29 May 2018: UPSC Exam Comprehensive News Analysis

• External Affairs Minister Sushma Swaraj said that India will not accept sanctions imposed, or to be imposed, by the United States on Iran.
• The remark was a categorical rejection of U.S. decision to withdraw from the six-nation Joint Comprehensive Plan of Action (JCPOA) nuclear agreement and its plans to impose massive new sanctions on Iranian entities.

Not under pressure

• Swaraj said that our foreign policy is not made under pressure from other countries and that we recognise UN sanctions and not country-specific sanctions. We didn’t follow U.S. sanctions on previous occasions either.

Indo-Iran relations

• Iran is India’s third-largest oil supplier, and India has many areas of strategic engagement with Iran, including management of the Shahid Beheshti Port in Chabahar, co-development of the International North-South Transport Corridor to Russia, as well as bilateral trade of about $13 billion of which about $5 billion was in non-oil trade in 2016-17.
• Swaraj’s comments and the visit by Mr. Zarif to Delhi indicate that the government intends to continue its engagement with Iran despite U.S. sanctions.
• However, Ms. Swaraj did not explain how India would hope to get around banking and insurance restrictions that may come about as the U.S. increases pressure on European banks which the India-Iran trade depends on.

Watch BYJU’S video on India-Iran Relations

• In a sign of the efforts to improve India-Pakistan relations in recent months, the heads of maritime security agencies of both sides met after a gap of two years and agreed to work on improving exchange of information regarding fishermen detained by each other.
• The Indian side reiterated the need for instituting Standard Operating Procedures (SOP) for immediate release and repatriation of fishermen who cross the International Maritime Boundary Line (IMBL) inadvertently as the issue needs to be approached in humanitarian context.
• Further, both sides also agreed on the need for expeditious exchange of the information about the apprehension of fishing boats and fishermen.

Maritime boundary

• A maritime boundaryis a conceptual division of the Earth’s water surface areas using physiographic or geopolitical criteria. As such, it usually bounds areas of exclusive national rights over mineral and biological resources, encompassing maritime features, limits and zones. Generally, a maritime boundary is delineated at a particular distance from a jurisdiction’s coastline.

• Pakistan on Monday summoned India’s Deputy High Commissioner J.P. Singh and issued a diplomatic demarche over India’s remarks on Gilgit-Baltistan.

Background

• The Cabinet on May 21 approved ‘Gilgit-Baltistan Order 2018’ which was also endorsed by the assembly for the region. The order is being seen as part of Pakistan’s efforts towards incorporating the disputed region as its fifth Province.

India’s protest

• India summoned Pakistan’s Deputy High Commissioner Syed Haider Shah in New Delhi and lodged a strong protest over Islamabad’s latest move.
• Singh was summoned to register Pakistan’s categorical rejection of the Indian statement on the Gilgit-Baltistan Order 2018 and its claim over Kashmir.

Gilgit-Baltistan

• Pakistan has bifurcated the part of Kashmir under its occupation into two parts — Gilgit-Baltistan and Pakistan-occupied Kashmir. Gilgit-Baltistan was treated as a separate geographical entity till now.
• It is believed that China’s concerns about the unsettled status — as the China-Pakistan Economic Corridor passes through the region — prompted Pakistan to change its status.

Watch BYJU’S video on Gilgit-Baltistan Issue

C. GS3 Related

• The European Union proposed a bloc-wide ban on single-use plastics such as straws, cutlery and cotton buds while urging the collection of most plastic drinks bottles by 2025.
• The set of proposals are part of a growing EU drive to rid the environment of plastic waste which has begun showing up in the food chain.

No deadline set

• These proposals will reduce single-use plastics through a range of measures. The proposals call for banning plastic cotton buds, cutlery, plates, straws, drink stirrers and balloon sticks, but it did not set a deadline.
• These items must all be made from sustainable materials instead, according to the plan which must be approved by the 28 EU member countries and the European Parliament.
• Member states must reduce the use of plastic food containers and drinks cups, by promoting alternatives for sale or ensuring they are not offered free.
• Producers must contribute to the costs of waste management and will be offered incentives to develop less polluting alternatives. For example, it calls for producers of plastic fishing gear to cover the cost of waste collection from port reception facilities.

Sustainable alternatives

• Member countries must collect 90% of single-use plastic drinks bottles by 2025, through deposit refund schemes, for example. The plan calls for producers to clearly label products and inform consumers how the waste should be disposed of.
• The proposals, plus one in January for all plastic packaging in Europe to be recyclable by 2030, follows China’s decision to ban imports of foreign waste products for recycling.

• Indian botanist Kamaljit S. Bawa, president of Bengaluru-based non-profit Ashoka Trust for Research in Ecology and the Environment (ATREE), received the prestigious Linnean Medal in Botany from the Linnean Society of London.
• Bawa is the first Indian to win the award ever since it was first constituted in 1888.
• The scientist is being recognised for his pioneering research on the evolution of tropical plants, tropical deforestation, non-timber forest products and for decades of work on the biodiversity of forests in Central America, the Western Ghats and the Eastern Himalaya.

Noted contributions

• Bawa’s efforts in establishing the open-access interdisciplinary journal Conservation and Society (which publishes peer-reviewed research exploring linkages between society, environment and development) in 2003, the online citizen-science repository ‘India Biodiversity Portal’ and ATREE (ranked second in Asia and 18th globally among the world’s environment think tanks, which generates interdisciplinary knowledge to inform policy and practice to achieve environmental conservation and sustainable development) were also cited.

The Linnean Medal

• The Linnean Medal is awarded to a biologist every year by the Linnean Society of London (the world’s oldest active biological society founded in 1788 and named after famous Swedish biologist Carl Linnaeus who gave us one of the systems of naming plants and animals).
• According to the society’s website, it is awarded as an expression of the society’s esteem and appreciation for service to science.
• Incidentally, the first scientist to receive the Linnean Medal was Sir Joseph D. Hooker who compiled the monumental seven-volume Flora of British India, the first ever comprehensive account of India’s plants.
• Other recipients include Alfred Wallace (popularly known as the ‘father of biogeography’) in 1892 and Ernst Mayr — famous evolutionary biologist who proposed the ‘biological species concept’, which is the most widely-accepted definition of a species — in 1977.

D. GS4 Related

E. Editorials

PMJDY Flagship Scheme

• Indebtedness shows no signs of abating as a result of the government’s flagship scheme
• The Pradhan Mantri Jan-Dhan Yojana (PMJDY), one of the flagship schemes of the present government, was launched in August 2014.
• The ‘J’ in JDY is the ‘J’ in ‘JAM’ (Jan Dhan-Aadhaar-Mobile) through which the Economic Survey of 2015 claimed that “every tear from every eye” could be wiped.

Critical evaluation of PMJDY

• As the Narendra Modi government enters its fifth year, evaluation of the scheme is in order, especially since this is one of the schemes through which the government is trying to battle its anti-poor image.
• The recently released World Bank Global Findex data show that 80% of Indian adults now have a bank account, which is being celebrated as the success of the JDY.
• While the increase in the proportion of adults having bank accounts is indeed impressive (80% in 2017 from 53% in 2014), 48% of those who have an account in a financial institution made no withdrawal or deposit in the past one year.
• Financial inclusion is not just about opening bank accounts, but also about using these accounts and providing access to formal credit.

Limitations

• In fact, the major limitation of the JDY has been that while it has managed to get many people to open bank accounts, there is no commensurate increase in the use of these accounts, availability of formal credit, or savings in financial institutions, especially among the country’s marginalised and poorer sections.

Access to formal credit

• One of the ways in which access to credit can be assessed is the credit-deposit ratio, which tells us how much credit can be availed per Rs.100 of bank deposits by a particular population group.
• The Reserve Bank of India (RBI) categorises the population into rural, semi-urban, urban, and metropolitan.
• We look at the first two regions specifically where one would expect the poorer beneficiaries to be present in larger numbers.
• Figure 1 shows that the credit-deposit ratio for the rural population increased from 41% in 1999 to 66.9% in 2016.
• However, much of the rise took place before the JDY was launched, particularly during the tenure of the United Progressive Alliance-1 government, when the credit-deposit ratio increased from 43.6% in 2004 to 57.1% in 2009.
• Since 2014, it has more or less stagnated in rural areas and has deteriorated slightly from 58.2% in 2014 to 57.7% in 2016 for semi-urban populations.
• Therefore, there is no sign, at least on this count, of increased access to formal credit that the PMJDY is supposed to have ensured for its beneficiaries.

Credit for Small borrowers

• To get a more accurate picture of access to credit for poorer populations, we look at the data by credit size.
• The RBI provides figures for credit at a disaggregated level in terms of small versus large borrowers. Small borrowers are defined as those with outstanding loans under Rs.2 lakh.

Falling credit for small borrowers

• The share of small borrowers in total credit has also been falling in this government.
• In fact, it has been falling since 2002. While the decline in the share during the 2004-14 period can be explained by the dramatic rise in corporate credit of large borrowers, there is no reversal in this trend even after the rate of growth of credit fell in general in more recent times as a result of rising non-performing assets and the debt overhang of public sector banks.
• Even in 2016, the best year under Mr. Modi on this count, it merely matches the lowest rates of growth witnessed during the crisis period of 2009-10.
• Based on these trends, it can be argued that there seems to be no increase in access to credit for the poor whether as a result of the JDY or otherwise.
• At best, the status quo has been maintained.
• To further probe access to credit for small borrowers, we look at these loans in two categories — agricultural credit and personal loans — which are more likely to be the ones which JDY beneficiaries will be using as against industrial or other loans.
• The data show that while the share of small agricultural credit has stagnated during this regime, that of the small personal loans, which covers home, vehicle, durable goods and so on, has fallen.

Dealing with money lenders

• Poor households in India, in the absence of access to formal credit, have to deal with moneylenders who charge exorbitant rates of interest.
• A recent source that is available in this regard is the Household Survey on India’s Citizen Environment and Consumer Economy, 2016, which shows that while for the top 1% of the population, one in six are exposed to informal credit, within the poorest section of the population, the figure is four times as high, with two in three taking credit from informal sources.
• Access to bank accounts seems to have had little effect on their dependence on private money lenders.
• About the issue of money lenders, a study by the RBI in 2017 states: “We document high levels of unsecured debt, and perhaps more importantly, debt taken from non-institutional sources such as moneylenders.
• Such debt generates high costs for Indian households, and is likely to lead to households becoming trapped in a long cycle of interest repayments.
• We note that this phenomenon has been well-documented over the decades, but nevertheless remains stubbornly persistent.”
• Therefore, it is not surprising that the report finds that nearly half of the households that take loans from moneylenders are not able to repay them in time, which is a typical condition for a debt trap.

Conclusion

• The available evidence presented so far does not suggest that the precarious conditions of indebtedness that poor people of this country find themselves in has seen any signs of abating as a result of the JDY.

Category: INTERNATIONAL RELATIONS

1. The cost of deterrence

Question 1. Which of the following statement/s regarding National Company Law Appellate 
Tribunal (NCLAT) is/are incorrect?

Question 2. Consider the following statements regarding Gaj-Yatra.

Question 3. Which of the following statements is incorrect with respect to Mycoplasma bovis?

Question 4. Which of the following statements is incorrect with respect to Right to 
Information Act?

Also, check previous Daily News Analysis