UPSC Exam: Comprehensive News Analysis – January 27

A. GS1 Related
CULTURE
1. Jaipur Literature Festival
B. GS2 Related
INTERNATIONAL AFFAIRS/BILATERAL RELATIONS
1. India should be pro-active: ASEAN
2. Visa lottery system to come to an end
C. GS3 Related
ECONOMY
1. Norms for Atal Pension relaxed by Govt
2. Impct of Higher oil prices
SECURITY
1. Armed Security forces numbers to be cut in Northeast
D. GS4 Related
E. Prelims Fact
F. UPSC Prelims Practice Questions
G. UPSC Mains Practice Questions 

A. GS1 Related

• The Jaipur Literature Festival is an annual literary festival which takes place in the Indian city of Jaipur each January
• Jaipur Literature Festival, now in its 11th year, is the largest literary festival in the world.
• The Festival’s core values remain unchanged; to serve as a democratic, non-aligned platform offering free and fair access.
• Every year, the Festival brings together a diverse mix of the world’s greatest writers, thinkers, humanitarians, politicians, business leaders, sports people and entertainers on one stage to champion the freedom to express and engage in thoughtful debate and dialogue.
• The Diggi Palace Hotel serves as the main venue of the festival with sessions held in the Hall of Audience and throughout the gardens of the Diggi Palace in the city centre.

 

B. GS2 Related

• All leaders at the just concluded ASEAN-India Commemorative Summit have urged India to play a proactive role in the Asia-Pacific region
• ASEAN is touted to become the fourth largest economic bloc in the world by 2030. As the region increasingly witnesses Chinese adventures in and around the Indian Ocean, it has become important for India to strengthen its relationship with other Asian economies.

 

Stats

• ASEAN today is one of the most thriving business and commerce centres globally.
• The region constitutes around 8 per cent of the global exports, and receives 15 per cent of world investments, while having almost 26 per cent in outward investments.
• It is also home to economies such as Cambodia, Laos, Myanmar and Vietnam, which are often touted as the last frontier economies in the world having exhibited more than 7 per cent growth consistently over the past few years.

 

What was discussed in the summit?

• During the summit, India announced 1,000 PhD fellowships in the IITs for students from the ASEAN countries.
• New Delhi also announced a dedicated training course in highway engineering, setting up of a virtual network of universities, and pilot projects to set up digital infrastructure at the ASEAN-India Commemorative Summit. Further, an ASEAN-India Startup festival will be held later this year.
• The participating countries also agreed to celebrate 2019 as the year of tourism for ASEAN nations
• Apart from countering ‘traditional and non-traditional’ threats to freedom of navigation, India plans to work closely with Malaysia and Indonesia on handling radicalisation. A conference on de-radicalisation will be held soon.

 

Advantages of close engagement with ASEAN

• Indian businesses could benefit by setting up production units in Asean, which could then act as a platform for them to enter China with whom Asean has an FTA. India could also benefit from Asean’s trade agreements with other economies in the region.
• Further, the ambition to have an Asean Economic Community would catapult the ten economies of $2.6 trillion into a single market and production base, providing Indian business unparalleled access to over 622 million people, almost double the populaton of the US.

 

Chinese presence

• There exists the continuous dominance and interference by China in some of the economies in the region as it gets desperate to win control in and around the subcontinent
• The entire Asean region is flooded with Chinese products. For example, in Cambodia, many government vehicles sport the tag, “Gifted by friends from China”.
  • India was instrumental in Cambodia securing freedom, but today finds it difficult to have a significant commercial presence in that country.
• Investments, soft loans, grants and assistance have been offered to most of the new frontier economies, making it difficult for countries such as India to do genuine business there.
  • Philippines expressed its allegiance to China over its age-old partner the US, which could have far-reaching strategic and defence spillovers.

 

Issue Area

• It is true that India’s mythology and culture find great resonance across the entire ASEAN region. However, repeated mention of the historical linkages appear rhetorical, and unable to add any real value as these economies anticipate a proactive and constructive commercial engagement with India.
• India’s commitment to trade and investment in ASEAN remains far from impressive. While around 10 per cent of India’s exports goes to ASEAN, we contribute only 2 per cent to ASEAN’s total import from across the globe. In fact, the balance of trade has always been in favour of ASEAN.

 

What should India do?

• The 3Cs, namely commerce, connectivity and culture, should ideally become the pivot of cooperation between ASEAN and India.
• Asean’s strength today lies in plantations, electronics and heavy machinery, while for India it is largely in computer services, light engineering and pharmaceuticals. Both sides needs to create appropriate frameworks to reduce both tariff and non-tariff barriers to widen the scope of trade, while looking at participation in the value chain.
• India in 2015 announced a ₹500-crore Project Development Fund, which was meant to encourage Indian businesses to set up ventures in CLMV countries (Cambodia, Laos Myanmar and Vietnam). The region offers a lot of opportunities for Indian entities in project exports, supply contracts, and creating utility infrastructure, apart from having manufacturing set-ups. It is important for India that such initiatives are realised soon, especially when it faces competition from an aggressive Chinese.
• India must strive to penetrate in select Asean economies where China is well entrenched, while increasing its influence in others where China is gaining a foothold. India must shrug off its traditional inertia and replicate the Chinese approach of offering the entire bouquet of its services to engage with the Asean economies. This would essentially mean avoiding procrastination and inordinate delay

 

Way forward

• However, India needs to be cautious while negotiating the Regional Comprehensive Economic Partnership (RCEP) with China being the big elephant in the room. Trade facilitation is another key area. It is important for Indian banks to set up operations in the region which would help Indian businesses.
• Aspects such as Mutual Recognition Agreement in the context of services should be ratified at the earliest keeping aside any apprehension on the impact that this could have on Asean’s services sectors which are largely confined to Singapore. India may also explore opportunity to be a part of the Asia-Pacific Economic Cooperation or APEC, and to the Chiang Mai Initiative Multilateralisation (CMIM) — a mechanism created in 2010 to help manage regional financial crisis.
• Both India and Asean would require to chisel their existing policies to facilitate trade and investment and, more importantly, maintain a sustainable environment for peace in the region.
• In this context, a benign and non-hegemonic engagement between India and Asean would yield sound economic results and would be a shot in arm as far as strategy is concerned.

 

• US President Donald Trump has proposed to end the visa lottery system in favor of reducing backlogs of highly-skilled workers. If passed by the Congress and signed into law, such a move is expected to significantly reduce the green card backlogs for highly skilled immigrants from India.
• The Diversity Immigrant Visa Programme, which the Trump administration wants to terminate, awards up to 50,000 individuals per year a visa for a green card, which allows permanent residency and is a path to US citizenship.

 

Why is Trump against this program?

• Trump is against this Program as this does not attract best of the brains to USA
• In recent past, several of the home grown terrorists including prime accused of New York terrorist attacks came either on diversity visa or chain migration.

Significance

• It will benefit Indian IT professionals who are currently having several decades of waiting period to get their Green Cards.

 

C. GS3 Related

• The Centre would now allow small finance banks and payment banks to offer the Atal Pension Yojana (APY), which is expected to significantly increase the coverage of the scheme.
• These new payments banks and small finance banks will provide a boost to the outreach of subscribers under APY
• In order to familiarise these small finance banks and payment banks with APY, the Pension Fund Regulatory and Development Authority (PFRDA) conducted an orientation meeting

What is the issue?

• Brent crude oil futures were trading at about $70 a barrel, marking a four-year high and a price increase of close to 6% since the start of the year.
• The rise in international prices has been particularly sharp given that oil had been selling at below $45 in June. This is a rally of about 55% in a matter of just months.
• Oil price dynamics have often been explained by changes in the supply outlook influenced by the decisions of major oil producers.
• Oil trading at $70 should offer some respite to traditional oil producers like the OPEC members, which have suffered the onslaught of U.S. shale producers.
• According to the IMF, last year, for instance, Saudi Arabia would break even on its budget with oil at $70. The recent spurt in oil prices, however, seems to be more the result of a weakening of the U.S. dollar than anything else.
• The dollar has been gradually weakening against major global currencies since the beginning of last year.
• But the trend was given a new push following comments by U.S. Treasury Secretary Steven Mnuchin in favour of a weak-dollar policy.
• At Davos this week, Mr. Mnuchin noted that a weaker dollar would be good for American trade.
• However, given that the U.S. is right in the middle of a monetary tightening cycle, it is unlikely that the dollar will continue to boost oil prices, unless the Federal Reserve slows the projected pace of interest rate increases.

 

What is the impact on India?

• As international oil prices head higher, India will have to brace itself for the economic risks of expensive energy.
• Consumers in India are already beginning to feel the pinch as petrol and diesel prices have hit multi-year highs.
• The retail selling price of both petrol and diesel in Delhi, for instance, has risen by close to Rs. 3 a litre since the beginning of 2018.
• The rise in domestic fuel prices is on expected lines given the policy of dynamic daily pricing of petrol and diesel adopted by the Centre.

What are the steps that India can take?

• But as rising oil prices put pressure on domestic consumers, the government will have to desist from resorting to subsidies to ease the pain.
• It should work towards rationalising taxes on petrol and diesel to bring down retail prices. This will help consumers without imposing an undue burden on the oil marketing companies.
• An even bigger risk posed by higher oil prices is to the government’s fiscal management. With the fiscal windfall from low oil prices likely to end for now, the government should think for the long term and make crucial tweaks to its hydrocarbon exploration and licensing policy to expedite oil discovery and production.
• Simultaneously, it must take a leaf from China’s book and actively support Indian energy firms’ bids for overseas oilfields.

 

• The Home Ministry will conduct a “security audit” in the Northeast and chalk out a plan to reduce the number of Central armed police force personnel deployed.

Stats

• The number of incidents in terms of insurgency has significantly reduced to 308 in 2017, the lowest since 1997.
• As the incidents have dropped by 85%, the deployment of central forces will be reduced and more responsibility will be given to Local Police
• A report presented said the abductions were down by 36% in 2017, compared with the previous year.
• 168 incidents were reported in 2016, and the number fell to 102 in 2017.

Context

• A meeting was chaired by Home Minister Rajnath Singh and it was decided that certain “tweaking” was required as far as the deployment of the Central forces was concerned.
• Imposition of the Armed Forces (Special Powers) Act was discussed in the meeting but “no considered view” was taken.

 

D. GS4 Related

E. Prelims Fact

F. Practice Questions for UPSC Prelims Exam

Question 1. Mukhya Mantri Bhavantar Bhugtan Yojana was a scheme by which of the following State governments?

Question 2. With respect to Atal Pension Yojana, consider the following statements

Question 3. Consider the following statements regarding AFSPA

Question 4. The Govt envisages to implement a project called Swayam Prabha to

G. UPSC Mains Practice Questions

GS Paper II

Also, check previous Daily News Analysis