Comprehensive News Analysis - 27 June 2016

A. GS1 Related

B. GS2 Related

1. India among top 3 regions in corruption-linked fraud

Topic: Corruption

Category: Governance

Key points:

• An overwhelming 80 per cent of companies polled in India said they had been victims of fraud in 2015-16, up from 69 per cent in 2013-14, according to a survey report
• The Global Fraud Report 2015-16 by risk mitigation consultancy Kroll, with the aid of the Economist Intelligence Unit, found that the perceived prevalence of fraud in India is the third-highest among all countries and regions surveyed across six continents

Category: India’s Neighbourhood

Keypoints:

• The External Affairs Ministry wants the relaxed visa norms announced for Bangladeshi citizens of ages above 65 and below 13 implemented without any further delay
• In her first standalone overseas visit after assuming office, the External Affairs Minister announced five-year multiple entry visas for Bangladeshis fulfilling certain criteria. But stiff resistance from Intelligence agencies and the governments of West Bengal and Assam has stalled the proposal
• The MEA had also wanted to announce visa free entry to Bangladeshi citizens under the age of 18 years and above 65 years and also include the neighbouring country in the list of 150 nations who are provided electronic tourist visa on arrival. Both the proposals were vehemently opposed by intelligence agencies and quietly dropped
• The Home Ministry has put forth a plan to make personal appearance mandatory at the Foreigners Regional Registration Office (FRRO) for multiple entry visas every year

Category: International Grouping

Key points :

• India on Monday joined the Missile Technology Control Regime (MTCR) as a full member and said its entry would be mutually beneficial to enhance global non-proliferation norms
• Significantly, China, which stonewalled India’s entry into the 48-nation Nuclear Suppliers Group (NSG) at the just- concluded Seoul plenary, is not a member of MTCR

C. GS3 Related

1. Scottish leader threatens to block legislation on Brexit

Topic: Brexit

Category: Economy

Key points :

• Scotland will do whatever it takes to remain in the European Union, including potentially blocking legislation on a British exit from the bloc, the First Minister of Scotland said
• Scotland, a nation of five million people, voted to stay in the EU by 62 to 38 per cent in Thursday’s referendum, putting it at odds with the United Kingdom, which voted by 52 to 48 percent in favour of an exit from the bloc, or Brexit
• the Brexit vote was a game changer that made it legitimate for Scotland to revisit the issue of independence she said

Category: Security

Key points:

• Iraqi forces recaptured the last remaining district held by Islamic State militants in the city of Fallujah on Sunday and the general commanding the operation declared the battle complete
• Prime Minister Haider al-Abadi claimed victory over Islamic State in Fallujah more than a week ago but fighting continued inside the city, including in the Golan district

D. GS4 Related

E. Important Editorials: A Quick Glance

The Hindu

1. Shrinking spaces at the nuclear high table

Topic: NSG

Category: International Groupings

Keypoints:

• All is not lost in India’s bid to join the high table of global nuclear commerce by gaining membership of the Nuclear Suppliers Group (NSG), which saw a sharp setback at the NSG plenary in Seoul, South Korea, with China and at least seven other nations reiterating concerns about non-signatories to the Nuclear Non-Proliferation Treaty (NPT) being admitted
• Indian negotiators emphasised that the country’s entry into the elite nuclear club, which frames rules for members’ nuclear trade with other nations, is justified on the basis of its clean non-proliferation record, a factor important in the NSG giving India a country-specific waiver in 2008
• Unfortunately, the 48-member Group could not arrive at a consensus on this issue. But within days of the plenary, a U.S. official has said there is a path forward that could see India becoming a full member of the regime by the end of 2016; meanwhile, an encouraging sign for South Block has come in the form of an ambassador being appointed to facilitate continued discussion on India
• History too points to the prospects of an emerging inflection point in India’s campaign for NSG membership: the waiver granted to India in September 2008 came in the wake of an NSG meeting in August of that year at which strident resistance to India’s bid was evident, resistance that was ultimately blunted by proactive diplomacy
• Nonetheless, the failed attempt at Seoul is an opportune moment for New Delhi to introspect about how much political and diplomatic currency it is willing to expend in the face of unrelenting opposition; also about what alternative means there are, if any, to secure its strategic goals
• Indeed the 2008 waiver, which emerged in parallel to the India-U.S. civil nuclear agreement, has helped India move forward with nuclear reactor agreements with others including Russia and France, and fuel supply arrangements with Australia
• It is true that under the amendments introduced to NSG rules between 2010 and 2013, paragraph 6 was revised to prohibit trade in enrichment and reprocessing (ENR) with any non-signatory of the NPT, effectively an ENR trade ban between NSG members and India
• It is argued that to prevent such amendments deleterious to Indian interests from being passed in the future, it is better to be an influential insider than an outsider supplicant
• Yet, is it worth sitting at the NSG table as a “second class citizen” subject to an ENR ban when India has indigenous ENR options? At its heart, the NSG quagmire harkens back to the elemental conundrum of non-alignment. If that concept is today viewed in terms of India acting with a strategic autonomy, there is no need, given our vast energy market, to be insecure about finding economic partners on the global nuclear stage

2. Caution on the coastline 

Topic:Conservation

Category: Environment

Key points:

• Environmental disasters highlight the efficacy of good rules and regulations in minimising harm to people, and loss of economic assets. The tsunami of 2004 highlighted the vulnerability of coastal zones to a catastrophic event, and the need to keep communities safe through scientific planning
• Clearly, any set of rules regulating human activity along India’s 7,500 km coastline has to ensure the long-term welfare of the millions of people who live in harmony with a fragile ecosystem. That must be the guiding principle for the Ministry of Environment, Forests and Climate Change, as it considers the suggestions made by the ShaileshNayak Committee after its review of the Coastal Regulation Zone Notification, 2011
• The exercise has begun badly, given that the Ministry had to be ordered to release the Committee report under the Right to Information Act. Now that it is in the public realm, questions relating to the lifting of development restrictions in designated sections of the coastal zone — notably those that already contain habitations — have to be discussed transparently

• The Committee acknowledges, for instance, the ambiguities that exist in key baseline data, including the demarcation of high and low tide lines and the coastal zone boundary, which has affected the preparation of Coastal Zone Management Plans

• Such plans are central to the implementation of any new CRZ notification. Transferring control of development in the CRZ-II zone, the existing built-up area close to the shoreline, from the Environment Department to State Town Planning authorities, as proposed, would mark a radical shift in governance. Also, the suggestion that construction and other activities could be taken up in CRZ-III zones just 50 m from the high tide line in densely populated rural areas under State norms (with the responsibility to rescue and rehabilitate during natural calamities left to local authorities) could be based on an over-estimation of the capacity in such bodies

• Proposing new, lightly regulated tourism in “no development zones” is extraordinary in such circumstances. The proper course would be to identify specific areas for such activity, assess its environmental impact, demarcate the area under the State’s management plans, and fix responsibility for enforcement, particularly for pollution control

• Changes to the CRZ notification should also mark an end to the half-hearted attempts made over the years at participatory governance involving local communities. Ensuring economic development and a better quality of life for them is unexceptionable as a goal, but it must pass the test of sustainability

Category: Governance

Key Points:

• One phase of a long-standing stand-off between the University Grants Commission (UGC) and a section of our university teachers appears to have ended on June 16. As reported in the press, on that day the Government of India announced that it was acceding to all but one of their demands on the rules governing their functioning
• There are three components to the UGC’s package governing the faculty. Of these, mostly two have proved to be bones of contention between the two parties. These have to do with the mandated workload for teachers and student evaluation of courses, including of the lecturer herself
• But it is the third component that needs to be scrutinised for its suitability. This is the assessment of teacher performance on a range of activities, ideally centred on research, or what laypersons would recognise as the contribution made to the stock of our knowledge. As a measure of faculty performance, the UGC has devised the Academic Performance Indicator (API), which is the score the teacher has attained in all activities combined
• On the workload, having attempted to increase it by 25 per cent via a notification issued on May 10, the UGC has now climbed down and restored status quo, whereby a teacher has to undertake 16 Direct Teaching Hours a week. However, they may not be taking into account that every hour of lecturing, or even discussion, requires several hours of reading and preparation, these two being distinct tasks
• India’s college teachers have to teach far too much. They teach more hours per week and for more weeks in the year than their counterparts in the world. This directly impinges upon the quality of the lectures students receive. This is as far as the dissemination of knowledge is concerned
• On the matter of creation of knowledge. It is not only that a heavy load of teaching crowds out the time left for research, but too much of teaching deadens the intellect which requires leisure and solitude to flourish
• So while the UGC’s decision to not increase the workload may appear conciliatory, it must not lead us to overlook the possibility that the existing work norm itself may be unacceptably high
• A constructive suggestion is made here. Instead of approaching the problem from the perspective of a mandatory number of teaching hours, it could be viewed within a framework that starts out by setting the number of courses a teacher must teach in a year
• The global benchmark is four courses, two being taught in each of the two semesters. Nevertheless, this would yet leave open the issue of the number of hours of lecture per course. Again, globally, the norm would be no more than 40 hours per course. In some universities in India it is as much as 60 hours per course, no doubt determined by the number of hours lecturers must teach per year. This approach has the consequence that students are now forced to attend far too many lectures
• As with teachers, so to for the students, too many lecture hours can be a disaster. Passive participation kills all creativity as there is no responsibility imposed on the student to engage. The student’s misery is compounded when the quality of lecturing is poor. The answer to both overworked teachers and deadened students is to drastically reduce the lecture hours. Back-of-the-envelope calculation based on the proposal that a teacher does four courses of 40 hours each in a year shows that India’s teachers, under present UGC norms, are teaching approximately a 100 per cent more than their peers. The consequence of this for the quality of our universities can be imagined
• The second of the bones of contention between the UGC and the teachers concerns student evaluation of courses. Surely students must be given the opportunity to assess the instruction they receive, in particular the quality of lectures. While there is scope for immaturity here, the answer to this is to take the evaluations with a pinch of salt, not to scrap them. The university needs to know how the courses that it offers are perceived so that course correction is possible. There is no substitute for student evaluation here. Teachers must learn to treat this as part of give and take. There is no professional or ethical ground on which they can refuse to stand up and be evaluated by their students. The UGC is right to recommend student evaluation of courses, even though we may argue over the metrics
• Finally, the third aspect of governance of our universities by the UGC. Represented by the API, this prescribes minimum scores to be attained before a teacher can be considered for promotion. Mainly two elements are involved. One is the specification of a mandatory number of years to be spent in each category, between Assistant and full Professor, and the other is the assessment of research
• Both are problematic. There is absolutely no reason why the number of years of experience in a post should be a consideration in assessing a teacher’s intellectual progress. Things had been done differently in India in the last century. C.V. Raman came into the university from government and Amartya Sen had been made a full professor when he was all of 23 years. They went on to win Nobel Prizes
• The least credible part of the API is the scoring of research. Scores are to be given to publications according to the journal in which they have been published, based on a schedule to be notified by the UGC. Evaluating articles by the journals in which they are published prejudges their intrinsic worth by privileging the prestige of the journal over the quality of the article. Even though it is a reasonable conjecture that prestigious journals use high standards when publishing articles, it is not always the case that less prestigious journals do not contain very good work. The same goes for the UGC’s privileging of “international” over the merely “national” journals. Finally, the API awards marks for projects undertaken, correlated with the money value of the grant amount. It encourages a form of academic entrepreneurship divorced from the pursuit of knowledge. It converts the university into a space in which teachers chase numerical targets to survive. The resulting neurosis cannot but spill over to the students
• For a full half-century India’s hapless public have faced a continuing deterioration of our higher education system. The blame must be laid squarely at the door of the UGC, which has all along enjoyed unbridled power in the regulation of the universities with scant accountability. Its small-mindedness has succeeded in turning the Indian university into a wasteland, and it has got away with it
• The irony is that while the Commission pressurises the universities to maintain standards by submitting themselves to rating, should its own record as regulator be assessed, it is unlikely to cover itself in glory. A public audit of the functioning of the UGC is required before it can do further damage

1. How India can signal solidarity with both the EU and Britain

Topic: India, EU and Britain

Category: International Relations

Key Points:

• As India figures out the long-term implications of the British vote to leave the European Union for economic globalisation and international security, New Delhi must immediately signal strong solidarity with Britain and Europe, both of whom are likely to be weakened in the near term
• If the fracturing of Europe makes India’s security environment a lot more uncertain than it was before the Brexit vote, strengthening strategic partnerships with Britain and Europe must be central to any new Indian effort to shape the Eurasian balance of power
• The impending economic divorce between London and Brussels will be long, painful and involve much recrimination. For India, though, Britain and Europe are among its most important partners. Finding ways to rejuvenate the economic and political ties to both should now be at the top of India’s diplomatic agenda
• While nationalism, backlash against economic integration and resentment against large scale immigration have been among the factors that made Brexit possible, the idea of reconnecting to its old economic partners in the British Commonwealth has been among the few positive ideas that animated the movement
• Many British leaders demanding separation from Europe had argued that the loss from the severance of the European market can be easily made up by Britain’s independent economic engagement with the rest of the world, including the United States, China and India
• Although President Barack Obama had publicly cautioned Britain against leaving the European Union, there is considerable support across the aisle in America
• Beijing, which has made major inroads into Britain over the last few years and was celebrating the prospect of a “golden decade” in the bilateral relationship, is well poised to become an even stronger partner to London in the coming years
• New Delhi, which has much goodwill among the Brexiteers, must make its move sooner than later. On the economic front, India must signal readiness to negotiate a quick free trade agreement with Britain. Although India can in no way substitute for Europe or match the size of American or Chinese resources, it can offer a measure of economic comfort at this difficult juncture
• India must match economic reassurance with a political exploration of the possibilities for strengthening the Commonwealth as a political institution. While independent India has sought membership of every global club since its independence, it has largely looked down on the Commonwealth that it inherited from the Raj
• As a club of globally dispersed states from the South Pacific to the Caribbean and the Southern Africa to the Middle East and South East Asia, the Commonwealth was for long ripe for Indian leadership
• Reviving the Commonwealth at this moment might be lot more demanding than it would have been a few years ago, but it is never too late. The first step is to initiate a high-level consultation among key members of the Commonwealth including Britain, Canada, Australia and India
• If nostalgia for the Commonwealth, hopes for restoring the special relationship with the US, and expanding the financial and commercial engagement with China give something to fall back upon, Europe after Brexit finds itself in a difficult corner
• The growing populist pressures, hostility towards the European bureaucracy in Brussels, anger against the power of international terrorist groups to target cites with impunity, and the growing resistance to movement of refugees from the South has put great strain on the European political leadership. Making matters worse is the European inability to either confront an increasingly assertive Russia or find much needed political accommodation
• the European project has never looked as shaky as it does today
• To be sure, the North Atlantic Treaty Organisation, the military alliance between America and Europe, could endure even amidst the weakening of the EU. Despite much talk, the EU has never looked capable of replacing the NATO
• But now NATO itself looks vulnerable, amidst the growing American scepticism about its utility
• As Germany and France struggle to deal with the political shock waves from the British vote and fend off potential copycats elsewhere in Europe, New Delhi must reach out to Berlin and Paris, who have been staunch supporters of India’s political aspirations in recent years. An early conclusion of a free trade agreement with Europe would be a strong vote of confidence from India

Category: Economy

Key points:

• Though it has been happening for many years, Brexit forced us to recognise that global trade is no longer the growth-engine it once was. If global trade rose faster than global GDP in the pre-financial crisis days, it contracted 13% or so in value terms in 2015 and grew a mere 2.8% in volume terms—a far cry from the 5.3% volume growth the IMF was projecting in April 2014
• Something quite similar is happening in private investment—as the World Bank pointed out recently, private participation in infrastructure in India is down from a high of $73.7 billion in 2010 to a mere $4.2 billion in 2015 and, within this, the share of PPP is down from $48.4 billion to $4.1 billion. The decline is sharpest in electricity where private investment fell from $37.8 billion to $2.1 billion—in the case of roads, this fell from $14.5 billion to $1.9 billion and from $0.7 billion to a mere $0.1 billion in the case of ports. While that was only to be expected given the severe stress most private firms—especially those in the infrastructure space—are facing, in a post-Brexit world where global growth and financial flows are likely to be further squeezed, it puts more of an onus on the government to increase its spending
• It is true the government has increased its spending on infrastructure, but this needs to be hiked a lot more. Clearly, the fiscal deficit has to be given the go by, but what will make it more palatable is if there is an explicit recognition that the breach is only going to be used to fund infrastructure capex
• Alternatively, explicit government guarantees can be given to funding agencies like IIFCL, though this too increases the contingent liabilities of the government. More government-to-government guaranteed projects are another option and the good news here is that with a current account deficit of 1.1% of GDP—expected to rise to around 1.5% of GDP in FY17 since exports are doing so badly—the current account has enough room to be able to absorb such expenditure were it to be funded from overseas government grants.
• It is also critical that a decision on the bad bank be taken at the earliest since, it is not until public sector bank balance-sheets are cleaned up that any meaningful lending can take place. And given the nature of vigilance and audit checks on banks, it is unlikely they can sell significantly large amounts of assets to private asset reconstruction companies at a significantly high discounts—this, however, is not such a problem when it is being sold to a publicly-funded bad bank
• Many assume this is letting crony capitalists get away easily—in reality, it is not, since, while the banks will take a significant haircut on the loans they will sell to the bad bank, the private promoters will probably have to face a near-complete write-off in equity values. Once again, this will require breaching the fiscal deficit targets—presumably, these are all issues being thrashed out with the new NK Singh fiscal deficit committee

Category: Governance

Key points:

• HRD ministry seems to have finally got its thinking right on higher education. Over the last two weeks, it first announced rules to make granting of deemed university status much faster and removed the cap on the number of off-campus centres that varsities/higher education institutes can set up. Then, it made foreign-university collaboration easier for colleges and varsities. Such moves bode well for a country where the gross enrolment in higher education—thanks to poor access and supply-side gaps, among other reasons—makes for barely a fourth of the university-age population (18-23 years)
• The 2012 regulations on foreign collaborations didn’t inspire even a single partnership, given they put the entire burden of initiating this on foreign varsities—as per the rules, applications would have to come from the foreign universities alone, and given the maze of red tape typical of processes here, the UGC received none. This is in sharp contrast with the situation before the rules came into force—there were 635 foreign education providers operating in India, albeit not all being bona fide, high-brand-value ones
• By allowing Indian varsities to apply to the UGC for foreign tie-ups, the government has now made the process much easier—the Indian partner is definitely better placed to see it through till the eventual approval. More such partnerships would mean high-quality education at much lower costs—Indians going to college in the US spent twice the amount that came in from that country as FDI in FY15. At the same time, by mandating that such tie-ups be only allowed between top-grade Indian and foreign varsities/colleges, the rules guard against students falling victims to fraudulent/low-value collaborations
• With just 757 universities—including central, state, private and deemed universities—and 141 million in the tertiary-education age segment, India remains poorly served for postgraduate/doctorate-level education
• Thus, the government putting a six-month deadline on processing of application and granting of deemed university status—as opposed to the 6-7 years it typically takes under the existing process—will help more such institutes come up
• Removing the cap on off-campus centres, too, will give a leg-up to access to education, given college density varies widely within the country—from 7 per lakh university-age population in Bihar to 58 in Pudducherry. Whether it is facilitating more deemed universities or more foreign-varsity partnerships, the ministry’s new efforts signal a better future for India

Category: Economy

Key points:

• The new garment policy — which aims to create one crore new jobs in three years — is a welcome initiative. But mere incentives and labour reforms will not be able to produce the targeted number of jobs. Granted, the policy will render make garment-making a little more competitive. The extra incentives given through higher drawback will make garments cheaper to the overseas buyer. Still, it may not be good enough to corner market share
• India’s exports to EU, Canada, Australia and China attract levies of 10-18 per cent. However, one or more of our competing countries have zero duty on exports into all these markets. So, when we export to EU, we can’t hope to be more price competitive compared with those having zero duties, unless Indian goods are 10-18 per cent cheaper (18 per cent when we export to Canada)
• Hence, merely giving an extra one or two per cent duty drawback, reducing the cost of labour by 10 per cent, without addressing such important issues will not be enough. It will only make the hugely competitive garment industry look like a subsidy-seeking weakling
• Creating one crore additional jobs in three years through garment exports is an achievable target. It is also a target that must be met, so that growth in consumption does not fall behind increases labour productivity, as is the case now
• Labour law modifications should be effected faster; besides, the compulsory need to get ESI cover for workers should be made optional. Instead, a choice of credible private or public insurance policies for health and life must be offered
• A free-trade agreement with the EU, a comprehensive trade agreement to get zero duty with Australia and Canada and a reduced duty on par with Pakistan into China must be completed without further delay
• China will agree to giving the same duty for Indian textiles as Pakistan should our ministry take up textile duty reduction while discussing steps to reduce trade deficit between India and China
• Also, allow import of cement and steel under the EPCG (export promotion capital goods) scheme to cut the huge cost of building by 50 per cent. Building accounts for 70 per cent of the project cost for a residential garment unit
• By taking such measures, the Government will save over ₹5,000 crore a year, and will help create cost-competitive garmenting units which will be easily be able to garner 10 per cent market share in garments in EU and an even higher percentage in Canada and Australia, besides taking up a $7-10 billion share in the $25-billion-plus fabric and yarn import into China
• Exports to EU alone will help generate 50 lakh jobs and exports to China will provide 20 lakh jobs and the rest including domestic market consumption growth will provide 30 lakh jobs, in all 100 lakh jobs in three years

Category: Economy

Key points:

• The government has done well to launch a publicity campaign to motivate Indians with hidden assets in the country to come clean. People should make use of the Income Declaration Scheme 2016, which allows them to pay tax, surcharge and penalty adding up to 45% on their past undisclosed income or face dire consequences. Informing and guiding taxpayers makes sense, but the tax administration must also ensure that the rights of the declarants are protected.
• Its earlier scheme offering amnesty to those with undisclosed assets overseas failed mainly due to the lack of trust on penalties after coming clean on concealed incomes. Bridging the trust deficit holds the key to the success of the ongoing scheme
• The primary challenge is to end the systemic demand for black money in India. Most economic agents need a war chest of black money to pay off ‘the system’.
• First make political funding transparent and legitimate. Most political parties show only a sliver of the money that they spend as their income, and mop up huge amounts of money by the sale of patronage and loot of the exchequer.
• The practice of collecting poll funds largely through unaccounted contributions forces businesses to generate black money. Collusion of civil servants in selling patronage, looting the exchequer and extortion corrupts them as well.
• All parties should compulsorily declare their monthly expenses, which must be open to challenge and vetted by the Election Commission, starting from the local to the national level
• They should then show their source of income — both disaggregated and combined, putting an end to off-the-book transactions. A concurrent reform is to adopt a comprehensive goods and services tax that creates multiple audit trails. This is the systemic route to combating black money

Around 6.5 million deaths globally are attributed each year to poor air quality inside and outside, making it the world’s fourth-largest threat to human health, behind high blood pressure, dietary risks and smoking.

Harmful pollutants such as particulate matter – which can contain acids, metals, soil and dust particles – sulfur oxides and nitrogen oxides, are responsible for the most widespread effects of air pollution

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

• Global Fraud Report
• Economic Intelligence Unit
• NSG
• IDS-2016
• MTCR
• CRZ
• Shailesh Nayak Committee
• AIIB
• IEA
• N K Singh Fiscal Deficit Committee

G. Fun with Practice Questions 🙂

Question 1: Which of the following statements is/are correct about Missile

Question 2: Which of the following statements is/are correct?

Question 3: Which of the following statements is/are correct?

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

Question 5: Which of the following statements is /are correct about ShaileshNayak Committee Report?

H. Archives:

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