UPSC 2017: Comprehensive News Analysis - July 04

In news:

• The Asian Development Bank (ADB) and the Government of India signed a $220 million loan agreement meant to improve connectivity, transport efficiency, and safety on the State highways of Rajasthan.
• The loan is the first tranche of the $500 million Rajasthan State Highways Investment Program, approved by ADB Board in May this year that will upgrade about 2,000 km of State highways and major district roads to two-lane or intermediate-lane standards to meet road safety requirements.

Basic Information:

The Asian Development Bank (ADB):

• The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in the Ortigas Center located in Mandaluyong, Metro Manila,
• Purpose: social and economic development in Asia.
• Motto: Fighting poverty in Asia and Pacific.
• ADB is an official United Nations Observer.

• Members:
  • The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries.
  • ADB now has 67 members, of which 48 are from within Asia and the Pacific and 19 outside.

• Voting System and shares: The ADB was modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions. At the end of 2014, Japan holds the largest proportion of shares at 15.7%. The United States holds 15.6%, China holds 6.5%, India holds 6.4%, and Australia holds 5.8%.
• Aim: The ADB defines itself as a social development organization that is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. This is carried out through investments – in the form of loans, grants and information sharing – in infrastructure, health care services, financial and public administration systems, helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.

Focus Areas:

1. Education
2. Environment, Climate change and Disaster risk management
3. Finance sector development.
4. Regional co-operation and integration
5. Private sector lending
6. Infrastructure, including transport and communications, energy, water supply and sanitation, and urban development

In news:

• India has slipped to the 88th place in terms of money parked by its citizens with Swiss banks, while the U.K. remains on the top
• Money officially held by Indians now accounts for a meagre 0.04 percent of total funds
• India was placed at 75th position in 2015 and at 61st in the year before that and till 2007 it used to be among top-50 countries in terms of holdings in Swiss banks.
• Automatic exchange of information between Switzerland and India helped to check the black money menace.
• The funds are the official figures and do not indicate the quantum of black money.

In news:

• Recently in his Budget speech, Finance minister Arun Jaitley revisited the idea of an integrated oil and gas sector

Historical View of the idea

• The idea first made its appearance during Atal Bihari Vajpayee’s government in 1998
• The proposal was then rejected for encouraging a monopolistic scenario in distribution of essential goods like LPG, petrol, kerosene etc.

Krishnamurthy committee :

• The Krishnamurthy committee formed by the UPA government, in 2005, debunked the idea
• As it would reduce competition and manpower in the oil and gas sector

Why did the idea of an integrated oil major surface again in 2017?(by Arun Jaitely) Mr. Jaitley stated five major reasons for the same:

(1) better capacity to bear higher risks, (2) avail economies of scale, (3) create more shareholder value, (4) make better investment decisions and (5) be more competent globally. 

Issues with this proposal

(a) Adversely affect Employment

• The Krishnamurthy Committee had earlier deduced that such integration will result in manpower reduction
• At a time when the government is struggling with job creation, it will be difficult to justify job losses due to restructuring

(b) Will restrict competition

• The Indian oil market today has hardly any competition
• Inidan Oil Market is dominated by IOCL, HPCL and BPCL
• Curbing competition in the past has already adversely affected the aviation and banking sectors
• So, any decision that creates a monopoly in the oil and gas sector must be carefully thought through

In news:

• National Multi Commodity Exchange (NMCE), India’s first de-mutualised online national multi-commodities exchange, will merge with the Indian Commodity Exchange (ICEX).

Advantages:

• The merger will help ICEX to further strengthen its position in the commodity derivatives market in India
• The large base of warehousing facilities of CWC (Central Warehousing Corporations) with storage capacity of 9.89 million tonnes will become available to the combined entity pan India, which will help generate more liquidity due to wider participation of the larger base of active members of the combined entity.

Indian Commodity Exchange (ICEX):

• ICEX is a deemed recognised stock exchange providing a nationwide online trading platform in commodity derivatives. It has put in place assaying and warehousing facilities in order to facilitate deliveries. Reliance Capital is its largest investor.

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

F. Bills/Acts/Schemes/Orgs in News

Question 1: The draft Medical Termination of Pregnancy bill 2014, has enhanced the 
legal limit for abortion

Question 2: Measles is a disease caused by

Question 3: India’s biggest Global Skill Park will be set up in which city?

Question 4: The concept of fundamental duties of Indian constitution was borrowed from 
which among the following?

Question 5: Consider the following statement with reference to Asian Development Bank:

Practice More: Enroll for India’s Largest All-India Test Series