UPSC 2017: Comprehensive News Analysis - October 27


A. GS1 Related
B. GS2 Related
1. Don’t deny PDS foodgrains to non-Aadhaar beneficiaries, Centre tells States
2. Rajasthan Assembly passes bill raising OBC quota to 26% 
2. The identity puzzle
1. India for constructive approach to Rohingya crisis
2. India, Sri Lanka ink housing project deal in Hambantota
C. GS3 Related
1. ‘India has to spend ₹50 lakh cr on infra’ 
2. NHAI eyes bond issue to finance highway projects 
3. NITI bats for divesting 34 sick PSUs 
4. A bold step in bank reform 
D. GS4 Related
E. Prelims Fact
F. UPSC Prelims Practice Questions
G. UPSC Mains Practice Questions 


A. GS1 Related

Nothing here for Today!!!


B. GS2 Related

Category: POLITY

1. Don’t deny PDS foodgrains to non-Aadhaar beneficiaries, Centre tells States


  • A 11-year-old Jharkhand girl recently died of alleged starvation after being allegedly denied PDS ration.

In news:

  • New instructions issued by the Centre:
  • The Union government has instructed the States not to deny the public distribution system (PDS) benefits to anyone who does not have Aadhaar or has not linked his ration card to the number and warned of strict action on violation of the directive.
  • The Centre also asked the State governments not to delete eligible households from the list of beneficiaries for non-possession of Aadhaar.
  • Maintenance of separate record:
  • Cases like those without Aadhaar, Aadhaar not linked to ration card, or failure of biometric authentication — where benefits are being extended, will have to be recorded separately as “exceptions” by the fair price shop dealer.
  • Further, the States will have to devise a mechanism of monthly audit and inspection, including field verification of such “exceptions” to guard against any “misuse”.

Basic Information:

Public Distribution system:

  • Public distribution system (PDS) is an Indian food security system. Established by the Government of India under Ministry of Consumer Affairs, Food, and Public Distribution and are managed jointly by state governments in India, it distributes subsidized food and non-food items to India’s poor. This scheme was launched in June 1947.
  • Major commodities distributed include staple food grains, such as wheat, rice, sugar, and kerosene, through a network of fair price shops (also known as ration shops) established in several states across the country. Food Corporation of India, a Government-owned corporation, procures and maintains the PDS.

2. Rajasthan Assembly passes bill raising OBC quota to 26%

In news:

  • The Rajasthan Assembly passed a bill which increases reservation for Other Backward Classes (OBC) in the state from 21 per cent to 26 per cent.
  • The decision grants five per cent reservation to the five “most backward” OBC communities, which includes Gujjars and four other communities that were earlier grouped as the special backward classes (SBC).

Basic Information:

Mandal Commission:

  • The Mandal Commission was established in India on 1 january 1979 by the Janata Party government under Prime Minister Morarji Desai with a mandate to “identify the socially or educationally backward.”
  • It was headed by Indian parliamentarian B.P. Mandal to consider the question of seat reservations and quotas for people to redress caste discrimination, and used eleven social, economic, and educational indicators to determine backwardness.
  • In 1980, the commission’s report affirmed the affirmative action practice under Indian law whereby members of Other Backward Classes (OBC), were given exclusive access to a certain portion of government Jobs and slots in public universities, and recommended changes to these quotas, by 27%.

3. The identity puzzle


  • Draft of the DNA Based Technology (Use and Regulation) Bill, 2017

Key Points and Issues:

  • The Law Commission of India submitted the draft to the government in July
  • Given that there are no appropriate legal mechanisms with regard to identifying missing persons, victims of disasters, etc. The DNA Bill seeks to regulate human DNA profiling and establish standard procedures for DNA testing

DNA profiling board:

  • The Law commission has recommended constitution of a statutory body called the DNA profiling board and a DNA data bank
  • Functionality: The profiling board will undertake functions such as laying down procedures and standards to establish DNA laboratories and granting accreditation to such laboratories.
  • And advising the concerned Ministries/ departments of the Central and State governments on issues relating to DNA laboratories
  • It will also be responsible for supervising, monitoring, inspecting and assessing the laboratories
  • The Board will frame guidelines for training the police and other investigating agencies dealing with DNA-related matters
  • Its functions also include giving advice on all ethical and human rights issues relating to DNA testing in consonance with international guidelines
  • It will recommend research and development activities in DNA testing and related issues
  • DNA profiling will be undertaken exclusively to identify a person and will not be used to extract any other information

DNA data bank:

  • The Bill has also recommended the setting up of a DNA data bank both nationally and on a regional basis in the States
  • The data bank will primarily store DNA profiles received from the accredited laboratories
  • And maintain certain indices for various categories of data such as crime scene index, suspects index, offenders index, missing persons’ index and unknown deceased persons’ index
  • With a view to assisting families of missing persons on the basis of their bodily samples and substances
  • Strict confidentiality will be maintained with regard to keeping records of DNA profiles and their use

Other facts related to the Bill:

  • The DNA profiles shall be shared with and by foreign governments or government organisations or agencies only for the purposes enumerated in the Act
  • Punishment: Violators of the provisions will be liable for punishment of imprisonment which may extend up to three years and also a fine which may extend up to Rs. 2 lakh


1. India for constructive approach to Rohingya crisis


  • Rohingya crisis.

In news:

  • India’s observations:
  • ‘Constructive’ approach is the need of the hour to deal with the exodus of the Rohingya.
  • The displaced members of the community will have to return to their place of origin in the Rakhine province of Myanmar.

Basic Information:

Rohingya Crisis

  • The Rohingya people are a Muslim minority group residing in the Rakhine state (in the south western Myanmar), formerly known as Arakan and are considered to be a variation of the Sunni religion.
  • The 1982 Citizenship Law denies the Rohingya Muslims citizenship despite the people living there for generations. They are considered “stateless entities”.
  • They are regarded as mere refugees from Bangladesh, face strong hostility in the country.
  • United Nations classifies them as one of the most persecuted refugee groups in the world.
  • To escape the dire situation in Myanmar, the Rohingya try to illegally enter Southeast Asian states like Malaysia, Thailand and Indonesia, begging for humanitarian support from potential host countries
  • As per the United Nations refugee agency from August almost 400,000 Rohingya have crossed Naf river over to Bangladesh from the northern Rakhine state in Myanmar, putting Bangladesh under immense strain
  • The dominant group, the Rakhine, rejects the label “Rohingya” and has started to persecute the Rohingya.
  • The latest surge follows attacks on police posts by an extremist Rohingya group, Arakan Rohingya Salvation Army(ARSA).
  • People from all over the world started calling this crisis and bloodshed “campaign of ethnic cleansing.”

2. India, Sri Lanka ink housing project deal in Hambantota

In news:

  • Sri Lanka signed an agreement with India to build 1,200 houses in the southern port city- Hambantota.
  • Hambantota is a Sinhala dominated area.
  • Of the 1,200 houses to be built, 600 will be constructed in the Southern Province, while the remaining would be built across Sri Lanka, through one model village in each of the country’s 25 districts.

Background information:

  • The coastal city of Hambantota gained strategic significance after President Rajapaksa built a massive port and an airport with huge Chinese loans.
  • In July this year, his successor government sold a majority stake of the port to China to service an outstanding $8-billion debt it owes China, fanning concerns of countries with competing strategic interests, particularly India and the U.S.


C. GS3 Related


1. ‘India has to spend ₹50 lakh cr on infra’


  • Infrastructure sector has suffered in India due to under-investment for a long time

Infrastructure Yearbook 2017:

  • A book released by rating agency Crisil.
  • Highlight:India would need to spend about ₹50 lakh crore between fiscal 2018 and 2022 to build its infrastructure in a sustainable manner
  • For years now, the government has been doing the heavy lifting in terms of infrastructure investments. However, having only the public investment cylinder firing is not good enough. Accelerating private sector investments is an essential complementarity, and the other cylinder that needs to fire.

Crisil InfraInvex

  • A new index launched by Crisil
  • It is an ‘investability’ index that would track, measure and assess the development, maturity and investment attractiveness of infrastructure sectors.
  • Attractive sector: The Crisil InfraInvex scores for 2017 show power transmission sector the most attractive to invest in currently, followed by roads and highways, and renewable energy.

NITI Aayog to devise new strategies:

  • NITI Aayog CEO Amitabh Kant pitched for channelling insurance and pension funds for financing infrastructure projects as also for a complete re-examination of the viability gap funding (VGF) scheme.

Basic Information:

Viability gap funding

  • Viability Gap Funding (VGF) Means a grant one-time or deferred, provided to support infrastructure projects that are economically justified but fall short of financial viability.
  • The lack of financial viability usually arises from long gestation periods and the inability to increase user charges to commercial levels.
  • Infrastructure projects also involve externalities that are not adequately captured in direct financial returns to the project sponsor. Through the provision of a catalytic grant assistance of the capital costs, several projects may become bankable and help mobilise private investment in infrastructure.
  • Government of India has notified a scheme for Viability Gap Funding to infrastructure projects that are to be undertaken through Public Private Partnerships.
  • It will be a Plan Scheme to be administered by the Ministry of Finance with suitable budgetary provisions to be made in the Annual Plans on a year-to- year basis.
  • The quantum of VGF provided under this scheme is in the form of a capital grant at the stage of project construction. The amount of VGF will be equivalent to the lowest bid for capital subsidy, but subject to a maximum of 20% of the total project cost. In case the sponsoring Ministry/State Government/ statutory entity propose to provide any assistance over and above the said VGF, it will be restricted to a further 20% of the total project cost.
  • Support under this scheme is available only for infrastructure projects where private sector sponsors are selected through a process of competitive bidding. The project agreements must also adhere to best practices that would secure value for public money and safeguard user interests. The lead financial institution for the project is responsible for regular monitoring and periodic evaluation of project compliance with agreed milestones and performance levels, particularly for the purpose of grant disbursement. VGF is disbursed only after the private sector company has subscribed and expended the equity contribution required for the project.

2. NHAI eyes bond issue to finance highway projects

In news:

  • The National Highways Authority of India (NHAI) will soon issue bonds to finance highway projects.
  • Both Foreign and domestic investments are allowed.
  • Key Fact: National Highway Authority of India (NHAI) has a AAA rating that would help it tap into the capital markets. Funds to the tune of ₹4-5 lakh crore can be raised from the markets for highway projects.

3. NITI bats for divesting 34 sick PSUs

In News:

  • Government think-tank NITI Aayog has recommended strategic disinvestment of 34 sick public sector units
  • Earlier, the Prime Minister’s Office (PMO) had asked the think tank to look into the viability of sick state run companies.
  • The Centre plans to raise funds to the tune of Rs. 72,500 crore through stake sale in PSUs this fiscal, including Rs. 46,500 crore from minority stake sale.

Basic Information:

Strategic disinvestment:

  • In strategic disinvestment the government sells major portion of its stake to a strategic buyer and also gives over the management control.
  • Under it, the strategic Partner, may hold less percentage of shares than the government but the government loses management control.
  • The Finance Ministry has empowered the NITI Ayog to advise the government on the strategic disinvestment of the CPSEs.
  • The procedure for strategic sale will be prepared by Department of Investment and Public Asset Management (DIPAM).

4. A bold step in bank reform


  • Recapitalization of Public Sector Banks

Key Points:

  • With India’s economic growth falling in the last couple of years, the government has been casting about for ways to strengthen the economy
  • The government have realised that a simpler, more effective remedy is at hand: recapitalising public sector banks (PSBs) and enhancing the flow of credit
  • The proposal to recapitalise PSBs to the extent of Rs. 2.11 trillion (Rs. 2.11 lakh crore) is a much needed step. It is, perhaps, the most effective way to provide a much-needed fiscal stimulus to the economy and revive growth

The menace of NPA’s:

  • When loans go bad and turn into non-performing assets (NPAs), banks have to make provisions for potential losses
  • This tends to erode bank capital and put the brakes on loan growth
  • That is precisely the situation PSBs have been facing since 2012-13

PSB’s and stressed assets:

  • Stressed advances’ (which represent non-performing loans as well as restructured loans) have risen from a little over 10% in 2012-13 to 15% in 2016-17. This has caused capital adequacy at PSBs to fall
  • Average capital at PSBs has fallen from over 13% in 2011-12 to 12.2% in 2016-17
  • The minimum capital required is 10.5%
  • Inadequate capital at PSBs has taken its toll on the flow of credit. Growth in credit has fallen below double digits over the last three years

Fiscal impact of the recapitalisation package

  • Analysts worry about the fiscal impact of the recapitalisation package
  • International norms allow borrowings for bank recapitalisation not to be counted towards the fiscal deficit
  • The proposed recapitalisation bonds are likely to add to the fiscal deficit’
  • The government should not worry unduly about missing the fiscal deficit target of 3.2% of GDP
  • The markets will understand that the fiscal stimulus is well spent


D. GS4 Related

Nothing here for Today!!!



Bills / Acts/ Schemes in News

The Consumer Protection Bill, 2015:

The Bill replaces the Consumer Protection Act, 1986. The Statement of Objects and Reasons of the Bill states that this is to widen the ambit and modernise the law on consumer protection due to the changes in the markets.

Definition of consumer: A consumer is defined as any person who buys a good or hires a service for a consideration. This includes the user of such good or service, but not one who obtains the good for resale or commercial purposes. It covers transactions through all modes including offline, online through electronic means, teleshopping, or multi level marketing.

Rights of consumers: The rights of consumers include the right to: (i) be protected against marketing of goods and services which are hazardous to life and property, (ii) be informed of the quality, quantity, potency, purity, standard and price of goods or services, (iii) be assured of access to a variety of goods or services at competitive prices, and (iv) to seek redressal against unfair or restrictive trade practices.

Central Consumer Protection Authority (CCPA): The central government will set up the CCPA to promote, protect and enforce the rights of consumers. The CCPA will carry out the following functions, among others: (i) inquiring into violations of consumer rights, investigating and launching prosecution at the appropriate forum; (ii) passing orders for recall of goods, or withdrawal of services and reimbursement of the price paid, and pass directions for discontinuation of unfair trade practices; (iii) issuing safety notices and order withdrawal of advertisements; and (iv) declaring contracts that are unfair to a consumer as void.

Product liability: If defects in the manufacture, construction, design, testing, service marketing etc. of a product results in any personal injury or property damage to a consumer, the manufacturer is liable in a product liability action.

Consumer Disputes Redressal Commissions: Consumer Grievance Redressal Commissions are to be set up at the district, state and national levels. A consumer can file a complaint with these commissions, regarding: (i) unfair or restrictive trade practices, (ii) defective goods or services, (iii) overcharging or deceptive charging, (iv) the offering of goods or services for sale which may be hazardous to life and safety, and (v) incurring loss due to an unfair contract.

The District Commission may issue the following orders regarding a complaint: remove the defect, replace the good, return the price amount, stop the sale or manufacture of hazardous products, discontinue unfair trade practices or pay compensation for any loss suffered by the consumer. Appeals from its decisions will be heard by the State Commission. Further appeals may be filed before the National Commission, and then before the Supreme Court.

Consumer Mediation Cell: The Bill introduces mediation as a mode of consumer dispute resolution. Consumer Mediation Cells will be established and attached to the redressal commissions at the district, state and national levels.

Penalties: Any person who fails to comply with an order of either of the Commissions would be liable for imprisonment from one month to three years, or with a fine from 10,000 rupees to 50,000 rupees.


F. Practice Questions for UPSC Prelims Exam

Question 1. Consider the following statements
  1. Bharat Net project aims to deploy high speed optical fiber cables across tier-3 cities
  2. Bharat Net project aims to deploy high speed optical fiber cables across metropolitan cities
  3. Bharat Net project aims to deploy high speed optical fiber cables across Tier-2 cities
  4. None of the above


Question 2. The Catalonia region, often seen in news belongs to which part of Spain?
  1. North Western
  2. North Eastern
  3. South Eastern
  4. South Western


Question 3. The Naf River acts as a natural international frontier between
  1. Southeastern Bangladesh and western Myanmar
  2. Southwestern Bangladesh and western Myanmar
  3. Northeastern Bangladesh and Western Myanmar
  4. None of the above
Question 4. Operation Insaniyat refers to
  1. Humanitarian assistance to Bangladesh on account of influx of refugees
  2. Humanitarian assistance to Syria on account of civil war crisis.
  3. Humanitarian assistance to African Nations.
  4. None of the above
Question 5. Consider the following statements
  1. Government of India has notified a scheme for Viability Gap Funding to infrastructure projects that are to be undertaken by Public sector alone.
  2. Viability Gap Funding is administered by the Ministry of Finance with suitable budgetary provisions to be made in the Annual Plans on a year-to- year basis.

Choose the correct statements from the options given below

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2


G. UPSC Mains Practice Questions

GS Paper II
  1. Who are the Rohingyas? What should India do as an aspiring superpower to control the spread of the agony?
GS Paper III
  1. “Recapitalization of the public sector banks is the most effective way to provide a much-needed fiscal stimulus to the economy and revive growth” Comment.


Also, check previous Daily News Analysis


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