from Pakistan’s Gwadar port, the centrepiece of a $46 billion economic corridor that China is building. Though the Indian investment in Chabahar, at $500 million, does not match the scale of the Chinese project, the Chabahar port will act as a gateway for India to Central Asia bypassing the China-Pakistan arc

• The long-term potential of this connectivity is immense. The real challenge lies in execution. India’s record in finishing big-ticket projects abroad is far from consistent. Also, with Tehran becoming the new destination of global powers, India needs to energise its diplomacy to keep engagement with Iran consistent, irrespective of outside pressure

• With the Chabahar project, India has raised the stakes in Tehran substantially, and also raised the bar on its own regional ambitions. It cannot afford to let bilateral ties drift again, as it happened over the past decade

2. ISRO’s new frontiers

Topic: S&T

Category: space

Key points:

• With the successful launch on Monday of the first technology demonstrator of the indigenously made Reusable Launch Vehicle (RLV), the Indian Space Research Organisation (ISRO) has taken a baby step in building a vehicle that can be reused multiple times to launch satellites into orbit

• The hypersonic flight, that lasted about 770 seconds from lift-off to splashdown in the Bay of Bengal, reached an altitude of about 65 km before re-entering the atmosphere at nearly five times the speed of sound

• Many more such successful launches have to be undertaken before the RLV becomes a reusable launch system to put satellites into orbit. Some of the objectives of this week’s launch were to test the aero-thermodynamic characterisation of the vehicle with wings when it re-enters the atmosphere at hypersonic speed; the control and guidance system; the control system to land the vehicle at a specific location; and the hot structure, the basic body-carrying part of the vehicle with heat protecting tiles. The ultimate objective is to test the vehicle’s performance when it travels at a speed of Mach 25 using air-breathing propulsion. It will take 10 to 15 years, and several more launches, before ISRO readies a reusable launch vehicle for commercial use

• Building a fully and rapidly reusable launch vehicle will play a pivotal role in cutting down by as much as 80 per cent the cost of launching satellites into orbit. In fact, ISRO is already well-known for launching satellites at a far cheaper cost than other space agencies

• Currently, the bulk of the launch cost comes from building the rocket, which can be used just once, as the rockets get burnt on re-entry into the atmosphere. No other space agency has reusable launch vehicles in operation, and ISRO has taken a lead in developing one

• Learning from the mistakes of the U.S. National Aeronautics and Space Administration (NASA) in its space shuttle programme, ISRO will not use the same reusable vehicle to launch satellites and carry astronauts as it drastically reduces the payload capacity and thereby increases the cost per kg

• ISRO will also use cutting-edge technology to shield the launch vehicle from intense heat to reduce, if not completely eliminate, refurbishment expenses. Getting this right would enable the vehicle to be reused within a very short span of time. If all works as per plan, ISRO should be able to break even after 25 to 50 launches, bringing down the cost of further launches on the same vehicle

3. The ease of living in India

Topic: Governance

Category: Reforms

Key points:

• As the 25th anniversary of the economic reforms approaches, it would be legitimate to take stock of what has been achieved, especially the extent to which they have succeeded in terms of the expectation

• In 1991, the focus of the reforms had been on trade, exchange rate and industrial policies. This had everything to do with the immediacy of the balance-of-payments crisis the economy then faced

• To contain the external deficit, the government had devalued the rupee and reined in public expenditure. It then went to the International Monetary Fund for balance-of-payments support. Within three years the crisis was surmounted and the programme with the IMF ended

• There can be no doubt that the reforms have eased India’s balance-of-payments constraint. India’s reserves today exceed $350 billion, compared to less than $6 billion in March 1991

• Moreover, the period since is the longest recorded when the country has gone without a foreign exchange shortage. Earlier one had arisen in every decade, starting with the 1950s. It is also significant that this new-found resilience has been achieved while the economy has got increasingly integrated with the rest of the world

• This outcome has gone against the pessimistic prognosis of the time that eliminating controls would suck in imports and jeopardise the balance of payments. This did not happen as exports also rose, though mainly in a sector unimagined in 1991, that is, software services. Of course, the rupee has depreciated very substantially after it was floated

• There is the criticism that the balance of payments has been manageable only due to capital inflows, and that the portfolio flows they comprise are subject to reversal. This is indeed correct. But a run has not occurred in 25 years, not even in the last decade when global capital may have stampeded out following the global financial crisis

• Altogether, the reforms should be credited with having improved India’s external position

• However, the reforms were not envisaged as merely staving off a balance-of-payments crisis. In Dr.Manmohan Singh’s words, spoken in Parliament, they were meant to be the harbinger of “the emergence of India as a major economic power in the world”. This is a worthy aspiration and the crude nationalism at times on display today should not discourage us from nursing it

• The question is whether we are on the right path to the goal. If per capita income is taken as the measure then we are still some distance away from ‘great power’ status. The most recent World Bank data show that over 2011-15 GDP per capita — measured in PPP dollars — was 5,700 in India, 11,108 in Albania, 13,206 in China and, yes, 25,638 in Malaysia.

• While the rate of growth of the economy accelerated after 1991, it had done so twice earlier, first in the 1950s and then in the late 1970s. So the reforms have only maintained an existing history with respect to economic growth

• What of poverty? Here the record is the same as that of economic growth. Absolute poverty has declined since 1991, but this has been the trend since the early 1970s. Essentially, the decline in poverty has kept pace with growth. Thus, mirroring growth of the economy, while the rate of decline in poverty accelerated since 2004, it had already accelerated on the cusp of the 1970s and the 1980s. However, even after a quarter century of economic reforms, approximately a quarter of the country remains poor according to a poverty line that is low by international standards.

• It is important to note that poverty measures are dependent upon the definition of poverty. The official index in India, on which the above cited trends are based, measures access to food a little more accurately than it does access to other conditions of life which are at least as vital. Even beyond health and education, the conditions of life are affected by physical infrastructure, which determines livelihood chances and well-being.Major components of this infrastructure would include transportation, water supply and sanitation.

• Structural reforms as liberalisation aim to provide access to and raise the profitability of the private sector. This may be essential at times, but there is a wide swathe of an economy where the market fails to deliver. This it does in the presence of what are referred to as externalities and public goods. Public goods are important as they mitigate the impact of income poverty and inequality. We can think of health, education, public infrastructure and recreational facilities as constituting the space in which we actually lead our lives. A significant transformation of it in India would require both a strengthening of the public finances and a generation of political will

• Then there is natural capital. An underlying premise of the reforms is the desirability of expanding the scope of markets.But markets are not always the best way to deal with nature, as we discovered when confronted with water shortages across the country this summer. Deep and smart regulation is necessary if we are to deal with depleting natural capital, of which this is only one instance

• Widespread liberalisation of the economic policy regime was long overdue in 1991, and has played a positive role since, but its impact has run its course and the policy has recognisable limits. Liberalisation cannot address all aspects of the man-made environment and now climate change threatens to change everything forever. We do not have another quarter century to deal with these imperatives. Government must be prevailed upon to match their concern for the ease of doing business with a commitment to the ease of living in India

Bottom Line: Reforms to ease of doing business is not enough, governments has to find the will to do its part-providing public goods and preserving the environment

4. Patently a missed opportunity

Topic: Governance

Category: Intellectual Property

Key Points

• A policy to grow (Intellectual Property), commercialize it, and thus drive economic growth sounds plausible but there are a lot ‘ifs’ as of now

• First, innovation thrives in an environment where access to knowledge is real and substantial. We need knowledge to make knowledge. A key driver of access is openness. The Indian government, as the largest funder of research in the country, could have mandated that this research be made accessible to scholars through open copyright licensing, but has chosen to abdicate this responsibility

• Second, while innovation is a desirable economic goal for any society, the academic consensus is that IP is not a good measure of innovation. Innovation is largely driven by forces other than IP law, and the policy shows no signs of understanding this tenuous connection

• Third, conflating IP with innovation can be dangerous. IP signifies activity — the activity of producing IP. For this activity to be useful, it must generate value in a society, by being commercially or otherwise licensed and brought to market

• What does a reckless policy of confusing IP for innovation lead to? Something like the situation with the Council for Scientific and Industrial Research (CSIR) today

• While we do not know if CSIR has earned a single rupee from patenting, we do know what CSIR spent on patenting: Rs.74 crore over a period of 10 years, and that’s not counting the huge overheads incurred in the process such as salaries and research costs. Still, those patents have done their job. On paper, the institution is considered a remarkable success story of innovation. In practice, however, it is hard to see how CSIR’s senseless patent quest can be considered anything other than a massive waste of public money

• If there is one thing the National IPR Policy is more concerned with than awareness, it is traditional knowledge. The charge that IP is a neocolonial conspiracy to appropriate and pirate our ancient knowledge is one that has found echoes in India at least since the 1980s. This report appears to turn that charge on its head by now concluding that the heart of domestic innovation lies in the remaking of our traditional knowledge as IP

• This change in perspective is not grounded in any analysis of existing efforts to protect indigenous knowledge. Our Geographical Indications law has been in force for 15 years, and government initiatives to increase registrations have been reasonably successful. The Biological Diversity Act is of similar vintage, but has only been enforced with seriousness in the present decade

• Have these laws resulted in substantial benefits to any community which originated a form of traditional knowledge? Has legal protection spurred the regeneration of traditional knowledge? In the absence of concrete evidence that either objective has been satisfied, it is unclear why India should carve out larger property protections in this domain

• What rich countries know is that our quest to protect traditional knowledge will ensure that we remain enthralled by the IP myth, thereby allowing their own IP to lucratively flourish in poor countries around the world.

• The National IPR Policy makes it clear that we will not roll back any aspects of Indian patent law, which was amended in 2005 to comply with World Trade Organisation (WTO) rules

• Unfortunately, almost every other assertion in the policy contradicts the principles espoused in our patent law. The Indian patent law extols a philosophy of minimalism — less is more. With the new IPR policy, this minimalism is now inexplicably shrouded in a cloak of maximalism, the lesson apparently having been revised to mean more is more

• The most significant achievement of the 2005 amendment to our patent law was a high bar for innovation: it was designed to reward real innovation, rather than the tweaks pharmaceutical companies the world over use to justify extending their monopolies — and their high prices

• The Indian system of supporting both innovation and access to medicines was an innovation in law-making, culminating in a Supreme Court ruling in April 2013 that ratified our law, the world sat up and took notice

• Later that year, South Africa announced its decision to amend the country’s patent law along the lines of Indian law, and Brazil launched a bill with exactly the same intent

• To follow through, what these countries require is the unwavering confidence of the Indian government in its own patent law. Unfortunately, you would have to read between the lines to find that confidence in this policy. This is a shame, for we could have used our patent law to take a bold, strong leadership position across the world.

• India’s first IPR policy was an opportunity to embrace the spirit of India’s innovative patent law, as well as the collective systems of knowledge we have fostered through millennia, which, taken together, emphasise innovation, access and openness

• India’s National IPR Policy fails to grasp this opportunity. Instead, it trots out the worn western fairy tale that more IP means innovation, encourages the pointless privatisation of indigenous knowledge, and fails innovation by doing nothing to make public research accessible to the people who pay for it.

The Indian Express

Question 1: Which of the following initiatives is/are included in the Sagarmala Programme?

Question 2: Which of the following can be categorised as public good(s)?

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

Question 4: Which of the following steps was/were introduced with the economic reforms of 1991?

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

Check Your Answers