CNA 3rd March 2020:- Download PDF Here
TABLE OF CONTENTS
A. GS 1 Related B. GS 2 Related INTERNATIONAL RELATIONS 1. India monitoring impact of U.S.-Taliban deal: MEA POLITY AND GOVERNANCE 1. Pension scheme fails to take off 2. 34 queries in Census 2020 form C. GS 3 Related ECONOMY 1. Sharp decline in PSB fraud amount, Centre tells Lok Sabha D. GS 4 Related E. Editorials INFRASTRUCTURE 1. Pushing the wrong energy buttons INTERNATIONAL RELATIONS 1. Return to chaos in Afghanistan? ECONOMY 1. Bottom or mirage? F. Prelims Facts 1. Purchasing Managers' Index (PMI) G. Tidbits 1. OECD lowers India’s FY21 GDP growth to 5.1% 2. Stop violence targeting Muslims, Iran tells India 3. Standing Committees make up for fewer sittings of Parliament: Naidu 4. EC not for state funding of polls: Thakur tells LS H. UPSC Prelims Practice Questions I. UPSC Mains Practice Questions
A. GS 1 Related
Nothing here for today!!!
B. GS 2 Related
A deal has been signed between the U.S. and the Taliban in Doha that has set the stage for America to wind down the longest war in its history. The agreement provides a timetable for the withdrawal of US troops from Afghanistan by May 2021 and an intra-Afghan dialogue in March 2020.
This issue has been covered in 2nd March 2020 Comprehensive News Analysis. Click here to read.
Just over 34,000 people have signed up for the National Pension Scheme for Traders, Shopkeepers and Self-Employed Persons.
The Labour Ministry’s vision document in 2019 had set a target of 25 lakh enrolments for the scheme in 2019-2020.
National Pension Scheme for Traders, Shopkeepers and Self-Employed Persons:
- The scheme, also known as Pradhan Mantri Laghu Vyapari Maan-dhan Yojana, was introduced in 2019.
- It is a voluntary and contribution-based central sector scheme.
- Retail traders, shopkeepers and self-employed persons who are between 18 and 40 years of age and have an annual turnover of 1.5 crores or less are eligible for the scheme.
- Under the scheme, the government makes a matching contribution to the subscriber’s account.
- Each eligible subscriber under this Scheme shall receive assured minimum monthly pension of Rs 3000 after attaining the age of sixty years.
The Registrar General of India (RGI) has asked all States to “give highest importance, attention and time” to the Census and National Population Register (NPR) work as “the foundations of the statistics of the country” depend on them.
Read more about the National Population Register.
- The decennial census exercise will be conducted in two phases — House Listing and Housing Census from April to September 2020 and Population Enumeration from February 9 to February 28, 2021.
- Centre has proposed that the next phase of NPR will be conducted along with the first phase of Census between April to September 2020.
- The pretest or the trial NPR form collected details from 30 lakh respondents in 2019 on 21 parameters, seeking specific details on “place of birth of father and mother, last place of residence” along with other information like Aadhar (optional), voter ID card, mobile phone and driving license numbers.
- The new NPR form, for the first time, is also expected to collect information on “mother tongue”.
- In 2010 and 2015, NPR collected details on 14 parameters.
- There are 34 questions in Census proforma and 14 questions in the NPR. The exercise will be conducted through a web-based mobile application. NPR is only being updated, no new register is being created.
- Many State governments have objected to new fields in NPR such as “the place of birth of parents” as sometimes in villages and even in cities people are not aware of their own place of birth.
- West Bengal government has demanded a repeal of CAA and NPR, and Kerala communicated to the RGI that NPR should be halted citing maintenance of public order.
C. GS 3 Related
According to the Finance Ministry, comprehensive steps taken to curb fraud in public sector banks (PSBs) have resulted in a sharp decline in the amount involved, from Rs. 50,329 crore in 2013-14 to just Rs. 3,781 crore in the first three quarters of 2019-20.
- An online searchable database of frauds reported by banks has been set up to enable mitigation of fraud risk.
- It also helps in carrying out due diligence during the credit sanction process.
- The Fugitive Economic Offenders Act is being invoked to attach and confiscate the assets of violators and strip them of the entitlement to defend any civil claim.
- The PSBs have been told to get certified copies of passports of promoters and directors and other authorised signatories of companies availing themselves of loan facilities of more than 50 crores.
- They also have been advised to decide on publishing photographs of wilful defaulters as per procedure.
- The government has also asked these banks to strictly ensure rotational transfer of officials to mitigate the possibility of their involvement in any fraud.
- The bank heads have been empowered to issue requests for opening look-out circulars against suspects.
- For enforcement of auditing standards and ensuring the quality of audits, the government has established the National Financial Reporting Authority as an independent regulator.
- Gross Non-Performing Assets (NPA) of nationalised banks, as per the Reserve Bank of India data on global operations, rose from Rs. 1,92,809 crore as on March 31, 2015, to Rs. 6,16,586 crore as on March 31, 2018.
- As a result of the government’s strategy of recognition, resolution, recapitalisation and reforms, the NPAs declined (as per declared results of nationalised banks) to Rs. 5,56,991 crore as on December 31, 2019.
The nationalised banks have recovered Rs. 3,08,370 crore over the last five financial years and the first three quarters of the current financial year.
D. GS 4 Related
Nothing here for today!!!
- The joint statement issued by India and the U.S. during U.S. President’s official visit to India, called for the Nuclear Power Corporation of India Limited and Westinghouse Electric Company to finalize the techno-commercial offer for the construction of six nuclear reactors in India at the earliest.
Nuclear energy in India:
- The fraction of electricity generated by nuclear power in India has remained stagnant at about 3% for decades and India plans to triple its nuclear capacity by 2024 to decrease the reliance of the Indian economy on the polluting fossil fuels.
US-India civil nuclear agreement of 2008:
- India and the US signed a historic US-India civil nuclear agreement in 2008, to cooperate in the civil nuclear energy sector. The deal gave a fillip to bilateral ties between India and the U.S.
- A major aspect of the civil nuclear agreement was that the Nuclear Suppliers Group (NSG), gave a special waiver to India enabling it to sign cooperation agreements with a dozen countries.
- Post-waiver, India signed civil nuclear cooperation agreements with the US, France, Russia, Canada, Argentina, Australia, Sri Lanka, the UK, Japan, Vietnam, Bangladesh, Kazakhstan and South Korea.
Agreement of 2016:
- The US-India civil nuclear agreement of 2008 was to be operationalized through an agreement in 2016 for building nuclear reactors.
- Under the agreement, US-based Westinghouse Electric Company was to build six AP1000 reactors in India.
- A longstanding obstacle in the finalization of the deal has been the Indian nuclear liability rules, which require the costs of a nuclear accident to be shared by the manufacturer of the nuclear reactors along with the operator of the nuclear power station.
- The foreign manufacturers have repeatedly stressed the need to bring Indian nuclear liability rules in-line with international norms, which require the costs of a nuclear accident to be channelled to the operator rather than the manufacturer.
- The proposed project was stalled when Westinghouse filed for bankruptcy in 2017 after cost overruns on its U.S. reactors.
- The present U.S. administration has made bilateral trade with India a top priority, seeking greater market access for U.S. products in India.
- Given India’s desire to increase its nuclear-generating capacity, nuclear co-operation presents a potential area for enhancing economic interactions.
- There has been a renewed focus on finalization of the techno-commercial negotiations of the 2016 agreement.
- Though the finalization of the agreement would give a fillip to India’s atomic energy generation capacity, there are some associated concerns too for India.
- Analysts estimate that each of the two AP1000 units being constructed by Westinghouse in the U.S. state of Georgia may cost about $13.8 billion. Going by these estimates, the six reactors being offered to India by Westinghouse would cost around ₹6 lakh crore. Given the high capital costs involved in these nuclear projects, the economic burden will eventually fall upon consumers and taxpayers of India.
- Studies have shown that despite reducing the capital costs by 30%, to account for lower construction costs in India, the first year tariff for electricity would be around ₹25 per unit.
- Notably, recent solar energy bids in India are around ₹3 per unit. Wind and solar energy costs have declined by around 70% to 90% in just the last 10 years and may decline further in the future.
- The above observations make it clear that electricity from American nuclear reactors would be more expensive than competing sources of energy. Nuclear energy is struggling to retain its relevance given the rapid growth of renewables.
Long term costs:
- Nuclear power can also impose long-term costs.
- Nearly a decade after the 2011 disaster, the Fukushima prefecture retains radioactive hotspots and the cost of clean-up has been estimated to range between $200-billion to $600-billion.
- The Chernobyl accident of 1986 has led to large areas being contaminated with radioactive materials and thousands of square kilometres being closed off for human inhabitation.
Safety issues associated with nuclear power:
- Nuclear reactors are vulnerable to serious accidents, as shown by the 2011 Fukushima disaster.
- Westinghouse in its negotiations has insisted on a prior assurance that India would not hold it responsible for the consequences of a nuclear disaster, which is effectively an admission that it is unable to guarantee the safety of its nuclear reactors.
Nuclear liability rules:
- The disastrous Fukushima accident was partly caused by weaknesses in the nuclear reactor design. Despite this fact, the manufacturing company paid nothing towards clean-up costs, or as compensation to the victims, due to an indemnity clause in Japanese law.
- Westinghouse wants a similar arrangement with India.
India’s experience with imported nuclear reactors:
- In spite of repeated efforts from the government to increase India’s nuclear energy generation capacity, the fraction of electricity generated by nuclear power in India has remained low.
- Tarapur Atomic Power Station is located in Maharashtra. It was the first commercial nuclear power station built in India with the involvement of US-based company, GE.
- The Boiling water reactors (BWRs) at Tarapur 1 and 2 units are similar to the reactors involved in the Fukushima Daiichi nuclear disaster. The reactors’ age and old design have raised safety concerns.
- The Kudankulam 1 and 2 reactors, in Tamil Nadu, are the only ones to have been imported and commissioned in the last decade in India.
- The reactors have been repeatedly shut down. In 2018-19, these reactors produced just 32% and 38%, respectively, of the electricity they were designed to produce.
The U.S.-Taliban agreement signed in Doha.
- An intra-Afghan dialogue is one of the major provisions of the recently signed U.S.-Taliban agreement. Through this, the U.S. seeks to exit Afghanistan with assurances from the Taliban that it would engage the Kabul government directly to find a lasting solution to the civil war.
- An intra-Afghan dialogue has been elusive since the establishment of the Afghan High Peace Council in 2010 by the then President Hamid Karzai.
- There are a few concerns associated with the proposed intra-Afghan dialogue.
Clauses of the deal:
- The prisoner swap clause in the Doha deal requires the Afghanistan government to release 5,000 Taliban prisoners in exchange for the Taliban release of 1,000 Afghan captives.
- President Ghani has ruled out complying with this clause, arguing that his government never agreed to it.
- Hence, a principal objective of the deal would be a non-starter, casting serious doubts on the possibility of a fruitful intra-Afghan dialogue.
- Though there are provisions for intra-Afghan dialogue, many have questioned the Taliban’s will to engage in peaceful negotiations.
- The Taliban’s earlier actions have amply indicated the fact that it never wanted to negotiate with Kabul. If the Taliban was interested, such an intra-Afghan negotiation would have taken place earlier. The Taliban has previously targeted many of the Afghan High Peace Council members, including the chairman of the Council, in 2011.
- The Taliban’s objective would be to capture Kabul, and not share power in Kabul with anyone.
- The Taliban will probably try to derail any attempt towards an intra-Afghan dialogue.
Upper-hand to the Taliban:
- The Taliban did not yield to the earlier intra-Afghan dialogue proposals by the U.S.
- Taliban consistently stated that it did not recognize the elected government in Kabul led by Mr Ghani. It continued targeting the Afghan security forces making 2018-19 one of the most violent years in recent Afghan history.
- The U.S. withdrawal from Afghanistan will invariably weaken the Kabul government, altering the balance of power both on the battlefield and at the negotiating table of the intra-Afghan talks. The Doha deal will legitimize the Taliban as a political actor in Afghanistan.
Political uncertainty in Afghanistan:
- The 2019 Afghanistan elections have resulted in political instability in Afghanistan.
- President Ashraf Ghani (belonging to the largest ethnic group of Pashtuns) and his primary challenger Chief Executive Abdullah Abdullah (belonging to the second largest ethnic group of Tajiks) have declared victory and both are threatening to set up parallel governments.
- Unlike, after the presidential election in 2014, wherein the U.S. brought both the leaders on a common platform and negotiated a deal, this time there were no such efforts from the U.S.’s side.
- Given the political instability already in Afghanistan, the high stake deal seems to have come at the wrong time.
- With the divide between Mr Ghani and Mr Abdullah in Kabul, any announcement on government formation is likely to increase the fault lines in the bureaucracy and the Afghan security forces. This will provide an opportunity for the Taliban to impose itself on Kabul and the rest of Afghanistan.
A civil war in Afghanistan:
- The intra-Afghan talks will likely fan ethnic tensions in the country. Consequently, ethnic fissures may descend into open conflict.
- There are concerns that the U.S.-Taliban deal will probably lead to another civil war in Afghanistan, instead of the intended goal of bringing lasting peace to Afghanistan.
- The Taliban may not target American troops but it will continue fighting the Afghan security forces for dominance. This might push the fragile country into chaos.
- Instead of expecting a fruitful intra-Afghan dialogue post the Doha agreement, there have been suggestions that the U.S.-Taliban deal should have followed an intra-Afghan dialogue between President Ashraf Ghani and Chief Executive Abdullah Abdullah on the one hand and between the Afghan government and Taliban on the other hand.
This could have ensured lasting peace and stability in Afghanistan.
For more information on this issue, please read 02 March 2020 Comprehensive News Analysis.
- The NSO estimates of Gross Domestic Product for the third quarter of the financial year.
- The GDP growth for the third quarter between October-December has been estimated at 4.7%.
- This marks a slowdown compared to last year’s third-quarter rate of 5.6% and the previous quarter’s rate of 5.1%.
Sectors indicating decline:
- Manufacturing, constituting around 20% of the gross value added (GVA), has contracted for a second straight quarter by posting a 0.2% decline. The manufacturing sector has been the biggest drag on the growth numbers.
- The output of electricity and allied utility services also shrank 0.7%, reflecting the lack of demand from the factories.
- Activity in construction, which helps generate demand for goods ranging from cement to steel, softened to a 0.3% expansion. This marks the construction industry’s slowdown for a third consecutive quarter.
Sectors indicating growth:
- Agriculture and the three largest services sectors, including public administration and defence, helped increase the overall GVA, with farm output expanding by 3.5% and the government-centred services growing by 9.7%.
Recent indications of growth:
- The Central government has claimed that the current numbers seemed to indicate that the economy may have “bottomed out” and would only grow faster in the coming times.
- There has been an improvement in output at the eight core industries. The overall growth of the eight core industries that include coal, refinery products, steel, cement and electricity averaged 2.2% in January, propelled by an 8% increase in coal production.
- The survey-based IHS Markit India Manufacturing PMI for February 2020 has pointed to an improvement in manufacturing activity.
- A closer analysis of the available data seems to point out that economic woes may still not be over for the Indian Economy.
- There have been arguments from some academicians that data revisions have helped lift growth numbers in the first half of the fiscal, while the actual numbers reveal a softening of growth in India.
- The downward revision of data for 2018-19 has lent a statistical boost of 0.6 percentage point to the first and second-quarter GDP growth estimates.
Gross Fixed Capital Formation (GFCF):
- The second-quarter GFCF figures have witnessed a downward revision from earlier projections.
- This marks the second successive contraction in capital formation in the Indian economy.
- GFCF shrank 5.2% in the third quarter, after declining 4.1% over the second quarter of July-September.
- The figures seem to signal the fact that investment activity is still not recovering, despite focussed efforts from the government like the recent corporate tax cuts.
Private Final Consumption Expenditure (PFCE):
- The second-quarter PFCE figures have witnessed a downward revision from earlier projections.
- Consumption spending too remains noticeably soft with the pace of growth for all three quarters being lower than the previous fiscal levels.
- The prospects of growth in PFCE in the upcoming quarters seem bleak.
- Automobile sales are still struggling with weak demand.
- The RBI’s consumer confidence survey points to a fall in non-essential consumption.
- The coronavirus outbreak’s impact on demand has not been factored in, which might indicate a possible downward revision in the coming times.
The data regarding private final consumption expenditure (PFCE) and gross fixed capital formation (GFCF), constituting key components of GDP seem to indicate the challenges for the Indian economy.
For more information on this topic, please read 29th February 2020 Comprehensive News Analysis.
F. Prelims Facts
What’s in News?
According to a monthly survey, India’s manufacturing sector activity eased in February 2020 from a near eight-year high in January 2020 and business sentiment took a hit amid fears of the COVID-19 outbreak on exports and supply chains. PMI for India declined from 55.3 in January to 54.5 in February; the reading was at 52.7 in December.
- The Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors.
- The purpose of the PMI is to provide information about current and future business conditions to company decision-makers, analysts, and investors.
- A PMI index of more than 50 indicates the expansion of the manufacturing segment of the economy in comparison with the previous month. A reading of 50 indicates no change. A reading below 50 suggests a contraction of the manufacturing sector.
What’s in News?
Organisation for Economic Cooperation and Development (OECD) has lowered its India’s GDP growth forecast to 5.1% from the earlier projection of 6.2% for 2020 on concerns of the impact of the deadly COVID-19 on the domestic as well as the global economy.
- Output contractions in China are being felt around the world, reflecting the key and rising role China has in global supply chains, travel and commodity markets.
- OECD said the adverse impact on confidence, financial markets, travel sector and disruption to supply chains contributes to the downward revisions in all G20 economies in 2020, particularly ones strongly interconnected to China.
- The OECD lowered its global GDP forecast by half a percentage point to 2.4%, the lowest rate since the 2008-09 financial crisis.
Read more about Organisation for Economic Cooperation and Development (OECD).
What’s in News?
Iran has asked India to stop communal violence targeting Muslim citizens. The unusually strong statement from Iranian Foreign Minister Javad Zarif came five days after India fast-tracked infrastructure work on Iran’s Chabahar port.
- Zarif was a leading guest in January’s Raisina Dialogue, India’s biggest foreign policy discussion forum.
- Chabahar Port is located on the Indian Ocean in the Sistan and Baluchistan province of Iran.
- It is located on the Gulf of Oman and is the only oceanic port of the country. The port gives access to the energy-rich Persian Gulf nations’ southern coast.
- India’s construction of the Shahid Beheshti terminal at Chabahar port since 2016 is a key component of its trade and connectivity routes to Afghanistan and Central Asia, circumventing Pakistan.
- It is a strategic project that would connect India, Afghanistan and Iran to Central Asia.
Chabahar port will boost India’s access to Iran, the key gateway to the International North-South Transport Corridor that has sea, rail and road routes between India, Russia, Iran, Europe and Central Asia.
What’s in News?
Giving an account of the functioning of the standing committees, Rajya Sabha Chairman said that the eight Rajya Sabha standing committees held 20 meetings and discussed the budgetary demands of 18 ministries.
- There are a total of 24 department-related standing committees, of which 8 are with Rajya Sabha and remaining 16 with Lok Sabha.
- The eight Rajya Sabha committees consist of 244 members from both the Houses, with 78 from Rajya Sabha and 166 from Lok Sabha.
- The standing committee system was introduced in 1993 with the panels drawing members from all political parties.
Read more about Parliamentary Committees
What’s in News?
The Election Commission has informed the Government that it is not in favour of state funding of elections, Minister of State for Finance Anurag Thakur told the Lok Sabha.
- The Commission is of the view that it would not be able to prohibit or check candidates’ expenditure over and above the state’s provision.
- It was in response to a question on whether the government was mulling the introduction of state funding of polls as recommended by the Indrajit Gupta Committee in 1998.
- That panel had suggested that state funding would ensure a level playing field for poorer political parties and argued that such a move would be in public interest.
- The committee had recommended some limitations, saying that state funds should only be given to recognised national and State parties and that funding should be given in kind, including free facilities provided to these parties and their candidates.
The panel admitted that only partial funding may be possible.
H. UPSC Prelims Practice Questions
Q1. Consider the following statements:
- The Sea is located between Greece and Turkey.
- It is connected to the Marmara Sea by the Strait of the Dardanelles.
The Sea being talked about is:
a. Ionian Sea
b. Aegean Sea
c. Adriatic Sea
d. Baltic Sea
Q2. Consider the following statements with respect to the Department-Related Standing Committees (DRSCs):
- There are a total of 24 DRSCs, 12 under Rajya Sabha and Lok Sabha each.
- The standing committee system was introduced in 1993.
- DRSCs examine Bills referred to them; select specific topics related to the ministries and examine implementation, but are not allowed to examine the budgetary outlays of the departments.
Which of the given statement/s is/are incorrect?
a. 1 and 2 only
b. 2 and 3 only
c. 1, 2 and 3
d. 1 and 3 only
Q3. Consider the following statements:
- Chakmas were originally residents of the Chittagong Hill Tracts in erstwhile East Pakistan.
- Chakmas follow Buddhism.
- Chakmas are identified as Particularly Vulnerable Tribal Groups (PVTGs) by the Ministry of Home Affairs.
Which of the given statement/s is/are correct?
a. 1 and 2 only
b. 2 and 3 only
c. 3 only
d. 2 only
Q4.Consider the following statements with respect to Organization for Economic Cooperation and Development (OECD):
- OECD is funded by its member countries.
- Secretariat of OECD is in Paris, France.
- India recently became a member of OECD.
Which of the given statement/s is/are incorrect?
a. 1 and 2 only
b. 2 and 3 only
c. 3 only
d. 1 only
I. UPSC Mains Practice Questions
- There has been a renewed focus on the finalization of the agreement with the US-based Westinghouse Electric Company to build six AP1000 reactors in India. Discuss the significance of the agreement and the associated concerns. (15 marks, 250 words)
- Though the recent NSO estimates of GDP growth rate for the fiscal’s third quarter seem to indicate a revival in the Indian economy, a closer analysis of the economic data reveals a softening of the growth numbers. Comment. (10 marks, 150 words)
Read previous CNA here.
CNA 3rd March 2020:- Download PDF Here