# 06 Nov 2018: UPSC Exam Comprehensive News Analysis

A. GS1 Related
INDIAN SOCIETY
1. Plea challenges order on ‘Dalit’ usage
B. GS2 Related
POLITY AND GOVERNANCE
1. Courts shouldn’t help make half-baked doctors, says SC
INTERNATIONAL RELATIONS
1. Iran oil: India and China get relief
C. GS3 Related
INFRASTRUCTURE
1. Centre eyes seaplanes in UDAN 3
ENVIRONMENT
1. Avni killing: NTCA seeks report
DEFENCE
1. India declares nuclear triad operational
D. GS4 Related
E. Editorials
INTERNATIONAL RELATIONS
1. Preserving the taboo (Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and The
Intermediate-Range Nuclear Forces Treaty (INF Treaty))
ECONOMY
1. In defence of Urjit Patel (RBI and the Government of India)
F. Tidbits
1. IG recommends dismissal of 175 cops over Patna violence
G. Prelims Fact
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions


A. GS1 Related

1. Plea challenges order on ‘Dalit’ usage

Context

• The Supreme Court may hear a petition challenging a government circular advising the media to refrain from calling Scheduled Caste members “Dalits”.
• The petition, filed by advocate Sriram Parakkat, on behalf of activist V.A. Ramesh Nathan, said the term ‘Dalit’ was a self- chosen name, a positive self-identifier and political identity, to describe the pan-Indian community of those affected by the caste system and the practice of untouchability for several centuries.
• The petition said the word “Dalit” meant “divided, split, broken, scattered”.
• In the 1930s, the word “Dalit” was popularised and reintroduced into the public imagination by Dr. B.R. Ambedkar to refer to the pan-Indian community of historically oppressed people, it said.
• It contended that the circular dated August 7, 2018 issued by the Information and Broadcasting Ministry was “vague, arbitrary, inconsistent and has no rational nexus to its ostensible objective”. It was issued on the basis of a Bombay High Court decision.
• “The ostensible reason/rationale for the issuance of the circular seems to be to prevent hurt and insult caused to people and communities by the reference to them as “Dalit”. However, this is without any basis. The term is embraced by the community to describe itself in rejection of various other terms/nomenclatures imposed upon them by outsiders. It (circular) has obviously been issued without a consultative process,” the petition said.

Who are the Dalits?

The most ancient mention of the caste system is found in the Rig Veda, believed to be developed between 1500 and 800 BC, where it was called the Varna system. It classified the society into four varnas:

• The Brahmins: priests, scholars and teachers; considered to be pure, wise and gentle; highly respected and obeyed
• The Kshatriyas: rulers, warriors and administrators; linked with anger, pleasure and boldness
• The Vaishyas: cattle herders, agriculturists, artisans and merchants; deemed to be hard-working people living off the plough
• The Shudras: labourers and service providers; associated with violence and impurity, worthy of contempt; despised and ordered

Over the time, particular castes were placed even below Shudras and were called Avarnas – not belonging to any class. They were supposed to do menial jobs as sweepers, gutter cleaners, scavengers, watchmen, farm laborers, rearers of unclean animals such as pigs, and curers of hides. People from such castes are called Dalits (meaning oppressed) in modern times. Although many of them have moved to other professions over time, yet the general perception against them has remained to be one of hatred and loathe.

Dalits (SC) and Tribals (ST) are the most marginalized sections of Indian society. Many atrocities have been committed against them since time immemorial. The SC/ST Prevention of Atrocities Act protects them against discrimination and atrocities.

“Dalit-Harijan-Depressed Class” Nomenclature Controversy

• The word “Dalit” comes from the Sanskrit root dal- and means “broken, ground-down, downtrodden, or oppressed”.
• “Dalit” refers to one’s caste rather than class; it applies to members of those menial castes which have historically borne the stigma of “untouchability” because their traditional occupations were deemed to be impure and polluted by the upper castes.
• Dalits, in a way, are ‘outcastes’ falling outside the traditional four-fold caste system consisting of the hereditary Brahmin, Kshatriya, Vaishya, and Shudra classes; till a few decades ago, there were physically and socially excluded and isolated from the rest of the society.
• The term was believed to have been first used by Jyotirao Phule, founder of the Satya Shodak Samaj, in the nineteenth century. He used the term for ‘untouchables’ and victims of caste based oppressions. It was B R Ambedkar, the ‘father of Indian Constitution’ and a victim of caste oppression in his early years, who popularised the term ‘Depressed Classes’, which is the anglicized version of Dalit.
• ‘Harijan’, meaning ‘children of God’, was a term first used by Gandhi to refer to Scheduled Castes in 1932. He even started three journals in English, Hindi and Gujarati in the same name in 1933. The exact origin of the word is subject to debate.
• Gandhi’s idea of using the word ‘Harijan’, many argue, was to avoid other words like ‘untouchables’ or ‘bhangis’ which were then used to refer to Scheduled Castes, because they were strongly stigmatised. He used the word ‘Harijan’ to bring the untouchables closer to God, and thereby to those who believed in God, which was the rest of Hindu society.

Who are SCs and STs?

• On the basis of the 1931 census that the British government had conducted, the Government of India 1935 Act was promulgated. The reservation for the “Depressed Classes” was incorporated into the act, which came into force in 1937. This “Depressed class” later came to known as the Scheduled Caste.
• Scheduled Tribes were the ‘tribes or communities’ who were isolated from the rest of the communities and wouldn’t abide to any religion. The British government in 1935 identified the ‘Schedule of Tribes’ which consisted of different types of indigenous tribal groups i.e. Denotified tribes, criminal tribes, forest dwellers and the like.
• By 1937 both the sections were given positive affirmative action and political representation. After India got its independence, the Constitution continued the affirmative action for the ‘depressed classes’ which were now termed as ‘Scheduled Castes’ and ‘Scheduled Tribes’.
• According to the Constitution of India, under article 341(1), the President of India, after consultation with the Governor, may specify, “the castes, races, tribes or parts of groups within castes or races, which shall be deemed to be Scheduled Castes”. Accordingly, the President has notified the Scheduled Castes in the order called ‘Constitution (Scheduled Castes) Order – 1950’ and the ‘Scheduled Castes and Scheduled Tribes List (Modification) Order – 1956’. However, under article 341(2), the Parliament of India by law can include or exclude the above-mentioned groups from the list of the Scheduled Castes.
• Part 3 of the Presidential order of 1950 states that “no person who professes a religion different from the Hindu [the Sikh or the Buddhist] religion shall be deemed to be a member of a Scheduled Caste.” This clearly lays down a religious barrier which states that any person who is not a Hindu, Buddhist or a Sikh, will not be entitled to reservation on the basis of being a Scheduled Caste.
• This is also the reason why most Dalits who convert to another religion, take up Buddhism as opposed to any other religion, so as not to leave the fold of reservations.

B. GS2 Related

1. Courts shouldn’t help make half-baked doctors, says SC

Context

• Courts should not play a role in the making of “half-baked doctors” by allowing unequipped medical colleges to carry out admissions, the Supreme Court has cautioned in a recent verdict.
• A Bench of Justices Arun Mishra and Vineet Saran dealt with the admission of over 500 students to four private medical colleges in Kerala, which were found to have poor infrastructure.

Background

• Trouble started when the MCI gave extremely poor gradings to the colleges about the facilities available on their campuses.
• The colleges appealed to the Centre, which had asked the MCI to review its decision denying them admissions for 2018-19.
• The MCI refused to review it, saying that once they have invoked the statute, they cannot re-think.
• The colleges approached the High Court on August 30, which observed that once the Centre has asked the MCI to review its decision on granting them admissions, the MCI is bound to comply.
• The high court allowed the colleges to conduct the admissions. On this, the MCI had moved the Supreme Court, which had initially stayed the high court decision last month.
• The State High Court had set aside the decisions of the Medical Council of India and the government to bar admissions to these colleges in 2018-19.
• It gave the colleges a second chance to remove the deficiencies and asked the MCI to carry out fresh inspections. It said the MCI could take “appropriate action” if the defects continue to remain.
• Quashing the High Court order, the Supreme Court held that admissions of students should not be on such conditional basis.
• Why had the High Court allowed the admissions to be carried on despite knowing very well that the colleges were sub-standard? “Such orders may ruin the entire career of the students. Once permission to admit students is granted, it should not be such conditional one”.

Medical Council of India

• Medical Council of India is a statutory body. Initially, it was set up in 1934 under the Indian Medical Council Act, 1933. The Council was later reconstituted under the Indian Medical Council Act, 1956 that supplanted the before Act.
• It establishes the uniform and high standards of medical education in India. It also registers doctors to practice in India, in order to protect and promote the health and safety of the public by ensuring proper standards in the practice of medicine.
• The registration of doctors and their qualifications is usually done by state medical councils. Recently the NITI Aayog has suggested the substitution of Medical Council of India (MCI) with the National Medical Commission (NMC).

1. Iran oil: India and China get relief

Context

• India is one of eight countries to receive temporary exemptions from U.S. sanctions on Iran that came into effect recently.
• The U.S. will be granting these exemptions to China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey.
• “We continue negotiations to get all the nations to zero,” Mr. Pompeo (United States Secretary of State) said.
• China and India, in that order, are the top two importers of Iranian oil. All payments for Iranian oil will be held in Foreign Accounts, Mr Pompeo said. Tehran can use the money to purchase non-sanctioned goods and for humanitarian purposes, including food, medicines and medical devices.
• In the last fiscal year, India, which imports over 80% of its oil, sourced some 10% of its oil imports, or just over 22 million tons from Iran. The Indian Oil Corporation is the biggest Indian customer for Iranian oil.

Background

US and Iran nuclear deal

• It is officially called the Joint Comprehensive Plan of Action (JCPOA).
• It was signed between Iran and the P5, plus Germany and the EU in 2015. P5 is the 5 permanent members of the UNSC (US, China, France, Russia, and UK).

The deal aimed at curbing Iran’s nuclear programme. Under the deal

• Most of Iran’s enriched uranium was shipped out of the country
• A heavy water facility was rendered inoperable
• Operational nuclear facilities were brought under international inspection

In return, the deal involved lifting of international sanctions on Iran.

What happened after the deal?

• October 2015: Iran conducts its first ballistic missile test since the nuclear deal. The US accuses Iran of violating a UN Security Council resolution, but former President Barack Obama acknowledges that ballistic missiles are “entirely separate” from the nuclear deal.
• Jan 2016: The IAEA acknowledges Iran has met its commitments under the nuclear deal, which sees most sanctions on Iran lifted. It takes time but Iran re-enters the global banking system and begins selling crude oil and natural gas on the international market. Next day, the US imposes sanctions over Iran’s ballistic missile tests.
• October 2018: Trump announces he will not re-certify the Iran nuclear deal as required, criticizing the accord by saying it “threw Iran’s dictatorship a political and economic lifeline.

What are US’s present concerns?

• Trump administration says the deal did not target Iran’s ballistic missile programme.
• It does not focus on Iran’s nuclear activities beyond 2025.
• It also leaves Iran’s role in conflicts in Yemen and Syria.

C. GS3 Related

1. Centre eyes seaplanes in UDAN 3

• Seaplanes may soon be operating commercial passenger flights in India with the Centre inviting bids for connecting selected destinations under the regional connectivity scheme (RCS).
• Included among the 10 destinations that the government proposes to connect through seaplanes are the recently unveiled Statue of Unity at Sardar Sarovar Dam, Sabarmati Riverfront in Ahmedabad, Tehri Dam in Uttarakhand and Nagarjuna Sagar in Telangana.
• Opening the third round of the RCS, the Ministry of Civil Aviation has invited proposals for air routes that include tourist destinations.
• The previous two rounds saw a total of 428 routes awarded to 17 airlines and helicopter operators. Air Odisha was granted rights to connect 54 routes and Air Deccan 30, but both have been able to only start 10 routes each, which too see erratic services.

• A “first of its kind” in the world, UDAN (Ude Desh Ka Aam Naagrik) will be based on market mechanism as well as bidding for a minimum of 50% seats in the participating airline’s flight and the rest would be market-based pricing.
• The scheme UDAN envisages providing connectivity to un-served and under-served airports of the country through revival of existing air-strips and airports. The scheme would be in operation for a period of 10 years.
• The UDAN scheme will be applicable on flights which cover between 200 km and 800 km with no lower limit set for hilly, remote, islands and regions which are security sensitive.
• Under the UDAN scheme, the flights are bound to connect at least one RCS airport (underserved and unserved airports).
• The RCS caps fares and also offers a ceiling for the VGF available for each route. Which means the airlines cannot charge beyond the caps specified from passengers.
• For the shortest route under the scheme fare has been capped at Rs 1,420. For longest route, fare has been capped ar Rs 3,500.
• The Centre has also decided to provide concessions such as 2% excise on Value Added Tax (VAT) and service tax at 1/10th.
• State government are bound to provide free security and fire service, utilities at concessional rates and reduce VAT on ATF to 1%.
• There will be no landing charges, parking charges and Terminal Navigation Landing Charges will be imposed for RCS flights.

1. Avni killing: NTCA seeks report

• The National Tiger Conservation Authority (NTCA) has commissioned a report from the Maharashtra Forest Department on how tigress Avni (T1) was killed.
• “If we are not satisfied [with the description of events] on whether the animal was executed following established procedure, we will conduct our own investigation,” Arup Nayak, Director, NTCA.
• On Sunday, Union Minister Maneka Gandhi had criticised the Maharashtra government for permitting a hunter to kill the tigress.
• The tigress, which is said to have killed 13 people, was shot dead in Yavatmal on November 2 by civilian hunter Asgar Ali, who was with a team of Forest Department officials.
• An official allegedly attempted — and failed — to fire a tranquilliser dart at the tigress, following which she charged at the team. Mr. Ali then fired in self-defence, according to Maharashtra Forest Minister Sudhir Mungantiwar.

National Tiger Conservation Authority

• NTCA is a statutory body under the Union Ministry of Environment, Forest and Climate change.
• It was provided statutory status by the Wild Life (Protection) Amendment Act, 2006 which had amended Wild Life (Protection) Act, 1972.
• It addresses the administrative as well as ecological concerns for conserving tigers, by providing a statutory basis for protection of tiger reserves.
• It also provides strengthened institutional mechanisms for the protection of ecologically sensitive areas and endangered species.
• It ensures enforcing of guidelines for tiger conservation and monitoring compliance of the same.
• It also places motivated and trained officers having good track record as Field Directors of tiger reserves.

Related Concept – Project Tiger

• Aims at conserving India’s national animal i.e. Tiger.
• Launched in 1973
• Currently there are 50 tiger reserves
• The tiger reserves are constituted on a core/buffer strategy.
• The core areas have the legal status of a national park or a sanctuary, whereas the buffer or peripheral areas are a mix of forest and non-forest land, managed as a multiple use area.
• The Project Tiger aims to foster an exclusive tiger agenda in the core areas of tiger reserves, with an inclusive people oriented agenda in the buffer.
• It is a Centrally Sponsored Scheme of the Ministry of Environment, Forests and Climate Change providing central assistance to the tiger States for tiger conservation in designated tiger reserves.
• The National Tiger Conservation Authority (NTCA) is a statutory body of the Ministry, with an overarching supervisory / coordination role, performing functions as provided in the Wildlife (Protection) Act, 1972.
• Wild tigers are found in 18 States in India.
• The All India tiger estimation is carried out once in every four years.

1. India declares nuclear triad operational

• India on Monday declared that its nuclear triad, stated in its nuclear doctrine, is operational after indigenous ballistic missile nuclear submarine INS Arihant achieved a milestone by conducting its first deterrence patrol.
• This means that Arihant is now prowling the deep seas carrying ballistic missiles equipped with nuclear warheads. “Prime Minister Narendra Modi received today [Monday] the crew of ship submersible ballistic nuclear INS Arihant. The submarine recently returned from its first deterrence patrol,” the PMO said in a statement.

INS Arihant

• INS Arihant is nuclear submarine capable of carrying nuclear tipped ballistic missiles. Thus it belongs to class referred to as Ship Submersible Ballistic Nuclear (SSBN)
• Its design is based on the Russian Akula-1 class submarine. It was built with Russia’s help under Advanced Technology Vessel (ATV) project started in the 1980s.
• It weighs 6000 tonnes and is 112 metre long. It is powered by 83 MW pressurised light water nuclear reactor with enriched uranium fuel.
• It will be armed with the K-15 Sagarika missiles with a range of 750 km. Later it will be armed with much longer range K-4 missiles (3,500 km range) being developed by DRDO.
• With its induction, India has completed its nuclear triad.
• The Arihant is harder to detect than India’s nuclear weapons platforms on land and in the air, giving it a “second-strike” capability. This would allow India to retaliate against an enemy who managed to destroy the rest of its nuclear arsenal in a first-strike.

• A nuclear triad refers to the nuclear weapons delivery of a strategic nuclear arsenal which consists of three components: land-based intercontinental ballistic missiles (ICBMs), strategic bombers, and submarine-launched ballistic missiles (SLBMs).
• India has nuclear-capable fighter aircraft such as the Dassault Mirage 2000H, Dassault Rafale, Sukhoi Su-30 MKI, MIG-29 and SEPECAT Jaguar.
• Land and air strike capabilities are under the control of Strategic Forces Command which is a part of Nuclear Command Authority.
• The purpose of having a three-branched nuclear capability is to significantly reduce the possibility that an enemy could destroy all of a nation’s nuclear forces in a first-strike attack; this, in turn, ensures a credible threat of a second strike, and thus increases a nation’s nuclear deterrence.

D. GS4 Related

Nothing here for today!!!

E. Editorials

1. Preserving the taboo (Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and The Intermediate-Range Nuclear Forces Treaty (INF Treaty))

Larger Background:

A Brief Note on the Intermediate-Range Nuclear Forces Treaty:

• The Intermediate-Range Nuclear Forces Treaty (INF Treaty) is nuclear arms-control accord reached by the United States and the Soviet Union in 1987 in which those two nations agreed to eliminate their stocks of intermediate-range and shorter-range (or “medium-range”) land-based missiles (which could carry nuclear warheads).
• It was the first arms-control treaty to abolish an entire category of weapon systems.
• In addition to this, two protocols to the treaty established unprecedented procedures for observers from both nations to verify firsthand the other nation’s destruction of its missiles.
• It is important to note that the INF Treaty defined intermediate-range ballistic missiles (IRBMs) and ground-launched cruise missiles (GLCMs) as those having ranges of 1,000 to 5,500 km (620 to 3,400 miles).
• It also defined shorter-range ballistic missiles (SRBMs) as those having ranges from 500 to 1,000 km.
• The deployment of IRBMs in Europe first became an arms-control issue in the late 1970s, when the Soviet Union began replacing its older single-warhead SS-4 and SS-5 IRBMs with newer and more accurate SS-20s, which could deliver three nuclear warheads apiece from a distance of 5,000 km. Mounted on mobile launchers based in the European part of the Soviet Union, the SS-20s could strike targets anywhere in western Europe in less than 10 minutes.
• One should note that under pressure from its western European allies in the North Atlantic Treaty Organization (NATO), the United States in 1979 committed itself to deploying two intermediate-range weapons systems of its own in western Europe: the Pershing II and the Tomahawk cruise missile. Mounted on mobile launchers, the Pershing II was an IRBM that could carry a single nuclear warhead a distance of about 2,000 km and strike within the vicinity of Moscow in less than 10 minutes.
• It is important to point out that the INF Treaty called for the progressive dismantling, over three years, of 2,619 missiles, about half of which were deployed at the time of signing. About two-thirds of the missiles affected were Soviet, and the rest were American.
• Further, each country was allowed to keep intact the warheads and guidance systems of the destroyed missiles. Also destroyed were missile launchers and various kinds of support equipment and structures.
• Teams of observers from both countries were given access to certain operating bases, support facilities, and elimination facilities in order to verify the withdrawal and destruction of the missile systems.
• Lastly, in order to ensure the permanent elimination of intermediate-range missiles, each country was given the right for 13 years to conduct periodic inspections of operating bases and support facilities and to monitor one production plant at which weapons of the INF category might be produced.

A Brief Note on the Treaty on the Non-Proliferation of Nuclear Weapons (NPT):

• The NPT is a landmark international treaty whose objective is to prevent the spread of nuclear weapons and weapons technology, to promote cooperation in the peaceful uses of nuclear energy and to further the goal of achieving nuclear disarmament and general and complete disarmament.
• The Treaty represents the only binding commitment in a multilateral treaty to the goal of disarmament by the nuclear-weapon States.
• A total of 191 States have joined the Treaty, including the five nuclear-weapon States. More countries have ratified the NPT than any other arms limitation and disarmament agreement, a testament to the Treaty’s significance.
• The Treaty is regarded as the cornerstone of the global nuclear non-proliferation regime and an essential foundation for the pursuit of nuclear disarmament. It was designed to prevent the spread of nuclear weapons, to further the goals of nuclear disarmament and general and complete disarmament, and to promote cooperation in the peaceful uses of nuclear energy.
• To further the goal of non-proliferation and as a confidence-building measure between States parties, the Treaty establishes a safeguards system under the responsibility of the International Atomic Energy Agency (IAEA). Safeguards are used to verify compliance with the Treaty through inspections conducted by the IAEA. The Treaty promotes cooperation in the field of peaceful nuclear technology and equal access to this technology for all States parties, while safeguards prevent the diversion of fissile material for weapons use.
• Importantly, India is not a signatory to the NPT.

Editorial Analysis:

• In the month of October, 2018, U.S. President Donald Trump declared that the U.S. is quitting the Intermediate-Range Nuclear Forces (INF) Treaty, a bilateral agreement with Russia signed in 1987.
• Experts were of the opinion that this decision was not unexpected since the U.S. has long maintained that Russia has been violating the treaty and Mr. Trump has been critical of arms control agreements because, according to him, other countries cheat putting the U.S. at a disadvantage.
• Experts assert that Mr. Trump’s decision has generated dismay and concern that this will trigger a new nuclear arms race in Europe and elsewhere.
• The INF Treaty reflected the political reality of the Cold War — of a bi-polar world with two nuclear superpowers — it is important to note that this is no longer consistent with today’s multi-polar nuclear world.
• The far greater challenge today is to understand that existing nuclear arms control instruments can only be preserved if these evolve to take new realities into account.
• It is important to note that under the INF Treaty, the U.S. and the U.S.S.R. agreed to eliminate within three years all ground-launched-missiles of 500-5,500 km range and not to develop, produce or deploy these in future. The U.S. destroyed 846 Pershing IIs and Ground Launched Cruise Missiles (GLCMs); and the U.S.S.R., 1,846 missiles (SS-4s, SS-5s and SS-20s), along with its support facilities.

The Reaction to the INF Treaty:

• The INF Treaty was widely welcomed, especially in Europe because these missiles were deployed in Europe and the treaty was signed on December 8, 1987 in Washington by U.S. President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev.
• U.S. President Ronald Reagan had earlier declared, “A nuclear cannot be won and must never be fought,” marking a ratcheting down of Cold War tensions that had been rising.
• By the early 1980s, the U.S.S.R. had accumulated nearly 40,000 nuclear weapons, exceeding the U.S. arsenal.
• In Europe, Russia replaced single warhead SS-4s and SS-5s with more accurate 3-warhead SS-20 missiles, heightening concerns. To reassure its North Atlantic Treaty Organisation (NATO) allies about its nuclear umbrella, the U.S. began deploying Pershing IIs and GLCMs in the U.K., Belgium, Italy and West Germany, setting off a new arms race.
• Growing rhetoric made the Europeans nervous. Realisation dawned that any nuclear conflict on European soil would only lead to more European casualties, catalysing a movement for ‘no-deployments’ in Europe.
• It is important to note that in the 1980s, the U.S. and the U.S.S.R. began three sets of parallel negotiations. These negotiations were done on the following:
• on strategic weapons leading to the Strategic Arms Reduction Treaty (START),
• on intermediate-range weapons leading to the INF, and
• the Nuclear and Space Talks to address Soviet concerns about Reagan’s newly launched ‘space wars’ programme (Strategic Defense Initiative).
• The INF talks originally considered equal ceilings on both sides but then moved to equal ceilings and non-deployment in Europe to address the sensitivities of allies. The U.S.S.R. wanted British and French missiles of similar ranges to be covered but the U.S. rejected the idea as also the inclusion of older 72 Pershing I missiles already deployed in Germany.
• In an effort to break the stalemate, German Chancellor Helmut Kohl made an announcement that Germany would unilaterally dismantle the Pershing 1s while the U.S.S.R. came up with a double global zero covering both shorter-range and intermediate-range missiles.
• The U.S. agreed, Europe breathed a sigh of relief and the INF was hailed as a great disarmament treaty even though no nuclear warheads were dismantled and similar range air-launched and sea-launched missiles were not constrained.
• However, since it was bilateral, the INF Treaty did not restrict other countries but this hardly mattered as it was the age of bi-polarity and the U.S.-U.S.S.R. nuclear equation was the only one that counted.

Changing Geopolitical Situation:

• It is important to note that in 2014, U.S. President Barack Obama formally accused Russia of violating the INF Treaty. However, he refrained from withdrawal on account of European concerns.
• However, on the other hand, Russia alleges that the U.S. launchers for its missile defence interceptors deployed in Poland and Romania are dual capable and can be quickly reconfigured to launch Tomahawk missiles, constituting a violation.
• Currently, experts have pointed out that the U.S.’s 2018 Nuclear Posture Review (NPR) reflects a harsher assessment of the security environment faced by the U.S. and envisages a more expansive role for nuclear weapons than in the past.
• Further, Russia is blamed for seeking the break-up of NATO and a re-ordering of ‘European and Middle East security and economic structures in its favour’.

Potential Causes for Concern:

• China is identified for the first time as a strategic competitor seeking regional hegemony in the Indo-Pacific region in the near-term and ‘displacement of the U.S. to achieve global pre-eminence in the future’.
• A 30-year modernisation plan with a price tag of \$1.2 trillion with new nuclear-armed sea-launched cruise missile (SLCMs) and low-yield warheads is detailed in the NPR. Russia has unveiled plans to develop a new nuclear torpedo and nuclear-powered cruise missile.
• Experts have pointed out that what is even more worrisome are developments that blur the line between nuclear and conventional weapons.
• For example, in order to lessen its dependence on nuclear weapons, the U.S. developed layered missile defences and conventional Prompt Global Strike (PGS) capabilities that use conventional payloads against strategic targets.
• Other countries have responded with hypersonics and a shift to lower yield tactical warheads.
• It is believed that with growing dependence on space-based and cyber systems, such asymmetric approaches only increase the risks of accidental and inadvertent nuclear escalation.

Concluding Remarks:

• In conclusion, it is important to note that the key difference with today’s return of major power rivalry is that it is no longer a bi-polar world, and that nuclear arms control is no longer governed by a single binary equation.
• Further, there are multiple nuclear equations that need to be considered for example: U.S.-Russia, U.S.-China, U.S.-North Korea, India-Pakistan, India-China, but none is standalone.
• Therefore, experts believe that neither nuclear stability nor strategic stability in today’s world can be ensured by the U.S. and Russia alone and this requires us to think afresh.
• Further, it is also important to note that the INF Treaty is not the first casualty of unravelling nuclear arms control.
• There have been some prior precedents:

These include:

1. In December 2001, the U.S. unilaterally withdrew from the 1972 Anti-Ballistic Missile (ABM) Treaty with the U.S.S.R. which limited deployment of ABM systems thereby ensuring mutual vulnerability, a key ingredient of deterrence stability in the bipolar era.
2. After this, the next casualty is likely to be the New START agreement between the U.S. and Russia, which will lapse in 2021, unless renewed for a five-year period. This limits both countries to 700 deployed intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missile (SLBMs) and heavy bombers and 1,550 warheads each.
3. However, Mr. Trump has described it as “one of several bad deals negotiated by the Obama administration”. The lapse of the New START would mark the first time since 1968 that the U.S. and Russian nuclear arsenals would be unconstrained by any agreement.
• Finally, it is important to note that the political disconnect is also evident in the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), the most successful example of multilateral arms control.
• Some experts believe that the Non-Proliferation of Nuclear Weapons (NPT) has become a victim of its success. It can neither accommodate the four countries outside it (India, Israel, North Korea and Pakistan) as all four possess nuclear weapons, nor can it register any progress on nuclear disarmament. Experts further assert that the NPT succeeded in delegitimising nuclear proliferation but not nuclear weapons. As a consequence of this,  NPT Review Conferences have become increasingly contentious.
• Lastly, the most important achievement of nuclear arms control is that the taboo against use of nuclear weapons has held since 1945. Preserving the taboo is critical but this needs realisation that existing nuclear arms control has to be brought into line with today’s political realities.

1. In defence of Urjit Patel (RBI and the Government of India)

Note to Students:

This particular editorial analysis takes into account the larger issue of the ongoing turf war between the RBI and the Central Government on a few issues that have caused considerable friction. It also takes into account a recent development where the RBI has been asked to share details sought by the Central Information Commission.

In essence, over and above some of the previous editorial releases, we have also taken into account some of the points covered in the editorials, namely, “In defence of Urjit Patel” and “Wilful on defaulters?” to give a broader and larger dimension to the issue under study.

• In fact, this is a very relevant topic for students to prepare from the perspective of Indian Economy. Here we have suitably signposted the Editorial Analysis into multiple headings.
• “Larger Background”: This particular section talks about the broader background of the issue, taking into consideration specific points that may have been featured in previous editions of The Hindu. The thought process behind including this section is to give a ‘storyline’ approach to an aspirant when he/she goes through this topic.

• “Editorial Analysis”: This particular section gives an insight towards the specific points covered in the specific editorial that is the subject of our study.

• “The Way Forward/Concluding Remarks”: This sections gives aspirants concluding points that are taken from the article in question as well as some forwarding looking points taken from other articles, as and when required.

The important aspect to note here is that the issue being discussed in the news assumes priority over just the article.

Larger Background:

Role of the Reserve Bank of India and the Ministry of Finance

• The Reserve Bank of India and the Ministry of Finance do have a number of options for stabilisation.

These include the following:

1. overtly intervening in the forex market,
2. selling non-resident Indian bonds (as last done in 2013) and
3. conducting a sovereign bond issuance

The Government at loggerheads with the RBI:

• The government and RBI have been at loggerheads over a few issues for some time now.
• The government believed that easing of lending rules for the banks under the prompt corrective action (PCA) framework could help reduce pressure on MSMEs.
• However, the regulator stood its ground arguing that such a move would put the clock back and undo clean-up efforts.
• Further, with the credit markets tightening after the IL&FS default in September, 2018, non-banking finance companies lobbied the government for more liquidity.
• However, the RBI maintained its position since the banking system did not witness any spike in borrowing costs and the market was just repricing risk in an evolving situation.
• Reportedly, the government and the RBI disagree on a large number of important issues such as classification of non-performing assets (NPAs) and setting up of a payments regulator independent of the RBI.

A look at the issue concerning setting up of a payments regulator independent of the RBI:

• Recently, the Reserve Bank of India (RBI) said there is no case for having a regulator for payment systems outside the central bank.
• The RBI had submitted a dissent note, against certain recommendations of the inter-ministerial committee for finalization of amendments to the Payment & Settlement Systems Act, 2007.
• The draft Payment and Settlement System Bill, 2018 had made an important observation. It said that an independent payments regulatory board (PRB) needs to be established to regulate the payments sector aimed at fostering competition, consumer protection, systemic stability and resilience in the payments sector.
• However, according to the RBI’s dissent note, the central bank believes that the PRB must remain with the central bank and headed by the RBI governor. The RBI and the government may nominate three members each to the board, with a casting vote for the governor.
• Crucially, the RBI had cited the report of the Ratan Watal Committee on digital payments as recommending the establishment of the PRB within the overall structure of the RBI, arguing therefore that there is no need for any deviation.

A Note on the Ratan Watal Committee on digital payments:

• This Committee on Digital Payments was constituted by the Ministry of Finance, Department of Economic Affairs under the Chairmanship of Shri. Ratan P. Watal, Principal Advisor, NITI Aayog and former Finance Secretary to the Government of India.
• In its Report, the Committee had  recommended a medium term strategy for accelerating growth of Digital Payments in India with a regulatory regime which is conducive to bridging the Digital divide by promoting competition, open access & interoperability in payments.
• The Report recommended inclusion of financially and socially excluded groups and assimilation of emerging technologies in the market, while safeguarding security of Digital Transactions and providing level playing to all stakeholders and new players who will enter this new transaction space.
• It had suggested inter-operability of the payments system between banks and non-banks, up-gradation of the digital payment infrastructure and institutions and a framework to reward innovations and for leading efforts in enabling digital payments.

A Closer Look:

• The RBI observed that it would prefer the Payments Regulatory Board to function under the purview of the RBI Governor.
• “There is no case of having a regulator for payment systems outside the RBI,” the note read.
• In support of its stance, the RBI stated that the activities of payments banks come well within the purview of the traditional banking system, which the central bank oversees as the overarching financial regulator.
• Thus, according to this logic, it might make better sense to have the RBI oversee the activities of payments banks as well instead of creating a brand new regulator for the growing industry.
• The RBI, in essence, is pointing to the interconnection between the payments industry and the banking system to back the extension of its regulatory powers.
• In conclusion, the RBI’s case makes good sense when seen from the perspective of the cost of regulatory compliance.
• As stated above, there is definite overlapping between the current regulatory powers of the RBI and the proposed regulations for the payments industry.
• Further, it is important to note that a unified regulator can thus help in lowering the compliance costs and enabling the seamless implementation of rules.
• Also, there is the real risk that a brand new regulator may be unable to match the expertise of the RBI in carrying out necessary regulatory duties.
• As a consequence of this, it makes better sense to have the RBI take charge of the rapidly growing payments industry which can ill-afford regulatory errors at this point.
• The fact that the RBI has made public its dissent against the Union government’s idea, suggests that the central bank has serious problems with the dilution of its current powers over the financial sector.
• However, the RBI’s demand for the centralisation of regulatory powers also brings with it the need for exercising a greater degree of responsibility.
• One must note that when we are at a time where there are increasing risks to the stability of the domestic financial system, both the government and the RBI must look to work together to tackle these risks instead of battling over regulatory powers.

A Brief Note on Section 7:

The RBI is an entity independent of the government as it takes its own decisions. However, in certain instances, it has to listen to the government. This provision in the RBI Act is contained in its Section 7 which says:

(1) The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest.

(2) Subject to any such directions, the general superintendence and direction of the affairs and business of the Bank shall be entrusted to a Central Board of Directors which may exercise all powers and do all acts and things which may be exercised or done by the Bank.

(3) Save as otherwise provided in regulations made by the Central Board, the Governor and in his absence the Deputy Governor nominated by him in this behalf, shall also have powers of general superintendence and direction of the affairs and the business of the Bank, and may exercise all powers and do all acts and things which may be exercised or done by the Bank.

Thus, it is clear from the above that this section empowers the government to issue directions in public interest to the central bank, which otherwise does not take orders from the government.

Why is it that Section 7 is seen as an extreme measure?

• It is important to note that Section 7 has never been used till now.
• It was not used even when the country was close to default in the dark days of 1991, nor in the aftermath of the 2008 global financial crisis.
• Importantly, it is not clear how this Section operates since it has never been used.
• Some sections believe that this aggressive move could scandalise a section of academia and experts, while raising questions about the government’s intentions and the impact on the RBI’s autonomy.
• A speech made last week by Viral Acharya, the deputy governor of the RBI, which brought the tensions between the RBI and the government to the fore, might have been provoked by the government’s invocation of Section 7.

What did the speech hint at?:

• Stressing the importance of the central bank’s autonomy, Acharya had sounded a warning to the government — keep your hands off the RBI. Supporting his arguments with illustrations, principles and insights, Acharya made a case of central bank’s autonomy for long-term financial stability in the country.

A Deeper Insight:

• It is important to note that this is not the first time that the RBI’s autonomy has come under focus, and it will surely not be the last. Successive Governors have fought against what they felt were transgressions — formal and informal — on the central bank’s autonomy by powerful Finance Ministers.

• Yaga Venugopal Reddy, a former Governor of the Reserve Bank of India, (RBI),  once famously quipped to a journalist: “I’m very independent. The RBI has full autonomy. I have taken the permission of my Finance Minster to tell you that.” On a more serious note, he clarified that the RBI is independent, but within the limits set by the government.
• In his book, “Advice and Dissent: My Life in Public Service”, he explains his understanding of this autonomy under three functions. These functions are:
1. operational issues,
2. policy matters, and
3. structural reforms.

In the case of the first, he believed in total freedom; on the second, he preferred prior consultation with the mandarins in North Block; and on the third, he worked in “very close coordination” with the government.

• Dr. Reddy describes the interactions with the government as “walking on a razor’s edge” and concedes that the sovereign is ultimately supreme.

Why does he believe so?

• This is because the RBI Act allows the government to give written directives to the RBI in the public interest.
• On critical issues, often the choice for the Governor is to concede to the government with or without a written directive. But tradition has been that both the government and the RBI have avoided recourse to this provision.
• That has been due only to the mature handling of differences behind closed doors, something that has been absent in the current tussle.
• Duvvuri Subbarao, another former Governor, argues along similar lines in his book, Who Moved My Interest Rate?

What does Duvvuri Subbarao say?:

• The existence of Section 7 in the RBI Act, even if it has never been used till now, proves that the RBI is not fully autonomous, says Dr. Subbarao.
• Dr. Subbarao points out that the fact that it has never been used is testimony to the sense of responsibility that the government and the central bank have displayed.

Position Taken by the RBI:

• The RBI recently came out with a statement.
• The recent statement put out by the government underlines that the RBI is autonomous but within the framework of the RBI Act.
• It is thus clear that the central bank cannot claim absolute autonomy.
• It is autonomy within the limits set by the government and its extent depends on the subject and the context.
• It is important to note that in a democracy, it is unthinkable that we will have an institution that is so autonomous that it is not answerable to the people.
• Experts point out that the risk of such an institution is that it will impose its preferences on society against the latter’s will, which is undemocratic.
• Experts further add that when seen from this perspective, the limits to the RBI’s autonomy will be clear.
• It is autonomous and accountable to the people ultimately, through the government.
• The onus is thus on responsible behaviour by both sides.

Editorial Analysis:

• Experts have pointed out that Central bank-government tensions are a common phenomenon.
• Successive governments have been in provocative situations with the RBI. On each occasion, the individuals involved defused tensions and found durable solutions outside the Section 7 consultation process.
• Experts assert that never before in the 83 years of the RBI’s history, has the Section 7 consultation process been initiated for managing intractable disputes in not one or two, but three policy matters. Post-consultations, the government can give written directions to the RBI in ‘public interest’.
• Some experts also assert that the disagreements relate to the RBI’s stringent restrictions on government-run banks whose non-performing assets (NPAs) have grown so much, that the only way of preventing risk spilling from them into the whole financial system is to quarantine their lending.
• Another source of friction is government’s insistence that the RBI go soft on power companies defaulting on loan repayments.
• The third source of friction is seigniorage, an eternal conflict. The RBI generates surpluses in the various money markets operations it runs. The RBI transfers part of the surpluses to the government, and with the rest it maintains various reserves to draw from in times of financial instability or contingencies. The Finance Ministry wants the RBI to reset the formulae so that larger surpluses become free for transfer to the government. Determined moves of this kind were resisted most recently by Governors Y.V. Reddy and D. Subbarao, both ex-IAS and old Ministry hands.

A Brief History of the long-standing battle:

• It is important to note that the long-standing battle between the RBI and the government escalated in 2015.
• As a matter of fact, the differences were so sharp that a substitute for the Finance Secretary was nominated to attend the RBI’s Board meetings.
• Experts have pointed out that for the first time, an interview with a panel headed by Cabinet Secretary was instituted in the selection process for appointing the RBI Governor. Dr. Patel was chosen through this revamped process. Mr. Jaitley was not a member on the selection committee headed by the Cabinet Secretary or of the Appointments Committee of the Cabinet (ACC). His views were taken onboard informally.
• It is important to note that the RBI has in recent years passed on its surpluses in totality to the government, transferring nothing to its own reserves. It is working on a framework that will assess its risk-buffer requirements in a systematic way for determining the transferable surpluses every year.
• Still not satisfied, the Ministry has initiated Section 7 consultations for dipping into the RBI’s war chest for ₹3.6 lakh crore. It is believed that for Ministry mandarins, pressuring the RBI comes easier than raising resources through privatisation or expenditure reforms.
• Questions arise:Would plugging those with the RBI’s surpluses serve ‘public interest’? Experts have argued that this is political convenience masquerading as public interest.

Some other pressing issues:

• One also observes that the RBI is being blamed for the NPAs crisis — though at the height of public outrage over the Nirav Modi scam, critics argue that the government dragged its feet on filling the vacancy of the Deputy Governor in charge of bank supervision and inspections.
• Mr. Patel was of the view that after decades of relying on public-sector banking background profiles, the job should be opened to a wider, global field of expertise. The panel that shortlisted candidates for approval by the ACC concurred with his opinion. Overcoming the IAS lobby’s resistance, applicants who combined exposure to public-sector banking system with experience at prestigious global banks were included in the shortlist.
• But the ACC headed by the Prime Minister returned the shortlist, with a demand for more names, forcing re-advertisement of the vacancy and restarting of the process afresh.
• The previous Deputy Governor had retired in mid-2017. The successor was appointed in June 2018. The position remained vacant for nearly 12 months.

Another Tangle- Issue surrounding the CIC and the RBI:

• The Reserve Bank of India finds itself in the midst of another tangle.
• The Central Information Commission (CIC) has recently directed RBI Governor Urjit Patel to show cause “why maximum penalty should not be imposed on him for” the central bank’s ostensible “defiance” of Supreme Court orders on disclosing the names of wilful defaulters on bank loans worth hundreds of crores of rupees.
• One must take note that at the heart of the matter is the issue of burgeoning bad loans at the country’s commercial banks, which by the RBI’s own admission had, at the gross level, surged to 11.6% of all advances as on March 31, 2018, from September 2017’s 10.2% level.

What the charge against the central bank is all about?

• It is important to note that in his order dated November 2, Information Commissioner M. Sridhar Acharyulu has come down heavily on the RBI and its chief for failing to uphold the interest of the public at large and not fulfilling its statutory duty to the depositors, the economy and the banking sector, by privileging individual banks’ interests over its obligation to ensure transparency.
• While the central bank has repeatedly acknowledged the gravity of the problem it faces, including in ensuring more accountability from the more numerous public sector banks over which it wants greater control, it has consistently invoked both the risk to the country’s “economic interest” and its “fiduciary” relationship with lenders to avoid sharing information on the largest defaulters with RTI applicants.

A few more assertions made by the CIC:

• The CIC order is also unsparing of the government for not being more forthcoming. Mr. Acharyulu has also asked the Finance Ministry why it should not explain to the people the action taken, or contemplated, to recover dues from wilful defaulters, who owe banks more than Rs. 50 crore, and, where warranted, the criminal proceedings initiated.
• Experts assert that while it is no one’s argument that all large unpaid loans are by-products of mala fide borrowing, the onus is on the RBI and the government to make as clean a breast of it as is legally possible, in order to retain public trust.
• Given that the RBI has initiated steps to set up a digital Public Credit Registry that would include details of all borrowers including wilful defaulters, it would behove the banking regulator to meet the CIC’s November 16 deadline for furnishing the information sought about those owing Rs. 1,000 crore or more, to start with.

Concluding Remarks:

• It is important to note that the RBI is a systemically vital institution that, barring its meek acquiescence on demonetisation, commands the confidence of the markets and the public’s respect. However, critics have pointed out that what it does not have in good measure is the government’s trust and support.
• Finally, there is enough creative tension between the two built into the system.
• The Governor has to be conscious of the limits to his autonomy at all times, and the government has to consider the advice coming from Mint Street in all seriousness, as indeed Dr. Reddy and Dr. Subbarao have pointed out.
• However, what if the Government and the RBI do have fundamental disagreements, as they seem to be having now, and are unable to arrive at a common ground?
• Well, the option of Section 7 is certainly available to the more powerful side; but it is important to note that Section 7 is a deterrent never to be used.
• In conclusion, it is to avoid situations such as the one we are seeing now that former RBI Governor Raghuram Rajan argued for a clear enunciation of the RBI’s responsibilities.
• In his book, “I Do What I Do”, former RBI Governor Raghuram Rajan points out that the position of the RBI Governor in the government hierarchy is not defined.
• The Governor draws the salary of a Cabinet Secretary, and it is generally understood that he will explain his decisions only to the Prime Minister and the Finance Minister. Argues Dr. Rajan: “There is a danger in keeping the position ill-defined because the constant effort of the bureaucracy is to whittle down its power.”
• Experts believe that the latest tussle between the executive and the central bank will eventually end, in all probability with a compromise.
• However, its purpose would have been served if the debate leads to greater awareness on both sides of the other’s compulsions.

F. Tidbits

1. IG recommends dismissal of 175 cops over Patna violence

• Following large-scale violence and vandalism by over 300 trainee police constables at New Police Line in Patna on Friday after the death of one of their colleagues, the Inspector General of Police, Patna Zone, who conducted a probe into the incident, has recommended dismissal of as many as 175 constables, 78 of them women. He also suspended 23 other policemen posted at the Police Line.
• On Friday, over 300 trainee constables, mostly women, had come out of their barracks at New Police Line and indulged in violence and vandalism, attacking two senior police officers and damaging several police vehicles.
• They were enraged over the death of a colleague, Sabita Pathak, 22, who was suffering from fever and other ailments for several days but was “denied leave by senior officials”.

G. Prelims Fact

Nothing here for today!!!

H. Practice Questions for UPSC Prelims Exam

Question 1. Following statements are given regarding BIMSTEC, please choose the correct one:
1. BIMSTEC is the sub-regional group of seven countries in South Asia and Southeast Asia lying in littoral and adjacent areas of Indian Ocean.

2. BIMSTEC has 14 sector-driven objectives, however, environment and climate change is not included into it.

Options:

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

See

Question 2. Bangkok Declaration has led to establishment of:
1. SAARC
2. BIMSTEC
3. G-20
4. BRICS

See

Question 3. “Public Affair Index 2018”, recently seen in news, is released by which of the following?

1. Public Affairs Centre
2. Ministry of Urban Development
3. NITI Aayog
4. Indian Institute of Public Administration

See

I. Practice Questions for UPSC Mains Exam

1. “The Comptroller and Auditor General (CAG) has a very vital role to play.” Explain how this is reflected in the method and terms of his appointment as well as the range of powers he can exercise. (150 words)

2. “Policy contradictions among various competing sectors and stakeholders have resulted in inadequate ‘protection and prevention of degradation to environment.” Comment with relevant illustrations. (150 words)

Also, check previous Daily News Analysis

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