15 Feb 2018: UPSC Exam Comprehensive News Analysis

TABLE OF CONTENTS

A. GS1 Related
B. GS2 Related
INTERNATIONAL RELATIONS
1. India offers support for reconstruction of Iraq
GOVERNANCE
1. SC may hear plea to take up two-child policy norm
C. GS3 Related
ECONOMY
1. Rs. 11,500 crore scam rocks PNB, stocks hit
2. Tribals produce high quality residue-free coffee
3. Harley tariff cut ‘not enough’: Trump
4. Centre targets industry to save power
5. India initiates review of anti-dumping duty on Chinese steel wheel imports
SECURITY
1. Centre studying plea to ban PFI
D. GS4 Related
E. Editorials
ECOLOGY AND ENVIRONMENT
1. ‘India State of Forest Report 2017’
ECONOMY
1. Improving tax compliance in India
INTERNATIONAL RELATIONS
1. PM Modi’s Palestine Visit
F. Prelims Fact
G. UPSC Prelims Practice Questions
H. UPSC Mains Practice Questions 

A. GS1 Related

Nothing here for today!!!

B. GS2 Related

Category: INTERNATIONAL RELATIONS

1. India offers support for reconstruction of Iraq

  • India has called for a comprehensive political settlement and reconciliation in Iraq at the International Conference for Reconstruction of Iraq in Kuwait, where major world powers are meeting to chalk out a plan of recovery for the country.
  • India will play its part in the reconstruction, and called for an end to global terrorism.

Collaborative approach

The conference being held in Iraq’s neighbour Kuwait has so far received promises of billions of dollars in the form of lines of credit from the international community and private investors, but reports say that Baghdad is yet to raise the resources for recovery from the destruction from years of foreign invasion and war with the Islamic State.

Pact against terror

  • India is currently campaigning for a comprehensive global convention against terrorism.
  • India assured Baghdad of support in the reconstruction of the country.
  • Since the outbreak of the war in 2003, India had frequently responded to the humanitarian needs in Iraq and contributed in several ways, including providing $10 million in aid towards the International Reconstruction Fund Facility for Iraq (IRFFI) for investments, reconstruction and development in Iraq.

Category: GOVERNANCE

1. SC may hear plea to take up two-child policy norm

  • The Supreme Court may hear a plea to direct the Centre to give a serious thought to the rise in population and adopt the two-child policy norm in family planning.
  • The PIL petition filed by activist Anupam Bajpai said couples who followed the policy should be rewarded with incentives, while those who violated the norm should be punished by withdrawal of government facilities and concessions.
  • The petition asked the court to direct the Centre to motivate the people of this country to follow the norm.
  • It said the pressure put on natural resources by the growing population has led to land degradation, dangerous levels of pollution, global warming and depletion of ground and surface water.
  • The rapid population growth and economic development in the country are degrading the environment through the uncontrolled growth of urbanisation and industrialisation, expansion and intensification of agriculture and destruction of the natural habitat.

C. GS3 Related

Category: ECONOMY

1. Rs. 11,500 crore scam rocks PNB, stocks hit

 

  • In what could be one of the biggest frauds in the Indian banking system, state-run lender Punjab National Bank (PNB) reported unauthorised transactions worth Rs. 11,500 crore in one of its branches in south Mumbai.
  • The Enforcement Directorate has registered a money laundering case in the matter, which involves Mumbai-based billionaire diamond merchant Nirav Modi. A case has been registered by the Central Bureau of Investigation against him and his business associates as well as a serving PNB official and a retired deputy manager of the bank.
  • In a communication to the stock exchanges on Wednesday morning, the country’s second largest lender said it had detected some unauthorised transactions in one of its branches for the benefit of a few select account holders with their apparent ‘connivance’.
  • The quantum of such transactions is $1771.69 million. The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land.
  • The bank’s stock plunged almost 10% through the day and its market capitalisation eroded by nearly Rs. 3,900 crore by the end of trading on the Bombay Stock Exchange.
  • The government also swung into action with the Finance Ministry asking all the banks to carry out a clean-up exercise. Financial Services Secretary Rajeev Kumar said the government will not tolerate ‘unclean banks’ while adding that the case dates back to 2011, when a fraudulent Letter of Undertaking (LoU) was submitted to PNB.
  • Reeling from a Rs. 11,500-crore fraud, Punjab National Bank reached out to alert other lenders to the perpetrators’ modus operandi, while at the same time apportioning a share of the blame to its competitors’ overseas branches.
  • In a letter dated February 12, to the CEOs of other banks, PNB said it was found that the SWIFT system had been misused by a junior-level branch official, who had fraudulently issued letters of undertaking (LoUs) on behalf of some companies for availing buyers’ credit from overseas branches of Indian banks.
  • The SWIFT network and identification codes are most commonly used for international wire transfers.
  • The companies were maintaining only current account with the branch and were not enjoying any fund or non-fund based limits. None of the transactions were routed through the CBS [core banking solution] system, thus avoiding early detection of fraudulent activity.
  • In one instance, LoUs were opened in favour of overseas branches of Indian banks for import of pearls for a period of one year, for which as per RBI norms, the total time period allowed is 90 days from the date of shipment.
  • This stipulation was overlooked by overseas branches of Indian banks, who are required to follow RBI guidelines.

2. Tribals produce high quality residue-free coffee

 

  • With no financial or technical support from anybody, Paliyar tribals living at Korankombu have been producing high quality, chemical and residue-free coffee using their traditional low-cost cultivation methods.
  • Poverty, no access to latest technologies and lack of funds to buy fertilizers and pesticides are a blessing in disguise for these people as they have been adopting their traditional practices to grow coffee in the reserve forest areas.
  • Adequate shade is necessary for plants to grow and for better yield. Pest attack is under control this year due to good showers.
  • They raise both Arabica and Robusta variety of coffee. While tall Robusta crops are grown near field bund, Arabica trees are planted inside the field.
  • They neither cut forest trees nor clean land to raise coffee. Natural coffee production does not affect the yield. They have harvested 600 kg of coffee in an acre.
  • ‘Shram dhan’ is still in vogue among tribal planters for harvesting.
  • The irony is that no coffee research station officials has visited the village so far. Forest officials and Q branch police are the only visitors to the village. Collector T.G. Vinay was the first top-level officer who visited the village to take part in a mass contact programme.
  • With no contact with outer world, they depend on big coffee estate owners to sell their high quality produce. They hand over their entire produce to the estate owners and receive whatever they offer for their survival. Even today, tuber available in the reserve forests is their only food.
  • Impressed by their work culture, the Forest Department has come forward to legalise their rights to use forest land for agriculture purpose under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.
  • More than 36 coffee planters’ families would benefit. Recognising their legal rights alone would not bring any fortune to them. Direct marketing support with brand label for their produce is the need of the hour.
  • The State and Central governments should recognise their product and popularise them throughout the world.

3. Harley tariff cut ‘not enough’: Trump

 

  • President Donald Trump cited the level of customs duty levied in India on Harley-Davidson motorcycle imports as an example of unfair trade and threatened to increase the import tariff on thousands and thousands of Indian motorcycles shipped to the U.S.
  • Trump had flagged Harley-Davidson in his maiden address to U.S. Congress in March 2017, and several administration officials have subsequently cited the issue as an example in discussions on the ‘America First’ policy.
  • The Indian government’s recent decision to reduce the tariff on high-end motorcycles from 75% to 50% was not enough, the U.S. president said and sought zero tax on the import of motorcycles, since the U.S does not impose any tariff on motorcycles from India.
  • After Mr. Trump had mentioned the tariff on high-end motorcycles in March, the Indian government had worked on reducing it.
  • On February 12, India announced a reduction in tariffs on high-end motorcycles, a move that was in contrast with duty increases on several items announced in this month’s Budget.
  • The Central Board of Excise and Customs (CBEC) announced the decision to slash customs duty on motorcycles to 50%. Earlier, it was up to 75% for new bikes with engines exceeding 800cc capacity and 100% for used motorcycles.

4. Centre targets industry to save power

 

  • After success with LED, EESL aims at 6,000 MW savings by creating market for energy-efficient motors
  • The Centre, through its company Energy Efficiency Services Limited (EESL), is planning to replicate its success in the LED space in the commercial sector by creating a market for low-cost, energy-efficient motors.
  • A large chunk of energy consumption goes to industry. About 30-34% of the total energy consumption goes to the industrial sector, which is a substantial amount.
  • And out of that, about 70% is electrical energy consumption. Most of this electricity consumption is due to the use of motor-driven systems.
  • Now, we can address the efficiency issues in the entire system or as at the sub-assembly level, which is at the motor level.
  • Using a combination of economies of scale and design efficiencies, EESL had so far been able to create motors in the capacity range of 1.1 KW to 22 KW that are 30% cheaper and result in an average of 15% lower electricity usage.
  • Apart from the price benefit, one of the other levers to create demand is the fact that the Department of Industrial Policy & Promotion has issued a quality assurance guidance that says that manufacturers will have to supply a minimum energy performance standard adhering to the ‘International Efficiency-2’ (IE-2) level.
  • The EESL motors are of the IE-3 level, which save between 7% to 23% of electricity compared with the current industry standard, depending on the application.
  • The present practice is of using non-IE motors. About 99% of the motors being used are IE-1 or non-IE.
  • Phase 1 of the nation-wide programme would seek to replace 1.2 lakh motors of the capacity of 1.1-22 KW, which would save 175 million units of electricity.
  • In the second phase, , two lakh motors would be replaced, including those of a capacity higher than 22 KW.
  • There are in total about 11 million motors that can be replaced, which works out to about 15 billion units of electricity being saved. This can lead to 6,000 MW of capacity reduction. But 11 million cannot be done overnight.

5. India initiates review of anti-dumping duty on Chinese steel wheel imports

 

  • In 2013, India imposed duty of up to $613 per tonne on the imports for 5 years.
  • India has initiated a review of anti-dumping duty on flat base steel wheels from China to take a call on the need for continued imposition of the duties in force.
  • The Directorate General of Anti-dumping and allied Duties (DGAD) has initiated the review investigation to examine whether the expiry of such duty (on imports of flat base steel wheels from China) is likely to lead to continuation or recurrence of dumping and injury to the domestic (Indian) industry.

Huge trade deficit

  • The move comes in the backdrop of India’s huge trade deficit with China ($51.1 billion in FY’17).
  • India had in 2013 imposed duty up to $613 per tonne on import of the product from China for five years.
  • As per the World Trade Organisation, if a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be dumping the product.
  • The global body has also said that the WTO agreement allows governments to act against dumping where there is genuine (“material”) injury to the competing domestic industry.

Category: SECURITY

1. Centre studying plea to ban PFI

 

  • Kerala has asked for a ban on the Popular Front of India (PFI), a Muslim organisation that is mainly operating out of the State.
  • The issue was discussed at the annual DGP meet held in Madhya Pradesh’s Tekanpur in January, where Kerala police chief Lokanath Behera gave a detailed presentation on the PFI’s growth and activities in the State.
  • The session was attended by Prime Minister Narendra Modi, Home Minister Rajnath Singh and other senior officials in the security establishment.
  • The Centre will collect more facts and evidence about the activities of the outfit before declaring it an unlawful association.
  • The PFI is under the scanner, but is not yet banned. On earlier occasions, organisations like SIMI (Students’ Islamic Movement of India) and Indian Mujahideen were discussed at DGP meets, but only after they were banned.
  • The DGP meet is an annual affair organised by the Intelligence Bureau where issues concerning internal security are discussed.
  • The National Investigation Agency had last year sent a detailed report to the Home Ministry and mentioned four cases where cadres of the PFI had either been charge-sheeted or convicted.

D. GS4 Related

Nothing here for today!!!

E. Editorials

Category: ECOLOGY AND ENVIRONMENT

1. ‘India State of Forest Report 2017’

 

  • The Environment Ministry’s ‘India State of Forest Report 2017’ based on satellite imagery, present a net positive balance in the form of 24.4% of India’s land area under some form of forest or tree cover
  • According to the report, forest and tree cover together registered a 1% rise over the previous estimate two years ago
  • However, according to some experts, such an estimate through remote sensing does not really provide deep insights into the integrity of the green areas
  • The ecosystem services performed by plantations that have a lot of trees grown for commercial purposes (as included in this report) cannot be equated with those of an undisturbed assemblage of plants, trees and animals
  • India retains very little of its ancient forests after centuries of pre-colonial and colonial exploitation
  • Forest restoration should, therefore, aid the return of native vegetation
  • Other findings of the report
  • Ministry’s report has calculated a cumulative loss of forests in Mizoram, Nagaland and Arunachal of nearly 1,200 sq km
  • The impact of such a terrible loss must be seen against the backdrop of the Northeast representing a global biodiversity hotspot
  • Dedicated efforts are required to protect the precious forests of the Northeast
  • India must review the programmes that it has been pursuing to revive forests
  • And move away from monoculture plantations that are favoured by even forest development corporations in many States

Category: ECONOMY

1. Improving tax compliance in India

 

  • In the recent budget, there was the introduction of the long-term capital gains (LTCG) tax, as well as significant tax breaks for senior citizens who earn interest income from fixed deposits.
  • However, measures related to tax compliance goes underreported.
  • The 2018-19 budget did not change the tax rate for individual taxpayers
  • But tax rationalization measures show a drive to endow enforcement agencies with more power and autonomy in scrutinizing returns
  • The provision that allowed tax officials to enter any premise and seek information has been extended to charitable organizations
  • This is perhaps due to reports that unreported cash was being hoarded at non-governmental organizations in light of demonetization
  • Furthermore, the budget also gives autonomy to senior tax officials
  • The budget authorizes the Joint Director, Deputy Director or the Assistant Director of Income Tax to call for information for the purpose of any enquiry without seeking approval of the higher authority
  • Such measures are meant to increase the likelihood of tax evaders getting caught and therefore increase the cost of compliance for those reporting false information in tax returns

Facts and Figures

  • The rate of tax compliance is low in India, with 36% of all individual taxpayers in the organized and unorganized sector filing tax returns
  • However, a closer look at recently released data suggests that tax compliance among individual taxpayers is at 11.6%
  • This, coupled with the low tax-to-GDP ratio, suggests that there is still much the government can do to widen the tax base

Challenges involved

  • Such measures increase the likelihood of being caught, but could be construed as a means of coercive power
  • Research shows that this tends to reduce trust in the tax authorities despite resulting in more enforced compliance
  • Studies in social psychology and behavioural economics suggest that lower trust levels in turn result in dishonesty
  • Thus, with an increase in enforcement powers, trust in government and tax authorities goes down
  • And there is a conducive environment for individuals to be dishonest in reporting their income on tax returns
  • Large-scale Central Board of Direct Taxes (CBDT) campaigns in recent years priming public goods and rewards for timely compliance can now be targeted to individual taxpayers by highlighting the salience of their value for public goods contribution

Category: INTERNATIONAL RELATIONS

1. PM Modi’s Palestine Visit

 

  • PM’s Palestine visit signals India’s strategy to grow ties with Israel and Palestine separately
  • It underlines the delicate balance New Delhi has adopted in this long-standing and seemingly intractable conflict
  • India, which has been a champion of the Palestinian people’s national aspirations, has built strong ties with Israel in recent years
  • Last year Mr. Modi became the first Indian Prime Minister to visit Israel
  • Israel is a vital source of defence equipment and agricultural technology for India
  • Israel faces political isolation internationally over its occupation of the Palestinian territories
  • Isreal does not have diplomatic ties with most countries in West Asia
  • India, which has vital interests in the Gulf and enjoys good ties with the region’s Muslim countries, cannot afford to be seen to be politically closer to Israel at the expense of ties with Palestinians
  • India has supported the creation of an independent Palestine within the 1967 borders, with East Jerusalem as its capital
  • According to this line, Israel would have to withdraw from the West Bank and East Jerusalem and either pull out the Jewish settlements or do a land-swap with the Palestinians as part of a final agreement
  • India’s support for the two-state solution remains, but it has now stopped short of the specifics related to borders

 Indo-Palestine relationship in the recent past

  • Late last year India voted along with a vast majority of member-states at the UN General Assembly against U.S. President Donald Trump’s decision to recognize Jerusalem as Israel’s capital
  • PM reiterated India’s support for the Palestinian cause during his recent visit
  • Both sides also signed a number of agreements for India-funded projects in the West Bank
  • India’s policy objective is clear and rooted in political realism
  • It wants to maintain the balance in its relationship with both Palestine and Israel, and strengthen bilateral ties with each separately

F. Prelims Fact

Nothing here for today!!!

G. Practice Questions for UPSC Prelims Exam

Question 1. Consider the following statements:
  1. RBI introduced a concept called Red Flagged Account (RFA), which are accounts where the suspicion of fraudulent activity is thrown up by the presence of one or more early warning signals.

  2. High-value electronic payments to unrelated parties have also been flagged off as a warning signal

Which of the following statements are correct?

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

See

Answer
Question 2. Consider the following statements about Kuwait International Conference for 
the Reconstruction of Iraq (KICRI):
  1. It will bring together a number of economically powerful countries, as well as regional and international organizations.

  2. It aims to rebuild Iraq after many years of war and conflicts.

Which of the following statements are correct?

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

See

Answer
Question 3. Consider the following statements about Comprehensive Convention on
International Terrorism (CCIT):
  1. The CCIT was proposed by India in 1996.

  2. Its objectives are to have a universal definition of terrorism that all 193-members of the UNGA will adopt into their own criminal law.

Which of the following statements are correct?

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

See

Answer
Question 4. Consider the following statements:
  1. Anti-dumping is additional duty levied by the importing country on specific goods.
  2. Countervailing duty refers to the international trade practice when manufacturers export a product to another country at a price below the domestic market price.

Which of the following statements are correct?

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

See

Answer

H. UPSC Mains Practice Questions

GS Paper II

  1. India recently has got access to strategic Oman port Duqm for military use. Also, provide details about similar agreements India has with other countries and explain its significance.

GS Paper III

  1. Our fiscal decisions should be marked by a push towards developing an economy with full employment and innovation, instead of seeking to chase down rating quarter by quarter. Critically Analyze.
Also, check previous Daily News Analysis

 

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