07 Jan 2022: UPSC Exam Comprehensive News Analysis

CNA 07 Jan 2022:- Download PDF Here

TABLE OF CONTENTS

A. GS 1 Related
B. GS 2 Related
GOVERNANCE
1. Use drones more effectively: Civil Aviation Ministry
INTERNATIONAL RELATIONS
1. Sri Lanka’s looming economic crisis
2. The status of the Nuclear Non-Proliferation Treaty
3. Russia-led troops deployed in Kazakhstan
C. GS 3 Related
D. GS 4 Related
E. Editorials
HEALTH
1. Extinguishing the tobacco industry’s main narrative
F. Prelims Facts
1. HAL jet trainer demonstrates its prowess
G. Tidbits
1. First open rock museum inaugurated
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions
FIP Magazine

Category: INTERNATIONAL RELATIONS

1. Sri Lanka’s looming economic crisis

Syllabus: India and its Neighbourhood – Relations

Mains: Sri Lanka’s situation of crisis and how India can help

Context

Sri Lanka’s external reserves dropped to $1.6 billion in November 2021, triggering panic among different sectors. 

Details

  • Sri Lanka’s external debt is dominated by market borrowings and international sovereign bonds constituting half of the country’s total foreign debt. 
  • The American credit rating agency “Fitch” downgraded the nation to a ‘CC’ rating, which is the lowest rating.

Background

  • Sri Lanka has been witnessing an economic crisis since August 2021.
  • Sri Lanka’s foreign reserve which was already in peril due to economic troubles and 2019’s Easter Sunday terror attacks are being further drained after the pandemic.
  • The critical aspects of the Sri Lankan economy involving exports (tea and garments), labour remittances and tourism sectors have been badly hit.
  • Sri Lanka’s total foreign debt is approximately $55 billion, which accounts for nearly 80% of its GDP. 
  • Sri Lanka has an outstanding payment of about $960 million to India.
  • Sri Lanka’s external reserves have now dropped to $1.6 billion in November 2021.
  • The current economic meltdown, marked by a continuing dollar crisis, rising living costs, and food shortage is threatening the prospects of the country.

Challenges

  • The repayment of foreign debt will lead to a situation wherein no dollars will be available to import essentials like food, fuel, or medical supplies.
  • Sri Lanka’s external debt that is already dominated by Chinese loans, will have to again turn to China for help with debt repayment, as it did in 2014.
  • This could make Sri Lanka fall prey to China’s debt-trap diplomacy.
  • The country is in need of importing more food, as the agricultural production dropped by half post the Government’s overnight switch to organic farming in May 2021. 
  • There is a shortage of milk powder and other essentials in the stores which are largely imported.
  • There is an acute shortage of LPG cylinders, following a spate of explosions reportedly owing to a change in the chemical composition of the gas.

Sri Lanka’s response

  • The Governor of the Central Bank of Sri Lanka confirmed that the country’s foreign reserves stood at $3.1 billion at year-end, however, this includes the $1.5 billion currency swap by China.
  • The Governor also said that the Central Bank has earmarked $500 million to repay an international sovereign bond maturing on January 18. 
  • The Government has expressed confidence about being able to fulfil its debt obligations this year, despite its Balance of Payments (BoP) crisis.
  • The Finance Minister also announced a $1.2 billion relief package.

Options for India

  • Irrespective of China’s massive investments in Sri Lanka, India has continued to be one of the largest trading partners for Sri Lanka and they have been heavily dependent on Indian tourists and investments. 
  • Sri Lanka also needs India as it provides vital services in the areas of education, healthcare and even pilgrimage. So India needs to leverage this unique advantage to help overcome the crisis in Sri Lanka without affecting its sovereignty.
  • India could postpone the deadline of repayment of outstanding debt that has been lent to Srilanka.
  • Further, India could assist by way of debt freeze, currency swap and by providing emergency Lines of Credit to meet its essential imports.
  • As Sri Lanka is an important part of India’s ‘Neighbourhood First policy”, India has to stand by the people of Sri Lanka in this dire situation.

Way Forward

  • The best option for Sri Lanka would be to negotiate a solution with the International Monetary Fund (IMF) to restructure its external debt.
  • IMF agreements usually come with specific conditions for the borrower.
  • Greater transparency has to be maintained on how the money has been spent. This would help gain the trust of the common people.
  • More focus and efforts should be concentrated on investments in social services and welfare programmes, that would help counter the aggravating poverty since the pandemic.

Also read: India – Sri Lanka relations

Nut Graf
Given that Sri Lanka is an important part of India’s ‘neighbourhood first’ policy, India should not hesitate to help its southern neighbour when it is undergoing an economic crisis, since this can be a good opportunity to strengthen bilateral ties and counter growing Chinese influence in the island nation.

2. The status of the Nuclear Non-Proliferation Treaty

Syllabus: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Mains: Nuclear Proliferation Treaty and its significance to India.

Context:
The five global nuclear powers, China, Russia, U.S., U.K., and France, pledged to prevent atomic weapons from spreading and avoid nuclear conflict. The joint statement was issued after the latest review of the Nuclear Non-Proliferation Treaty (NPT), which first came into force in 1970.

Read more about Nuclear Non-Proliferation Treaty (NPT).

Latest Developments

  • The hegemonic rise of China has led other countries within its immediate sphere of geographical influence to wonder if they need to develop strategic capabilities to safeguard their sovereignty. 
  • The current situation with regard to Ukraine and Russia is also posing a challenge to the treaty. 
  • Australia, through AUKUS, seems to be on a path to acquire nuclear capabilities for its naval fleet, to counter China, the ramifications of which could be severe.
  • The world’s current stockpile stands at,
    • China: 350
    • France: Around 290
    • Russia: Around 6,257
    • The U.K.: Around 225
    • The U.S: Around 5,600
    • Pakistan: About 165
    • India: About 160
    • Israel: 90
    • North Korea: 45 

Conclusion

With Australia already on the road to acquiring nuclear capabilities, it stands to reason that other nations would work towards developing or acquiring nuclear weapons. This could, in principle, also re-ignite another arms race. The P5’s joint statement, ‘Preventing Nuclear War and Avoiding Arms Races’, affirms non-offensive uses of nuclear weapons and commits to the NPT agreement.

The impetus is on the major powers to stay on the path which the NPT has paved and signal commitment through its actions towards putting an end to the arms race and hopefully complete disarmament.

Nut Graf
At a time when the latest geopolitical developments raise fear of igniting another arms race, the P5’s joint statement affirming non-offensive usage of nuclear power and commitment to the NPT assumes great significance.

3. Russia-led troops deployed in Kazakhstan

Syllabus: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Mains: The political crisis in Kazakhstan and its latest developments.

Context:

Russian led forces have dispatched troops to help put an end to the mounting unrest in Kazakhstan.

Details:

  • The protests in Kazakhstan triggered by rising fuel prices have now transformed into anti-government riots.
  • Kazakhstan, located between Russia and China and also sharing borders with three other ex-Soviet republics, is the largest economy in Central Asia, with rich hydrocarbon and metal deposits. 
  • Strategically, it links the large and fast-growing markets of China and South Asia with those of Russia and Europe by road, rail, and a port on the Caspian Sea. It has described itself as the buckle in China’s huge ‘Belt and Road‘ trade project.

Latest Developments

  • The uprisings began in the oil-rich western regions against the removal of state price caps on New Year’s Day for butane and propane, which are often referred to as ‘road fuels for the poor’ due to their low cost.
  • The President of Kazakhstan appealed to the Russian dominated Collective Security Treaty Organisation (CSTO), which includes five other ex-Soviet states, to assist them in restoring order.
  • A Moscow-led military alliance dispatched troops to help put an end to the mounting unrest in Kazakhstan.
  • The United States is said to be closely monitoring reports of peacekeeping forces of Russia and will also be watching for any violation of human rights.
Nut Graf
Protests over fuel price rise have spiralled into anti-government protests in what is considered the most stable of the Central Asian republics. Kazakhs are venting out long-held grievances against their government and unless these are heard, there is a fear of this unrest spilling out into the larger Central Asian region.

E. Editorials

Category: HEALTH

1. Extinguishing the tobacco industry’s main narrative

Syllabus: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

Mains: Issues with India’s Tobacco Industries and the way forward.

Context

Tobacco intake kills more than 13 lakh people in India every year. The annual economic burden from tobacco usage is estimated to be ₹177,340 crore which is more than 1% of India’s GDP. The illicit trade in tobacco products is also on the rise.

Details

  • India is the second largest consumer and producer of tobacco-based products.
  • There are approximately 200 million tobacco consumers in India.
  • In India, bidis, chewing tobacco and khaini form 89% of consumption as against 11% for cigarettes.
  • About 28.6% of Indian adults use tobacco.
  • Close to 27% of all cancers in India are due to tobacco intake.
  • The share of cigarettes in the total tobacco consumption in India is about 20%, compared with 85% globally.
  • The annual per capita consumption of all tobacco products in India stands at 0.83 kg, about 45% of the world average of 1.85 kg.
  • The per capita consumption in cigarette form is one-tenth of world levels i.e. 101 cigarettes per annum compared to a global average of 1,030.

Illicit trade in Tobacco

According to,

  • Illicit cigarette sales in Indian cities, 2018: This surveyed the empty cigarette packs collected from retail outlets across different cities in India and it estimated that illicit cigarettes constitute about 2.7% of the market. 
  • Estimating illicit cigarette consumption using tax-gap approach, 2020: Used the tax-gap analysis to estimate that the percentage of illicit cigarettes was 5.1% in 2009-10 and 6.6% in 2016-17. 
  • The tobacco industry, led by ITC Limited, has maintained that the illegal cigarette trade accounts for as much as 25% of the cigarette market in India.
  • Tobacco Institute of India report said that the illicit cigarette volume in India has grown by 44% from 2011 to 2019.

Impact on Economy

  • The economic burden from tobacco use in India has increased by 22% over the period between 2011 to 2017.
  • There has been a 3% real decline in Goods and Services Tax (GST) revenues from tobacco products between the years 2020 and 2021.
  • The share of central excise duties in the total tobacco taxes has decreased from 54% to 8% for cigarettes, 17% to 1% for bidis, and 59% to 11% for smokeless tobacco products, on average, from 2017 to 2021.

Existing policy on Tobacco products

  • Tobacco products are categorised as sin goods or demerit goods. Therefore, it has become imperative for policymakers to devise measures to effectively curb their use.
  • Over the years, governments have resorted to a mix of policies which range from monitoring the pricing and taxation regime of these products to the focus gradually shifting towards awareness campaigns highlighting the deadly effects of tobacco use, regulatory control laws pertaining to packaging and labelling as well as shaming and prohibiting its use in public places.

Read more about the Taxation policy on Tobacco Products.

Way Forward

  • Tax measures are the most cost-effective measures to reduce the demand for tobacco products. When tobacco products become more expensive, people either quit using them or use them less.
  • Public health groups, along with economists and doctors, have urged the government to increase excise duty on all tobacco products in the Union Budget of 2022-23 to generate additional revenue.
  • Increasing excise on all tobacco products can be a very effective policy measure to address the immediate need to raise revenue by the central government as well as reducing tobacco use and related diseases.
  • Several countries in the world have high excise taxes along with GST or sales tax and they are continuously being revised.
  • India had no significant tax increases on any of the tobacco products for the past four years since the introduction of GST in 2017 because of which tobacco products have become more affordable as shown in recent studies.

Read more about WHO Framework Convention on Tobacco Control.

Conclusion

Eliminating all forms of illicit trade in tobacco products is one of the major objectives of the Protocol to Eliminate Illicit Trade in Tobacco under the World Health Organization’s Framework Convention on Tobacco Control. India has ratified the World Health Organization Protocol and it should now show leadership in implementing the measures to effectively address even the relatively lower levels of illicit trade in India.

Nut Graf
Succumbing to pressure from the tobacco industry and not increasing taxes on this product can only hamper efforts to curb the use of tobacco and related products which have huge health and economic costs for the country.

F. Prelims Facts

1. HAL jet trainer demonstrates its prowess

Context:

  • The Intermediate Jet Trainer (IJT), designed and developed by Hindustan Aeronautics Ltd. (HAL) for Stage 2 training of Indian Air Force (IAF) pilots, has successfully demonstrated the capability to carry out six turn spins, displaying an important requirement for the platform.
  • IJTs are to replace the ageing “Kirans” of the IAF fleet.

Trainer Aircrafts developed by HAL

  • HTT-40 Basic Trainer Aircraft (BTA)
  • Intermediate Jet Trainer (IJT)
  • Hawk Advanced Jet Trainer (AJT) 
  • Lead-in Fighter Trainer (LIFT)

G. Tidbits

1. First open rock museum inaugurated

  • Union Minister of State for Science & Technology inaugurated India’s first open rock museum on the campus of the CSIR-National Geophysical Research Institute (NGRI) in Hyderabad.
  • About 46 different types of rocks of ages ranging from 3.3 billion years to around 55 million years have been displayed in a garden with descriptions giving their economic and scientific importance.

H. UPSC Prelims Practice Questions

Q1. With respect to the Foreign Contribution Regulation Act (FCRA), which of the following 
statements is/are correct?
  1. FCRA is implemented by the Ministry of Finance.
  2. Contributions made by a citizen of India or by the PIO card holders living in another country, from his/her personal savings, through the normal banking channels, are not treated as foreign contribution.
  3. An association can invest the foreign contribution received by it in the profitable ventures and can utilise the proceeds for welfare activities.

Options:

  1. 1 and 2 only
  2. 2 and 3 only
  3. 3 only
  4. None 
CHECK ANSWERS:-

Answer: d

Explanation:

  • The Statement 1 is not correct. FCRA is implemented by the Ministry of Home Affairs.
  • The Statement 2 is not correct. Contributions made by a citizen of India living in another country (i.e., Non-Resident Indian), from his personal savings, through the normal banking channels, are not treated as foreign contributions. However, the PIO Card holders are excluded from the list.
  • The Statement 3 is not correct. The association should utilize such funds for the welfare purpose or activities for which it is received. The utilization should be in line with the objectives of the association. However, foreign contributions can be utilized for self-sustaining activities, not meant for commercial purposes.
Q2. Consider the following statements:
  1. The Election Commission of India imposes limits on the expenditure incurred by a candidate and the political parties, on their election campaign.
  2. If a candidate has not filed his/her statement of expenses within the required time period, the Election Commission after consultation with the President, has the authority to declare him/her to be disqualified for a period of three years.
  3. A candidate is not allowed to spend more than the maximum limit of election expenses.

Which of the above statements is/are incorrect?

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

Answer: a

Explanation:

  • Statement 1 is incorrect. The Election Commission of India imposes limits on the expenditure incurred by a candidate, but not political parties, on their election campaign.
  • Statement 2 is incorrect. Candidates have to keep a separate account and file the election expenses with the poll watchdog under the law. An incorrect account or expenditure beyond the cap can lead to disqualification for up to three years under Section 10A of the Representation of the People Act, 1951.
  • Statement 3 is correct. A candidate is not allowed to spend more than the maximum limit of election expenses.
Q3. Keoladeo National Park is in the state of
  1. Rajasthan
  2. Madhya Pradesh
  3. Gujarat
  4. Himachal Pradesh 
CHECK ANSWERS:-

Answer: a

Explanation: 

  • Keoladeo National Park, located in the State of Rajasthan, is an important wintering ground of Palaearctic migratory waterfowl and is renowned for its large congregation of non-migratory resident breeding birds. 
  • It is the only park in India that is completely enclosed by a 2 m high boundary wall that minimises the possibilities of any encroachment and biotic disturbances.
  • The park was the only known wintering site of the central population of the critically endangered Siberian Crane, and also serves as a wintering area for other globally threatened species such as the Greater Spotted Eagle and Imperial Eagle.
Q4. Which of the following countries is/are part of the Collective Security Treaty 
Organization (CTSO)?
  1. Armenia
  2. Belarus
  3. Kazakhstan 
  4. Kyrgyzstan
  5. Russia
  6. Tajikistan

Options:

  1. 1, 2, 5 and 6 only
  2. 2, 3, 4 and 5 only
  3. 1, 2, 3, 4 and 6 only
  4. 1, 2, 3, 4, 5 and 6
CHECK ANSWERS:-

Answer: d

Explanation: 

  • The Collective Security Treaty Organization originates from the conclusion of the Collective Security Treaty, which was signed in Tashkent (Uzbekistan) on May 15, 1992.
  • The treaty entered into force upon completion of the national ratification procedures on April 20, 1994.
  • The Organization today includes: the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation and the Republic of Tajikistan
  • Article 4 of the Treaty states: “If one of the States Parties is subjected to aggression by any state or group of states, then this will be considered as aggression against all States Parties to this Treaty. In the event of an act of aggression against any of the participating States, all other participating States will provide him with the necessary assistance, including military, and will also provide support at their disposal in exercising the right to collective defense in accordance with Article 51 of the UN Charter. ”
Q5. With reference to ‘Asia Pacific Ministerial Conference on Housing and Urban Development 
(APMCHUD)’, consider the following statements: (UPSC CSE 2017)
  1. The first APMCHUD was held in India in 2006 on the theme ‘Emerging Urban Forms — Policy  Responses and Governance Structure’.
  2. India hosts all the Annual Ministerial Conferences in partnership with ADB, APEC and ASEAN.

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
CHECK ANSWERS:-

Answer: d

Explanation: 

  • Statement 1 is not correct, the first APMCHUD conference was held in New Delhi in 2006, with the theme, “A vision for sustainable urbanisation in the Asia-Pacific by 2020”, was aimed at galvanizing government action and political commitment at the regional level to improve the lives of 581 million slum dwellers.
  • Statement 2 is not correct, the conference can be hosted by any of the member countries whose proposal to host needs to be approved by the members of APMCHUD in the previous conference.

I. UPSC Mains Practice Questions

  1. Though it started as an initiative to protect farmers against price fluctuations, MSP has now become a point of contention, leading to several protests. List out the deficiencies in the MSP system and suggest possible remedies. (250 words; 15 marks)[GS-3, Agriculture]
  2. Throw light on the problem of tobacco consumption in India and the possible ways for the government to curb its consumption. (250 words; 15 marks)[GS-2, Health]

Read the previous CNA here.

CNA 07 Jan 2022:- Download PDF Here

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