10 Feb 2022: UPSC Exam Comprehensive News Analysis

CNA 10 Feb 2022:-Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
INTERNATIONAL RELATIONS
1. Quad Ministers set to meet in Australia
C. GS 3 Related
SCIENCE AND TECHNOLOGY
1. Scientists set new record in fusion energy
D. GS 4 Related
E. Editorials
ECONOMY
1. It’s time to take a relook at privatisation
INTERNATIONAL RELATIONS
1. Anger in diplomacy
2. The French format
F. Prelims Facts
1. ISRO to launch new satellite on Feb. 14
G. Tidbits
1. Pak. drone drops RDX, bomb-making items
2. INCOIS carries out coastal vulnerability assessment
3. The coups in West Africa and the regional response
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions
FIP Magazine

E. Editorials

Category: ECONOMY

1. It’s time to take a relook at privatisation

Syllabus: Indian Economy and issues; Mobilization of resources.

Mains: Critical analysis of privatisation policy as a solution to India’s economic crisis.

Background

  • India’s fiscal deficit for FY22 is said to be 6.8% of the GDP or ₹15.06 lakh crore. It accounts for about 12.7% of the GDP if debts of the States are included.
  • Privatisation is being put forward as an option to generate sufficient revenues for the government to close down the fiscal deficit. Also in the recent past, there has been a broad consensus that privatisation is the solution for the revival of the economy post-pandemic as the policymakers suggest that the private sector has more ability to grow faster.

Privatisation

  • Privatisation means the transfer of ownership, management, and control of the public sector enterprises to the private sector.
  • Objectives:
    • To minimise the public sector’s role and create new investment space for the private sector, and to infuse private capital, technology and management practices that will contribute to growth and new jobs.
    • The proceeds from the sale of the public firms would help finance various government-run social sector and developmental programmes.

Privatisation in India

  • The Disinvestment Commission, under the Ministry of Industries, was set up in 1996 to provide inputs on which firms to privatise over a five-10-year period.
  • A separate Department of Disinvestment was set up under the Ministry of Finance and later upgraded to a full-fledged Ministry in 2001. It was downgraded back to a department in 2004.
  • Despite strong institutional backing, privatisation as a policy has failed to raise significant funds. The actual receipts from disinvestment have fallen short of targets.
  • In FY11, ₹22,846 crores were raised against a target of ₹40,000 crores.
  • In FY20, ₹50,304 crores were raised against a target of ₹1 lakh crores.
  • Between FY11 and FY21, about ₹5 lakh crores were raised, which is about 33% of FY22’s projected fiscal deficit.

To read more about the Privatisation Policy in CNA dated June 29, 2021.

Evidence against privatisation

  • Studies indicate that the gap in growth between public sector undertakings (PSUs) with autonomy and private firms is not very significant.
  • A study highlighted that the famed British privatisation initiative of British Airways, British Gas, and the Railways led to no systemic difference in performance.
  • Evidence on performance after privatisation is more mixed in developing countries.
  • Growth post-privatisation is linked to factors like better funding by the private firms compared to the government budget and a better business model.
  • Privatisation as a revenue source has also offered meagre returns.

Challenges with privatisation

  • Valuation – 65% of 300 national highway projects have been recording significant toll collection growth. Valuations of such assets should ensure to capture potential growth in toll revenue.
  • Employment – PSUs have been significant generators of employment, with about 10.3 lakh employees in Central Public Sector Enterprises (in 2019). A push for privatisation is said to be a push for mass layoffs, in a period of low job creation.
  • Concentration of public assets in select private hands – In India, about 70% of profits generated in the corporate sector in FY20 were from just 20 firms.
  • Concerns of Monopoly –
    • Cigarettes are dominated by a single player, with a 77% market share in FY21
    • Paints has one entity with 40% in FY21
    • Telecom has just three players left
  • Loss of strategic control – Privatization decreases the government control on strategic sectors.

Conclusion

An alternative method of selective PSU reform could be considered which has been a success in other countries like:

  • In China, growth has been led by corporatised PSUs that are held under a holding company, which promotes better governance, appoints leadership and executes mergers and acquisitions.
  • In Singapore, the Ministry of Finance focuses on policymaking, while Temasek Holdings (a private firm) is focused on corporatising and expanding its PSUs.

A PSU with greater autonomy, with the government retaining control and subject to the right incentives, the Indian PSUs could aspire to be as large and efficient as that of China’s.

Nut Graf
Considering the social and institutional constraints, India’s ability to privatise firms is expected to continue to be slow in the future. At this rate, it is unlikely to raise significant revenue. Hence other options such as reforming the PSU sector need to be considered.

Category: INTERNATIONAL RELATIONS

1. Anger in diplomacy

Syllabus: India and its neighbourhood – relations.

Mains: India’s response to social media posts by MNCs on the Kashmir issue and the way forward.

Context

Multinational companies faced backlash in India over their posts on social media that supported “Kashmir Solidarity Day”.

Kashmir Solidarity Day

  • February 5th is observed as Kashmir Solidarity Day or Kashmir Day in Pakistan.
  • The day is observed to show Pakistan’s support towards the people residing in the Indian administered part of Jammu and Kashmir and the efforts of separatists of Kashmir.

Details

  • The posts by the companies appeared to be part of a coordinated exercise sponsored by the Pakistani establishment, as they contained offensive messages calling for “Kashmiri liberation”.
  • Given that the companies, like Hyundai, Toyota, KFC, Pizza Hut, and Schwabe, also have flourishing businesses in India, it is questioned as to why the private MNCs would post politically charged messages.

India’s Response

  • The government summoned the respected country’s Ambassadors and ensured that Indian embassies take up the issue with other governments.
  • The External Affairs Minister raised the matter with his Korean counterpart, who apologised to the Indian people.
  • The Commerce Minister added that the apology by Hyundai India was not adequately “forceful or unequivocal”.
  • The social media consumers in India threatened to boycott products made by the companies concerned.

Way forward

  • The government must consider the bigger picture of its actions and consequences, especially while confronting the powerful global players.
  • Holding the foreign governments in democratic countries to account for the actions of the local distributors of their private companies could have unforeseen repercussions.
  • India’s claims over Jammu and Kashmir are strong, widely acknowledged, and not so fragile that a few social media posts, that appeared only in Pakistan, can dent in any way.
  • The Foreign Ministry’s resources are to be spent in furthering India’s interests rather than on short-lived controversies.
Nut Graf
The advent of social media has changed how diplomacy is conducted between countries. India must show restraint in handling the controversies emerging out of social media as they have serious consequences on bilateral relations.

2. The French format

Syllabus: Effect of policies and politics of developed and developing countries on India’s interests

Mains: Role of Normandy format and Minsk protocol in resolving the Ukraine crisis.

Context

The Normandy Format talks if convened is said to be a breakthrough for Russia-Ukraine Crisis

Normandy Format

  • The Normandy format is a diplomatic grouping created in June 2014 with the aim of finding a peaceful resolution to the conflict in Ukraine due to Russia’s military aggression.
  • It is an informal forum that was set up by France, Germany, Russia and Ukraine.
  • It takes its name from the Normandy landings in the second world war.

Read more about the Russia-Ukraine crisis.

Minsk Protocol

  • The Minsk Protocol is an agreement signed by representatives of Ukraine, Russia, OSCE, and the then heads of the two separatist groups, Donetsk People’s Republic and Luhansk People’s Republic, to end the war in the Donbas region.
  • The accords call for a general amnesty for the rebels, constitutional amendments giving the breakaway regions in eastern Ukraine more autonomy and the handing over of Ukraine’s borders to its army.
  • The Minsk deal has never been enforced.

Latest Developments

  • The French president held talks with Vladimir Putin and Ukraine President Volodymyr Zelensky, and said that both sides remain committed to the Minsk protocol, aimed at ending the violence between Ukraine and Russia-backed separatists in the east.
  • France, through the Normandy Format talks, is trying for a Moscow-Kiev dialogue based on the Minsk protocol, which was accepted by both sides.
  • Russia has assured that it would not escalate the crisis.

Differences within the western bloc on Russia

  • The U.S. – Threatened to shut down Russia’s Nord Stream 2 pipeline in the event of a Russian invasion.
  • Germany – Germany has barred Estonia, a NATO member that shares a border with Russia, from supplying arms to Ukraine.
  • Hungary – It has stated that Russia’s demands were reasonable.
  • France – It has suggested that the West must respect Russia.

Conclusion

The varied responses from different stakeholders in the west show that Europe has less intent for a conflict with Russia. It is to be seen whether France and Germany have the diplomatic power to calm Russia without compromising on the continent’s security. In this regard, it would be considered a big diplomatic breakthrough if the Normandy Format talks could be convened and if Russia and Ukraine are obliged to revive the Minsk agreement.

Nut Graf
As a continent that experienced two disastrous World Wars and a Cold War, Europe needs to adopt pragmatic realism in resolving the Ukraine crisis. France’s shuttle diplomacy between Russia and Ukraine is one of the most significant interventions in the crisis.

F. Prelims Facts

1. ISRO to launch new satellite on Feb. 14

Context:

  • As part of the first launch of 2022, the Indian Space Research Organisation (ISRO) plans to place, into orbit, an Earth Observation Satellite (EOS-04) onboard the PSLV C-52.

EOS-04 satellite:

  • EOS-04 is a radar-imaging satellite, designed to provide high-quality images under all weather conditions for applications such as agriculture, forestry & plantations, soil moisture and hydrology, and flood mapping.
  • The EOS-04 satellite would be placed in a sun-synchronous polar orbit.

G. Tidbits

1. Pak. drone drops RDX, bomb-making items

  • The Border Security Force (BSF) has recovered over four kg of RDX, a pistol and bomb-making items that were dropped in two packets by a drone that flew from Pakistan into an Indian farm along the Punjab border.
  • This is an example of the potential of the use of drones to threaten the security of the nation.

2. INCOIS carries out coastal vulnerability assessment

  • Indian National Centre for Ocean Information Services (INCOIS) has carried out coastal vulnerability assessments for the entire Indian coast at the States’ level. Using this data it has prepared an Atlas and would also prepare a Coastal Vulnerability Index (CVI).
  • While the maps determine the coastal risks due to future sea-level rise based on the physical and geological parameters, the CVI uses the relative risk posed by physical changes that will occur as sea-level rises.
  • The coastal vulnerability assessments can be useful information for coastal disaster management and building resilient coastal communities.

3. The coups in West Africa and the regional response

  • There have been a rising number of military takeovers in Africa and West Africa in particular. Between 2020 and 2022, there already have been 6 successful military coups and 3 failed ones.
  • Recent military coups have occurred in Guinea, Mali, Sudan and Burkina Faso.
  • The rising instances of coups could have an adverse impact on democratic institutions and constitutional order apart from the loss of human lives and suffering associated with violent take-overs.

H. UPSC Prelims Practice Questions

Q1. Which of the following best defines ‘Khabar Lahariya’?
  1. Only newspaper in India operated by only Dalit women
  2. NGO working in the Bundelkhand region, raising issues of Dalit women
  3. A special provision under RTI, ensuring faster replies to questions submitted by Dalits
  4. A direct benefit transfer scheme for Dalit women in Madhya Pradesh
CHECK ANSWERS:-

Answer: a

Explanation:

  • Khabar Lahariya is an Indian newspaper, published in various rural dialects of Hindi, including Bundeli, Avadhi and Bajjika dialects. The newspaper focuses on gender and education.
  • Beginning from the rural villages of Uttar Pradesh, Lahariya profoundly voiced out the issues of their community through a feminist perspective irrespective of class, caste, or religion.
  • Khabar Lahariya is India’s only newspaper run by Dalit women.
Q2. Consider the following statements:
  1. Energy by nuclear fusion promises to be low carbon, but more dangerous than how nuclear energy is now produced.
  2. A kilogram of fusion fuel contains about 10 million times as much energy as a kilogram of coal, oil or gas.
  3. The ITER is a fusion research mega-project supported by seven members — China, the European Union, India, Japan, South Korea, Russia and the U.S. — and based in the south of France.

Choose the correct code:

  1. 1 only
  2. 2 only
  3. 1 & 3 only
  4. 2 & 3 only
CHECK ANSWERS:-

Answer: d

Explanation:

  • Nuclear fusion is considered safer than nuclear fission. Nuclear fission power plants have the disadvantage of generating unstable nuclei; some of these are radioactive for millions of years. Fusion on the other hand does not create any long-lived radioactive nuclear waste. A fusion reactor produces helium, which is an inert gas.
  • Also, fusion energy production is not based on a chain reaction, as is fission. Plasma must be kept at very high temperatures with the support of external heating systems and confined by an external magnetic field. Every shift or change of the working configuration in the reactor causes the cooling of plasma or the loss of its containment; in such a case, the reactor would automatically come to a halt within a few seconds, since the process of energy production is arrested, with no effects taking place on the outside. For this reason, fusion reactors are considered to be inherently safe.
Q3. INCOIS (Indian National Centre for Ocean Information Services) operates under which of 
the following ministries?
  1. Ministry of Science & Technology
  2. Ministry of Earth Sciences
  3. Ministry of Environment, Forest & Climate Change
  4. Ministry of Defence
CHECK ANSWERS:-

Answer: b

Explanation:

  • Indian National Center for Ocean Information Services (INCOIS) is an autonomous organization of the Government of India, under the Ministry of Earth Sciences.
  • INCOIS is mandated to provide ocean information and advisory services to society, industry, government agencies and the scientific community through sustained ocean observations and through systematic and focused research.
Q4. Consider the following statements with regards to ASEAN:
  1. The motto of ASEAN is “One Vision, One Identity, One Community”.
  2. ASEAN was established with the signing of the ASEAN Declaration (Bangkok Declaration) in 1969 by its founding fathers – Indonesia, Malaysia, Philippines, Singapore and Thailand.
  3. India has a separate mission to ASEAN in Jakarta.

Choose the correct code:

  1. 1 & 2 only
  2. 2 & 3 only
  3. 1 & 3 only
  4. All of the above
CHECK ANSWERS:-

Answer: c

Explanation:

  • The ASEAN Declaration or Bangkok Declaration is the founding document of the Association of Southeast Asian Nations (ASEAN). It was signed in Bangkok in 1967 by the five ASEAN founding members, Indonesia, Malaysia, Philippines, Singapore, and Thailand.
  • India has set up a separate Mission to ASEAN and the EAS in Jakarta in April 2015 with a dedicated Ambassador to strengthen engagement.
Q5. Who among the following rulers advised his subjects through this inscription -  
''Whosoever praises his religious sect or blames other sects out of excessive devotion to 
his own sect, with the view of glorifying his own sect, he rather injures his own sect very 
severely." (UPSC 2020)
  1. Ashoka
  2. Samudragupta
  3. Harshavardhana
  4. Krishnadeva Raya
CHECK ANSWERS:-

Answer: a

Explanation:

  • The Major Rock Edicts of Ashoka refer to 14 separate major Edicts, which are significantly detailed and extensive.
  • 12th Rock Edict read: Beloved-of-the-Gods, King Piyadasi, honours both ascetics and the householders of all religions, and he honours them with gifts and honours of various kinds. But Beloved-of-the-Gods, King Piyadasi, does not value gifts and honours as much as he values this — that there should be growth in the essentials of all religions. Growth in essentials can be done in different ways, but all of them have as their root restraint in speech, that is, not praising one’s own religion, or condemning the religion of others without good cause. And if there is cause for criticism, it should be done in a mild way.

I. UPSC Mains Practice Questions

  1.  A wave of military coups has hit West Africa again and it not only threatens regional stability but also affects Indian interests. Comment. (250 words; 15 marks)[GS-2, International Relations]
  2. Critically examine the new Central Media Accreditation Guidelines. (250 words; 15 marks)[GS-2, Polity]

Read the previous CNA here.

CNA 10 Feb 2022:-Download PDF Here

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