Comprehensive News Analysis - 30 June 2016

A. GS1 Related

B. GS2 Related

1. Cinemas, malls may soon be open 24×7 

Topic: Legislation/Labour

Category: Polity/Governance

Key points :

• The Cabinet approved Model Shops and Establishments (Regulation of Employment and Conditions of Services) Bill, 2016
• The new model law would allow malls, cinema halls, restaurants, shops, banks and other such workplaces to be open around the clock for 365 days in a year
• The model law, which will now be sent to all States, would enable women to work during the night in shops and establishments with mandatory cab services and other workplace facilities for them
• The law covers all premises — barring factories — with work related to printing, banking, insurance; stocks and shares brokerage; theatres and “any other public amusement” which is currently not covered under the Factories Act 1948
• But it only acts as an advisory to the State governments, which will have the option to adopt this or make changes to it according to their needs

2. Heavy military presence in Sri Lanka’s North and East: UN

Topic: Sri Lanka

Category: India’s Neighbourhood

Key points :

• Presenting at the 32nd session of the Council an oral update on Sri Lanka nine months after a consensus resolution was adopted on reconciliation and accountability,the United Nations High Commissioner for Human Rights said there was “heavy” military presence in the Northern and Eastern Provinces of Sri Lanka
• Describing as “slow” the progress in identification and release of land still held by the military in the two provinces, Mr. Hussein told the Human Rights Council in Geneva that “these point to a deeper challenge for the [Sri Lanka] government in asserting full control over the military and intelligence establishment”
• On the process of the military shifting its structures and resettlement, the High Commissioner, who visited Sri Lanka in February, felt “the lack of transparency” in the process was “increasingly feeding frustration and disenchantment, particularly amongst victims and the IDP [internally-displaced persons] community.”
• He also expressed his concern over the fate of persons detained under the Prevention of Terrorism Act (PTA)

3. Fight stunting, says World Bank chief

Topic:Health

Category: Governance

Key points:

• In just about every developing country, there is not enough appreciation of investing in health, education, social security and economic growth. Most of the FDI is coming into India on the assumption that there will be a workforce able to take them into the next generation. Prime Minister Modi has been talking about a new nationwide approach to improve nutrition and I am here to offer my complete assistance for that,” the visiting World Bank Chief said
• The latest data from the fourth round of National Family Health Survey (NFHS), released earlier this year, showed that 37 per cent of children under the age of five are stunted. The data was released for 15 States and points to a slow reduction in malnourishment, with a fall of just five percentage points in a decade
• The World Bank is recommending that stunting figures from all countries be shared annually at the World Economic Forum, to keep Finance Ministers committed to ensuring that economic progress translated to countries achieving health targets, he said

4. Cabinet clears 23.5% hike in pay for Central govt. staff

Topic: Fiscal Spending

Category: Governance

Key points:

• The government on Wednesday announced an overall increase of 23.5 per cent for over one crore government employees and pensioners in line with the Seventh Pay Commission’s recommendations
• The Union Cabinet dispensed with the present system of pay bands and grade pay and approved a new pay matrix as recommended by the Pay Commission. Employee status, hitherto determined by grade pay, will now be determined by the level in the pay matrix
• To examine the concerns employees have raised, the Union Cabinet decided to set up four committees: The first will look into the implementation issues anticipated and the second one will go into the likely anomalies. Another one will further examine the recommendations on allowances, which have largely been kept on hold. The fourth will suggest measures for streamlining the National Pension System

PAP: Pay Allowances and Pension

5. Supreme Court cannot exercise power of pardon vested with President, Governor

Topic: Judiciary

Category: Polity

Key points:

• The constitutional power of the executive to grant pardon to convicts cannot be exercised by the apex court unless there is a violation of fundamental rights, the Supreme Court held
• The observation came on the pleas of some persons convicted under the Narcotic Drugs and Psychotropic Substances (NDPS) Act who were seeking grant of remission of their 10-year sentence as the relief was not available to them under the New Punjab Jail Manual of 1996
• The apex court said the factual matrix of the case “does not remotely suggest” that there has been violation of any fundamental right of the petitioners and thus, their plea to invoke Article 142 (enforcement of decrees and orders of Supreme Court) of the Constitution, along with Article 32, was “absolutely fallacious“
• “Article 32, as has been interpreted and stated by the Constitution Bench and well settled in law, can be only invoked when there is violation of any fundamental right or where the Court takes up certain grievance which falls in the realm of public interest litigation,” the court said

C. GS3 Related

1. Centre buffing package for leather sector to boost jobs

Topic: Industry

Category: Economy

Key points:

• About 2.5 million people are employed in the $12 billion leather industry. The sector, like textiles, predominantly employs women. To increase productivity, the leather sector package may include labour reforms similar to those introduced in the textiles package
• India accounts for about 10 per cent of the world’s leather production, and is the world’s second largest producer of leather garments and footwear. Despite advantages of low cost of labour and production, India faces major competition in overseas markets from countries such as China
• The leather industry package may include higher incentives under the Duty Free Import Scheme (DFIS). Under DFIS, a manufacturer-exporter or a merchant exporter having a tie-up with a supporting manufacturer is currently allowed duty-free import of inputs up to three per cent of the value of exports realised in the previous year. In the new package, this may be raised to five per cent, the sources said
• The package may also include greater sops under theIndian Leather Development Programme(ILDP). Currently, ILDP provides up to 30 per cent subsidy on the cost of plant and machinery for micro and small enterprises and 20 per cent subsidy to other units. The subsidy has a ceiling of Rs.2 crore for each product line. In the new package, this ceiling could either be done away with or enhanced
• The package may include higher subsidy for setting up of mega leather clusters to create world-class infrastructure, and for upgradation or installation of Common Effluent Treatment Plants

2. National Mineral Exploration Policy cleared, gets sop booster shot

Topic: Mineral Exploration

Category: Economy

Key points:

• In a bid to attract private investments including foreign direct investment into the business of mineral exploration, the Cabinet on Wednesday cleared a new National Mineral Exploration Policy (NEMP) with various incentives for explorers, including a risk cover
• Under the policy, the mining ministry will auction off 100 non-coal, non-fuel blocks to private explorers in the next nine months. The move is expected to encourage high-tech exploration firms, especially those that focus on exploration rather than mining, to work seriously on the country’s largely unknown but presumably rich deposits of base metals and diamonds
• Under NEMP, the mines ministry will carry out auctioning of identified mineral blocks for exploration by private sector on a revenue-sharing basis. In case their exploration leads to auctionable resources, the data created by them will be shared with potential end users who will be given mining rights through a competitive bidding process
• The explorer firms will be paid a part of the royalty by the miners during the lease period, likely 50 years
• “If the explorer agencies do not discover any auctionable resources, their exploration expenditure will be reimbursed on normative cost basis,” an official statement said
• Under NMEP, the government would create baseline geoscientific data as a public good for open dissemination free of charge and carry out a National Aerogeophysical Programme for acquiring state-of-the-art baseline data for targeting concealed mineral deposits.

Mineral Policy

• – 8 lakh sq km: Area with extractable minerals
• – 10%: of resource-bearing area already explored
• – Exploration long remained the preserve of public-sector GSI and MECL
• – Of late, some other state-run firms allowed to do exploration

New Policy

• – 100 GSI-surveyed mineral blocks to be up for grabs for private explorers, including foreign ones, in 8-9 months
• – Once the resources are found and estimated, explorers will return the blocks to govt
• – Govt will auction off the explored blocks to end users, who will pay a fraction of royalty to explorers over 50-year mining lease period

D. GS4 Related

E. Important Editorials: A Quick Glance

The Hindu

1. Dangerous times in Turkey

Topic: Terrorism

Category: Security

Keypoints:

• Tuesday night’s suicide attack on Istanbul’s Ataturk airport that killed 41 people is yet another reminder of the dangerous times Turkey is living through. Its southern border has become a transit point for jihadists travelling to Syria. In the east and southeast, government troops are locked in a deadly conflict with Kurdish militants
• The Istanbul attack, the fourth major terror strike in the city this year, points to the worsening security situation in urban centres. No group has claimed responsibility for the latest assault. But the Turkish government and Western analysts say it is an act of the Islamic State
• If so, it is a blowback for Turkey, after President RecepTayyip Erdogan’s aggressive Syria policy helped extremists mushroom in West Asia. From the advent of the Syrian crisis, he has led the call for President Bashar al-Assad’s resignation. Turkey teamed up with Mr. Assad’s other regional rivals, including Saudi Arabia and Qatar, in bankrolling the anti-regime forces in the Syrian civil war. And, Turkey kept its 800-km-long border with Syria open so that militants from around the world could transit to Syria. This ‘open-border’ approach was pivotal in the IS’s efforts to build an army of foreign fighters.
• But, playing with extremist groups for short-term goals is invariably counterproductive in the long run. By the time Turkey started changing its policy towards the IS, partly under pressure from Western allies, the group was already a formidable terrorist organisation and had turned its bombers northwards. First it attacked two left-wing gatherings in Turkey, in Suruc and Ankara last year, and now it is targeting Istanbul in a stark warning to the establishment
• Erdogan has said that Turkey will “continue the fight against terrorism until the end”. But what is his strategy? The major security challenges Turkey faces today are directly or indirectly linked to the Syrian war. Whether Mr. Erdogan acknowledges it or not, his ambitious plan to expand Turkish influence in a post-Assad Syria has come to naught. The earlier he changes tack the better for both Syria and Turkey
• To begin with, Ankara should seal its border with Syria to stop the cross-border terrorist movement. It should also cease the proxy war it is fighting against Mr. Assad, and join international efforts to broker peace in Syria between the regime and the rebels. Having done this, it could narrow its focus to an isolated IS and assist in regional efforts to defeat the group. It will not be an easy shift to make, given the geopolitical investment Turkey has already made in Syria. But no amount of strategic manoeuvring will serve Turkey’s interests if its cities fall to chaos and violence

2. Pulgaon fire: Explosive trail mail 

Topic:Defence

Category: Governance

Key points:

• The deadly fire at the Central Ammunition Depot (CAD) in Pulgaon in May has raised questions about the quality and manufacturing process of explosive TNT (trinitrotoluene). According to official communications submitted for the ongoing inquiry into the incident, this is the probable cause of the May 31 fire that broke out in Shed No. 192 at the Pulgaon CAD, setting off anti-tank mines stored inside and resulting in the death of 19 military and civilian personnel involved in fire-fighting
• The inquiry has also highlighted neglect at various levels in the system, the inordinate number of stakeholders in the line-up, lack of accountability and defective manufacturing processes at ordnance factories
• For instance, the anti-tank mines had been declared defective in 2010 due to TNT leakage — they were segregated and the CAD was awaiting instructions on their repair or destruction. Since then, mails on the imminent danger posed went back and forth between the various stakeholders involved: the Army, the Armament Research and Development Establishment (ARDE), the High Energy Materials Research Laboratory (HEMRL), the Ordnance Factory Board and the Defence Ministry. The low quality of the explosive has been accepted by ARDE and HEMRL officials on different occasions. The issue of defective mines was also flagged by the Comptroller and Auditor General in audit reports in 2014 and 2015
• Despite all this, no action was taken and the ordnance factory at Chanda, which manufactured the anti-tank mines, kept insisting on finding a repair solution. The entire episode raises grave questions
• With an elaborate system of quality control in place, how did the Controllerate of Quality Assurance (CQA) clear the mines before they were supplied to the Army?
• This suggests a lack of standards in defence manufacturing at a time when the government is keen on strengthening domestic industrial capacity and increasing exports
• There were conficting interests at play, a result of the complex and overlapping hierarchies. Explosives and ammunition are manufactured by the Ordnance Factory Board and then inspected by the CQA, both of which are under the Secretary (Defence Production). The ARDE and the HEMRL, which come under the Defence Research and Development Organisation, are under the watch of the Department of Defence Research and Development. Meanwhile, the three services are under the Defence Secretary. All this gives no control to the end-user, the Army, on the product. It is time the government fixed the systemic deficiencies and misalignments. The findings of the Court of Inquiry would be the logical moment to kick-start the process

3. Panchayati Raj Ministry: A downgrade for democracy

Topic: Panchayati Raj Institutions

Category: Governance

Key Points:

• An important initiative for strengthening panchayat empowerment was the Index of Devolution prepared by independent experts and geared towards rewarding States that over the previous year had made the most incremental progress towards more effective devolution in terms of the Constitution and their own State legislation. Many States that had been slow starters, including Bihar, Tripura, Chhattisgarh, Haryana, and Rajasthan, found their scores rising and were appropriately recognised
• Gujarat, Rajasthan, and now Haryana, have placed regressive restrictions on less educated and poorer candidates, particularly Dalit women, from even contesting panchayat elections
• This de-democratisation of local self-government will be aggravated if a Cabinet Minister for Panchayati Raj is not available to advocate and promote the cause with Chief Ministers and his counterparts in the States. After all, the 73rd amendment, now incorporated as part IX of the Constitution, is the joint responsibility of the Union and the States, calling for high-level coordination to promote and protect the provisions of the longest and most detailed amendment ever carried out to the Constitution. It was passed virtually unanimously in December 1992 as representing the consensus among Central and State stakeholders
• This consensual method must be persisted with by bringing State ministers together; convening academic experts and field-level NGOs; promoting feedback from and best practices among elected panchayat representatives; monitoring the special interests of women representatives, Dalits and tribals; maintaining and updating data-banks on all aspects of panchayat raj; commissioning expert studies and preparing periodic reports such as the biannual State of the Panchayats reports. These are among the key activities undertaken by the Ministry. Providing such an all-India perspective will be seriously diluted or even entirely lost without an independent Ministry for the subject
• Moreover, merging or subordinating panchayat raj under rural development amounts to a grossly inadequate reading of the Constitution, in particular the Eleventh Schedule that lists the proposed jurisdiction (“powers, authority and responsibilities”) of national-level panchayati raj
• While schemes of the Rural Development Ministry, like the Mahatma Gandhi National Rural Employment Guarantee Scheme, rural housing, National Rural Livelihoods Mission and the Pradhan Mantri Gram SadakYojana, are indeed covered under more than one entry in the Eleventh Schedule, the range of entries covers virtually the entire gamut of development and welfare in rural India, beginning with entry 1, “agriculture, including agricultural extension”, as also “animal husbandry, dairying and poultry” (entry 4) and “fisheries” (entry 5) that are the responsibility of the Agriculture Ministry; “minor irrigation, water management and watershed development” (entry 3) that falls under the Ministry of Water Resources; “social forestry and farm forestry” (entry 6) and “minor forest produce” (entry 7) that jointly concern the Ministry of Environment, Forest and Climate Change and the Ministry of Tribal Affairs. Drinking water (entry 11) and sanitation (entry 23), including the Swachh Bharat Abhiyan, are the responsibility of the Ministry of Drinking Water and Sanitation. The Eleventh Schedule goes on to detail “small scale industries, including food processing industries” (entry 8) and “khadi, village and cottage industries” (entry 9), that fall respectively under the Ministry of Micro, Small and Medium Enterprises, the Ministry of Food Processing Industries and the Ministry of Textiles.“Family welfare” (entry 24) and “health, including hospitals, primary health centres and dispensaries” (entry 23) are part of the National Rural Health Mission run by the Ministry of Health and Family Welfare; while the massive Integrated Child Development Services programme falls under “women and child development” (entry 25) that is run by the Ministry of the same name. “Education, including primary and secondary schools” (entry 17), “technical training and vocational education” (entry 18), “adult and non-formal education” (entry 19) and libraries (entry 20) belong to the domain of the Human Resource Development Ministry, especially the transformative SarvaShikshaAbhiyan, and the Ministry of Skill Development and Entrepreneurship, while “cultural activities” (entry 21) are part of the Ministry of Culture. “Social welfare” (entry 26), “the welfare of the weaker sections, and, in particular, of the Scheduled Castes and the Scheduled Tribes” is in the jurisdiction of the Ministry of Social Welfare and the Ministry of Tribal Affairs. “Public distribution system” (entry 28) belongs to the Ministry of Food and Public Distribution. This listing is illustrative rather than comprehensive
• With such a wide constitutional remit, confining panchayati raj to just the Ministry of Rural Development will be a conceptual infringement, an emasculation of the constitutional role envisaged for panchayati raj institutions
• What the 73rd amendment sought to do was a radical reorganisation of last-mile delivery of public goods and services to the panchayats by devolving “such powers and authority as may be necessary to enable them to function as institutions of self-government” (Article 243G)
• Note, “self-government” not “self-governance”: the fundamental mandate was to establish the panchayati raj system as the third tier of government, not to make these institutions implementing agencies for State departments or Union Ministries. This was to be achieved by endowing these “institutions of self-government” with the required functions, finances and functionaries (the three Fs)
• Clearly such a revolution in political relations between elected local government authorities and the State political set-up requires time and patient experimentation to play out. The Ministry of Panchayati Raj, set up in 2004, has over the past 12 years or so been advocating and incentivising this. It is the primary duty of the Ministry to perform these delicate advisory functions
• Panchayati raj remains on the State list but, in view of the 73rd constitutional amendment, the Centre becomes responsible to work with the States to fulfil in letter and spirit the aims and objects of the constitutional legislation. For this revolutionary task, an independent Ministry, preferably under a persuasive and influential Minister, is essential. Otherwise panchayati raj will wither on the vine
• Prime among these is “activity mapping”, that is, identifying the numerous tasks to be undertaken in planning and implementing any given scheme with a view to allocating these different activities to different tiers of the system from the Central to the State government and the three separate levels of rural self-government: the village, the intermediary (taluka or block) and the district would have to be supplemented by parallel and simultaneous devolution to the appropriate tiers of finances and functionaries. To this end, the then government, issued directions in November 2004 and August 2013 to departmental secretaries of all Ministries concerned to work on such “activity maps” for their respective Centrally-sponsored schemes. This called for a systemic overhaul of district and sub-district level administration (and the politics of administering rural India) involving the effective empowerment of a whole new tribe of elected local representatives
• The numbers alone tell the scale of the tale. As against about 5,000 elected MPs and MLAs to run the “world’s largest democracy”, we have about 28 lakh rural and about 4 lakh urban representatives, with about 14 lakh rural and urban women, making ours also the “world’s most representative democracy”. There are more elected women in India alone than in the rest of the world put together
• We have also guaranteed equitable representation for the Scheduled Castes, Scheduled Tribes and Other Backward Classes. The gram sabhas too have been constitutionally recognised to provide a forum of accountability to the beneficiaries. All this is an achievement without precedent in history or parallel in contemporary times
• Notwithstanding the hurdles, real and imagined, thrown in the way of such empowerment, virtually the whole country is moving forward, at different speeds and with considerable diversity but, nevertheless, in the desired direction. It cannot be faster or more uniform for there are many eggs to be broken to make the devolution omelette
• Quietly, considerable progress has been made in the last 25 years. Panchayati raj has been made ineluctable, irremovable and irreversible, but much remains to be accomplished. To disrupt the process by downgrading the Ministry of Panchayati Raj and making it an adjunct of some other Ministry would be the most retrograde step in democratic decentralisation in over a quarter century

1. Happy Birthday peace: The Mizo Accord turns 30

Topic: Federalism

Category: Polity

Key points:

• On June 30,30 years ago, the Mizo Peace Accord(The Memorandum of Settlement on Mizoram) was signed, one of the Indian state’s enduring peacemaking successes. It was signed by the Mizo National Front (MNF) leader Laldenga, Mizoram Chief Secretary Lalkhama, and union Home Secretary R D Pradhan
• Laldenga, a retired Army Havildar who had also worked as an accounts clerk in the Assam government, founded the Mizo National Famine Front in 1956-57 to protest against famine in the Lushai hills. By October 1961, he had formed the MNF and its armed wing, Mizo National Army (MNA), which called for independence. The Army launched an operation against the MNA, driving it across the border into East Pakistan. The MNF received arms, funds and training from China and Pakistan. Laldenga was arrested and brought to Assam in 1963. He was acquitted of charges of treason, but on February 28, 1966, he declared Mizoram’s independence and resumed the insurgency
• The Army intensified operations, and used the controversial strategy of uprooting nearly 80% of the population and resettling them in new, fenced-in protected villages or regrouping centres. By 1971, the violence had come down significantly, and by the early 1980s, Laldenga — whose family was based in London — had established contact with Indian intelligence agencies in Europe to explore ways to return to Mizoram
• The negotiations continued as the two sides worked on the modalities of the MNA surrender. The issue of the surrender of 750 Mizo fighters was resolved by the formation of two camps on the Indo-Bangladesh border, at Parva and Marpara. From there, after surrendering their arms and ammunition, the rebels went to the rehabilitation centre at Luangmual on the outskirts of Aizawl
• Under the Accord, the government agreed to grant full statehood to Mizoram, along with its own High Court. A university was proposed. The Accord promised constitutional protection for Mizo religious and social customs, and laws of the Mizo people. Mizo was notified as an official Indian language. The MNF agreed to break all contact with other insurgent groups in the Northeast
• As part of the deal, Laldenga was made the interim Chief Minister of Mizoram. He won the first Mizoram Legislative Assembly election after statehood in 1987, and continued as CM for a year before his government was toppled.
• Among the four major peace accords signed by the Rajiv Gandhi government— Punjab, Assam, Sri Lanka and Mizo — the last was the most successful. It also set the template for future negotiations with rebel groups, including the Naga groups
• On June 25, Mizoram launched the 30th anniversary celebrations of the Mizo Accord with a peace rally and an awareness drive that underscored the advantages of peace and stability in the region. That peace has been sustained in Mizoram for 30 years is no mean achievement, when the situation in parts of Manipur, Nagaland and Assam still remains unsettled

1. PIB

a) The National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation has released the report titled “ Key Indicators of Household Expenditure on Services and Durable Goods” based on the related information collected during July, 2014 to June 2015 as part of NSS 72^nd Round.  This survey on household expenditure on services and durable goods was the first focused survey of its kind undertaken by National Sample Survey Office.The survey was designed to collect some demographic particulars, detailed information on household expenditure on transport, miscellaneous consumer services, food expenditures incurred in hotel & restaurants, expenditure on repair & maintenance services availed, hotel lodging charges, and on durable goods other than those used exclusively for entrepreneurial activity in India through a nationwide household survey.

Bus / Tram are the most reported means of transport both in rural and urban areas. About 66% households in rural areas and 62% households in urban areas reported expenditure on this particular mode.

In case of budget-share of different types of miscellaneous services in rural areas, communication services accounted for the highest share (25.33%) followed by barber & beauty shops (11.07%), TV & radio services (10.58%), repair & maintenance (10.27%)  & tailoring services (10.18%).  In urban areas, communication services again accounted for highest share of budget (26.33%) followed by domestic services (12.11 %), TV & radio services (10.22%) and recreational & cultural services (9.95%).

In rural areas though the highest budget share was in respect of transport equipment (about 45%), a notably high budget share of about 23% was observed on jewellery and ornaments followed by heating, cooling and electricity generation devices and IT and communication devices (both having a share of about 7% each), and furniture and fixtures (about 5.6%).

In the urban area, almost similar pattern was observed except the fact that a high share of budget, next to transport equipment, was found for heating, cooling and electricity generation devices (about 7.9%) and for IT and communication devices (7.8%) when the main purpose was for enterprise.

b) BRICS Youth Summit, 2016 at Guwahati, Assam from 1st to 3rd July 2016 

Prime Minister Shri Narendra Modi, in his remark at Fortaleza BRICS Summit, had stressed the role of youth and sports in furthering intra-BRICS cooperation.

It is in this context that BRICS Youth Summit, 2016 is being organised at Guwahati (Assam) from 1st to 3rd July, 2016. The Theme for the Summit is “Youth as bridge for Intra-BRICS Exchanges”. The subjects to be covered by thematic debates are (i) Skill Development and Entreneurship, (ii) Social Inclusion, (iii) Youth Volunteerism and (iv) Youth Participation in Governance. The programme for the Summit also includes thematic debates, cultural events, site-visits and interactive sessions with local youth. The Youth Summit would also be an occasion to introduce India’s North-East to BRICS youth.

d) Launch of Prashikshak – Teacher Education Portal tomorrow 

‘Prashikshak’, the teacher education portal for District Institutes of Education and Training (DIETs) will be launched by the Minister of Human Resource and Development on 30th June, 2016 at Hall No. 4 VigyanBhawan, New Delhi

Prashikshak Portal has been developed by the Ministry of HRD in collaboration with Central Square Foundation.

The major users of Prashikshak will be Pre-service teacher educators, DIET principals and faculty, Policy makers at District, State Government and National Level, and the General public.

Thus, Prashikshak is a unique IT Initiative taken up by the HRD Ministry which would entail the establishment of a strong monitoring mechanism with a database of teacher education institutes with all relevant performance indicators. The objective of Prashikshak is to help DIETs make informed decisions about their institutes, compare the performance of their institute against other DIETs in the state/country as well as help aspiring teachers make informed decisions about which institute to join.

e) Cabinet approves Memorandum of Understanding between Union Public Service Commission and Royal Civil Service Commission, Bhutan 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the signing of a Memorandum of Understanding (MoU) between Union Public Service Commission (UPSC) and Royal Civil Service Commission (RCSC), Bhutan.

The MoU will strengthen the existing relationship between RCSC and UPSC. It will facilitate sharing of experience and expertise of both the parties in the area of recruitment.

f) Extension of Addendum IX and renewal of MoU between India and Canada by way of signing supplementary addendum X 

The Union Cabinet has given its ex-post-facto approval for extension of Addendum IX for the period from 1″‘ April, 2011 to 31st March, 2016 and renewal of Memorandum of Understanding between Government of India and Shastri Indo-Canadian Institute (SlCI) by way of signing supplementary Addendum X to the Memorandum of Understanding signed in November,1968.

SlCI, a bi-national organization, was established in 1968 through a Memorandum of Understanding between Government of Republic of India and SlCI signed on November 29, 1968.
Named after Late Shri Lal Bahadur Shastri, former Prime Minister of India, the Shastri Indo-Canadian institute (SlCI) was established with an aim to promote understanding between India and Canada through facilitation of academic activities between the two countries. SlCI, in the past, had focused in the fields of Humanities and Social Sciences but expanded its area of interest from 2001 onwards into the fields of Law, Management, Information Science, Science and Technology and Human Interface of Science.

g) Cabinet approves MoU between India and Tanzania 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the signing of a Memorandum of Understanding (MoU) between India and Tanzania for bilateral cooperation in water resources management and development.

The areas of enhanced cooperation include techniques in water harvesting, surface and groundwater management and development and aquifer recharge.

h)5 Lakh handloom weavers to get MUDRA loans in three yearsNew model formulated under MUDRA scheme for handloom sector: Textiles Secretary

National Workshop on MUDRA Scheme for Handloom Weavers and Artisans held

The Ministry of Textiles has set a target of extending MUDRA loans to five lakh handloom weavers in the next three years

The new model combines elements of concessional credit such as margin money, interest subvention and credit guarantee cover.

i) Press note on key indicators of Domestic Tourism in India NSS 72nd Round (July, 2014 –June, 2015) 

The National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation has released the report titled “Key Indicators of Domestic Tourism in India” based on the related information collected during July, 2014 to June, 2015 as a part of NSS 72nd Round. Similar survey on the same subject was last conducted by NSSO during July 2008 – June 2009 as part of NSS 65th Round.

The Domestic Tourism Expenditure Survey was designed to collect detailed information on tourism expenditure alongwith some information on household characteristics, visitor characteristics and trip characteristics relating to domestic overnight trips.

j) During last 365 days from the date of survey, 19% of Indian households reported at least one overnight trip with any one of the leading purposes as holidaying, leisure & recreation, health & medical and shopping.Characteristics of overnight trips

• Majority of overnight trips at all-India level (287.2 lakhs from rural and 79.2 lakhs from urban areas), completed during last 365 days, were for the leading purpose of health & medical.
• Nearly half (48%) of all single member trips undertaken by members from a particular household were performed by females in both rural and urban areas for leading purpose health & medical.

k) ICMR-CEEW Launch the ‘Solar for Healthcare’ Initiative 

The Indian Council of Medical Research (ICMR) has signed an MoU with the Council on Energy, Environment and Water (CEEW), a policy research institution, to launch a new ‘Initiative on Solar for Healthcare’. The collaboration will focus on providing effective health care delivery at the last mile by reducing uncertainty in critical infrastructure, particularly electricity supply via cost effective solar-based solutions.

a) Bank NPA crisis: Here’s what is crucially missing

Topic: Banking

Category: Economy

Key points:

• RBI Governor will be remembered for his relentless pursuit of India’s monetary policy reforms, controlling inflation and advocating a stable policy framework. His precise diagnosis and direction for “deep surgery” for the chronic NPA problems of the banking sector, especially in public sector banks, is also noteworthy. He minced no words when he said that routine “band-aid” would not clean up the balance-sheet mess and put them back on a healthy trajectory
• RBI has been issuing master circulars from time to time, encompassing entire aspects of ensuring true and fair financial statements of banks. RBI has insisted that the new restructured loans, where the borrower has renegotiated the terms of repayment, must be classified as non-performing assets (NPA) from April 1, 2015, with provisioning of 15% of the outstanding instead of 5% for restructured loans, so that banks can take early recovery action or sell NPAs to asset restructuring companies (a loan turns into an NPA when interest repayments remain due on the 91st day)
• Financial audit of banks are done by statutory central auditors (SCAs) and statutory branch auditors (SBAs)
• The option to consider whether concurrent audit should be done by bank’s own staff or external auditors is left to the discretion of individual banks. A critical issue is that auditors should be experienced, well-trained and, most importantly, adhere to applicable accounting and auditing standards, mandatory guidelines and the ethical code of conduct. Auditors must be able to function independently with professional autonomy and judgement. Adequate facilities and the requisite records must be made available to auditors with initial and periodical familiarisation of the process. Relevant internal guidelines or circulars or important references including the circulars issued by RBI and/or Sebi and other regulating bodies must be made available to the concurrent auditors
• Banks may devise a proper reporting system and periodicity of various check-list items as per risk assessment. Serious irregularities pointed out by the audit should be straight away reported to the controlling offices or head offices for immediate action. The findings of the concurrent audit must be placed before the Audit Committee of Board(ACB). An annual appraisal or report of the audit system should also be placed before the ACB.
• Whenever fraudulent transactions are detected, they should immediately be reported to the inspection and audit department, and the chief vigilance officer and controlling officers. Follow-up action on the concurrent audit reports must be done promptly by the controlling office and inspection and audit department
• When RBI has been insisting on true and fair financial statements by banks through various notifications, master circulars, guidelines and directions time and again, why has the banking sector, especially PSBs, been pursuing window dressing so consistently for years till the position reached the current imbroglio? Statutory auditors finally certify the accounts true and fair. Whenever any falsification of accounts on the part of the borrowers is observed by the banks or financial institutions, the auditors are responsible to bring it to the notice of the management. Auditors must have to follow auditing standards, applicable accounting standards, rules and the professional code of ethics. Being the regulator of chartered accountants, The Institute of Chartered Accountants of India ICAI is duty bound to fix accountability of auditors if they are found lacking in professionalism and ethics.
• RBI stipulates that lenders may engage their own auditors for specific certification purpose without relying on certification given by borrowers’ auditors for ensuring proper end-use of funds and preventing diversion/siphoning of funds by the borrowers. Bank must invariably exercise basic minimum own diligence in the matter.
• Master directions issued by RBI in January 2016 consolidate all regulatory matters under various Acts and are put on the RBI website. Proper medicine is prescribed for chronic NPA infection, but what is missing is strict implementation. Creating more rules, regulators and watchdogs may lead to overlaps, confusion and would prove to be counterproductive. If prompt administration of extant rules is taken care of and due diligence is exercised by regulators, bank management, auditors, audit committee and the board of directors, the NPA crisis can be resolved

a) Time has come for ‘Move India’

Topic: Transport

Category: Economy

Key points:

• In the monsoon session of Parliament, the Goods and Services Tax (GST) is likely to see the light of the day. That would be one of the most significant competition reforms India would adopt in recent times to create an internal market
• Along with fulfilling the long-pending demand of our citizens to unify India in terms of doing business, this will help reduce logistic costs of cargo movements significantly — saving about 17 per cent per trip, according to industry sources
• However, the taxes alone will not solve the problems of congestion and delays on Indian roads
• According to the All India Transporters Association, a cargo consignment faces 19 types of taxes, regulatory inspections and operational procedures. While the GST will take care of some of them, many onerous regulatory and operational barriers cause delays and increase the cost of transportation
• According to a study by IIM Calcutta and the Transport Corporation of India, the annual cost of transportation delays in India due to logistic bottlenecks is estimated to be over $21 billion, which is about one per cent of India’s GDP
• Hence, it is now time for a ‘Move India’ initiative, akin to the many other initiatives this government has taken to make India a better place to do business
• It should focus on the de-congestion of roads and faster movement of cargoes by removing regulatory and operational barriers. This will make India a highly competitive economy. While we are competitive at farm/firm gate and the functioning of our ports has considerably improved over the last few years, poor internal connectivity hinders our overall competitiveness
• In order to improve internal connectivity, the Ministry of Road Transport and Highways has done well to build a network of 12 vertical and 12 horizontal corridors
• While this is necessary to connect all major cities with each other by road, there should be concomitant efforts by State governments to develop and improve conditions of State highways and rural roads
• This is because the bulk of India’s total road network belongs to the categories of State highways and rural roads.

• Other than building these transport corridors, there should be an emphasis on removing regulatory bottlenecks
• Among the challenges hindering seamless movement of cargoes, two are most important. First, there are numerous checks and, hence, delays at State borders. Secondly, there is lack of coordination among various agencies, which disturbs easy and speedy movement of cargoes
• As far as operational procedures are concerned, along with uneven development of road infrastructure, which is a major concern for developing effective supply chain network, there is the non-existence of a consolidated market in the logistics sector
• This coupled with unauthorised toll collection is resulting in huge transportation costs, which accounts for 35 per cent of total logistic cost in India
• To address these challenges, India should adopt ‘internal carnet’ — a tool developed by the International Road Transport Union (IRU) and has been successfully applied in many European countries. It facilitates the transportation of goods under customs supervision between two customs offices in a country. It eliminates all impediments such as inter-State cross-border checking and other administrative procedures involved in cross-border movement of cargoes. Duties and taxes are secured by a guarantee backed by national insurers. All would result in significant reduction in time and cost in the movement of internal cargoes
• Over the last few years, a number of inland container depots have been established in India and many more are in the offing. Therefore, along with GST, it will not be difficult for India to adopt ‘internal carnet’
• Other than consolidating the logistics market in India, this will enhance competition and regulatory efficiency in our internal connectivity, resulting in significant reduction in the cost of doing business
• Along with ‘internal carnet’, in order to improve our connectivity with the north-east, we should also adopt the ‘TIR Convention’, which is another instrument developed by the IRU for facilitating transit of goods at a country’s border
• It will facilitate easy and speedy movement of goods from the customs of origin to the customs of destination without inspections at the borders and deposit financial customs guarantees
• There will be a substantial reduction in transportation cost between the north-east and other parts of the country. Improved connectivity with the north-east will boost India’s larger agenda of regional connectivity with South-East Asia
• In short, apart from adopting the GST, reforms in domestic transport regulations are vital to facilitate seamless internal connectivity. It is time for both the Centre and State governments to work in tandem to make ‘Move India’ a reality
• To make it happen, there should be a special emphasis on convergence and congruence in planning for different modes of transport (inter-modality). Seamless internal connectivity will provide a boost to sub-regional connectivity, in keeping with the larger objectives of India’s Act East Policy

a) Shed ‘Big Brother’ tag for regional trade

Topic: Trade

Category: Economy

Key points:

• The government is keen to expand trade ties between its neighbours. This is welcome. The Asia-Pacific Trade Agreement (APTA), between Bangladesh, China, India, Laos, Mongolia, South Korea and Sri Lanka, is one of the world’s earliest multilateral trade agreements, signed in 1975 as the Bangkok agreement, and renamed in 2005
• South Asia is routinely labelled as the region with least economic integration. The latest full-year data from the government, from 2015-16, proves this. The distance between Mumbai and Karachi is 882 km; that between Kolkata and Dhaka is 249 km. The India-Pakistan and India-Bangladesh trade, exports plus imports, was 0.74% and 2.14%, respectively, of India’s total trade last year. In contrast, India-North America trade was 35.5%, even though Mumbai and New York are roughly 12,550 km apart
• Mumbai and Frankfurt are 6,600 km apart; the distance to London is around 7,200 km. Yet, trade with the EU (which still includes Britain), was around 35% of our total last year. India’s trade with its immediate neighbours is a measly 7.25%. In contrast, our trade with Africa is 19.2% of the total number
• APTA, resurrected, is a great idea. But unlike colonial times, trade does not follow the flag any more. Today, a complex cocktail, which includes inclusiveness, dialogue, shared histories and, most important, cultural, social and political bonhomie, will drive trade and money through the region. India has to tread purposefully but softly, to shed its adverse image. Trade will follow goodwill, and charm

b) Sombre message from Reserve Bank

Topic: Monetary Policy

Category: Economy

Key points:

• The RBI’s latest Financial Stability Report shows some easing of corporate leverage but continuing stress on the banking system, with no let-up in the imperative to clean up bank books. At a macro level, the biggest risk the report identifies is the risk of a commodity price reversal
• India has been one of the biggest gainers among the world’s large economies from falling commodity prices. The obverse, obviously, would be that India stands to suffer the most, if the commodity prices that had softened significantly now start hardening. While the price of crude has risen sharply over the last six months, from under $30 a barrel to over $50 a barrel, there is hope that the price would stabilise around $55 a barrel
• If Brexit-related redeployment of assets makes the dollar stronger for a longish period, this would push up the rupee cost of India’s imports, particularly of energy
• Banks are having a tough time. Their gross non-performing assets stood at 11.5% of total lending at end-March. Their profitability fell. Public sector banks suffer from weakened capital to risk-weighted-asset ratios. Further, it is clear from the improving position of non-banking finance companies that these have been taking up the space vacated by banks, along with urban cooperative banks. The report’s assessment is stark, “As per the banking stability indicator, risks to the banking sector increased significantly during the second half of 2015-16 due to deteriorating asset quality and lower profitability. While stress tests reveal resilience, the system could become vulnerable if the macroeconomic conditions were to deteriorate sharply.”
• In other words, the government has even less space for fiscal indiscipline in the current financial year than in normal years. At risk is financial stability, besides the current account deficit and price stability
• The plus side is the prospect of a good monsoon, which would alleviate rural distress and obviate the need for large rural spends out of the Budget. Even then, policy and efficient administration have to bear the brunt of raising investment levels

a) China’s target is Indian Ocean: U.S. official Thomas Shannon

Warning that China’s motives to secure the South China Sea are “madness” and intended towards the Indian Ocean, a top visiting U.S. official said in unusually strong remarks that the U.S. will work to ensure India remains the “natural power” in the Indian Ocean, even as he expressed the U.S.’s commitment to help India attain membership of the Nuclear Suppliers Group.

b) India test-fires new surface-to-air missile from defence base off Odisha coast

India on Thursday test fired a new surface-to-air missile from a defence base off Odisha coast. The missile was developed jointly with Israel.

Earlier, the officials at DRDO had informed that the test-firing was to be jointly conducted by defence personnel, DRDO and Israel Aerospace Industries.

The system also includes a multi-functional surveillance and threat alert radar (MF STAR) for tracking, detection and guidance of the missile

c) India lifts ban on trade of certain items with Iran – Government

India has lifted a ban on trade of specified items with Iran after some western sanctions against the Persian Gulf nation were lifted earlier this year, the government said in a notification on Wednesday.

“Direct or indirect export to Iran or import from Iran is now permitted subject to UN Security Council Resolution and IAEA specified documents,” the notification added

d) Import of solar panels triples in 2015-16 

The value of imported solar cells and modules tripled to $2.34 billion in 2015-16, with China accounting for 83 per cent ( $1.9 billion) of it.

In 2014-15, India’s solar imports amounted to $821 million; China’s share was 73 per cent. China has gained share in a growing market.

e) Apex court for one-time cess on big diesel cars

The Supreme Court on Wednesday suggested that authorities permit the registration of diesel SUVs and cars with engine capacity of 2,000CC and above in Delhi and the National Capital Region (NCR), provided the owner of the vehicle pays a one-time environment cess.

f) RCEP logjam: Trade ministers to meet on August 5 in Laos

Trade ministers of countries, including India, China and Japan, will meet on August 5 in Laos to iron out issues holding back negotiations of the Regional Comprehensive Economic Partnership (RCEP).

There are several complex issues, including the proposed three-tier system of tariff relaxation and services sector matters, which need intervention at a ministerial level, a senior official said.

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

• Model Shops and Establishments (Regulation of Employment and Conditions of Services) Bill, 2016
• National Family Health Survey
• Art 32 and Art 142
• Indian Leather Development Programme
• National Mineral Exploration Policy
• Mizo Accord
• Panchayati Raj Institutions
• Bank NPA Crisis
• NSSO Survey 72nd Round
• MUDRA
• Act East Policy
• Asia Pacific Trade Agreement
• GST
• Financial Stability Report
• RCEP

G. Fun with Practice Questions 🙂

Question 1: Which of the following data is/are correct ?

Question 2: Which of the following statements is/are correctabout the National Mineral Exploration Policy ?

Question 3: Which plateau is known as the mineral heart land of India ?

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

Question 5: Which of the following statements is/are stipulated according to thethe Constitutional (73rd Amendment) Act 1992 ?

H. Archives:

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