UPSC Exam Comprehensive News Analysis Oct01

F. Tidbits

• The first ever lion cubs were born by means of artificial insemination — the first such pair anywhere in the world — in Pretoria.

Significance

• Lions are extinct in 26 African countries and numbers in the wild have plummeted 43% over the last two decades, with roughly only 20,000 left, according to the International Union for Conservation of Nature (IUCN), which lists the African lion as vulnerable.
• This technique can be used to save other endangered big cats.

Concerns

• The captive lion breeding industry is exploitative and profit-driven.

• Until recently, it seemed as if growth was finally returning and that the petulant rupee was the only problem to handle. Not any longer, though.

Concerns

• The last few days have seen a crisis break out in the debt markets in the form of the IL&FS defaults that is threatening to spread to other parts of the economy and rudely snuff out the nascent growth impulse, if it is not handled with care.
• Alongside, global oil prices have been staging an incessant upward march, causing fresh headaches for the Centre.

Oil prices

• Petrol prices have breached the ₹90-a-litre level in many parts of the country in the last few days, with diesel prices not too far behind.
• With the Organisation of Petroleum Exporting Countries (OPEC) ignoring calls to increase output, global oil prices, that are hovering around $82 a barrel now, could well touch the $100-a-barrel mark as the November 4 date for sanctions on Iran nears.
• As domestic prices of petrol and diesel too race towards the three-figure mark, there is bound to be tremendous pressure on the Centre to cut taxes to reduce prices.

Should Centre cut duty?

• A cut in excise duty will have adverse implications for revenues this fiscal and end up impacting the fiscal deficit.
• Staying pat and allowing prices to rise would push up prices of a range of commodities and mass consumption items, leading to an adverse impact on inflation and spending power of the people.
• At a time when the economy is being propped up by private consumption spending (and public investment), this might be a problematic choice.
• Yet, that’s probably the way the Centre should go. For one, a cut of a couple of rupees, which is what the Centre can afford now, will be cosmetic and hardly make a difference to the pump price of petrol when oil prices are surging ahead by almost a dollar per barrel every couple of days. The benefit of the cut will be overrun in no time.
• Second, the higher fuel prices have had zero impact on consumption. Petrol and diesel consumption have continued to grow at a healthy pace. Petrol consumption has raced ahead at 8.2% in the April-August period; August alone saw a growth of 7.8%. Reducing prices by cutting duties, in this backdrop, may either maintain this growth or even push it up, which is not desirable.
• The last thing that the Centre needs is a spiralling deficit in the current account caused by an uncontrolled rise in oil imports.
• Though consumers have been absorbing the higher fuel prices till now, there will come a point when the laws of economics kick in; the higher prices will pinch and they would be forced to economise on consumption. That would be a desirable goal for the Centre to work towards. But such an option may not be politically feasible especially with elections round the corner.

Liquidity crisis

• Distracting policymakers from their focus on oil prices is the drama unfolding in the debt markets in the aftermath of the series of defaults over the last few weeks by IL&FS.
• The markets convulsed last week when the sale of Dewan Housing debt paper at a steep discount by DSP Mutual Fund to meet its own redemption pressures set off fears of a liquidity crunch.
• It is a fact that liquidity has been tight for many months now despite RBI’s periodic efforts to manage the situation.
• The fear factor has ensured that the market for medium to long-term borrowing has dried up with lenders unwilling to lend beyond the short-term.
• This is an unfortunate development just when investment activity was beginning to look up. For instance, the head of a large infrastructure company said that he had put off plans to invest ₹1,500 crore to expand capacity. Because of the climate of uncertainty following the IL&FS episode and the fear that the contagion could spread to the larger economy.

Other concerns

• Offtake of passenger cars from showrooms has apparently slowed down in the last couple of weeks too, going by some reports.
• This is but natural given that the two major costs that determine a new car purchase — fuel price and interest costs — are both on the upward march.

Way forward

• These are initial signals for the Centre to react quickly.
• The IL&FS situation has to be managed carefully and confidence restored in the markets.
• The upcoming monetary policy statement from RBI is crucial in this context.
• While a rate hike is taken as given, the central bank’s moves to ease liquidity on a stable basis in the busy season ahead for the economy will be crucial.

• As the Indian sugar sector steps into a new season, it looks forward to more exports, price stability in the domestic market, and clearance of cane arrears to farmers.

Concerns

• The problems the industry confronts today are many, and stem mainly from high production in 2017-2018 and 2018-2019 seasons, exceeding domestic demand.

High production

• The Indian Sugar Mills’ Association estimates sugar production during the 2018-2019 (October to September) season to be 35 million tonnes. In 2017-2018, it was about 32 million tonnes. The carryover stock is 10.3 million tonnes.
• The domestic demand is about 26 million tonnes. Just about five lakh tonnes of sugar were exported in 2017-2018 and the estimated target is to export five million tonnes during 2018-2019.

Government package

• The Union government recently announced a ₹5,500-crore package. This includes ₹1,375 crore towards internal transport, freight handling, and other charges for exports and ₹4,163 crore directly to farmers as part of fair and remunerative price (FRP) for 2018-19, which will reduce sugar mill’s cane price liability, if they fulfil the stipulations of the Department of Food and Public Distribution.
• Though the announcement bolsters hope for a better season ahead, it is inadequate.

Global price outlook

• The international sugar prices are low compared with India’s domestic raw sugar price by almost ₹12-₹13 a kg, and the global price outlook is depressing for the 2018-2019 season too.
• The support for transport charges to the ports might reduce this loss by ₹2.5 to ₹3 a kg. In 2017-2018 too, the government came out with a package a few months before the season ended. It then announced ₹5.50/quintal as assistance for cane crushed. However, there were hardly any takers, as the difference between the domestic ex-mill price after fixing of MSP for sugar and the global market price increased.

Tamil Nadu

• In Tamil Nadu, the situation is worse. With poor rainfall hitting sugarcane production for the last six years, capacity utilisation dropped to 27% and production in 2017-2018 was just 0.7 million tonnes. It is expected to be 0.85 million tons in 2018-2019 and capacity utilisation at about 32 %.
• With lower capacity utilisation, the cost of production of sugar for T.N. mills will be higher by ₹10 a kg compared to mills in other States.

Way forward

• Hence, this season, the industry wants the government to make exports compulsory for each sugar mill and, simultaneously, if prices in domestic market improve a bit, it may compensate the loss on exports.
• Further, the government-fixed minimum price for sugar (factory gate price) should be increased to ₹34 a kg from ₹29 a kg.
• The support announced by the government will move sugar for exports, thus reducing the stock with the mills.

Background

• Around three centuries ago, India’s share of the global economy was about 25%. Today, it has dwindled to single digits. During this period, India missed three waves of industrialisation: Industry 1.0, driven by mechanisation, steam power and weaving loom; Industry 2.0, driven by mass production and assembly line; and Industry 3.0, driven by electronics and computers.
• With the onset of Industry 4.0, where the industrial and digital worlds are converging, India has a once-in-a-lifetime opportunity to regain lost ground by leveraging its enviable combination of technology and talent, an advantage not many countries can claim to possess.

What can be done?

• First, the affiliation system of higher education, which drove consistent quality while building scale in the past, needs to be reimagined. This model worked well during Industry 2.0 and Industry 3.0. With digital disrupting every aspect of our life, there is a need for greater autonomy and innovation in higher education to develop multi-disciplinary talent.
• Having universities with hundreds of affiliated colleges following standardised approaches stifles innovation and entrepreneurship. What India needs today is an exponential increase in corporate-funded universities, deemed universities and autonomous institutions that have the latitude to innovate.
• Second, we need a skilling movement similar to our freedom movement. Every skilled individual needs to participate in this movement.
• Individual Social Responsibility (ISR) can create much greater impact than Corporate Social Responsibility (CSR).
• The curriculum in many of our educational institutions is out of sync with shifts in the marketplace and the faculty find it hard to cope with the velocity of change. Teaching-learning models should boost self-paced learning and assessment methodologies should focus on learning outcomes. This can be done only if employees, present and past, exposed to shifts in the physical-digital world, enthusiastically participate in skilling at scale. While paid volunteering time off is catching on in some measure, employee-led volunteering has to be woven into the cultural fabric of organisations.
• Third, our labour laws dating back to a time when government and public sector undertakings created jobs, need to be unshackled. In a gig economy, where work-from-home, crowdsourcing, dual employment and moonlighting are gaining currency, rigid laws that are more regulatory and punitive than progressive and catalytic, set us back. We need laws that are employment friendly rather than employee or employer-friendly.

Way forward

• If we can address these areas of education, skilling and labour laws on a war footing, India can truly bend the curve and significantly enhance its contribution to global GDP.
• While employer brands of the future would be those that focus on skilling and reskilling, countries of the future would be the ones that focus on education, skilling, and forward-looking labour laws.

• Aggravating the problem for loss-making airlines, oil marketing companies have increased the domestic Aviation Turbine Fuel (ATF) prices by 7.25% effective October 1.
• This is on account of higher jet fuel prices in the international market coupled with the weakening of Indian rupee as against U.S. dollar (exchange fluctuation).
• Freight charges have also contributed to the fuel prices.

• India’s exports hold a promising outlook with the U.S. economy growing at its best in four years, coupled with the rupee depreciation leading to enhanced net revenue realisations, according to a report by Assocham.
• The U.S. emerged as the top export destination for India, with $47.9 billion worth of shipments in the last fiscal ended March, followed by the UAE and Hong Kong, Commerce Ministry data showed.
• The U.S. economic growth accelerated by 4.2% in the second quarter of this year, its fastest pace in about four years despite the ongoing tariff war with China.
• The U.S. accounted for about 16% of India’s total merchandise exports of $303 billion in the fiscal 2017-18 with the annual growth of 13.42%, the report said.
• It is the largest market for Indian exports, both for merchandise and services. So, when the U.S. grows at its current pace, it augurs very well for the total Indian exports’ basket, it added.
• A sharp drop in rupee may have caused a burden on the country’s import bill, but the net realisations for exporters have increased significantly.
• According to the trade data for August 2018, while exports have shown a growth of about 19% in dollar terms, the rupee realisations for the export shipments went up close to 30%.
• With further streamlining of exporters’ GST refunds, their competitiveness should also improve, helping them in the global market, Assocham said.

• Using the knowledge of senior botanists, nature lovers initiated an experimental effort in Odisha’s Berhampur on Sunday to cure trees affected by human activities by using traditional ingredients.
• The initiative was started by Sabuja Bahini, Anchalika Vikash Parishad and other organisations and later joined by other government authorities, environmentalists etc.

Problems

• Metal nails, wires and publicity materials on the trunk of the trees are the reason behind the slow death of trees.
• It was seen that toxic metallic oxides produced through corrosion had started to damage the internal parts of these trees.
• Fungal infection caused by posters nailed on tree trunks was a major problem.

Traditional methods

• As plants have great self-healing power, they have decided to provide natural remedies to them which would help them heal the wounds by themselves.
• They experimented with a concoction comprising turmeric, neem leaves, gobar [cattle dung] and clay collected from ponds.
• No chemical ingredients like modern pesticides or fungicides were used in the mixture.
• In the concoction, turmeric and neem serve as disinfectants for the wounds and fungal infections while gobar and clay help the plant cells to regenerate.

Way forward

• The process does not involve any costly materials, the general public should start saving the trees in their area through this process in future.
• They will try to bring a private member Bill to save trees in urban areas from getting damaged by human interventions.

• Hinting at the prevalence of a culturally rich Pampa Valley civilisation flourished along the heritage village of Aranmula, the villagers have unearthed parts of a few terracotta artefacts of archaeological value on the banks of the river Pampa.
• The terracotta pieces were first sighted by a villager and a few fishermen in Edayaranmula.
• The broken terracotta pieces were of Naga images, a male bust, female face, ornaments, etc.

Significance

• The sighting of the terracotta works hints at ancient civilisation in the Pampa Valley at par with that of the Indus Valley.

• The Gujarat Cooperative Milk Marketing Federation is India’s largest farmers’ cooperative.
• Inaugurating a new chocolate-making factory set up by dairy giant Amul in Gujarat, Prime Minister Narendra Modi said a cooperative like Amul is a viable economic alternative to capitalist and socialist models.
• Mr. Modi credited Sardar Patel, who founded the Kheda Milk Union, for creating the model. Sardar saheb sowed the seed for a third economic model — controlled neither by government nor capitalists. Instead, it was created with the cooperation of farmers and people and everybody was a part of it.
• He called upon Amul to set a target for making India the third largest milk processor in the world, from its current ranking of 10th, by the time the nation completed 75 years of its existence.

• Ahead of the bilateral summit between Prime Minister Narendra Modi and Russian President Vladimir Putin later this week, discussions are still underway between the two sides to conclude a final deal for 200 Kamov-226T utility helicopters.

• India and Russia have already concluded an Inter-Governmental Agreement (IGA) for 200 helicopters estimated to cost over $1 billion.
• Under the deal, 60 helicopters will be imported from Russia and at least another 140 will be built in India by Hindustan Aeronautics Limited (HAL) with technology transfer.
• As part of this, a joint venture was set up in India which will build the helicopters.

S-400 systems

• However, the big focus during Mr. Putin’s visit on October 4-5 is the proposed ₹39,000-crore deal for five S-400 air defence systems as the prospect of U.S. sanctions looms large with U.S. officials warning against it.
• The state-of-the-art S-400 Triumf (NATO name SA-21 Growler) is considered one of the most advanced long-range defence systems in the world.
• It has a range of 400 km and can hit targets at a height of up to 30 km.
• Its powerful radars can track hundreds of targets simultaneously and destroy a range of targets.
• Each system includes a command post, a 3D phased array acquisition radar, optional tracking radar and firing units.
• There are various kinds of missiles to choose from based on the mission requirements.

Threat of sanctions

• With the friction in relations between the U.S. and Russia, the S-400 has become a major point of friction.
• Several countries, including some U.S. allies, have expressed interest or are acquiring the system and Washington has threatened them with sanctions.
• Early this month, the Trump administration imposed sanctions on some entities and individuals in China as it recently acquired Su-35 fighter jets and S-400 systems.

11. Social media giants to help EC clean up poll campaign

• Internet major Google and social media giants Twitter and Facebook have assured the Election Commission that they will not allow their platforms to be used for anything which affects the sanctity of polls during the campaign period.
• It was done on a pilot basis in Karnataka.
• Now they will have a bigger pilot before the Lok Sabha elections in the four States of Madhya Pradesh, Rajasthan, Chhattisgarh and Mizoram.

• The back-channel talks between the National Security Advisers of India and Pakistan from 2015 to 2018 were a ‘good instrument’, says Syed Tariq Fatemi, special assistant on foreign affairs to former Pakistan Prime Minister Nawaz Sharif, amid reports that the new government of Prime Minister Imran Khan plans to shut down the office.
• India-Pakistan talks appear to have gone back to square one, after the cancellation of Foreign Minister talks, and then the tough words ahead of the United Nations General Assembly.
• For the Indian side, this was not the right timing for this, primarily since relations with Pakistan are being seen through the prism of domestic politics.
• Both countries have missed so many opportunities in the past [for peace] and yet neither side appears to have learned the lesson that these missed opportunities do not return. In fact these missed opportunities create a playing field which is further restricted as a space for engagement.
• A policy of enmity is not serving our region. Even our neighbours frown at our behaviour and believe that India and Pakistan are keeping the rest of South Asia from realising its potential.
• Two major issues — the investigation into the Pathankot attack and the conviction of Kulbhushan Jadhav — still remain a challenge.

G. Prelims Fact

H. Practice Questions for UPSC Prelims Exam

1. Cleaner and cheaper auto-fuel

2. Productive use of agricultural residue, cattle dung etc

3. Enhances farmers’ income

4. Boosts organic farming

5. Tackles the problem of polluted air and carbon emissions

6. Brings down dependency on crude oil imports

Choose the correct option:

I. Practice Questions for UPSC Mains Exam