08 Jun 2018: UPSC Exam Comprehensive News Analysis

A. GS1 Related

B. GS2 Related

• Singapore Minister of Trade and Industry S. Iswaran expressed confidence that significant progress would be achieved in the construction of Amaravati in six months, starting with the seed capital, consequent to the signing of two MoUs.
• The MoUs are the Concession and Development Agreement (A concession or concession agreement is a grant of rights, land or property by a government, local authority, corporation, individual or other legal entity.) and the Shareholder Agreement (SHA is a contract between the shareholders of a corporation).
• The SHA was signed by the Amaravati Development Corporation (ADC) and Singapore Amaravati Investment Holdings Ltd. (SAIH) and the CADA by the AP-Capital Region Development Authority, Amaravati Development Partners (ADC and Ascendas-Singbridge & Sembcorp Industries) and SAIH.
• Iswaran said these pacts were essential to legally secure the many visions and plans and contracts worked out during the journey so far and they were part of the broader engagement between the Singapore and A.P. governments.
• Naidu said with the signing of the MoUs, the zero date had begun and development would be visible in the seed capital over the next 3 months to one year.

• A team of 20 scientists, along with a key vessel of the United States National Oceanic and Atmospheric Administration (NOAA), is arriving in Goa, marking the expansion of U.S.-Indian collaboration in the study of the Indian Ocean.
• Subtle changes on the surface and deep below in the western Indian Ocean have a significant impact on weather in India in days, and in the United States, two to four weeks later.
• Jointly collecting data on changes in the current, temperature, salinity and other parameters is a less known component of the Indo-Pacific cooperation between India and America.
• NOAA’s ship Ronald H Brown is on a global expedition on the lines of a similar ocean expedition 50 years ago.
• NOAA scientists will work with Indian scientists at the Second India-United States Colloquium on Earth Observations and Sciences for Society and Economy from June 11 to 13.

The Madden-Julian Oscillation

• The phenomenon called the Madden-Julian Oscillation, discovered in the 1970s, starts when water vapor rises out of the Indian Ocean every 30 to 60 days to create a major ocean storm that travels west to east from near Seychelles off Africa toward India, crosses into the tropical Pacific Ocean and eventually affects weather patterns across America.
• Scientists are advancing the knowledge of this phenomenon with new tools and models.
• El Nino was also discovered after putting these buoys in the Pacific Ocean.

• The government is not yet ready to sign the Hague treaty on inter-country abduction of children by parents fleeing a bad marriage.
• There has been immense pressure from the U.S. on the government to sign the treaty though the government has long held the view that the decision could lead to harassment of women escaping marital discord or domestic violence.

The Hague Convention

• The Hague Convention is a multi-national treaty that seeks to protect children wrongfully removed by one of the parents from the custody of the other parent.

Committee report

• A committee constituted by the Centre to examine legal issues involved in international parental abduction submitted its report in April, opposing a central provision of the Hague Convention.
• It said that the criterion of habitual residence of the child, which is used to determine whether the child was wrongfully removed by a parent as well as to seek the return of the child to the country of habitual residence, was not in the best interest of the child.
• It also recommended setting up of a Child Removal Disputes Resolution Authority to act as a nodal body to decide on the custody of the child as well as a model law to deal with such disputes.
• However, the government is contemplating assigning the National Commission for Protection of Children the responsibility to adjudicate on such cases along with a judicial expert.
• While the government had decided in late 2016 that it will not sign the Hague treaty, later it appointed a panel to prepare a report indicating that there was some rethinking within the government on the matter.

Way forward

• Safeguards need to be in place before signing the treaty.
• It has to be a political decision that the government needs to take.
• The government has sent the report to the Ministry of External Affairs and other Ministries and are waiting for a reaction from them.

C. GS3 Related

• The UN India Business Forum and the Women Entrepreneurial Platform of NITI Aayog formed a consortium to reduce gender disparities in start-up investments by providing mentorship and networking opportunities and accelerating financial and market linkages for women entrepreneurs.
• UN India-NITI Aayog Investor Consortium for Women Entrepreneurs will bring together key ecosystem stakeholders, including venture capitalists and impact investors, international donor and funding agencies, private sector partners and state governments.
• The consortium aims to strengthen women’s entrepreneurship by creating an enabling ecosystem for investments.
• Women entrepreneurs will be identified through key partners, including WEP, UN Women, and UNDP.
• The consortium secretariat will then connect entrepreneurs with relevant members.
• In full potential scenario when women participate in the economy, equally to men, it could add $2.9 trillion to India’s GDP by 2025.
• However, Indian women entrepreneurs continue to face challenges in accessing investors and raising capital.
• Sustainable development has the potential to open up markets worth $12 trillion around the world by 2030.
• It is estimated that up to $5 trillion is needed in a year to implement UN’s Sustainable Development Goals (SDGs) worldwide.
• Return on investments on implementing the SDGs could be about $30 billion a year.
• Key partners for finance include HDFC, ICICI Bank, State Bank of India, Ambuja Cement, Tata Housing and LinkedIn while for health and nutrition companies such as Cadila Pharmaceuticals, Philips India, and Tata Chemicals have enrolled.

2. ‘PSB recap plan inadequate for growth’

• The government’s recapitalisation plan for the 21 public sector banks (PSBs) will not be sufficient to support credit growth but will take care of the provisioning requirement for bad loans, according to Moody’s.
• The PSBs capital shortfalls are larger than the scale that the government had expected when it announced the recapitalisation in October 2017, mainly because the banks have failed to raise additional capital from the market and it may be difficult for them to raise more capital given the substantial decline in their share prices since the beginning of 2018.

Background

• In October last, the Centre had announced the infusion of Rs.2.11 lakh crore in PSBs over two years, of which Rs.1.35 lakh crore was to come through recapitalisation bonds.
• The government will infuse Rs.65,000 crore in this financial year, following the Rs.90,000 crore infusion made in FY18.

Issues

• Moreover, the capacity of these 21 banks to generate internal capital has deteriorated because of their weak financial performance and a sharp increase in government bond yields, which hurt their investment income.
• In addition, the discovery of the ₹14,400 crore fraud in Punjab National Bank in February this year increased the need for additional capital for the lender.
• Moody’s said all PSBs will see their Common Equity Tier 1 (Tier 1 commoncapital ratio is a measurement of a bank’s core equity capital compared with its total risk-weighted assets that signifies a bank’s financial strength) ratios exceeding the 8% minimum by March 2019, following the capital infusion, though this assumes overall credit growth for the PSBs of a modest 6%-8% in the next year.
• The relatively stronger banks will have room to grow, but the weaker ones will continue to shrink their balance sheets to conserve capital.
• Moody’s Indian affiliate ICRA said that with the accelerated recognition of stressed assets during FY18, the asset quality problems of the banking sector had peaked in March 2018.
• ICRA said further additions to gross non-performing assets will decline with fresh slippages falling to about 3% in FY19 compared with 7.1% in FY18 and 5.5% in FY2017.
• The regulatory push for the recognition and resolution of stressed assets stepped up further during Q4FY2018 as the RBI announced the revised framework for the resolution of stressed assets during February 2018.

• The Defence Acquisition Council (DAC) approved procurement of high powered radars for the Indian Air Force and air cushion vehicles for the Army and the Coast Guard together worth over Rs.5,500 crore.
• The 12 high power radars will be procured indigenously under the ‘Buy (Indian) IDDM’ category.

Defence Procurement Procedure

• Defence Procurement Procedure (DPP)-2016 came into effect from April 2016 and focuses on institutionalising, streamlining and simplifying defence procurement procedure to give a boost to Make in India initiative of the Government of India, by promoting indigenous design, development and manufacturing of defence equipment, platforms, systems and sub-systems.
• The key features of revised DPP, promoting Make in India include:
  1. A new category of procurement ‘Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)}’ had been introduced in Defence Procurement Procedure-2016 and the same has been accorded top most priority for procurement of capital equipment.
  2. Preference has been accorded to ‘Buy (Indian)’ and ‘Buy and Make (Indian)’ categories of capital acquisition over ‘Buy (Global)’ & ‘Buy & Make (Global)’ categories.
  3. Requirement of Indigenous content has been enhanced/rationalised for various categories of capital acquisition.
  4. The ‘Make’ Procedure has been simplified with provisions for funding of 90 % of development cost by the government to Indian industry and reserving projects not exceeding development cost of Rs. 10 crores (government funded) and Rs. 3 crores (industry funded) for MSMEs.

Radars

• The radars will provide long-range medium and high-altitude radar cover with the capability to detect and track high-speed targets following parabolic trajectories.
• Technologically superior, the radars will have the capability to scan 360 degrees without mechanical rotation of Antenna and will operate on a 24×7 basis with minimal maintenance requirement.

ACVs

• In the other deal, air cushion vehicles (ACVs are designed to travel close to but above ground or water) to be procured from an Indian shipyard will enable travel at very high speeds over shallow water, sand banks, mud flats and swamps which are non-navigable by boats and small crafts due to draught restrictions or uncharted depths.

Background

• The DAC meeting, chaired by Defence Minister Nirmala Sitharaman, was scheduled to discuss the broad contours of the Navy’s ambitious project to build six advanced submarines under the multi-billion P-75 (I) programme.

D. GS4 Related

E. Editorials

Context

• India is in need of a massive new effort to catalogue, map and monitor all life forms
• Life is a unique asset of our planet. India is blessed with an extraordinary richness of life.
• A myriad of unusual and exquisite species occur in the countless ecosystems spread across our vast lands, rivers and oceans.
• Woven into this rich fabric of biodiversity is a stunningly vibrant and colourful tapestry of peoples, cultures and traditions.

Loss of life forms

• This unique bio-cultural tapestry has been resilient to change for centuries, but with the unleashing of unprecedented economic and environmental forces, it is now subject to increasing wear and tear.
• Ultimately, these forces could even destroy our tapestry of life, cultures and traditions — and in the process, ourselves.
• Biologists all over the world have been documenting the ongoing loss of life forms. Modern extinction rates are more than a thousand times greater than the rates of the geological past.
• We have seen our forests degrade and diminish, our rivers vanish, and our air become unfit to breathe.
• We constantly talk about cleaning up the Ganga, as if it were the sole festering wound, but we overlook that the whole tapestry covering our body is slowly disintegrating. All life requires nurturing.

Facts

• In recent decades, populations of more than 40% of large mammals have declined and insect biomass has decreased by more than 75%. Natural habitats all over the world have shrunk. For these losses, our country ranks higher than most.
• We have entered what scientists are calling the Anthropocene era — a new period in earth’s history, when humans have begun to impact our environment at the global scale.

Significance of Half Earth

• To protect life on earth, the famous American biologist E.O. Wilson has described an ambitious project he calls “Half-Earth”.
• He calls for formally protecting 50% of the earth’s land surface in order to conserve our rapidly disappearing natural heritage. Others have rightly argued that in the past conservation efforts have often disregarded issues of social justice and equity.
• Thus the goals of “Half-Earth” should not compromise the rights of indigenous people.
• Clearly, we must do more to safeguard biodiversity and the ecosystem services that support all human endeavours.

Efforts by India’s Forest policy

• India’s forest policy calls for forests to cover almost a third of the country, and if we include other natural systems such as grasslands and wetlands, the area to be protected could amount to almost 40%. In a populous country such as ours, that would be a huge achievement.
• Some areas could be fully protected while others might be managed by stakeholders for sustainable use and enrichment of biodiversity.
• We need a massive new effort to catalogue, map, and monitor life, using fundamentally different approaches.
• Current efforts to map India’s biodiversity are largely restricted to forestlands, while plans for species monitoring are even more inadequate.
• We have the digital tools and artificial intelligence today to efficiently catalogue, map, and monitor life’s fabric in a manner never before attempted — and with the potential engagement of millions of students and citizens.
• This mapping effort would include not only all life, including cultures, ethnicities, and dialects, but also the use of biodiversity and its vulnerability to changes in land use and climate.

New ideas

• Cataloguing, mapping and monitoring life will give us a glimpse of what we have, and what is most vulnerable. But how do we reconcile the growing needs of society with the need to sustain our vanishing natural heritage?
• We still have only the most basic understanding of how society interacts with biodiversity, and how economic, social and political forces can erode the biodiversity that ultimately sustains us.
• We are just beginning to learn how myriad species interact to drive our ecosystems, and how these systems, in turn, maintain our soils, water and breathable air.
• Wild pollinators, the microbiota of soils, and the many enemies of agricultural pests — these and many other natural services underpin our agricultural productivity and mitigate climate change.
• In many of our academic institutions, the ‘Life Sciences’ are still restricted largely to the study of cells and molecules — life at microscopic and submicroscopic levels. In such cases, the words Life Sciences sadly misrepresent a vast area of inquiry vital to humanity’s survival.
• Our institutions need to place far more emphasis on the scientific study of life at higher levels. We also need a comprehensive inquiry into how our society is shaping as well as responding to changes in biodiversity.
• A new biodiversity science is taking shape across the globe, focused on the intimate interweaving of nature with human societies.
• India has not been, but must be, at the forefront of this emerging science, because nowhere on Earth are natural and human systems tied together more inextricably than on the subcontinent.

The way forward

• Fortunately, some in the Indian science establishment, such as the Departments of Biotechnology and of Science and Technology, have recently started programmes and initiatives in the broader areas of science and society.
• Several non-government think tanks in the civil society sector have strong interdisciplinary programmes in environmental sustainability.
• The India Biodiversity Portal has the ambitious goal of mapping India’s biodiversity with the engagement of civil society though the portal relies largely on private support.
• However, the scale of the problem is so massive and its importance so vital for our future that government and private philanthropy need to bring together multiple stakeholders to develop a programme to document, map and monitor all life, and develop a new knowledge enterprise to fully explore various dimensions of biodiversity and ecosystem services and their critical link to our future.

Category: ECONOMY

1. Is the Indian economy on an upswing: A Strong V-Shaped recovery

• The Indian economy has shown a strong V-shaped recovery driven largely by domestic growth impulses.
• If one considers nine consecutive quarters since the fourth quarter of 2015-16, Gross Domestic Product (GDP) growth fell quarter after quarter from a peak of 9% to a trough of 5.6% in the first quarter of 2017-18.
• As is widely recognised, this was due to demonetisation and the transitory adverse effects of the goods and services tax implementation.
• This sharp recovery is based entirely on domestic factors as the contribution of net export growth to GDP has been zero or negative since the third quarter of 2016-17.
• From the demand side, two segments which have supported growth are government consumption and overall investment demand.
• The growth in gross fixed capital formation was as high as 14.4% in the fourth quarter of 2017-18.
• The real investment rate has also increased to 34.6% in the fourth quarter of 2017-18, although paradoxically, the nominal investment rate during this period remained below 31%.

Productivity focus of the government’s policy initiatives:

• Many of the government’s policy initiatives have shown a clear productivity-enhancing supply-side thrust including demonetisation and the GST.
• The new Monetary Policy Framework agreement has institutionalised a consumer price index (CPI) inflation target of 4% on average. Key policy initiatives (Make in India, Start-up India) also aim at improving productivity.
• Two early policy successes are related to market determination of mineral and spectrum prices. The power sector further benefitted from the Ujwal DISCOM Assurance Yojana scheme. For real estate and banking, the regulatory framework was changed.
• Additional fiscal space was created by better targeting of subsidies while expansion for rail/road projects was prioritised.
• Two factors may create short-term drags on India’s prospects for maintaining a sustained level of high growth: rising global crude prices and prospects of fiscal slippage.
• Global crude prices recently touched $80 a barrel. for the first time since 2014.
• The supply factors include U.S. sanctions on Iran and the crisis in Venezuela.
• On the demand side, according to the World Bank, world oil consumption grew strongly in 2017, up by 1.6% year-on-year. In 2018, U.S. consumption growth is expected to gather further momentum.
• Rising crude prices may adversely affect most indicators of India’s macro balance including trade and current account deficits, inflation, exchange rate and fiscal deficit.
• Reversing a falling trend since December 2017, CPI-based inflation increased to 4.6% in April 2018 due to rising prices of petrol and diesel used for transport.
• Continued pressure on inflation may prompt the RBI to revise the repo rate upwards during the current year.
• The Centre’s fiscal deficit-GDP ratio, after showing a steady improvement since 2014-15, slipped back to a level of more than 3.5% of GDP in 2017-18, exceeding the fiscal responsibility and budget management (FRBM) target of 3% and the budgeted target of 3.2%.
• In spite of the fact that the FRBM Act has been modified, shifting the policy anchor to achieving a debt-GDP ratio of 40% while retaining the fiscal deficit target at 3% of GDP. This target is now to be reached by March 2021.

Challenges

• The revival appears to be led by recovery in growth rates of public administration, defence, construction and agriculture.
• While there appears to be a genuine recovery in construction which has been lagging behind for some time now, the growth in public administration and defence at 13.3% in the fourth quarter is almost double the growth rate in the third quarter.
• The overall growth rate also appears to be better because of a better than expected performance in the agriculture sector.
• But herein lies the problem of the Indian economy. It is going through a period when domestic demand especially in the rural areas has almost collapsed.
• Not surprisingly, there has growing farmer unrest in the rural areas against falling commodity prices.
• However, agricultural growth in real terms at 4.5% appears more of a statistical artefact than a story of turnaround in agriculture.
• But even in real terms, excluding agriculture and public administration (both of which remain vulnerable to different shocks and pressures), the overall growth rate of the economy actually shows a decline in the fourth quarter to 7.2% compared to 7.4% in the third quarter.
• While rural demand remains subdued, export demand has also plummeted with the export-GDP ratio reaching its lowest in a decade.
• With private investment and consumer demand sluggish, the only thing that is working for the economy is lower inflation.

Significance of V-Shaped recovery

• A V-shaped recovery depends on  export growth and also  on private investment picking up.
• The 7.2% growth in the Indian economy during the October-December quarter has put the country in the highest growth bracket globally.
• Equally important, in a highly informalised economy, where the share of the unregistered economy is not very well known, all estimates of GDP growth, especially projections, are likely to be an issue.
• Expressions of optimism aside, is a V-shaped recovery possible if the investment-GDP ratio is still lowest in 10 years? It was 38% of GDP at its peak in 2017-18, fell to 31% in 2013-14, and further slowed over the last four years to under 29%. Moreover, capacity utilisation in industry has been around 70% only.
• That a V-shaped recovery is in the offing is a tad over-optimistic. The external environment is not exactly buoyant. Global growth had been slow till 2017, when it improved in the U.S., Europe, China and Japan.
• But the most recent downside, which will have widespread consequences in India, is that oil prices, after being low for at least four years, have begun rising again.
• The international trade environment, favourable until recently, has worsened with threats of a U.S.-China trade war. Third, interest rates have begun to rise in the U.S., and will continue to rise, reducing the prospect of more fund flow to emerging economies, including India.

Stats

• Exports value fell sharply to levels well below the value of $315 billion in 2013-14, were $275 billion in 2016-17, and have only recently risen to $303 billion in 2017-18. They were well below this level in the last several years. From their peak at 16% of GDP for merchandise exports just before the global economic crisis broke, they are down to 11.7% of GDP IN 2017-18 (the lowest ever since 2003-4).

Problems

• But the twin balance sheet problem is nowhere close to resolution. Under the circumstances, public investment is critical. The latter has mainly been driven by State governments.
• Fiscal consolidation by the Union government has been offset by the worsening of State balance sheets, partly on account of rising farm loan waivers.
• Thus the combined fiscal deficit of nearly 7% at present makes it less likely that State governments can offset the tepid private investment by increasing their public investment.
• The main good news in recent times on revenue has been the 53% rise in the number of tax payers under the GST, and increased formalisation of the economy bringing more entities in the tax net.
• However, the Union and State governments face mounting fiscal pressures on account of rising international crude oil prices. The subsidy burden on governments has risen and as the fiscal deficit remains a source of concern, the governments remain loath to cut petrol and diesel prices.
• The implication is that the inflation rate, which has remained low in recent years, is likely to rise. In any case, given that the path of fiscal consolidation cannot be abandoned for fear, inter alia, of losing credibility with international rating agencies, the potential for India spending its way out into a high growth path quickly remains limited.

 

F. Tidbits

1. ‘Indo-Pacific area should be inclusive’

• India joined Australia, Japan and the United States to discuss the future of Asia-Pacific region as an inclusive space.
• They reaffirmed their support for a free, open, prosperous and inclusive Indo-Pacific Region.
• They also confirmed their common commitment, based on shared values and principles, to promote a rules-based order in the Indo-Pacific.
• The statement indicates the discomfort of the various stakeholders with China’s bid to alter the status quo in the South China Sea, that is interpreted as a hurdle to freedom of maritime and air movements.

2. India’s FDI inflows fall, outflows double

 

G. Practice Questions for UPSC Prelims Exam

Question 1. Which of the following is not a characteristic of the tribal revolts during the 
British rule?

1. Localized nature
2. Religious leadership
3. Militant struggle

Options:

1. 1 only
2. 2 only
3. 2 and 3 only
4. None of the above

 

See

Answer

(d)

Type: Modern history
Level: Moderate
Explanation: 

Self-explanatory

Question 2. Which of the following is incorrect with respect to the international dateline?

1. It is an imaginary line that separates two consecutive calendar days.
2. It sits on the 180º line of longitude in the middle of the Pacific Ocean.
3. It is a perfectly straight line.
4. It has been moved slightly over the years.

 

See

Answer

(c)

Type: Geography
Level: Easy
Explanation: 

Self-explanatory

Question 3. Which of the following statements are correct?

1. India is a ‘Union of States’ implies the indestructible nature of its unity.
2. Acquisition of a foreign territory falls within the purview of Article 1.
3. Exclusive Economic Zone extends up to 200 km into the sea.

Options:

1. 1 only
2. 1 and 2 only
3. 3 only
4. All of the above

 

See

Answer

(a)

Type: Indian Constitution
Level: Moderate
Explanation: 

• No unit constituting the Indian union can secede from it.
• Acquisition of a foreign territory is governed by international law. In Berubari Union case, the Supreme Court was of the view that Article 1 does not confer power to acquire foreign territories.
• Exclusive Economic Zone extends up to 200 nautical miles (370 km) into the sea from the shore baseline.

Question 4. Consider the following statements regarding Objectives Resolution:

1. The Objectives resolution was introduced by Jawahar Lal Nehru and B.R Ambedkar.
2. As per OR, the constituent assembly declared India as Independent Sovereign Republic.
3. OR was later adopted as the preamble of Indian constitution as it was.

Which of the following statements are incorrect?

1. 1 only
2. 1 and 2 only
3. 1 and 3 only
4. 1, 2 and 3

 

See

Answer

(c)

Type: Modern History
Level: Moderate
Explanation: 

• The Objectives resolution was introduced by Jawahar Lal Nehru, which was later adopted as the Preamble of Indian constitution with certain changes.
• OR declared India as Independent Sovereign Republic. Although Constituent assembly became fully sovereign only after Indian independence act, 1947.

H. UPSC Mains Practice Questions

1. Equal treatment to un-equals is nothing but inequality. Discuss the right to equality provided by Indian constitution in this context.
2. The decision of the British government to partition Bengal boomeranged and led to public outrage of far-reaching consequences. Discuss the significance of incidents that followed partition of Bengal in 1905.

 

Also, check previous Daily News Analysis

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