Professional Documents
Culture Documents
July Magazine PDF
July Magazine PDF
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PREFACE
With the present shift in examination pattern of UPSC Civil Services Examination, ‘General
Studies – II and General Studies III’ can safely be replaced with ‘Current Affairs’. Moreover,
following the recent trend of UPSC, almost all the questions are issue-based rather than
news-based. Therefore, the right approach to preparation is to prepare issues, rather than
just reading news.
Taking this into account, our website www.iasbaba.com will cover current affairs focusing
more on ‘issues’ on a daily basis. This will help you pick up relevant news items of the day
from various national dailies such as The Hindu, Indian Express, Business Standard, LiveMint,
Business Line and other important Online sources. Over time, some of these news items will
become important issues.
UPSC has the knack of picking such issues and asking general opinion based questions.
Answering such questions will require general awareness and an overall understanding of
the issue. Therefore, we intend to create the right understanding among aspirants – ‘How to
cover these issues?
This is the 14th edition of IASbaba’s Monthly Magazine. This edition covers all important
issues that were in news in the month of July 2016
Value add’s from IASbaba- Must Read and Connecting the dots.
‘Must Read’ section, will give you important links to be read from exam perspective. This
will make sure that, you don’t miss out on any important news/editorials from various
newspapers on daily basis.
Under each news article, ‘Connecting the dots’ facilitates your thinking to connect and
ponder over various aspects of an issue. Basically, it helps you in understanding an issue
from multi-dimensional view-point. You will understand its importance while giving Mains
or Interview.
“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times I’ve
been trusted to take the game winning shot and missed. I’ve failed over & over again in
my life. And that is why I succeed.”
- Michael Jordan
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INDEX
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NATIONAL
TOPIC:
General Studies 1
Role of women and women’s organization – women empowerment
General studies 2:
Welfare schemes for vulnerable sections of the population by the Centre and States
and the performance of these schemes; mechanisms, laws, institutions and Bodies
constituted for the protection and betterment of these vulnerable sections
Totally un-Quranic
The Prophet of Islam was tremendously displeased and reprimanded a man for divorcing
his wife in an instant. Therefore, world-over as well as in the Shia community in India,
triple talaq is not accepted by Muslims.
In Islam, marriage is a social contract with clear conditions to be noted down in a
nikahnama (marriage contract) as well as provides for affirmative provisions for a bride
such as mehr (dower).
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The Quran gives equal right to both husband and wife to seek divorce. But it nowhere
allows instant divorce, for it treats marriage as a serious social relationship, entered into
by two individuals.
There are a number of verses in the Quran that call for attempts to reconcile in the case
of marital discord to be carried out over a period of 90 days.
Findings:
According to a survey conducted by the Bharatiya Muslim MahilaAndolan (BMMA), a
women's rights advocacy group, which is campaigning against triple talaq, 59 percent of
divorced Indian Muslim women were divorced through triple talaq.
In a national study, Seeking Justice within Family, out of a sample of 4,710 women, 525
have been divorced. Of these, 346 women were divorced orally, 40 women were sent a
letter of divorce by their husbands, 18 women were divorced on phone, one via SMS,
three through email and 117 through other methods. In the same study, 92%
respondents called for a legal ban on the practice of oral, unilateral or triple divorce.
By Law:
The Muslim Personal Law (Shariat) Application Act, 1937, allows Indian Muslims to be
governed by the Shariat. The absence of codification has legally allowed community
leaders to hold the practices as sacrosanct.
The Dissolution of Muslim Marriages Act, 1939, however, codifies a woman’s right to
seek divorce by approaching the court.
Courts could adjudicate under Article 13 of the Constitution if the Shariat law was found
to be “inconsistent with or in derogation of the fundamental rights” of Muslim women.
JamiatUlama-i-Hind, a Maharashtra-based organisation committed to protecting the
Islamic way of life, has argued that the minority religious community’s personal laws
draw its authority from the Holy Koran and not the Indian Constitution. The law is not
within the purview of the expression “laws in force” as mentioned in Article 13 of the
constitution and hence its validity could not be tested on a challenge based on Part III
(fundamental rights) of the constitution. In view of such clear provisions, if the court
frames fresh provisions, it will amount to judicial legislation and will be violative of the
doctrine of separation of powers
In the Past:
SC had urged the government in the Shah Bano case to frame a uniform civil code, a
two-judge bench in October 2015 suo-motu ordered registration of a PIL.
Justices Anil R Dave and Adarsh K Goel had sought responses from the Attorney General
and the National Legal Services Authority of India on whether “gender discrimination”
suffered by Muslim women should not be considered a violation of fundamental rights.
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The bench was hearing a matter related to succession when it said it is time to focus on
rights of Muslim women. The judges asked for the case to be placed before the CJI to
constitute a bench. It is now being heard with Shayara Bano case.
During UPA government a report had been submitted to the Ministry of women and
child development on the subject 'Women and the law: An assessment of family laws
with focus on laws relating to marriage, divorce, custody, inheritance and succession'.
The committee recommended a ban on various practices that are purportedly Islamic
but require reform, including talaq-e-bidat (unilateral triple talaq) and polygamy
The Shamim Ara Judgement— makes it clear that talaq sent over email or text message
or through a notice or through the Qazi, etc is not valid and also clarified the procedure
for a Muslim husband to divorce his wife:
Present:
Supreme Court: Has called for an open-court debate on the highest judiciary’s authority to
look into Islamic personal law and possibly subject it to the regime of fundamental rights
under the Constitution.
TOPIC:
General studies 2:
Government policies and interventions for development in various sectors and issues
arising out of their design and implementation.
General studies 3:
Science and Technology – developments and their applications and effects in everyday
life Achievements of Indians in science & technology; indigenization of technology and
developing new technology.
Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-
technology and issues relating to intellectual property rights.
Net neutrality-
Net neutrality is the principle that individuals should be free to access all content and
applications equally, regardless of the source, without Internet service providers
discriminating against specific online services or websites.
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Without net neutrality rules in place, ISPs can prevent users from visiting some websites,
provide slower speeds for services like Netflix, or even redirect users from one website
to a competing website. Net neutrality rules prevent this by requiring ISPs to connect
users to all lawful content on the internet equally, without giving preferential treatment
to certain sites or services.
In the absence of net neutrality, companies can buy priority access to ISP customers.
Larger, wealthier companies like Google or Facebook can pay ISPs to provide faster,
more reliable access to their websites than to potential competitors. This could deter
innovative start-up services that are unable to purchase priority access from the ISPs.
Also, if ISPs can charge online services to connect to consumers, consumers would
ultimately bear these additional costs
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It forgets that while English is spoken by only about 12 per cent of the world’s
population, 53 per cent of the Internet’s content is English.If Indians need to access
education or health services, they need to access it in their languages, and not in English.
And no education can succeed without teachers. The Internet is not a substitute for
schools and colleges but only a complement, that too if material exists in the languages
that the students understand. Similarly, health demands clinics, hospitals and doctors,
not a few websites on a private Facebook platform.
4. Monopolization of internet:
Free basics have some limited apps which can be accessed without any cost (zero
rating). When more people log onto free basics as it has no data charge, indirectly FB
starts monopolising internet.
Internet becomes FB and FB becomes internet. Who knows—if after monopolisation FB
can charge money or data from people for accessing its services!
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TRAI, at present: The real problem was that Free Basics had an exclusive agreement with
just one telco to do so. It would accordingly be fine if Free Basics entered into a similar
agreement with all telcos.
Telcos will not be able to benefit from content-based price discrimination. However,
they will facilitate ways whereby content providers can pick up the tab for consumers
accessing their content (and not other)
Orconsumers being reimbursed directly by content providers for the access of their
content
Effects on the consumer: Incentivised access to some content and services over others,
undercutting the key equalising feature of the Internet
IASbaba’s Views:
Universal access to the Internet need not be interpreted as “uniform access” and the
build-out of networks should be aligned to the absorptive capacity of a region by making
it a demand-driven service.
The time is also right to give up the telecom-Internet distinction as communication
systems of the society are of special social significance and requires committed
regulation and not just be treated as ordinary market goods.
An attempt to bring back the Free Basicsby making a distinction between telecom and
‘Internet services’ should be done away with and TRAI should make sure that paid
prioritisation, blocking and throttling of lawful content and services on the net be
excluded (strictly, at that)
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TOPIC:
General Studies 2
Issue:
PerumalMurugan, award-winning Tamil writer, had become a household name last year
when he publicly announced that he was giving up writing after coming under sustained
attack from certain local, caste-based groups, who had protested against his
novel Mathorubhagan (translated into English as One Part Woman).
After widespread protests by local caste-based groups, the police got involved, and
“summoned” the parties for a “peace talk”.
However, the Madras High Court has now rejected the demand for banning the book
or prosecuting him, and declared that it will not allow self-appointed super-censors
in society to decide what people read or see.
It has upheld the freedom of writers to write and advised those professing to be hurt
by a book to just avoid reading it.
The Bench also reminded the authorities (police and the local officials) of their duty
to secure freedom of expression and not give in to mob demands in the name of
preserving law and order thus, handing Mr. Murugan a complete victory.
As mentioned above, local police and officials imposed an unequal settlement upon
Mr. Murugan.
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The local police cited its duty to maintain “law and order”, and had told him that this
was the only way in which the protesters could be appeased.
In the language of free speech, this is known as the “heckler’s veto”: by threatening
public disorder or disturbance, socially powerful groups can shut down critical or
inconvenient speech by simply cowing the writer as well as the police into
submission. India has a long and shameful history of caving in to the heckler’s veto.
However, the recent verdict is a welcome one as the Court placed itself firmly on the
side of the more liberal and progressive Indian free speech tradition, and against a
series of regressive judgments that have upheld book bans and censorship on the
specious grounds of ‘hurt sentiments’ or ‘offended religious beliefs’ (on the basis of
heckler’s veto).
Judicial censorship (Very important)
Under the Constitution, the judiciary is not granted the power to censor speech.
Article 19(2) stipulates that the freedom of speech can be restricted only by a valid
“law” — that is (subject to certain exceptions contained in Article 13 of the
Constitution), a law enacted by Parliament.
Once Parliament passes a law restricting speech, the judiciary may review it to check
whether it passes constitutional scrutiny.
In the case of banning books,this procedure is contained in Sections 95 and 96 of the
Code of Criminal Procedure.
Section 95 authorizes the government to ban a book if it appears to have violated
certain laws.
If the government chooses to ban a book, the writer or publisher may then approach the
High Court, arguing that the ban is an unconstitutional invasion of their right to free
speech. Then the High Courts can — and often have — struck down bans on this basis.
This two-step procedure is vitally important in protecting the right to free speech,
since it first requires the government to apply its mind to the question of whether a
book may legitimately be banned, and then authorizes the court to determine whether
the government correctly applied its mind.
Straightaway approaching the court for a ban short-circuits an essential safeguard, and
also invites the court to step outside its jurisdiction by passing banning orders not
contemplated by the Constitution.
Unfortunately, this has become an increasingly common tactic in recent years (i.e. no
courts are following the above two steps procedure), and also has far too frequently
been entertained by the Supreme Court.
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The PerumalMurugan case, presented a great chance for the Madras High Court to spell
out the limits of the courts’ jurisdiction, and the impermissibility of judicial censorship.
But, it failed to do so.
Conclusion
The most troubling part is – ‘The courts themselves are arriving at the conclusion
whether the book (One Part Woman in this case) breaks or do not break any laws’. (just
by relying upon arguments by different sides)
The verdicts given in many previous cases (even in the Perumal case) also shows how
this form of analysis is heavily judge-centric, depending almost entirely on what an
individual judge feels about a controversial work.
For speech to be truly free, the judiciary must stop relying upon the rigid straitjacket
model it is following; it should understand its limitations on judicial censorship and
follow the procedures laid down by the Constitution of India (as mentioned above)
Launch: 1980
Objective: To boost exports and increase production
Scheme: Indian companies that produce goods solely for export can register as ‘export-
oriented units’. In doing so, these producers become exempt from duty payments on a
range of resources used in production
Time for a relook at the EoU Scheme—
Is there really a need—Yes—due to the following reasons
Declining exports
Rising trade deficit
To achieve its target of $900 billion exports by 2020 as envisaged in the Foreign Trade
Policy (FTP) of 2015–20
Gradual reduction in EoUs after the SEZ Act—
Inability in fulfilling the net foreign exchange (NFE) obligations
Not paying the central sales tax (CST)
Exceeding the limit in sales to the domestic tariff area (DTA)
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Reasons:
SEZ Act coming in force
Government’s inability to utilise properly the uniqueness of the 100-per-cent-EoU
Scheme
Performance: Fallen drastically as well as turned negative in 2010-12
Reason:
Withdrawal of the tax benefits under the Income Tax Act, 1961 from 1 April 2011 (EoUs
opted out)
No internal audit mechanism to check and facilitate the functioning of EoUs in place
Governance Woes
Cases of misrepresentation and non-compliance: Around 48 cases of incorrect/irregular
DTA sales were recorded—duty forgone, irregular internal audit system
Clearance of products into DTA often exceeds these prescribed limits
Others—
Complexities that arise due to its size
Lack of entrepreneurial talent
Lack of promotion of the scheme
Limited share in manufacturing
Inability of the FTPto make the best of the 100-per cent-EoU scheme
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Higher level of rewards under MEIS for export items with High domestic content and
value addition
Chapter-3 incentives extended to units located in SEZs.
Export obligation under EPCG scheme reduced to 75% to Promote domestic capital
goods manufacturing.
FTP to be aligned with Make in India, Digital India and Skills India initiatives.
Duty credit scrips made freely transferable and usable for payment of custom duty,
excise duty and service tax.
Export promotion mission to take on board state Governments
Unlike annual reviews, FTP will be reviewed after two-and-Half years.
Higher level of support for export of defence, farm Produce and eco-friendly products.
Welfare schemes for vulnerable sections of the population by the Centre and States
and the performance of these schemes; mechanisms, laws, institutions and Bodies
constituted for the protection and betterment of these vulnerable sections.
Human Rights Issue – LGBT community issue
Government policies and interventions in regard to the above issue.
In News:
On June 30 (in Geneva), following a seminal vote, the United Nations Human Rights
Council (UNHRC) passed a resolution to create a post of an independent expert on
sexual orientation and gender identity. (Remember it as SOGI expert)
This SOGI expert, once officially appointed, will assess, study and report annually on the
nature, the cause, and the extent of discrimination faced by lesbian, gay, bisexual and
transgender (LGBT) persons around the world.
However, India chose to abstain from voting altogether to appoint this SOGI expert and
offered no official reasons for its abstention.
We also know that, the issue of LGBT rights in India is a matter being considered by the
Supreme Court under a batch of curative petitions filed by various institutions and
organisations and the apex court is yet to pronounce on this issue.
Analysis: It should be viewed here that whether India’s recent decision to abstain from
voting would in any way affect the upcoming Supreme Court’s judgment, which the apex
court is right now considering the curative petitions filed by various institutions and
organisations.
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Proponents of LGBT rights have argued that India’s decision to abstain was a matter of
grave shame and as an act utterly unbecoming of a modern progressive state.
In India the transgender persons are deprived of the fundamental rights available to the
other two sexes, i.e. male and female.
We also know that, the issue of LGBT rights in India is a matter being considered by the
Supreme Court under a batch of curative petitions filed by various institutions and
organisations… And the Apex Court is yet to pronounce on this issue.
Critics argue that the Supreme Court’s judgment - upholding Section 377 of the Indian
Penal Code, according to which homosexuality or unnatural sex between two consenting
adults is illegal and an offence – violates Fundamental Rights under Articles 14, 15 and
21 of the Constitution.
“A majority of the countries have legalised homosexuality. Even in India, Section 377 IPC
was introduced not as a reflection of existing Indian values and traditions, but rather, it
was imposed upon Indian society due to the moral values of the colonisers. Indian
society prior to enactment of the IPC had a much greater tolerance of homosexuality.”
The apex court has failed to consider the dynamic nature of law, particularly with
respect to homosexuality.
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India also voted in favour of amendments that were introduced by Pakistan which
explicitly states that the SOGI expert’s mission would ensure, at all costs, respect for the
sovereign right of every country to implement its own national laws.
I.e. in India’s case, this is a direct reference to Section 377 of the Indian Penal Code,
which makes even consensual homosexual activity a crime.
Therefore, any report of the newly appointed expert would have to give sufficient
weight to the fact that India’s laws proscribe, and even criminalise, homosexuality.
Conclusion:
When viewed in this light, it’s clear that India’s above acts and laws directly or indirectly
denies to several persons their basic human dignity, and that impinges on the rights of a
sizeable slice of the populace from participating fully in the make-up of our country’s
moral bedrock.
Now, with the curative petitions still left undecided, India’s decision to abstain from
voting sharpens the focus on the Supreme Court’s next steps on Section 377.
It is imperative that a Bench of five judges or more is constituted as expeditiously as
possible to rehear the challenge to Section 377, made by the clutch of petitioners both
old and new.
For, a failure to annul the Supreme Court’s verdict in Koushal would only perpetuate
what is really a gross miscarriage of justice. Ultimately, the court’s legitimacy as a vital
pillar of our democracy depends on its ability to nullify popular will when the decisions
of the majority transgress the Constitution’s guarantees.
By reversing Koushal, the court can help usher India into a more equal future, where the
tyrannical belief of some does not deny to any person the right to be treated as an equal
member of society, and the right to enjoy the Constitution’s foundational liberties.
1. Recent Supreme Court’s Judgement recognizing transgenders as third gender puts them
in a strange paradox situation – On the one hand, they are now legally recognised and
protected under the Constitution, but on the other hand they may be breaking the law if
they have consensual gay sex. Critically analyze.
2. Is India’s recent position on issues related to LGBT (Lesbian, Gay, Bisexual and
Transgender) rights both at International and National level, progressive? Critically
analyze.
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Immoral Traffic (Prevention) Act lays down the legal framework for sex work in India
Some of the provisions under ITPA provide for rescuing sex workers, remanding them to
a rescue home and handing over them to their parents or family members (i.e. Rescue,
Protect and Rehabilitate)
However, a case study in Kolhapur showed that some of the women/sex workers
rescued and remanded in home did not have living parents, some had left home
decades ago, and some had families who did not know they were engaged in sex work.
The women were shunted from home to home and finally released after some years.
Such episode reveals in a nutshell all the shortcomings in the Immoral Traffic (Prevention)
Act (ITPA).
1. One, that it includes the word ‘immoral’, inserting an element of morality when the
discussion should be purely legal.
2. Two, that all sex work is assumed to be a result of trafficking with workers needing
rescue.
3. Three, that adult sex workers should be put into homes without their consent.
4. Four, that adult women should need to produce families to be released, thus
denying them any agency in their lives.
5. And finally, that what is fondly paraded as an act of ‘rescue and rehabilitation’
should actually be incarceration and trauma.
Sex workers and activists have also been demanding amendments to the Act,
pointing out that its various provisions are being used disproportionately against sex
workers.
There is a demand from several sex workers collectives to legalise the trade, and
allow them to work with “dignity”. Organisations such as the All India Network of Sex
Workers have maintained that by legalising the trade not only will trafficking of
women come down, but will also help in availing benefits of various health and
welfare schemes.
Clearly, there is every reason to desire a better law that can correct the anomalies in
the existing one. But the recently minted Draft Trafficking of Persons (Prevention,
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Protection and Rehabilitation) Bill, 2016 does not do this. On the contrary, it opens
up brand new grounds for anxiety.
Concerns with the new Draft Trafficking of Persons (Prevention, Protection and
Rehabilitation) Bill, 2016
1. The Bill was fashioned in great secrecy – i.e. no wide consultative process took place
among all the stakeholders
2. The Draft Bill tackles trafficking solely through the lens of sex work. The Bill ignores
the tens of thousands of men, women and children who are routinely trafficked for
marriage, domestic labour or bonded labour in fields, mines, and textile
and beedi factories.
3. A provision in the Draft Bill allows any social worker or public-spirited citizen to
‘rescue’ and ‘produce’ a ‘victim’ before the District Anti-Trafficking Committees it
proposes to set up. This may create tensions in future as it opens doors to moral
policing and could lead to harassment of not just sex workers but other ordinary
people by overzealous, vigilante citizens.
4. The Bill continues to conflate or combine both “prostitution” with “commercial
sexual exploitation” into one – which goes completely against the grain of what
activists are fighting for, namely protecting the rights of adults who stay in
prostitution voluntarily.
5. I.e. the Bill follows the conventional and simplistic approach to define ‘prostitution
as exploitation’ rather than looking at it as ‘exploitation of prostitution’, which is
the primary evil that must be addressed.
6. It is important to treat trafficking in children, adult trafficked labour, and forced sex
work as separate categories, but the Draft Bill mixes up everything in its
portmanteau approach.
The 2013 Verma Committee had specifically clarified that “the recast Section 370 ought not
to be interpreted to permit law enforcement agencies to harass sex workers who undertake
activities of their own free will, and their clients”.
In 2015, a Supreme Court panel had recommended that the law relating to trafficking be
read down for consenting adults in sex work and their clients.
Further, the Draft Bill threatens basic constitutional freedoms of the persons it seeks to
rescue. For instance,
Article 22 gives a detained individual the right to consult a lawyer and be produced
before a magistrate within 24 hours, but the Draft Bill allows persons to be directly
produced before the member-secretaries of its District Anti-Trafficking Committees.
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Adult trafficked persons must be consulted and made aware of their rights so that
they can take informed and independent decisions on whether they want to be
repatriated.
The enormous power and little accountability that is vested in the proposed District
Committees is troubling. They raid and rescue, rescued persons are produced before
them, and they are also responsible for post-rescue care. In effect, it would appear
that they are policeman, judge and rehabilitator rolled in one. At present, despite its
lacunae, the ITPA still has some processes in place. For instance, nobody can enter a
brothel without a warrant, and only some categories of police officers have the
power to raid a brothel. Now, these guidelines stand to be transgressed.
Overall, the critics argue that the present ITP Bill is carelessly drafted and muddled
Bill that does more harm than good.
It duplicates several existing (and unimaginative) provisions: Anti Human Trafficking
Units already work in districts and States, the ITPA’s present raid-rescue-
rehabilitation approach is a dismal failure, and rescue homes today are often the site
of fresh exploitation.
Thousands of placement agencies continue to be the chief source of human
trafficking despite laws.
The Draft Bill repeats the need for their registration without explaining how it will
ensure it. These are but a few of the many shortcomings the Draft Bill needs to fix.
1. Critically analyze the provisions of Immoral Traffic (Prevention) Act and suggest some
strategies to plug the loopholes in the ITPA Act.
2. Government of India has come up with a new Draft Trafficking of Persons (Prevention,
Protection and Rehabilitation) Bill, 2016. Critically analyze how effective this Bill would
be if it becomes an Act.
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TOPIC:
General studies 2
Welfare schemes for vulnerable sections of the population by the Centre and States
and the performance of these schemes; mechanisms, laws, institutions and Bodies
constituted for the protection and betterment of these vulnerable sections
General studies 3
In News:
A constitutional bench had upheld the act in the Naga People’s Movement of Human
Rights, the Justice B.P. Jeevan Reddy committee advised the government to repeal it.
Now the recent order of the Supreme Court is a landmark in the rights discourse in the
country, where one may say that the court adopts an approach consistent with
constitutional guarantees of life and liberty and dismantles the incessant and
unreflective argument based on extreme notions of security and order.
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1. One, the “order situation in Manipur is, at best, an internal disturbance. There is no
threat to the security of the country or a part thereof either by war or an external
aggression or an armed rebellion”.
2. Two, “for tackling the internal disturbance, the armed forces of the Union can be
deployed in aid of the civil power. The armed forces do not supplant the civil
administration but only supplement it”.
3. Three, “the deployment of the armed forces is intended to restore normalcy and it
would be extremely odd if normalcy were not restored within some reasonable
period, certainly not an indefinite period or an indeterminate period”.
Conclusion:
The AFSPA provides the framework for the armed forces but the law clearly lays down
the operational procedure which is more often violated than followed.
However, the court has made it clear that the state is bound by the direction of the
Constitution bench that “every death caused by the armed forces” should be thoroughly
inquired into if there is a complaint or allegation of abuse or misuse of power.
The order, which will be one in a series of orders to come, as more cases being
investigated reach their conclusions, has shone a much needed light on the dark
underbelly of the operation of the AFSPA in several parts of the country and the effects
it has had on governance and civil liberties.
It is a welcome step in extending the rule of law and fundamental rights to an area
where there has been much need for it for decades.
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Our Constitution has guaranteed and envisaged certain Fundamental Rights and
Fundamental Duties respectively.
However, since then, the scope of Fundamental Rights has seen significant
expansion (especially through judicial pronouncements) and as a result, an
imbalance has been created between the current set of Fundamental Rights and
Duties.
Therefore, this particular article attempts to examine if a few additional
Fundamental Duties in the Constitution of this country could help in balancing out
the rights of its citizens and further make them more responsible towards the
country’s development.
The Constitution of India has envisaged a holistic approach towards civic life in a
democratic polity – through guaranteeing certain rights called as Fundamental Rights.
These Fundamental Rights uphold the equality of all individuals, the dignity of the
individual, the larger public interest and unity of the nation.
Since human conduct cannot be confined to the realm of Fundamental Rights, the
Constitution has also envisaged certain duties, known as Fundamental Duties.
Though the rights and duties of the citizens are correlative and inseparable, the original
constitution contained only the fundamental rights and not the fundamental duties.
In other words, the framers of the Constitution did not feel it necessary to incorporate
the fundamental duties of the citizens in the Constitution.
However, the post-Constitution civic life, for around a quarter century, did not portray a
rosy picture, and therefore, it was thought fit to have a framework of duties in the
Constitution itself.
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In 1976, the Sardar Swaran Singh Committee was set up to make recommendations
about fundamental duties, the need and necessity of which was felt during the
operation of the internal emergency (1975–1977).
In 1976, the fundamental duties of citizens were added in the Constitution. In 2002, one
more Fundamental Duty was added.
The following ten Fundamental Duties were introduced by the 42nd Amendment Act, 1976
— Article 51-A: It shall be the duty of every citizen of India:
1. To abide by the Constitution and respect its ideals and institutions, the National Flag
and the National Anthem;
2. to cherish and follow the noble ideals which inspired our national struggle for
freedom;
3. to uphold and protect the sovereignty, unity and integrity of India;
4. to defend the country and render national service when called upon to do so;
5. to promote harmony and the spirit of common brotherhood amongst all people of
India transcending religious, linguistic and regional or sectional diversities and to
renounce practices derogatory to the dignity of women;
6. to value and preserve the rich heritage of our composite culture;
7. to protect and improve the natural environment including forests, lakes, rivers and
wildlife and to have compassion for living creatures;
8. to develop the scientific temper, humanism and the spirit of inquiry and reform;
9. to safeguard public property and to abjure violence;
10. to strive towards excellence in all spheres of individual and collective activity, so that
the nation constantly rises to higher levels of endeavour and achievement.
Subsequently, another duty was added by the 86th Constitutional Amendment Act of 2002:
for a parent or guardian
11. to provide opportunities for education of the child or ward between the age of six
and fourteen.
Since then, the scope of Fundamental Rights has seen significant expansion through
judicial pronouncements:
For example:
the right to free legal services to the poor,
right to speedy trial and
right to live in a clean and healthy environment
As a result, an imbalance has been created between the current set of Fundamental Rights
and Duties.
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So let us examine whether adding a few new Fundamental Duties in the Constitution could
help in balancing out the rights of its citizens and further make them more responsible
towards the country’s development.
Additional duties
1. Duty to vote:
o Article 326 of the Constitution read with Section 62 of the Representation of
People’s Act, 1951 confers the right to vote. However, quite often the
question arises as to whether that right also implies an obligation.
o The voter turnout during the last general election amounted only to about 67
per cent. This voter apathy should be taken seriously and an attempt should
be made to make voting a citizenship obligation.
o The state can take several steps to ensure that this duty to vote is made
operational and effective. One method through which this may be achieved is
by developing a system of incentives for voters and conversely
disadvantages for those who abstain from performing their duty to vote. A
very large section of people can be motivated to vote this way.
2. Duty to pay taxes:
o The tax gap (the revenue that a government is expected to receive as against
the revenue it actually collects) continues to increase every year.
o Research has found that tax evasion is a direct result of lack of trust among
the people, in general, and the government, in particular. Citizens must
believe that their taxes are bound to be used for public good.
o The incorporation of the right to pay taxes as part of Fundamental Duties in
the Constitution will shift the onus onto the taxpayer to pay taxes rather than
the tax department to collect them.
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The significance of Fundamental Duties is not diminished by the fact that there is no
punishment prescribed for not following them. Fundamental Duties constitute the
conscience of our Constitution; they should be treated as constitutional values that must be
propagated by all citizens.
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It appears our polity is not even aware of such a noble part of our Constitution. This should
be included in the curriculum of high school students at least.
A new set of Fundamental Duties can go a long way towards instilling a reinvigorated sense
of civic responsibility among citizens.
The scope of Fundamental Rights and Fundamental Duties has seen significant
expansion, especially through judicial pronouncements and as a result, an imbalance
has been created between the current set of Fundamental Rights and Duties.
Examine whether adding a few new Fundamental Duties in the Constitution could
help in balancing out the rights of its citizens and further make them more
responsible towards the country’s development.
TOPIC:
General Studies 2
Effect of policies and politics of developed and developing countries on India’s
interests, Indian Diaspora.
General Studies 3
Effects of liberalization on the economy, changes in industrial policy and their effects
on industrialgrowth.
Is protectionism a problem?
Will the next USA President becommitted to free trade?
Democratic candidate has given lukewarm support to free trade as well as Trans-Pacific
Partnership.
Republican candidate is hostile towards trade deals that throw open US markets.
Trump envisages a 35% tariff on imported cars and parts produced by Ford plants in
Mexico and a 45% tariff on imports from China. Such a step is called as Tariff protection
policy.
Tariff protection policymeans that a duty is imposed on imports to raise their price, making
them less attractive to consumers and thus protecting domestic industries from foreign
competition
Implications
Economists are of the opinion thatsuch ‘tariff protectionist’ measures may prove to be
macroeconomic disasters.
Would repudiate free and open trade
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Consider an example
Product A costs= $100
Step taken:
Now, President Trump announces 50% tariff on Chinese imports used in the product.
The new price of product A= $150
So, the US manufacturers will turn to domestic producers and thus put upward pressure
on US prices. The revised price of product A comes to $120.Hence, this will help during
deflation.
China’s Reaction:
However, President Xi Jinping retaliates with a Chinese tariff. This means that US goods
become more expensive abroad and thus, there will be decrease in US exports.
Consequently, the domestic producers will raise the domestic prices to sustain and
hence, the final price of product A will be more than $120
Overall Effect:From the viewpoint of American consumer, any product they buy, whether
Chinese (now subject to tax) or US produced substitute, it will be more costly than before.
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IASbaba’s Views
The need was: All the country governments should have worked together and focussed
on the risingNazi threat and German re-militarisation.
Thus, tariff protectionism might not be a bad macroeconomic policy in liquidity trap
situation and should be limited to need-based economic conditions. But, it is not a good
foreign policy either, hence should be used cautiously.
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Refer:
Post-Nairobi: WTO- Doha Development Agenda
http://iasbaba.com/2015/12/iasbabas-daily-current-affairs-29th-december-2015/
India’s trade pacts in a changing world
http://iasbabas-daily-current-affairs-4th-march-2016/
TOPIC:General Studies 2
Indian Constitution, significant provisions and basic structure- Cooperative Federalism
Functions and responsibilities of the Union and the States, issues and challenges
pertaining to the federal structure, devolution of powers and finances up to local levels
and challenges therein
Appointment to various Constitutional posts, powers, functions and responsibilities of
various Constitutional Bodies
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Sarkaria Commission
ARC views were endorsed by Commission on Centre-State Relations (Sarkaria Commission)
Sarkaria Commission (1983–87) made a strong case for the establishment of a
permanent Inter-State Council
Government accepted the recommendation and in 1990, under Art 263 of the Indian
Constitution, established the Inter-state Council (ISC)
Inter-State Council
Composition:
Chairman: Prime Minister
Members:
Chief Ministers of all states
Chief Ministers of Union Territories having a Legislative Assembly and Administrators of
UTs not having a Legislative Assembly
Union Ministers of Cabinet rank in the Union Council of Ministers nominated by the
Prime Minister
Under: Ministry of Home Affairs
Mandate:
Investigating and discussing such subjects of common interests between some/all states
and between Union and state/s
Making recommendations upon any such subject
Deliberating upon such other matters of general interest to the States as may be
referred by the Chairman to the Council.
Why in news?
The 11th Inter-State Council meeting organised in July 2016 was convened after 10 years
Prime Minister of India chaired the Council in presence of the Chief Ministers,
Lieutenant-Governors of the Union Territories and 17 Union Ministers who are members
of the Inter-State Council.
ISC, 2016:
Intelligence sharing between states and union
Countering Internal security challenges
Adequate financial resources to states to implement government schemes
CAMPA amendment to disburse Rs. 40,000 crore to states
Sharing with states- the revenue generated from auction of natural resources
Imparting Skill education
Pan- India coverage of Aadhar
DBT for providing subsidies, benefits and public services
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Importance of ISC
Bridge trust deficit between centre and states
If the platform is not a problem solver, it atleast acts as a safety-valve
ISC has constitutional backing which gives states a strong footing that is essential to
build the atmosphere of confidence in calibrating centre-state relation.
Other platform
NITI Aayog’s Governing Council
Similar to ISC composition to address centre- state issues
Prime minister, chosen Cabinet ministers and chief ministers
NITIAayog is by executive decision
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Some recommendations:
For ISC:
To be substantially strengthened and activised as the key player in intergovernmental
resolutions
Must meet at least thrice in a year on an agenda evolved after proper consultation with
States.
Issues of governance must as far as possible be sorted out through the political and
administrative processes rather than pushed to long drawn adjudication in the Court.
Such strongly it projects the importance of ISC that it commented -
Once ISC is made a vibrant, negotiating forum for policy development and conflict
resolution, the Government may consider the functions for the National Development
also being transferred to the ISC.
For Governor:
Fixing Governors’ tenures
Mandatory consultation of chief ministers before the appointment of Governors
Choosing individuals who have been outside active politics for at least a couple of years.
Way forward
There are many challenges of maintaining a federation. The Solutionis periodic debates
and discussions.
Post liberalisation too, centralised nature of economy was visible. Today, the new
government has shown its inclination towards federalist vision with emphasis on
decentralizing decision making and encouraging state competition
The centrehas also hinted at discussing and implementingsome of Punchhi Committee
recommendations which broadly fall under legislative, administrative and financial
heads
Dr.B.R.Ambedkar had described India and its states as “one integral whole, its people a
single people living under a single imperium derived from a single source”
Thus, Centre-state relation should be harmonised as disruption created by constant
altercating situations impose heavy administrative and economic costs on the states
affected.
Refer:
Article 356—Arunachal Pradesh: Is President’s rule being misused?
http://iasbaba.com/2016/01/iasbabas-daily-current-affairs-27th-january-2016/
Harking back to an interventionist era – Article 356
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http://iasbaba.com/2016/04/iasbabas-daily-current-affairs-2nd-april-2016/
Centrally sponsored schemes (CSS):Slimming Down
http://iasbaba.com/2015/08/iasbabas-daily-current-affairs-7th-august-2015/
Ambiguous outcomes
Social outcomes are an unreliable indicator of social attitudes as they do not necessarily
reflect people’s actual preferences.
For instance
In US, of all marriages, approx.1% consists of black and white marriages. But, the social
acceptance of these marriages has increased dramatically.
In India, a report suggests that interest in intercaste marriage is higher than the actual
reported rate
A 2004 Indian National Election Study was conducted by Centre for the Study of
Developing Societies
Sample: asked 27,000 respondents if intercaste marriage should be banned.
Result: Though 60% approved of such proposition, only 47% of urban residents were in
favour.
Also
Study:of more than 10,000 matrimonial advertisements in major national dailies was
conducted between 1970 to 2010
Result: requests for within-caste proposals fell from 30% during 1970-1980 to 19% for
2000-10
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Women’s behaviour- because the taboos against intercaste marriage are stronger for
women than men. (Woman adopts husband’s caste)
Sample
1070 women were studied. They were given choice of three matrimonial matches who had
high-income potential
high status
similarity in height, age, skin tone and educational status
Only difference: each belonged to upper caste, backward caste and Dalit
Findings
62% women willing to look beyond their caste to find suitable matches
71% Dalit women and 54% upper caste women expressed interest in intercaste matches
Thoughts behind it
The marriage market, like any other market, works on principle of exchange. To get
something, one has to offer something too.
Women approached marriage with a view to upgrade either economic status or caste
status.
Middle class upper caste woman would consider marrying a wealthier lower caste man
(Trade of castestatus)
Lower caste woman from wealthy family would consider marrying middle class higher
caste man (Trade of class status)
Wealthier Dalit women, in comparison to lower middle and middle class Dalitwomen,
were more likely to respond to other two out-of-caste matrimonial interests
Notable: Although an expression of matrimonial interest does not consequentially translate
into marriage, yet considering the inter-caste match is transformative.
Discrimination persists
For upward mobility, significant number of people consider crossing caste boundaries in
marriage.
Yet, stigma associated with Dalits ensures discrimination against them
Upper caste women: For an identical profile of a groom, 52.1% showed interest for
backward caste match and 28.7% for a Dalitmatch.
Future?
By 2030, 40 per cent of Indians are predicted to live in urban areas
Urban areashave relative anonymity of individual’s identity
This doesn’t allow strict observation and enforcement of rules of ‘purity’ or ‘pollution’
Fewer activities are related caste identity
The urban middle class which was dominated by upper caste has now become more
diverse with entry of backward castes and Dalits.
Thus, Urbanisation has high probability of undermining caste
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Marriage market
Matrimonial ads published in the national dailies belonging to backward castes and
Dalits- 1970- 1.5% 2010- 10%
Networks:In cities, middle class people shift from family and caste network to friends
and professional networks.
Reliance on technology: Though online matrimonial websites bundle caste with
personal profile, new dating apps are different from it.
Obstacles
Families run after such marriages with threat of humiliation, boycott and in extreme
cases, honour killing.
Caste based political parties and leaders may lose influence if intercaste marriages take
place. Thus they incite violence as well as threaten the boycott of entire family.
Role of State
State has to protect individual’s freedom to marry
Few states have encouraged intercaste marriage by providingcash rewards or
preferential access to government programs to intercaste couples. (Rajasthan and
Haryana)
Public campaigns in favour of intercaste marriages will encourage such practice and also
slowly change people’s mind-set.
Caste based politics has to be policed.
Acting swiftly against instigators and propagators of honour killings will deter such
future practices.
Conclusion
Genetic studies: Before disappearing 1900 years ago, practice of intercaste marriages
was prevalent in Indian subcontinent.
Dr. B.R. Ambedkar had extensively propagated intercaste marriages. He observed
thatrules of caste and marriage were socially constructed, and what societies can build,
can also be undone.
Though caste fault lines remain strong in social and political arena, they are not set in
stone. Openness to intercaste marriages indicate silent and gradual transformation of
social behaviour.
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Refer:
BabasahebAmbedkar – 125th Birth Anniversary
http://iasbaba.com/2016/04/iasbabas-daily-current-affairs-14th-april-2016/
Socio Economic and Caste Census (SECC) 2011 data
http://iasbaba.com/2015/07/iasbabas-daily-current-affairs-23th-july-2015/
TOPIC:
General Studies 2
Government policies and interventions for development in various sectors and issues
arising out of their design and implementation
Issues relating to development and management of Social Sector or Services relating
to Health, Education, Human Resources.
Issues relating to poverty and hunger
General Studies 3
Indian Economy and issues relating to planning, mobilization of resources, growth,
development and employment.
Inclusive growth and issues arising from it.
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The problem and solution framework are correctly identified. What lacks is targets or
financial commitments or concrete and specific programmes and processes to accomplish
this goal.
Systemic development is a long process to convert intent into action.It requires
Continuity
Consistency
excellence in execution
A measurement of process, output and outcome/impact metrics
Positive factors
Programmes like Swachh Bharat, ‘BetiBachao, BetiPadhao’, etc. are important nutrition-
sensitive factors that address hygiene, sanitation and education.
India already has the infrastructure and mechanism for reaching people most at risk in
the nutrition-specific areas. Need is to revamp it and make more effective.
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What to do next?
Immediate steps to be taken should include
Creating Nutrition Mission to arrange work both in nutrition-specific and nutrition-
sensitive areas so that the impact from them can be embedded in productive outcomes
Creating a Nutrition Secretariat as part of the PMO. Responsibility will be to ensure
multi-sectoral alignment on priorities, sequencing and timelines.
Making the nodal Ministries accountable for revamping the ICDS, MDM, PDS with clear
goals, timelines and resources. Open it for PPP and CSRindulgence
Extening large-scale food fortification beyond salt to other staples like flour, oil, dairy,
etc.
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Related Articles
India: Epicentre of Global Malnutrition
http://iasbaba.com/2015/10/iasbabas-daily-current-affairs-27th-october-2015/
Battle with many corners
http://indianexpress.com/article/opinion/columns/battle-with-many-corners/
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exploitation, the 1991 reforms tilted the state’s concern towards the interests of
globalised capital. The domestic corporate financial oligarchy also aligned with it.
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This would have been not an issue if jobs were available to peasants who migrated to
urban areas.
Sadly, the scale of job creation has been little despite high GDP growth.
As Karl Marx says- “Primitive accumulation of capital is rampant not only in “flow” terms
(income squeeze) but also in “stock” terms (asset dispossession).”
Primitive Accumulation of capital= a process by which large swaths of the population are
violently divorced from their traditional means of self-sufficiency.
A weakened workforce
Joblessness has variety of forms which misleads the picture of unemployment scenario.
Casual employment
Intermittent employment
Part-time employment
Disguised unemployment (camouflaged often as “petty entrepreneurship”)
National Sample Survey
The ‘usual status employment grew at 0.8% per annumduring 2004-05 to 2009-10, a
period of high GDP growth.
This was below the natural rate of growth of the workforce itself, even when the job-
seeking displaced peasants are not included.
Result
Proliferation of risky and insecure employment
A burgeoning lumpenproletariat-the unorganized and unpolitical lower orders of society
who are not interested in revolutionary advancement.
Weakening of bargaining powereven of the unionised workers
Hence, compression of the per capita real income of the working people as a whole
(agricultural labourers, traditional petty producers, and non-white-collar workers.)
Statistics supplement the results
Rural population- food intake below 2,200 calories per person per day= 58.5% (93-94)
and 68% (2011-12)
Urban population- food intake below 2,100 calories per person per day= 57% (93-94)
and 65% (2011-12)
Decoding the results
It is often claimed that increase in calorie deprivation doesnot necessarily mean
worsening economic status.
It could arise for other reasons such as changing tastes, greater health consciousness,
reduced physical work effort, or greater emphasis on children’s education and health
care.
However it is difficult to explain that-
Reduced calorie intake occurred because of other reasons even when real incomes
of the working people were rising andalso, an increase in calorie intake when real
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incomes were also rising, such as between 2009-10 (a poor crop year) and 2011-12
(a good crop year).
Thus, the reasonable explanation for declining calorie intake is a decline in real income of
the working people — that is, income deflated by a price index that takes into account the
effect of privatisation of essential services.
Refer:
It doesn’t trickle down
http://indianexpress.com/article/opinion/columns/facebook-free-basic-net-neutrality-traiit-
doesnt-trickle-down/
Punjab: A case study in agricultural and economic mismanagement in India
http://iasbaba.com/2015/10/iasbabas-daily-current-affairs-28th-october-2015/
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TOPIC:
General studies 1
General studies 2
Unlike the Indian economy, which receives periodic attention and reforms (mostly
during critical moments defined by food shortages and foreign exchange outages),
the workings of Indian democracy have not received a single one.
This reflects that there are no desires to expand the horizons of the workings of
democracy.
The neglect is clearly visible in every angle from which the country has been approached, by
the observers located both within and without its society.
The rulers of the western world often criticize and rate India’s conditions poorly,
especially for its deviance from the apparently superior norms of a free-market
architecture.
However, India’s nationalist elite in contrast to above arguments traces the causes
and effects that India face today to western hegemony (leadership or dominance).
But both lose the narrative by refusing to see that its condition is related to the failings of
its democracy, which in one dimension has remained more or less unchanged since 1947.
“This dimension is that the majority of the population has been left with weak
capabilities”.
“Capabilities are what enable individuals to pursue the lives that they value”. This, Nobel
laureate Amartya Sen has suggested, is true freedom and should therefore be the focus of
all developmental effort.
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It is irrelevant to it whether we have more or less of the state or the market or whether
we insert ‘socialist’ and ‘secular’ into the Constitution so long as large sections of our
people are unfree in the sense that they cannot lead lives that they value.
Jawaharlal Nehru expressed in his famous speech - "He sees Indian Independence as an
opportunity to build a “prosperous, democratic and progressive nation and to create social,
economic and political institutions which will ensure justice and fullness of life to every man
and woman”.
B.R. Ambedkar had defined democracy as a means to bring about a significant change in
the living conditions of the depressed without resorting to bloodshed.
Concerns:
However, Indian democracy has failed to fulfill the vision and expectations of these India’s
founding fathers. As a matter of fact, it has done far worse.
In the past year it appears to have added heightened violence towards the
marginalised to its sedentary character.
With recent one being the incident in Gujarat, where 4 Dalits were stripped in full
public view, beaten up for skinning dead cow.
By assaulting them for undertaking it, not only has their dignity been denied but
their livelihood snatched away. In any civilised society the perpetrators of this crime
would not just be grasped by the long arm of the law but publicly shamed.
Gujarat is of course only one of the sites of violence against Dalits. It is important to
recognise that it has been widespread across northern India and not absent from the
south either, with Tamil Nadu featuring prominently. It is also important to recognise
that acts of violence against Dalits are not of recent origin. Their oppression is
systemic and deeply rooted in India.
Even the states that are long-ruled by parties with leadership drawn from the middle
castes have witnessed violence against the Dalits for some time. When in power,
middle caste-based parties have replaced their invective towards the top of the
caste pyramid with suppression of those at its bottom.
Caste still very much matters to Indian citizens even in the modern world, though one must
point out that different groups of citizens have different reasons for maintaining the system
of caste.
The upper castes want to keep caste alive to oppress the lower castes thereby maintaining
their domination. It is very interesting to note that the lower caste groups, who are
supposed to hate the caste system, also want to use their caste identity to gain benefits in
the corridors of power and politics and, at the same time, they want to put a stop to the
caste oppression imposed upon them by the upper castes. It is an ironical and interesting
situation of the Indian society in modern India.
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“The roots of democracy lie not in the form of Government, Parliamentary or otherwise. A
democracy is more than a form of government. It is primarily a mode of associated living.
The roots of democracy are to be searched in the social relationship, in the terms of
associated life between people who form a society”. -- Dr. Ambedkar
India today hosts the world’s largest number of the poorly educated and prone to poor
health, a development disaster in spite of being the world’s third-largest economy in
purchasing power terms.
Quarter century has been spent focussing on India’s economic architecture in the name of
‘economic reforms’, but still majority of Indians is still below poverty line and think twice to
travel in third tier AC on the Indian Railways.
It would be profitable if the government now devote the next decade to mounting
an assault on human deprivation.
The development of the capabilities of India’s women, Dalits and deprived should
merit the first draft of attention and resources thus expended.
For a democracy to be complete, something more than just focus on the individual is
necessary as members of a democracy must engage with one another.
India has failed to nurture individual and collective capabilities. There has been far
too little effort in public policy to create spaces where citizens interact freely and
peacefully.
Therefore, public policy should engineer spaces where Indians can meet on the basis of a
participatory parity. Widespread public services from schools and hospitals to parks and
crematoria are one way to bring individuals together as they struggle from birth to death in
this country. Repeated interaction in public spaces would make us realise our common
humanity and enable us to see any residual identity for what it really is.
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Conclusion:
The need of the hour is that we, Indians, regardless of caste, ethnic religious and regional
identities, should aim at creating an egalitarian society for the future of India and develop
some universal values upon which the edifice of the idea of India can stand with pride and
glory.
"A person’s worth is determined by his knowledge and capacity and the inherent qualities
which mark his conduct in life.”
The four fold division of castes’ says the Creator in the Bhagavad Gita, “was created by me
according to the apportionment of qualities and duties”. “Not birth, not sacrament, not
learning, makes one dvija (twice-born), but righteous conduct alone causes it.”
“Be he a Sudra or a member of any other class, says the Lord in the same epic, “he that
serves as a raft on a raftlesscurrent, or helps to ford the unfordable, deserves respect in
every way.”
“The spirit of democracy is not a mechanical thing to be adjusted by abolition of forms. It
requires change of heart.” -- Mahatma Gandhi
TOPIC:
General Studies 1
Capitalism, socialism etc.- their forms and effect on the society.
Social empowerment, regionalism & secularism.
General Studies 2
Issues relating to development and management of Social Sector/Services relating
to Health, Education, Human Resources.
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However, not much has been known where middle class in this and how it has fared.
More than a class between rich and poor, it is more of a socio-economic construct.
As per National Council of Applied Economic Research (NCAER), India’s middle class was
expected to be around 5-6% of the total population (2001-02)
Estimate based on Market Information Survey of Households
Included household with annual income in range of Rs. 2-10 lakh
In 2011-12, as per India Human Development Survey (IHDS)- done by NCAER + University
of Maryland- the share of middle class was just below 6% of the total population
The estimate household annual income was in range of Rs. 2.7-13.4lakh
The price change and decline in average family size were taken into consideration
to determine middle class household income range.
Wholesale Price Index used to make price adjustments
Middle class and median class
The NCAER survey fixed Rs. 22000 per month as the minimum criteria to be a middle
class. (average family of four)
See above the estimated household annual income range starts from Rs. 2.7 lakh
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In this survey, 49% of the respondents having monthly income of Rs.5000 identified
themselves as middle class
The NCAER survey gave only three choices to respondents- rich, poor or middle class
Lok survey- 2014
It is a series of surveys to study the changing social and political attitudes in India (done
by University of Pennsylvania)
Of a sample size more than 62,000, 49% of the respondents identified themselves as
middle class
It included even those in the lowest of the five designated income groups of the
sample
The middle class notion
More than 60% respondents of Lok Survey identified themselves as middle class as
they were optimistic about increasing living standards in future even when at the given
point of time, they did not enjoy all material comforts.
On the other hand, the relatively rich have identified themselves as poor
IHDS 2011-12 survey showed that even within the richest 20% of urban households,
ranked by per capita income, more than 8% of them identified themselves as poor.
Thus, middle class is more of a socio-economic construct than a statistical category. It
is more about self-perception than reflection of material well-being
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Though almost 50% of Indians aspire to be a part of middle class, the reality differs
The consumer durables normally associated with the middle class is still a luxury for
median class
From IHDS data, five consumer goods are chosen that are expected to be owned by the
middle class
Any motor vehicle, TV, computer or laptop, cooler or AC and refrigerator.
At all-India level, rural and urban areas combined, the median household owned only
one of the five assets. (2011-12)
In 90% of the cases, it is the TV
At urban level, the median household owned two of the five assets
Most cases were TV and refrigerator
A household possessing all the five of the mentioned assets, it is among the 2.75% of all
household in India.
Urban India has 7% of such households, hence, more egalitarian
Thus, the asset ownership reflects income levels
Households having all five consumer goods in urban India is 6 times more likely to be
among the top income quartile than being in the median quartile.
Employment
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Usual Principal Status is considered for the occupation for the NSSO survey (2011-12)
UPS= status of activity on which a person has spent relatively longer time of the
preceding 365 days prior to the date of survey. (more than 180 days)
Median class is relatively engaged more in manual work than the ‘white-collar’ jobs.
White collar job= performed in an office, cubicle, or other administrative setting.
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Only 31% of the working age men of the urban median class is engaged in white collar
jobs like managers, professionals and technicians.
Still 47% are engaged in work arenas like “metal, machinery and related trades
workers”, machine operators, drivers, labourers in construction or manufacturing, etc.
which is exactly not a ‘white-collar’ job
From urban median class to urban rich class, the picture changes drastically.
74% working age men are employed in ‘white-collar’ jobs,
Only 10% of working age men from rich class are involved in ‘non white-collar’ jobs
like plant workers
Less than 30% of the median class working age males of the urban areas had any
written job contract
It included salaried or wage employment, whether regular or casual
In contrast to it, 60% rich class working age males of the urban areas had a written job
contract
The top 1% urban working age males, who were not self-employed had a written job
contract in more than 70% cases.
Thus, Prima facie, the occupation structure for the three different urban classes suggests
that—
It is the rich and the super-rich together constituting the top 10% of population,
whose occupation structure more closely matches our established notions of what
constitutes the middle class, rather than the median 20%.
In rural occupation, manual work dominates for all classes, though there are some
differences
30% of the median rural class work as either agricultural labourers (excluding farmers
who worked on own land) or as construction or industrial labourers.
However, only 10% of rich rural class are engaged as agricultural labourers or industrial
labourers.
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The richest 10% income class who have income levels to be qualified as middle class is
almostentirely dominated by upper caste in urban areas.
As per NSSO, upper caste (excluding Muslims) constituted 30% of the households in
overall urban India
But, top 1% class of urban India has 73% households by upper caste
Thus, social inequality is present in almost all indicators of economic well-being in India
In a recent Oxford University Press blog, two professors from Indiamentioned that
middle class might perpetuate social inequalities than eradicating it.
“Even when the rise of middle class transforms the way people think, behave and relate to
each other, the process does not do away with inequalities of caste and community. Those
trying to move up in the new social and economic order use their available resources and
networks, including those of caste and kinship to stabilize and improve their positions in the
emerging social order, with a new framework of inequality,”
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Is there a solution?
Yes, EDUCATION
The notion of an aspirational and upwardly mobile middle class is not just a chimera.
Education is a great unifier.
An overwhelming large section of the population has woke up to the importance of
education, irrespective of socio-economic equalities
In contrast to asset ownership or employment categories, there is little gap in school
enrolment levels between various incomes classes
However, the quality of public education matters as poorer sections go to
government schools
Conclusion
The younger generation needs to be educated if the India’s median class wants to reach
themiddle class income levels.
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Education will clearly determine whether or not India moves up from its current status
of a lower middle income nation to a middle income nation.
Related articles:
1991 is history: Where do we go now?
http://www.livemint.com/Opinion/rFnp5HBiv7YgCE6DDQVpkM/1991-is-history-Where-do-
we-go-now.html
TOPIC:
General Studies 2
General Studies 3
Importance of ICT
Information and communications technology (ICT) has played an increasingly important role
in promoting economic and social development, such as
enhancing productivity,
facilitating trade,
creating quality jobs,
providing ICT-based services such as e-health and e-learning, and
improving governance.
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the extent to which there has been penetration of information and communications
technology (ICT) especially through the Internet and mobile phone subscriptions
or
through the degree of press freedom given to the journalists, news organisations
and citizens of a country
Access to ICT also gains relevance in the newly adopted Sustainable Development Goals
(SDGs) for 2030 of the United Nations, with greater relevance for the least developed
countries to be able to provide universal and affordable access to the Internet to its
people.
Over-performers, underperformers
Though ICT has promoted development across various dimensions of society from
connecting individuals to spreading across businesses, and governments, there exists a
digital divide in its accessibility between the high income and low income countries.
From the above stats, we can arrive at a conclusion that – there is a high degree of
correlation between the economic progress of a country and its access to ICT. However, this
is not true.
There are countries which have over-performed relative to their economic peers in
providing digital technology.
One such country worth mentioning here is Costa Rica, which is the world’s top over-
performer, known for its communication technology and also press freedom.
Similarly, there are countries which have underperformedamong their income peers on
access to information and communication.
For instance, Cuba, which has the lowest number of mobile phone subscriptions and
lowest press freedom index, has been the most underperforming country on access to
information and communication.
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Further, two of the world’s most populated countries — India and China — are also
among the few underperformers on access to ICT.
India, which has been appreciated globally for providing IT services, faces a huge digital
divide, having a relatively low percentage of population with access to the Internet.
In 2014, it had only about 18 people per 100 using the Internet (World Bank Data).
China on the other hand has a very weak press freedom index, resulting in its overall
low performance on access to ICT.
Apart from the digital divide existing between countries, there also exists a gap in
adoption of digital technologyacross different demographic groups within the country.
With the world presently scoring 62.99 on a scale of 100 in access to ICT, higher overall
social progress could be achieved by overcoming the digital divides that exist between the
countries regardless of their level of economic progress.
1. One of the ways to bring about greater penetration of digital technology in society is
to make it more affordable.
2. This could be realised through support from multilateral organisations to the
underperforming countries by helping them build their communication
infrastructure.
3. Promoting greater market competition in Internet provision
4. Encouraging public-private partnerships in building ICT infrastructure could increase
the affordability of digital technology and thereby improve access to it.
5. Further, digital divides could be bridged to an extent by bringing greater awareness
among citizens about the use of digital technology which could help in reducing
information inequality in society.
6. It is also essential to build up the corresponding human capital necessary for making
optimal use of the technology.
Conclusion:
ICT proves to play a fundamental role in the improvement of education, the battle against
climate change and even the progress on gender equality. Therefore, the significant digital
dividesneed to be addressed through strengthened enabling policy environments and
international cooperation to improve affordability, access, education, capacity-building,
multilingualism, cultural preservation, investment and appropriate financing.
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TOPIC:
General Studies 2
Issues relating to development and management of Social Sector/Services relating to
Health, Education, Human Resources.
Government policies and interventions for development in various sectors and issues
arising out of their design and implementation.
General Studies 3
Science and Technology- developments and their applications and effects in everyday
life
Basics of cyber security
Awareness in the fields of IT
E-health threats
Cyber threat is a real menace of the digitised world.
Data theft and hacking has become a routine
The threat of electronic data misuse is on the rise with sensitive data having limited or
no protection
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In such scenario, when health care is being encouraged for digitisation, along with its
advantage, it is necessary to acknowledge threats and take required precautions.
Medical data
It is sensitive in nature and contains details such as bodily functions, physical anatomy,
sexuality, a history of substance abuse, psychological issues or any other diagnosis or
prognosis.
Patients expect full anonymity of their medical health from the third parties or even
close relatives.
The patients may share the ‘chosen’ information for self-benefit and not to reveal
entirely
External Fallout of leak: social isolation or discrimination
Internal Fallout of leak: Patients might not reveal true or complete information, leading
to inaccurate medical treatment
Observed inthe west:
Non-physicians improperly viewing e-health data of celebrities without any
legitimate reason
Health records sold on e-bay.
Stealing medical records from computer and laptops
Medical info for sale: As per report, medical information has more worth than financial
information as they can be misused to buy drugs and medical equipment for resale and
also making false insurance claims.
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Conclusion
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Parliament has passed the Child Labour (Prohibition and Regulation) Amendment Bill,
2016. The bill was first passed in Rajya Sabha and later in Lok Sabha during Monsoon
session of Parliament.
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It seeks to amend the Child Labour (Prohibition and Regulation) Act, 1986 to widen the
scope of the law against child labour and stricter punishments for violations.
Currently, children under the age of 14 are banned only from working in hazardous
industries. There was no bar on the employment of children between 14 and 18 years.
Now, the proposed amendments prohibit all work, hazardous or otherwise, for children
under 14, who now also enjoy the constitutional right to free and compulsory education.
And for adolescents between 14 and 18 years, whose labour was entirely lawful until
now, the law prohibits their employment in work scheduled as hazardous.
It makes child labour a cognizable offence attracting a jail term of up to two years and
penalty up to fifty thousand rupees.
The Bill has a provision of creating Rehabilitation Fund has also been made for the
rehabilitation of children.
Until here, the amendments made seem good and meant to strengthen legislative
framework that prohibits children from employment.
However, on closer scrutiny, the reality of what is being offered is the reverse of what
appears on paper.
Amendments proposed
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It is estimated that around 80 per cent of child labour is in work with family
members. This is in farms, forests, home-based work such as bidi rolling, carpet
weaving, making of bangles and handicrafts, home-based assembly tasks, domestic
work, eateries, roadside garages, and street vending.
The amended act legalises the bulk of child labour while claiming to do the opposite.
Under the garb of family-run enterprises, children will also be allowed to work in
industries like zari, bangle and carpet making, beedi making, brick kilns, diamond
cutting, even scavenging.
The truth is that a number of these industries rely on the small nimble fingers of children
and perpetuate a system that thrives on bonded labour, or at best very poor wages.
The government argues that these amendments are being made in response to the
socio-economic realities of the country and to allow children to learn traditional crafts
after school hours.
A sobering study points out that while combining school and work is a reality for poor
children in India, the likelihood of children who work for over 3hours dropping out of
school is estimated to be as high as 70%.
In the country where the traffickers passes on as a “Mama” (uncle) or a “Mausi” (aunt),
where is the question of state actually being able to monitor the number of hours a child
actually works, even if he is actually working in the family enterprise?
Once again it will be the girl child who will be the 1 st to be pulled out of school and put
into the workforce, as will children from economically weaker section and marginalized
section of society – the very children most at risk and whom the Act is largely designed
to protect.
Not only will these amendments not help eliminate child labour, but will also in all
likelihood, deny our children their rights under the RTE Act, possibly creating the perfect
preconditions for some of them to take to juvenile crime.
Conclusion:
The argument that has long held sway is that child labour, however unfortunate, is
inevitable as long as households remained poor. Only after parents escape poverty will
their children be able to enter school. What these claims ignore is that the reverse is far
more true. That child labour is indeed a major cause of persisting poverty. That if a child
is trapped in labour instead of being able to attend fully to her schooling, she will never
be able to escape the poverty of her parents. The child of a sanitation worker, rag-
picker, domestic worker or casual labourer is likely to be trapped in the professions of
her parents unless she is able to access quality education.
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We should not be the generation that will preside over a system when the state dropped
the ball – and our children and we pay the price for it, under the garb of doing right for
them.
Economic development, investment, women and child welfare and job creation should
be given their rightful place in budgetary allocation. Amidst the furore over the recent
juvenile crimes and release we should be able to think of such positive steps so that
another child is not turned into a criminal because of avoidable circumstances.
TOPIC:
General Studies 2
Government policies and interventions for development in various sectors and issues
arising out of their design and implementation.
General Studies 3
Conservation, environmental pollution and degradation, environmental impact
assessment
Disaster and disaster management.
Science and Technology- developments and their applications and effects in everyday
life
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What?
As part of the Indo-US nuclear deal signed almost a decade ago, India had offered GE
and Westinghouse one site each to set up six units of 1000 MWe.
Government in 2012 demarcated Kovvada land in Andhra Pradesh for acquisition to
build nuclear power plant.
This project is transferred from Gujarat. Westinghouse was given to Mithivirdi. But after
protests from local people and also environmental objections, it was shifted to Andhra
Pradesh
Nuclear hub in making
The Nuclear Power Corporation of India Limited (NPCIL) plans to install six nuclear
reactors, each generating 1,594 megawatts (MW), or 9,564 MW of power overall.
This will throw the normal life out of gear of the communities of Kovvada as they will
have to shift to other areas.
Andhra Pradesh has permitted for the establishment of string of nuclear plants along the
coastline- both U.S. and Russian-which will together generate 30,000 MW by 2031.
Political angle
In 2012, the protestors mainly included cadre of TDP workers, which was then in
opposition.
The opposition in parliament during the UPA rule also opposed the nuclear power plant
project.
However, now the centre and the Andhra Pradesh state government are in support of
the project.
It is not a political issue in the State as all parties have agreed to the project.
However, this time it is the CPI (M) which is mobilising the masses to rise against the
proposed plant at Kovvada.
Resistance in Kovvada:
Four years ago, Kovvada had experienced a small resistance movement.
The protestors, including the fisherfolk, anti-nuclear activists and leaders of political
parties raised slogans against establishment of the nuclear power plant as it would rob
them of their livelihood and expose to high dose of radiation
Relay hunger strike: It began in December 2012 where hundreds of people staged
protests and raised slogans against the power plant. it lasted for more than 150 days
With passage of time and no strong political backing, the movement lost its steam.
The fishermen are indulged in knitting long nylon and plastic threads into hammocks
because effluents from nearby pharma industries into the water bodies consumed their
fishes.
Activists cite four reasons for ‘Destination Andhra Pradesh’ for nuclear plants
Warm rapport between leadership of central and state government
AP’s huge requirement for power as it shifts from agriculture to industrialisation
Ready availability of government land
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Astonishingly, the state government says that it has no role in deciding anything relating
to such projects which come under the aegis of the Central government and NPCIL
As per a state government official, the Government of India has just asked the state
government to look for nuclear plant sites in Nellore and Prakasam districts
US will build nuclear plant at Kovvada, Russia is expected in Nellore/Prakasam.
Where is safety?
Vicinity of plant
Kovvada and surrounding villages have many families living within the ‘exclusion’
zone, i.e. the immediate vicinity of the nuclear plant upto 1.5km from the project
site where no one is expected to live.
There are 42 villages in the ‘sterilised’ zone, upto 5 km where no development
should take place.
In the ‘emergency’ zone which is upto 16km, there are 66 villages
Safety from nuclear issue is debatable as
Neither India has experience in handling new generation reactors- whether GE-
Hitachi’s Economic simplified boiling water reactor or Westinghouse’s AP1000
Nor an independent and strong regulatory mechanism
The Atomic Regulatory Board works like an arm of DAE
Another issue is of Indian Civil Nuclear Liability law which has a low liability cap
The liability for Kovvada is put at Rs. 1600 crore for a plant whereas its cost is whopping
Rs. 4 lakh crore!!
Report findings
A US based institute called- Energy Economics and Financial Analysis revealed that GE-
Hitachi and Westinghouse nuclear reactors were neither cost effective nor power
efficient along with a huge risk factor.
The first units of six nuclear reactors are not expected to produce electricity for the
grid before 2031
Indian Institute of Chemical Technology has estimated that tariffs for electricity in
Kovvada will be very high
First year tariffs will be in range of Rs. 19.8 to Rs. 32.77per KwH
Thus, it needs to be understood if it is worth to spend crores on nuclear power
whose share is just 0.58% in primary energy demand of India
NPCIL
When state government is acting in an unfriendly manner with ban on land registration,
the NPCIL is making all efforts to encourage people to accept the RR package which it
calls ‘the best package ever’.
It has deposited the first tranche of Rs.359 crore of the Rs.1,000 crore it has earmarked
as relief and rehabilitation (R&R) package with the Srikakulam District Collector.
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NPCIL officers believe that local people will cooperate once they get the assured
monetary reliefs.
On safety
The new age reactors require less land
The reactors have latest Generation-III plus pressurised water type which automatically
shuts down in case of an accident or an earthquake above 7.2 magnitude.
Once the reactors shut down, they cooling takes place on its own in the fortnight.
Human intervention is required after that only.
Survey support
National Geophysical Research Institute has conducted study which classified Kovvada as
low vulnerability of zone 2
Conclusion
Too much haste?
Former Union Energy Secretary has expressed displeasure over showing such rush in
building the nuclear plant in Kovvada
There has been no scientific bases on which the site is chosen.
Intense seismic activity was recorded by the Department of Atomic Energy’s own
agencies
Four fault lines run through the region
It is also a cyclone affected area
Yet, the site has been selected for building the nuclear plant. With such plans,
Fukushima disaster can’t be ruled out
Exposure to radiations can lead to genetic disorders and cancer. The sufferings can last
till generations. And more importantly, though some people knew, most of them were
not made aware fully of such critical information
Chernobyl disaster: A WHO report mapping the impact of disaster after two decades
mentioned
Increased incidence of thyroid cancer
Doubling of leukaemia
Radiation cataract
Mental health issues
Though Social Impact Assessment has been on the agenda, the environmental clearance
for the project is yet to be sought.
20000 people are estimated to be displaced which belong to agriculture and fishing
families, affecting a total population of more than 6 lakhs.
What remains to be seen is if people will succumb to the temporary monetary bait or fight
for their human rights.
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INTERNATIONAL
Introduction:
We have earlier covered many articles in regard to India’s engagement with Iran and how it
is working to spread its influence and presence in Central Asia.
We also know that India recently concluded the long-awaited contract with Iran, i.e.
to develop the Chabahar port, and
a related deal involving the establishment of a trilateral trade and economic
corridor
This engagement is possibly one of the most crucial steps which would not only enable
India’s access to Afghanistan, but also large parts of Central Asia which are rich in natural
resources.
It is significant also because India gets to contest China’s influence in the region.
While there’s been some headway in Central Asia, in the immediate neighbourhood things
have not been quite so impressive in terms of India’s investments.
Note: The below article briefs us about the present lethargic relations between India and its
immediate neighbouring countries (esp. South-East Asian countries) and makes a point why
India should increase its presence/relations in/with these countries.
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On the other hand, the recently concluded Trans-Pacific Partnership (TPP) agreement to
which Vietnam is a signatory along with 11 other Pacific economies representing 26 per
cent of world trade, would provide almost duty-free access to goods produced in and
exported from Vietnam.
4. Indian companies can get direct access to the developing and developed markets of TPP
and ASEAN members
While Myanmar could act as the gateway to the entire Asean region apart from tapping
the significant local market, Indian companies in Vietnam would get direct access to
the developing and developed markets of TPP members. Besides these, it goes without
saying that CLMV would provide access to the entire Asean landmass.
Concerns:
While the Government in 2014 had expressed the desire to set up a Rs. 500-crore
Project Development Fund (PDF) for catalysing Indian investments in CLMV countries,
the same has not seen any significant traction on the ground either.
If these initiatives see the light of day, it will usher in a good amount of Indian
investments into the region, possibly in textiles, leather and low-end manufacturing,
amongst others.
The Kaladan multi-modal transit-transport system conceived in 2008 envisioning
connecting India’s north-eastern States through Myanmar to its Sitwe port has been in
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limbo due to delay and escalated costs. The project was intended to be a landmark
initiative that would facilitate India’s links to the Asean region.
Conclusion:
“Good economics is good politics”. Elucidate the statement in regard to the importance
of why India should focus East?
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India’s present relation with West Asian countries (in focus with strategic dimension):
Recent visits of our Prime Minister to the West Asian countries (United Arab
Emirates, Saudi Arabia, Iran, Afghanistan and Qatar) have, undoubtedly, helped
strengthen relations with these countries, especially in the area of economics and
trade.
Each one of these countries has also been desirous of partnering India in
development-related activities, recognising India’s current importance in Asia and
the region.
However, the same cannot be said of strategic and security relations. i.e. mere
mention in joint statements of shared security and strategic concerns, common
ideals and convergence of interests, enhanced defence ties, etc do not translate into
a strategic relationship
Here, India’s foreign policy and diplomacy have to move with caution.
Most countries of West Asia have their own security and strategic construct. India is
not visualised — nor does India see itself — as a “net provider of security” in the
region and, consequently, India does not figure prominently in these countries’
security and strategic plans.
There are again certain limits to intelligence and counter-terrorism cooperation, as
serious differences exist between many of these countries and India on what
constitutes terrorism and who can be described as a terrorist.
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India-Iran nexus may hurt Saudi Arabia and Saudi-Pak nexus hurts India:
Saudi Arabia, for example, needs to be seen as a dilettante in security matters — flirting
with different nations, most noticeably the U.S., and frequently leaning towards
Pakistan.
Hence, when the India-Saudi Arabia joint statement talks of the two countries’
responsibilities to promote peace, security and stability in the region, it conveys
different meanings for the two countries.
For Saudi Arabia, locked in a near existential conflict with Iran — with which it has
ideological, doctrinal and hegemonistic issues — Iran is the main enemy.
For India, Iran is a friend, and the threat of terrorism emanates from Pakistan, which
remains intent on employing terror as a strategic instrumentality to destroy India.
Hence, it is best to avoid an excess of exuberance in such matters.
Much of this applies in equal, if not greater, measure to the current euphoria regarding
our relations with Iran.
India and Iran share very strong cultural relation. India is home to the second largest
Shia population in the world is well known.
The umbilical links between Qom (Iran) and centres of Shia orthodoxy in India may
be less known, but do exist.
Yet, Iran maintains a certain wariness in its relations with India.
Reasons:
o Many attribute this to India’s negative vote in the Atomic Energy Agency
earlier on, and
o India’s implicit adherence to U.S. sanctions against Iran more recently.
Other reasons possibly exist, but clearly New Delhi needs to work far more strenuously to
regain Tehran’s confidence. One high-profile visit by the Prime Minister, or the inking of the
Chabahar port agreement, may not be enough.
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The delay in setting up Chabahar port has, however, reduced its economic value and
utility, with China’s One Belt One Road (OBOR) initiative — to which both Pakistan
and Iran subscribe — threatening to outflank it.
Another impression that the establishment of Chabahar port gives India a strategic
advantage vis-à-visChina is equally misleading.
Comparison with Gwadar port makes this obvious. China’s investment in Gwadar port
dwarfs what India proposes to invest in Chabahar. Moreover, China’s relations with Iran
are today on an upswing.
Chinese President Xi Jinping was the first major world leader to visit Iran after the lifting
of sanctions, signing more than a dozen deals, including the OBOR initiative. Iran has
openly welcomed both China’s OBOR initiative and Maritime Silk Road initiative, and
sees major economic benefits to itself once they are completed.
China’s trade with Iran is of the order of $52 billion, much higher than the $9 billion
trade between India and Iran. China expects to raise this to nearly $600 billion over the
next decade.
Not to be ignored is the Pakistan factor, adding further grist to China’s efforts. This
includes dangling the possibility of an Iran-Pakistan-China gas pipeline.
Challenges in Afghanistan:
Unfortunately, Afghanistan, for which Chabahar port was intended to be the lifeline, is in
dire straits today and its future in jeopardy.
India’s investment in Afghanistan has been substantial (for which it paid a heavy
price in terms of both development assistance and the loss of human lives), including
the Rs.1,700 crore Salma dam in the strategically vital Herat province (opened by the
Prime Minister on June 4 this year); the new Afghan Parliament building; and the
218-km long Zaranj-Delaram Highway in western Afghanistan — but it faces the
prospect of losing out on all that it has invested.
Currently, large swathes of Afghanistan are under Taliban control. Constant attacks
on government and other targets have eroded the credibility of the National Unity
Government.
Some parties are aligning more with Pakistan and some Afghan leaders now seem to be
leaning towards the China-dominated Shanghai Cooperation Organisation and give it a
key role in a future security architecture. Only, Hamid Karzai government displays little
preference for India.
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Some Collapse of the National Unity Government will almost certainly lead to a surge in
Taliban-directed activity.
Countries that have propped up the National Unity Government might even offer an
olive branch to the Taliban and involve Taliban members in a future Afghan
government.
This would then enable the Tehrik-e-Taliban Pakistan, the Haqqani network and the
Islamic State (IS) to further enlarge their presence inside Afghanistan.
A Talibanised Afghanistan could well become a staging post for launching attacks
against India. The possibility of regional instability, which Pakistan could use to its
advantage and to India’s detriment, cannot also be disregarded.
Conclusion:
These developments constitute a strategic reversal for India. In the new order of
things, India faces the danger of being relegated to a “bit player”, with little or no
influence.
India has been kept out of the newly created Quadrilateral Coordination Group
which consists of the U.S., China, Pakistan and Afghanistan to discuss Afghanistan’s
future.
Left with few options and with the anticipated proliferation of Islamist extremist
groups including the al-Qaeda and the IS, India’s focus would need to shift from
development to finding ways and means to ensure that Afghanistan does not turn
into a major crucible for myriad terrorist groups, specially the IS and the al-Qaeda in
the Indian Subcontinent (AQIS).
Consequently, the dividend that India expects from the development of Chabahar
port may well prove to be highly evanescent. Hence, premature celebrations are
best avoided. As India’s prospects recede, the economic advantages accruing to
China from the OBOR — which incorporates Pakistan, Afghanistan and Iran — would
increase. This would further diminish whatever elbow room exists for India in that
country and in the region.
What are the implications of India’s highly visible changing diplomacy in regard to the
development of Chabahar port? Discuss the issue highlighting the difference between
China’s development of Gwadhar port and India’s development of Chabahar port.
Examine the India’s recent developments in strategic dimensions with West Asian
countries. Why India’s foreign policy and diplomacy have to move with caution?
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In News:
PM Modi will be visiting some of the African countries (especially the four Indian Ocean
littoral countries – Kenya, Tanzania, Mozambique and South Africa)
The visit will be the first by an Indian PM to Mozambique since 1982 and the first to
Kenya since 1981.
NDA govt’s Africa policy was manifested in the third India-Africa summit in 2015, which
was attended by the leaders of 51 of 54 African nations. Previous summits in 2008 and
2011 had attracted 14-15 heads of state of governments.
PM Modi’s visit to the four Indian Ocean littoral countries has three components —
the first related to economy and trade,
the second to security and
the third to the Indian diaspora.
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Fig: Four Indian Ocean littoral countries - Tanzania, Kenya, Mozambique, South Africa –
which the PM Modi will be visiting
India, stresses all-round relations which includes business, investment, education and
training.
1. India has significant relations with all four countries in terms of trade as well as
investment of Indian private and public sector companies.
2. Other areas - oil and gas industry, automobile, textiles, telecommunications,
engineering products, pharma and medicine
3. Emerging areas of interest - floriculture and agriculture, commercial farming of
sugarcane, palm oil and coffee, because of the agriculture investment-friendly
attitude of many of the states
4. Cabinet has also approved of an MoU with Mozambique to double the import of
pulses to 2,00,000 tonnes by 2020.
1. Indian diaspora is spread across the Indian Ocean islands of Seychelles, Reunion,
Mauritius, as well as the littoral states like Kenya, Tanzania, and South Africa.
2. India’s goal is to incorporate the vast region from India to South Africa as part of its
security sphere.
3. New Delhi has had old ties with the Indian Ocean states of Seychelles and Mauritius
on the security front. India reportedly also maintains a listening post in Madagascar
and Oman.
4. In this context, naval exercises, military and peacekeeping operations, outreach to
the littoral states is crucial.
5. India has emerged as a maritime security provider in East Africa and has build up a
regular naval presence in the strategic Mozambique channel.
6. 2012 agreement provides for anti-piracy patrols by the Indian Navy in the Channel
and in Mozambican waters.
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7. Security from the grim reality of Islamic State terror will have to be and will be at the
core of dialogues.
As for security, the region is far more important for India especially because of the diaspora.
India is a trusted security partner. What it now needs to do is to step up its economic game.
Concerns:
1. Death penalty
In three of the four countries PM is visiting, namely, Mozambique, South Africa and
Kenya, the death penalty now belongs to the past, the first two having abolished it
by law and the third stopped it de facto.
India is behind these three countries and Asia as a whole is behind Africa in regard to
Death penalties.
India gave its excuse explaining that retaining the death penalty is that it acts as a
deterrence against terror.
But still the question remains –“Does it really?” By making martyrs of terrorists, it
makes role models of them for ‘the cause’.
Conclusion:
Africa is key to India’s economic and maritime interests in the Indian Ocean region. The
Prime Minister’s emphasis on the “blue economy initiative” which aims to build on maritime
trade links between India and the countries situated along the Indian Ocean is significant.
With South Africa, Kenya and Mozambique among these, is important for India to establish
deeper links with Africa so as not to get crowded out by other Asian giants.
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It is obvious the possibilities in relationship building are infinite. All we have to do is to push
the boundaries.
1. Discuss the opportunities that the African countries (especially the Indian Ocean littoral
countries) provide for India. Also discuss the concerns between India and these countries.
A friend in need:
Turbulent Maldivian politics: Maldives continues its descent into political anarchy with
democratic institutions facing an unabated onslaught under the authoritarian regime of
President Abdulla Yameen
The Yameen government stands accused of stifling democracy, riding roughshod over
the country’s 2008 constitution, reducing its majlis (parliament) where his party has a
majority to a mere rubber stamp, and weakening the judiciary.
Unfair persecution and imprisonment of political rivals, rampant corruption and severe
curbs on press freedom are other charges.
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Maldives growing "closeness" with China: Both China and Pakistan stepping up their
strategic inroads into the Maldives
ISIS threat: Growing Islamic radicalisation in the tiny island-nation of about four lakh
people once known for its tolerant practices has many foreign governments, including
India, deeply concerned. While the Maldivian government says only 49 of its citizens
have joined ISIS, unofficial figures pitch the number at about 250-300.
GMR issue: Relations between India and Maldives came under a strain after Male had
terminated the agreement it entered into with GMR in 2010 for the modernisation of
the Ibrahim Nasir International Airport. The airport was taken over by the Maldives
Airports Company Limited after a high-voltage legal tussle in which GMR.
The quantum of damages to be paid by the Maldives is yet to announced by the
arbitration tribunal in Singapore.
India has, for some time, chosen to maintain a studied silence on what’s happening in this
troubled tourists’ paradise.
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India seems to be fast ceding its traditional space for effective diplomatic influence in the
archipelago.
India’s cautious dealings with the Yameen regime followed a period of strained bilateral
ties after Mohamed Nasheed — he was the first democratically elected president of the
archipelago in 2008 — was ousted in 2012.
Unwilling to be seen as aligning with any political faction, India has engaged in outreach
to the entire political spectrum in the archipelago.
New Delhi is also unlikely to accede to the request of the Maldives United Opposition
(MUO) — a broad coalition of political parties seeking restoration of democracy — to
directly intervene or impose sanctions to arm-twist the Yameen regime.
The MUO that has Nasheed as an advisor, was launched in early-June at London with a
25-member shadow cabinet. Some of its members were in New Delhi recently to seek
India’s support to “bring back democracy to the Maldives” and ensure the elections
which are still two years away are “free and fair” by having a “transitional arrangement”
in place after Yameen’s removal.
However, as India walks the middle path, what remains worrying is the Yameen’s
regime’s “deep involvement” with China.
The contract for the $500-million Male international airport modernisation project
bagged by GMR was unilaterally terminated once Nasheed was ousted.
India’s loss was China’s gain with the latter bagging the contract for the airport and the
China-Maldives Friendship Bridge project that will link Male to the airport.
Conclusion:
Amid all these concerns, the window for Indian diplomatic intervention seems to be
closing. In seeking to balance its geo-strategic interests along with the need to remain
engaged with the Yameen government, India cannot afford to trust Yameen’s
enunciation of an ‘India First’ approach. Especially when at stake is India’s influence in
the Indian Ocean region.
New Delhi will need to step up pressure on the government in Male if it is to safeguard
its own strategic and security interests in the archipelago that straddles important sea
lanes in the Indian Ocean Region. Quiet persuasion is what India has been engaging in so
far, but it may need to rally international opinion against the repressive regime, possibly
through the Commonwealth Ministerial Action Group (CMAG).
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1. Critically analyze the relations and growing concerns between India and Maldives. Also
discuss the importance of this island-nation for India with regard to strategic and
security perspective.
Why in news?
The Regional Comprehensive Economic Policy negotiations enter the fourth year in 2016
and the 13th round of RCEP negotiations took place in Auckland on12-18th June 2016.
RCEP— Regional Comprehensive Economic Partnership (RCEP) is an ASEAN-centred
proposal for a regional free trade area.
Between:
10 ASEAN states: (Brunei, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, the
Philippines, Singapore, Thailand, Vietnam)CLIMBB-PSTV+
Six states with which ASEAN has existing FTAs (Australia, China, India, Japan, South
Korea and New Zealand)JACSIN
Launched in: November 2012 at the ASEAN Summit in Cambodia
Viewed as: Alternative to the Trans-Pacific Partnership Trade Agreement
Stats: The 16 RCEP participating countries account for almost half of the world’s
population, almost 30 per cent of global GDP and over a quarter of world exports.
Why RCEP?
Purpose: ASEAN+6 RECP—aimed at transforming the region by higher economic growth
through more cross-border trade and investment.
Objective: To achieve a modern, comprehensive, high-quality and mutually beneficial
economic partnership agreement that will covertrade in goods, trade in services,
investment, economic and technical co-operation, intellectual property, competition,
dispute settlement and other issues.
Dynamics of RCEP
1. It will not create a large integrated market
For an integrated market, RCEP must agree to a zero tariff area among members. However,
this was never on agenda. Best possible solution was RCEP countries agreeing to a single
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tariff concession list providing uniform tariffs for products across member-countries. The
‘noodle-bowl’ of numerous competing FTAs will continue and RCEP will be an add-on to the
list.
Challenge: The zero-tariff was not agreeable to all countries.
2. No substantial tariff concessions in most cases
Large-scale slashing is theoretically not possible among the countries already connected
through FTAs. For example, ASEAN countries and their FTA partners have already
opened over 80 per cent trade through existing FTAs. They can, at best, make small
incremental offers to each other, under RCEP.
Country groups such as India-China, India-Australia and New Zealand or China-Japan do
not have any existing FTA relationship with each other and hence there’s scope for
exchanging deeper tariff slashing.
Challenge: Many countries in the group are not enthusiastic about this, probably due to a
tough economic climate. The level of tariff slashing that these countries will finally agree
upon is yet to be established.
3.ROO criteria
Consensus on adopting common Rules of Origins (ROO) will make movement of goods
easier, predictable across the member-countries.
However, this is just a framework and product level details for almost 5,200 product
sub-headings are yet to be negotiated.
A ROO criterion determines nationality of goods.
For instance, if squash is made in India from Nagpur oranges, the squash obviously
originates in India. But what if the squash is made in India from oranges grown in the US?
Which is the country of origin for squash here: India or the US? There is no standard answer.
Two broad interests group in RCEP
1. Export- driven trading economy: Many ASEAN countries argue that even minor
processing should qualify a product for FTA benefits
2. Manufacturing economy: China or India argues that processing should be substantial
else non-FTA country products will enter the domestic market.
Challenge: RCEP will have a tough time balancing the conflicting needs of the stakeholders,
comprising a mix of manufacturing and trading economies. While a few countries are
pushing for large MNC-centric rules, RCEP being home to over 100 million SMEs may
struggle to find a balance.
4. Pending indecisive areas: Contours of the final outcome are yet to emerge in the area of
IPR, services and investments. RCEP will have to reconcile the interests of many conflicting
interest groups to ensure that IPR provisions do not compromise on public health issues as it
contains 45 per cent of the world population, of which the majority is poor.
Another contentious issue before it is ‘investor-state dispute settlement (ISDS)’ that seeks
to enable an investor to sue a foreign government.
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In conclusion, RCEP may still take over a year to conclude. This intervening period can be
used to tie up loose ends. The Cabinet’s decision in June on introducing labour reforms for
the textiles and apparel sector may prove to be a welcome grand step in this direction.
Refer:
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http://www.livemint.com/Politics/37pnX4pjCINPeglF6d53HL/RCEP-negotiations-India-likely-
to-take-a-more-aggressive-st.html
2. Turkey versus IS and Kurds: Turkey is battling threats on two main fronts, against
Islamic State group jihadists and Kurdish militants.
3. Geo-strategic significance (Syria Issue): Turkey, a NATO frontline state was also in News
as it waited for almost a year to join US-led air strikes on Syria (against Islamic State
jihadists) and to open its air bases to US planes.
4. Turkey versus Russia: Turkey had criticised Russia's intervention in Syria, which had
provoked several airspace incidents along its border.
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Turkey is located between Europe and Asia. Turkey's location at the crossroads of Europe
and Asia makes it a country of significant geostrategic importance.
The Black Sea is to the north, the Mediterranean Sea to the south, and the Aegean Sea to
the west.
The Bosphorus, the Sea of Marmara, and the Dardanelles (which together form the Turkish
Straits) demarcate the boundary between Thrace and Anatolia.
Note: Locate and remember all the above said straits and seas in your Atlas. (Important
for exams)
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With a Black Sea coastline facing Russia, Turkey has been a NATO frontline state for
more than 60 years. (NATO member since 1952)
Turkey’s strategically placed location is important for US, as both can take part in the
US-led fight against Islamic State jihadists
Turkey bordering with Black Sea, makes it a prime location to watch the activities of
Russia and contain Russia. Turkey had criticised Russia's intervention in Syria, which
has provoked several airspace incidents along its border.
Turkey has played a key role in Europe's migrant crisis, having taken in more than
two million Syrian refugees, compared with its own population of around 78 million.
The Republic of Turkey was created as a secular state in 1923 after the collapse of the
Ottoman empire at the end of World War I.
Its founder Mustafa Kemal Ataturk was president until his death in 1938. His successor
Ismet Inonu introduced multi-party democracy in 1946. Turkey witnessed repressive
military coups in 1960, 1971 and 1980.
In 1997 the Turkish military also forced out current President Recep Tayyip Erdogan's
late mentor Necmettin Erbakan from the premiership.
The Islamic-rooted Justice and Development Party (AKP) came to power in November
2002. Its leader Erdogan was prime minister from 2003 until 2014, when he became
the first Turkish president directly elected by the people.
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Why a coup?
Erdogan has comfortably been in power for well over a decade and has brought in a lot
of reform to the Turkish establishment and society.
The military sees itself as upholders of Kemalism, the form of democratic nationalism
and secularism ushered in by founding father Mustafa Kemal Ataturk in 1923. Erdogan
on the other hand is considered an Islamist and conservative.
At the moment, it seem the coup has lost its momentum. Erdogan also seems to have
the support of the public and maybe a section of the military too. Also, thousands of
people took to the streets in favour of the democratic Erdogan government.
If the coup fails, then President Erdogan will emerge more powerful. Since 2003 he has
been able to make himself one of the most powerful president in the country ever, and
this make him more authoritarian. Some experts suggest he might even push for more
constitutional changes.
Kurds Issue:
The Kurds are one of the indigenous people of the Mesopotamian plains and the
highlands in what are now south-eastern Turkey, north-eastern Syria, northern Iraq,
north-western Iran and south-western Armenia.
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Treaty of Sevres: After World War One and the defeat of the Ottoman Empire, the
victorious Western allies made provision for a Kurdish state in the 1920 Treaty of
Sevres.
Treaty of Lausanne: However, such hopes were dashed three years later, when the
Treaty of Lausanne, which set the boundaries of modern Turkey, made no provision for
a Kurdish state and left Kurds with minority status in their respective countries.
Over the next 80 years, any move by Kurds to set up an independent state was brutally
quashed.
So, these Kurds are aiming to change the outcome of World War One
In mid-2013, IS turned its sights on three Kurdish enclaves that bordered its territory
in northern Syria. It launched repeated attacks until mid-2014, when the armed wing
of the Syrian Kurdish Democratic Unity Party (PYD) repelled IS.
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The jihadists' advance in Iraq also drew that country's Kurds into the conflict. The
government of Iraq's semi-autonomous Kurdistan Region sent its Peshmerga forces
to areas abandoned by the army.
In mid-September 2014, IS launched an assault on the enclave around the northern
town of Kobane, forcing tens of thousands of people to flee across the nearby
Turkish border.
Despite the proximity of the fighting and the threat posed by IS, Turkey refused to attack
the jihadist group's positions near the border or allow Turkish Kurds to cross to defend
it, triggering Kurdish protests.
In October, Ankara partially relented and agreed to allow Peshmerga fighters to join the
battle for Kobane, after US-led air strikes helped halt the IS advance.
Since then, the Kurds won series of battles against IS and established control over a
400km (250-mile) stretch of contiguous territory along the Turkish border and advanced
to within 50km (30 miles) of the IS stronghold of Raqqa.
Since July 2015, Turkey has suffered heavy violence with the resumption of the Kurdish
conflict against the background of the war in Syria and a series of bloody attacks.
Small background:
Since 1984, the outlawed Kurdistan Workers' Party (PKK) in Turkey has led an armed
rebellion in the Kurdish-majority southeast that has claimed more than 45,000 lives.
In order to stop this rebellion, Turkey government and Kurdistan Workers' Party
(PKK) had signed a ceasefire agreement.
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However this de facto ceasefire was broken in July 2015 when the Turkey
government launched an unprecedented two-pronged "anti-terror" operation
against jihadists in Syria and Kurdish militants in southeast Turkey and northern Iraq.
Western concerns have also mounted about the state of democracy and freedom of
speech in Turkey after several raids on media groups and a string of prosecutions of
journalists.
Major attacks
Since mid-2015 Turkey has seen a string of attacks with mass fatalities –
Oct 2015 - 103 people were killed and more than 500 wounded in twin suicide
bombings targeting a pro-Kurdish peace rally in Ankara. The prime minister said IS
was the main suspect.
In 2016, seven major attacks claimed more than 120 lives including the latest on
June 28.
In that attack, 45 people were killed, including foreigners, and over 200 injured in a
triple suicide bombing and gun attack at Istanbul's Ataturk airport. There was no
claim of responsibility but authorities said evidence points to the Islamic State group.
Migrant crisis
Turkey has taken in 2.7 million Syrians from the brutal war that broke out across its
border in 2011, making it host to the largest refugee population in the world.
Many Syrian refugees have launched attempts to reach Europe from Turkey's shores,
making the perilous journey by sea to Greece.
Under a controversial deal between the European Union and Turkey that came into
force in March, failed asylum seekers face being sent back from the Greek islands to
Turkey.
In News:
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Informal trade is broadly defined as all trade between two countries that should be
included in the national income statistics, according to conventional national income
accounting, but is not.
Factors such as high tariffs, political tension, infrastructure impediments, ease of trading
goods via third countries have generated a thriving industry for informal trade between the
two South Asian giants.
1. Pakistan’s negative list of 1,209 itemsis the most important factor pushing informal
exports from India.
Items on the negative list are those that are not allowed to be imported from India.
More than one in every two items exported informally to Pakistan were on Pakistan’s
negative list. Clearly, the restriction has fuelled indirect trade.
2. 58% of the traders cited ease of sending goods via a third country as the second biggest
important reason. This highlights weaknesses in infrastructure for formal trade,
consequently leading to high transport costs.
3. The third biggest reason was seen to be high tariffs. Compliance to the tariff
liberalization plan of South Asian Free Trade Area (SAFTA) is expected to bring down
tariff rates.
The agreement on SAFTA is a trade agreement to promote trade and economic growth in
South Asia by reducing tariffs for intra-regional export. India also maintains a sensitive list of
614 items on which no tariff concessions are granted.
4. The fact that Pakistan has refrained from according the Most Favoured Nation (MFN)
title to India has also hindered barrier-free trade, say trade analysts.
According to the World Trade Organisation, MFN means that every time a country lowers a
trade barrier or opens up a market, it has to do so for the same goods or services from all its
trading partners—whether rich or poor, weak or strong.
Real jewellery, including gold, diamond and precious stones, accounted for the largest
share of 23% of informal exports from India to Pakistan.
About 30% of items on India’s current sensitive list comprise of textiles, indicating that
shift to formal trade can be expected once India relaxes its tariffs.
While India’s imports from Pakistan included items such as dry fruits and spices,
informal exports from India included chemicals, tyres, alcohol and tobacco products,
among several others.
Informal exports from India to Pakistan in 2012-13 stood at $3.9 billion, much higher than
the just over $2 billion worth of formal exports. Informal imports, on the other hand, from
Pakistan valued $0.7 billion, slightly more than formal imports of $0.5 billion.
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Most of informal trade between the two countries were also found to be via a third
country, inparticular Dubai.
About 68% of India’s informal export to Pakistan was found to be routed via Dubai.
59% of informal import from Pakistan was accounted for by passengers travelling by bus
or rail.
24% of informal import from Pakistan was via Line of Control trade routes, while 17%
was via Dubai.
Experts say that trade via a circuitous route is itself an indication of the potential of
bilateral trade between the two countries.
However, “the cost of non-cooperation is huge. People in third countries know what
India has and what Pakistan wants, and their business thrives on the lack of information
and hesitation of these two countries. The benefits of direct trade need to be explored.”
The survey, which measured the efficiency of transport of goods via two routes—the
Delhi-Lahore route and the Delhi-Mumbai-Dubai-Karachi-Lahore route—found that the
latter route was 2.75 times more efficient in terms of transport per transaction cost
incurred per container-kilometre.
Higher transaction cost per-tonne-per-kilometre on the direct route is because of
factors such as limited number of items that can be exported via road route,
cumbersome customs checks at Attari/Wagah customs station, transaction costs in the
form of bribes incurred in getting customs clearances, physical examination of goods
and poor infrastructure, among others.
While the total cost of shipping would still be lower in the formal channel, given the fact
that the distance is one-tenth of the route via Dubai, predictability and comfort
encourages traders to incur these high costs
The study highlights that – “if appropriate measures are taken, a significant share of
informal trade can be diverted to formal channels”. Informal trade between India and
Pakistan, though, is unlikely to be totally eliminated as ethnic networks between the two
countries would continue to facilitate it at cheaper costs.
Connecting the dots:
1. Recent studies have shown that informal trade between India and Pakistan is almost
twice the value of formal trade between the two countries. Discuss what factors are
driving this informal trade and also suggest appropriate measures to be taken to convert
this significant share of informal trade to formal trade.
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UNESCO
The United Nations Educational, Scientific and Cultural Organization (UNESCO) seeks to
encourage the identification, protection and preservation of cultural and natural
heritage around the world considered to be of outstanding value to humanity.
This is embodied in an international treaty called the Convention concerning the
Protection of the World Cultural and Natural Heritage, adopted by UNESCO in 1972.
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The power plants will pollute the waters with toxic coal ash, bring constant coal-barge
traffic, and require the dredging of riverbeds.
Mercury from the smokestacks will accumulate in the marine life, permanently
contaminating the food supply of hundreds of thousands of people and vulnerable
wildlife.
And therefore, it needs to use renewable energy. It is already a world leader in solar
energy and has significant potential of other resources like hydro energy.
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Conclusion
World governments, the private sector and tourists all need to coordinate their efforts
to reduce carbon emissions and to protect the world’s most treasured cultural and
natural resources from the impact of tourism activities as well as other polluting
developmental activities.
As the threat of climate change grows increasingly menacing, influential institutions like
the WHC must take a stand against the toxic and insidious legacy of dependence on coal
and other fossil fuels.
The committee shouldn’t be silent on this crucial issue so as to prevent World Heritage
sites around the world from suffering.
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ECONOMICS
Government of India recently announced another new set of “radical changes” in foreign
direct investment (FDI) policies
Just in November 2015, the government had introduced changes in 15 major sectors, and
now, the latest announcement covers nine sectors
Comparison between the changes adopted by the earlier and latest FDI policy reforms:
However, the thrust/vision of the two sets of policy changes remains the same – “to ease
entry of foreign investors in India”
With these successive changes in FDI policy, India has become “the most open economy in
the world for FDI” but can the country expect to benefit from this form of investment?
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3. Improper/poor definition of FDI – do not allow us to make the distinction between long-
term investments and portfolio investments
In the past, the RBI followed the practice of identifying “foreign-controlled rupee
companies”, which were companies having foreign shareholding of 25 per cent or more
of total equity or where 40 per cent share is held by investors from a single country.
In recent decades, the Organisation for Economic Cooperation and Development (OECD)
and International Monetary Fund (IMF) have pushed for a globally acceptable definition
of FDI, according to which 10 per cent or more of foreign equity constitutes the
“controlling share” in an enterprise. But not all countries have adopted the OECD-IMF
definition.
For instance, in India all investments other than those through the stock market are
reported as FDI. India, therefore, does not make any distinction between the
“controlling share” and the others as far as FDI is concerned.
This implies that data on FDI for India do not allow us to make the distinction between
long-term investments and portfolio investments.
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While it may be justified for balance of payments purposes, the fact is that retained
earnings increase the host country’s liabilities without actually transferring resources
from abroad.
Retained earnings are a part of the profits earned by foreign companies in their host
countries, which are in domestic currencies. Once capitalised and absorbed in the equity
stock, retained earnings become conduits for larger dividend remittances in future.
Further, if such earnings are used to take over domestic companies or to buy back
shares from the public, then they would not add to the existing capacities.
Data provided by the UN Conference on Trade and Development (UNCTAD) show that
the share of reinvested earnings has increased progressively during the recent past and
by 2013 they constituted two-thirds of the FDI outflows from the developed countries.
In fact, more money was flowing into the developed countries as dividend income than
that was flowing out as direct investment. Thus actual cross-border equity flows that
meet the conventional definition of FDI are only a fraction of the reported global FDI
flows.
According to official statistics, India has seen a steep increase in FDI inflows totalling over
$55 billion in 2015-16. However, in the world of high finance, FDI is not a gift horse —there
are at least two sets of costs that host countries have to bear.
The first is the direct cost stemming from outflows on account of operation of foreign
companies.
The RBI has reported that between 2009-10 and 2014-15, outflows due to repatriations,
dividends and payments for technology have together constituted a major foreign
exchange drain — nearly one-half of the equity inflows during this period!
The RBI also tells us that during the same period, subsidiaries of foreign companies
operating in India ran negative trade balances in almost all manufacturing sub-sectors.
But, together with remittances and other payments, foreign subsidiaries in most sectors
regularly drew out surpluses which look quite large when compared with the capital that
the foreign companies were bringing in.
Apart from the direct costs, foreign investors are able to extract indirect benefits from
their host economies by using bilateral investment promotion and protection
agreements (BIPA).
In recent years, India has faced a number of disputes with foreign investors, which arose
because the latter was able to invoke the investor-state dispute settlement (ISDS)
mechanism included in the BIPAs that allows disputes to be taken to private
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international arbitration panels. Most of the cases have arisen as the foreign investors
have challenged the tax liabilities imposed by the government.
The government has amended the model BIPA ostensibly to blunt the ISDS mechanism.
The new model BIPA includes a strong stricture to foreign investors to make timely
payment of their tax liabilities in accordance with India’s laws. It will be well worth
watching as to how this instrument gels with the investor-friendly regime that has now
been put in place.
IASbaba’s views on: India has become “the most open economy in the world for FDI” but can
the country expect to benefit from this form of (FDI) investment?
From the above article, we can conclude that India gets benefitted from FDI if –
1. India’s FDI inflows retains its character of being long-term inflows (rather than short
term inflows or portfolio investments)
2. Definition of FDI adopted by India provides data that allow us to make the distinction
between long-term investments and portfolio investments
4. Its retained earnings are less, as the retained earnings increase the host country’s
liabilities without actually transferring resources from abroad
5. Effective policies and laws are implemented to restrict or reduce the share of
reinvested earnings and also to keep a check on inflows and outflows
India should also be aware of the two sets of costs that it has to bear:
Direct cost stemming from outflows on account of operation of foreign companies; and
Indirect benefits, that the foreign investors are able to extract from their host
economies by using bilateral investment promotion and protection agreements (BIPA)
India has become “the most open economy in the world for FDI” but can the country
expect to benefit from this form of investment? Critically comment.
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TOPIC:
General Studies 2:
Government policies and interventions for development in various sectors and issues
arising out of their design and implementation; Governance issues
General Studies 3:
Indian Economy and issues relating to mobilization of resources, growth, development;
Banking Issues
The redemption pressure of the Foreign Currency Non-Resident (bank) deposits, or the
FCNR (B) deposits will increase as the outflow would start in September.
Usually it is considered to be a non-event; however, if foreign exchange flows dry up due
to Brexit (as banks will struggle to deliver more than $10 billion of forwards to the RBI
after maintaining nostro balances of $10 billion to $15 billion) it may inflict damage on
the Indian financial sector.
Scheme:
These deposits were raised in 2013 to accumulate foreign currency due to the worsening
balance of payment conditions—when the rupee was depreciating sharply and went on
to hit its lowest against the dollar in August 2013
RBI offered a special window to the banks to swap the fresh FCNR (B) dollar funds,
mobilised for a tenor of three years to five years at a fixed rate of 3.5 per cent annually
for the tenor of the deposit.
Way Ahead:
Need to take a closer assessment as we reach closer to the time of maturity of the FCNR
(B) deposits.
The liquidity tightness that time would have to be replenished by stepping-up open
market purchases
RBI has entered into currency swaps and forwards, and that should take care of the
dollar requirement and be neutral for the reserves
RBI will keep systemic liquidity at ease and additionally could consider a combination of
three options — arrange for a sizable amount of higher tenor term repo; followed by
OMO purchases; and reduction in daily cash reserve ratio maintenance from 90 per cent
to 70 per cent of the net demand and time liabilities for the stipulated period.
Besides the swap arrangements and forex flows from exports, RBI can utilise the foreign
exchange reserve, which stands at $363 billion as of April 29, 2016. Additionally, RBI can
also use the line of credit arrangement with other central banks
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New rules: MPC is a departure from the present practice where the entire onus rests on
the governor for any rate decision. While the governor will have the casting vote if there
is a tie, the responsibility will be shared by the committee. The governor has to ensure
that he does not opt for the casting vote frequently.
The transition to the new policy framework would require more discussion and better
discipline, to ensure with this committee approach which will improve credibility of
decision-making
http://iasbaba.com/2015/07/iasbabas-daily-current-affairs-24th-july-2015/
Burden of Expectations
Expectation of sharp cuts in interest rates: Difficult to manage rate cut expectation of the
government and the industry at a time when inflation is on the rise
This at a time when retail inflation accelerated to a near two-year high of 5.76 per cent
in May, driven by surging prices of food products such as pulses and sugar
The Consumer Price Index-based and the Wholesale Price Index-based inflations are
climbing.
Food inflation rose by 100 basis points, headline inflation moved up by 60 basis points,
and after excluding food, fuel, petrol and diesel, inflation edged up marginally and
remained sticky in April.
To counter food inflation, RBI can only cut liquidity and keep interest rates high. With 7 th
Pay Commission handing more money in the hands of the consumers, it’ll be difficult to
cut liquidity
http://iasbaba.com/2016/05/iasbabas-daily-current-affairs-31st-may-2016/
Cleaning up Banks
Bad loans have skyrocketed to Rs 5.8 lakh-crore— Crisil has downgraded nine banks
since March and expects stressed loans to rise to Rs 7.1 lakh crore by the end of 2016-
17.
Banks must be recapitalised after the write-offs and additional capital brought in to
meet Basel-III norms.
Recapitalisation involves political decision as the bulk of the bad loans, roughly 90 per
cent, are in public sector banks but the responsibility would still stay with the Central
Bank—which if not managed properly, could lead to structural problems that can cripple
the entire economy.
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A massive overhaul and reform of banking processes is required to prevent this sort of
bad loan situation building up again and RBI needs to give advices in a well-thought
politically acceptable ways.
With public sector banks burdened with bad loans, it will be a challenge to kick-start
lending in the economy for growth to revive
http://iasbaba.com/2016/01/iasbabas-daily-current-affairs-29th-january-2016/
Highlights:
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Point of Focus
Encourage States: More states need to be encouraged to participate and the compliance
can be ensured via Digital initiative and the idea of last-mile delivery via better
infrastructure.
Large mandis should lead the way: will create a demand-side pull and attract more farmers
to the e-NAM
Create validation: Success needs to be brought about early for its spill-over effects to take
place. Increasingly, the government should aim for better management of perishables.
Licensing reform: It is a very significant shift, away from the current system of local mandi-
specific licensing and therefore, it requires dealing away with restrictions and rents on
licenses to new buyers that often limited the pool of buyers in primary markets, especially
for parties located outside the State and its entrenched networks.
Standardisation of System: Along the provision of quality assessors to certify the produce,
there has to be an institutional attempt for quality standardisation
Need much more competitive, integrated and well-appointed local markets, where both
local traders and extra-local online buyers can bid on the produce brought by farmers to
their mandis
Need to standardise the logistics (transportation and shipment charges) aspect as well
Ease of movement needs to be secured against the maze of permits, the condition of the
road network, the inability of the railways to transport commodities at a scale—
transportation accounts for 14 per cent of the supply chain costs
The lack of specialised agricultural produce transportation vehicles needs to be done
away with the help of the ‘Make In India’ programme
More investment in invested in basic facilities like warehouses, cold storages and
inventory management systems—proper price discovery and national trading needs to
be backed up by massive investment in storage sites and facilities
Private players need to be encouraged to spend on research and development on
“mobile cold storages”
Encouraging large farmers, APMCs or transport operators to buy fit-for-purpose
vehicles—geographical boundaries to be diluted
There is also a need to address the marketing challenges of many producers still
restricted to transacting, under very unfavourable conditions, outside market yards. This
can be emphasised upon as an opportunity for both a more comprehensive and
contextual approach to market reform—including support to new and promising
institutional forms such as producer companies, especially among small and marginal
farmers working in rain-fed regions.
The opening up of the food-processing sector for foreign direct investment (FDI) should be
complemented with the above steps.
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1. Is there a need for the Centre to enact a Right to Trade law to create a true national
market for agricultural produce? Discuss.
Refer:
E-platform for trading farm produce to make agriculture remunerative
http://iasbaba.com/2016/04/iasbabas-daily-current-affairs-15th-april-2016/
The need for unifying agricultural markets
http://iasbaba.com/2015/11/iasbabas-daily-current-affairs-26th-november-2015/
Background:
The financial condition of Indian banks has deteriorated in tandem with the economic cycle
since 2013. A 2013 report by India Ratings and Research, an arm of Fitch Ratings, predicted
further deterioration—Rs.1.26 trillion of bank loans may potentially be in distress over the
next 12 to 24 months.
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Way Ahead
India’s corporate bond market needs liquidity, transparency, safe and sound market
infrastructure, appropriate institutional structure, etc.
Regulatory efforts are on to enable wider participation in the market and create scope
for market making. This would facilitate the growth of the corporate bond market,
which would directly cater to the needs of the real economy and the financial sector.
Corporate bond market is still shallow in India, issuance concentrated in few highly rated
firms. Securitisation is at its minimal level. Hence diversification and awareness among
the investors can increase the investor base in this market. Therefore, a collaborative
effort of all stake holders including RBI, SEBI, Finance Ministry and co-operation of
market participants can develop Indian debt market.
How can the bankruptcy code boost the corporate bond market? Discuss the limitations, if
any.
Refer:
Non-performing assets and recent steps to clean them up
http://iasbaba.com/2015/12/iasbabas-daily-current-affairs-19th-december-2015/
The problem of debt concentration
http://iasbaba.com/2015/10/iasbabas-daily-current-affairs-26th-october-2015/
Fashioning a Banking Turn- Public Sector Banks
http://iasbaba.com/2016/01/iasbabas-daily-current-affairs-29th-january-2016/
Indradhanush Plan for Public Sector Banks (PSBs)
http://iasbaba.com/2015/09/iasbabas-daily-current-affairs-7th-september-2015/
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Background
Who: National Advisory Committee on Accounting Standards (NACAS) recommended Ind AS
standards to the Ministry of Corporate Affairs (MCA)
For: Commercial Banks (Banks), Insurance Companies (Insurers) and Non-Banking Financial
Companies (NBFCs)
Earlier: India was following accounting standards from GAAP prior to adoption of IndAS.
Applicability: mandatorily to be followed by companies having net worth of Rs. 500 crore
(US$74 million) or more from 1 April 2016
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India’s stand: Firms resisted the shift to IFSR stating drastic changes in numbers. Thus, Ind
AS chosen as a middle path to harmonise Indian accounting rules with IFSR
Importance of Ind AS
Changes the way companies present their position; either increase or decrease
profits/losses of the firm
Pre-Ind AS Post-Ind AS
Incentives, discounts or rebates given to Incentives, discounts or rebates given to
customers could be shown as part of customers will have to be deducted from
advertising, sales promotion or marketing sales (revenues).
expenses. This was cost to company.
Excise duties taken away from revenues to Excise duties will now come under
show ‘net sales’ ‘expenses’
Intangible assets like goodwill were Intangible assets like goodwill has indefinite
amortised or written off as expenses over a life and hence needn’t be amortised. This
period of time. can increase profit of the firm which carry
sizeable goodwill in books
Investments by a company in government Advocates the ‘fair value’ method of
securities or mutual funds is shown at the accounting
lower of cost ormarket value. Will have to be necessarily be captured at
fair value.
For firms which have legacy or undervalued
investments, this revaluation can expand
the balance sheet size
Companies reported their segment-wise Segments reported to investors are the
performance based on a broad same as the firm uses for the purpose of
product/service grouping or even assessing performance and allocating
geographical segments (within India, resources.
Outside India). Promises clearer disclosures to investors in
certain cases
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The Central Statistics Office’s (CSO) provisional estimates for the Indian economy for 2015-
16 show that the Indian economy growing at 7.6 per cent in 2015-16 and predicts that 8 per
cent growth is around the corner.
In 2016-17, the upbeat view is that we can expect a boost to growth in the coming year
from three sources:
Ever since the global financial crisis broke (2007-08), the economy has not behaved
the way economic textbooks prescribe.
Economic policies are proving to be singularly ineffective in reviving the global
economy.
Governments have failed to control running levels of fiscal deficits and public debt.
Central banks have been experimenting with unorthodox policies such as
quantitative easing, zero interest rate and now negative interest rate policy.
However, all these efforts and policies have failed to revive the economy.
First, manufacturing has grown at 8.1 per cent at current prices. This is not matched by
the growth in the Index of Industrial Production (IIP), which is only 2.4 per cent.
Second, it is hard to explain how manufacturing growth has been so strong when
exports asa whole have contracted.
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Third, as the Centre for Monitoring Indian Economy has pointed out, a big chunk of the
growth in 2015-16 has come from an item called ‘discrepancies’ in the CSO’s statistics
(in plain language, an item about which we know little).
I.e. of the growth of 7.6 per cent in 2015-16, 2.4 percentage points were accounted for
by ‘discrepancies’.
Continued weakness in the world economy, problems in our banking sector, the ongoing
fiscal consolidation and the falling investment rate mean a return to 8 per cent growth
may not happen anytime soon.
Also, a key factor boosting India’s growth in 2015-16 was the decline in world oil prices.
Lower oil prices translate into higher private consumption.
Now both the estimates of Central Statistics Office and Economic Survey are based on
the assumption that this benefit (low oil prices) would continue to accrue to the
economy in 2016-17. (CSO estimated that oil prices to be $50 per barrel and Economic
Survey assumes it to be $35 per barrel) – However which may not happen
This assumption seems wrong as oil prices have already moved up to $50 per barrel. If
they stay at this level, there is every prospect that the gains in 2015-16 on account of
falling oil prices would be absent.
The Pay Commission hike could contribute about 0.6 per cent of the GDP depending on
how much of it is fully paid out in 2016-17.
A better monsoon could add about 0.3 percentage points.
However, the recent rise in oil prices could thus overwhelm potential gains from better
monsoons and the pay hike.
Given global uncertainties, export demand will improve only marginally.
Most analysts predict that increase in government spending might improve the
aggregate demand, but increased public expenditure may lead to fiscal deficit.
The fiscal deficit factors in not just increases in capital expenditure but also declines in
other government expenditure as well higher taxes. Fiscal consolidation planned for
2016-17 means that demand will shrink by 0.4 percentage points of the GDP.
Lastly, we cannot expect private investment to pick up given that corporate balance
sheets are stressed and real interest rates very high.
Conclusion:
Adding up all the pluses and minuses estimated above, we get a fall in GDP growth. This
means that growth is likely to end up closer to 7 per cent in 2016-17.
And this is without factoring in the potential for upheaval arising from Brexit, a rise in
U.S. interest rates and a further slowing down in China.
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Raising the growth rate to over 8 per cent in the next two or three years is a huge
challenge. It’s a challenge that certainly cannot be overcome as long as the government
operates within the present straitjacket of fiscal consolidation and inflation targeting;
policies that tend to reduce growth in the medium-term.
1. The Central Statistics Office’s (CSO) estimates for the Indian economy predicts that 8 per
cent growth is around the corner. Do you agree? Critically analyze why raising the
growth rate to over 8 per cent in the next two or three years is a huge challenge.
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Age group:
The subscriber should be between 18 - 40 years
Therefore, minimum period of contribution by the subscriber under APY would be 20
years or more.
Key functions:
Record keeping, administration and customer service are performed by National
Securities Depository Limited.
A Permanent Retirement Account Number (PRAN) is assigned to all subscribers.
Under a broader framework: Becomes a part of financial inclusion under the Pradhan
Mantri Jan Dhan Yojana—using banks as intermediaries for promoting, administering and
extending pension benefits to low income workers.
Existing limitations
Major impediment- Stringent default penalties:
If a subscriber misses six months’ consecutive contributions, the account is frozen
After 12 months, it is deactivated
Beyond 24 months, the account is permanently closed.
Considering that APY is meant for unorganised workers with irregular income streams, this
feature reduces the scheme’s effectiveness.
Limited government co-contribution:
Although co-contribution has been extended to 2019-2020, this could be availed of only
by those joining before March 31, 2016 (revised from December 31, 2015).
In such a case when the coverage of the scheme is less than 1 per cent, many
unorganised workers joining the scheme in future may not be able to fully access it.
Poor agent incentives:
Increased responsibilities: Banks are asked to administer APY so that new bank accounts
opened under PMJDY could be used for promoting the scheme and expanding financial
inclusion among the economically excluded.
Lesser incentives: In comparison to responsibilities, incentives to banks are considerably
lower than those provided in previous schemes. Here, the incentives have to be
mutually negotiated, and shared between banks and business correspondents.
Poorer reach: Due to low financial inclusion and low penetration of bank branches in
rural areas, it will come in the way of the rural poor accessing the scheme.
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Scope of improvement
Removing account closure for defaults:
If there is sustained non-payment, a system should be devised by which subscribers are
no longer entitled to a fixed monthly pension on retirement as per APY
But, they can continue making suitable contributions to the APY account at his/her
discretion to get different returns.
At retirement, 40 per cent of the accumulated corpus can be converted into an annuity
and the rest can be offered as a lump sum.
Encouraging mobile money payments:
APY hopes to leverage PMJDY’s success to expand its coverage among low income
workers.
According to the RBI, though there is increased account density among underserved
communities in PMJDY, the account usage is low with nearly 35 per cent of such bank
accounts having zero balance.
This requires the deployment of low cost and flexible mobile money channels, which is a
newly emerging technology, to improve last mile access to banks for the rural poor.
Ease of premature exits and withdrawals:
APY should provide for partial withdrawal of the corpus in an emergency after a
reasonable lock-in period of 5 or 10 years.
Public Provident Fund schemes have a 15-year lock-in period prior to full withdrawal,
and allow 50 per cent withdrawal at the end of the sixth year. APY should introduce
similar flexibility.
Enhancing behavioural interventions:
Recently, behavioural interventions or ‘nudges’ have attracted significant attention as
low cost policy tools to cause desired savings behaviour.
Studies around the world show that nudges such as peer comparison, commitment
devices, goal-setting calendars and personalisation are effective in overcoming self-
control issues and prompting regular savings.
Although APY has incorporated SMS reminders and auto-debit facility, scope for
embedding behavioural interventions into the APY design still exists.
Thus, these improvements are urgently needed to improve the coverage of unorganised
workers and enhance old age security among them.
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TOPIC:
General Studies 3
General Studies 2
Bilateral, regional and global groupings and agreements involving India and/or
affecting India's interests
Important International institutions, agencies and fora- their structure, mandate.
Introduction:
India has become the fastest-growing country even as the global economy has
weakened.
This is because – India got benefitted from a confluence of factors — such as the
reduced international price of energy and resilience in domestic private
consumption.
However, if India has to continue its sustained growth leadership, it should carefully
study and assess the global outlook and international policy agenda impacts.
Therefore, this article gives a solution for above concern – It advocates for an urgent
requirement for a global policy agenda to address the rising structural weaknesses.
And the article also discusses that India must play a key role in helping to build and
implement such a global agenda, as part of the process in sustaining its own growth.
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Global structural weaknesses deserve to be looked at carefully. They arise from both supply-
side factors and demand constraints, affecting global trade, a critical growth engine in
recent decades:
1. Low productivity: Productivity has clearly been falling in industrialised countries, and in
emerging markets, leading to supply shortages.
2. Spillover effects: China’s slowing growth has had significant spillover effects on other
countries.
3. Falling investments and innovations: There is rising consensus that the spillover effects
led to falling investment returns, perhaps from slowing innovation that has reduced
investment.
(Greater research and increased competition, especially in the service sector, would help
raise investment and productivity.)
4. Poor demand and rising inequalities: The imbalances slowing growth possibly also
reflect an overall demand shortfall.
Why has demand slowed down?
Demand was likely boosted by debt in many advanced and emerging market countries,
sequentially, and capital is now at the risk of moving out of emerging markets.
Additionally, many believe rising inequalities in advanced countries and key emerging
markets have reduced the propensity to consume and produced what is called a “savings
glut” in many countries—the counterpart of a demand-side constraint which feeds the fear
of deflation.
5. Global trade has stalled far below the long-term annual average trade growth of at least
5% until the start of the financial crisis, and even more, in emerging markets.
It is not just cyclical in nature: there is evidence that trade elasticity to income has
fallen, especially in the United States and China. Of course, trade liberalisation has
slowed significantly with the collapse of the Doha Development Round.
Especially on the investment side, corporate investment remains low and higher
levels of public infrastructure are needed to meet supply bottlenecks and crowd in
private investment.
On the demand side, inequalities have clearly increased in recent years and exports
remain weak though India has been relatively protected from the factors affecting
China’s reduced trade.
While each of abovementioned factors require concerted domestic policy reforms, India
also needs to be fully engaged in the emerging G20-led international policy agenda being
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developed to deal with global structural weaknesses and raise public investment where
fiscal space is available.
2. India should reap the benefits out of WTO trade facilitation and reduced trade costs:
With the failure of the Doha Round to move ahead with multilateral trade
liberalisation, other efforts are being proposed to revive trade. Thus far, India has
not benefited as much as others like China (as it did after securing World Trade
Organization (WTO) membership), from the trade booms in recent decades.
But India has ratified the deal reached by the WTO on trade facilitation, which
should, potentially, significantly reduce trade costs.
3. India should increase its trade integration through more regional and bilateral trade
agreements:
A number of regional and bilateral trade agreements have been proposed, some
going beyond manufacturing, to cover agriculture, investment, business, and other
services where India has comparative strength.
In any case, steps to raise India’s trade integration more quickly in the South Asia region
would help catalyse new investment and competition.
4. India must play a key role in helping to build and implement a global policy agenda
There is the issue of the international monetary system and how it manages the
volatility of global liquidity.
Also at stake are the spillovers from domestic monetary policies, especially from the
industrialised countries, and their implications for global liquidity.
Therefore, there is an urgent requirement for a global policy agenda to address the
rising structural weaknesses and better manage the volatility of global liquidity.
The International Monetary Fund (IMF) is now discussing a road map for
strengthening the international monetary system, and India needs to be part of the
brainstorming behind it; how to better manage liquidity shocks and deal with
external financing needs.
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In the absence of such mechanism, the world will continue to be vulnerable to the
sudden drying up of liquidity or of disorderly acceleration in capital flows. This risk, in
particular, is now a major concern in the current international monetary situation.
India has advocated that the role of IMF should be transformed to act as the global
mechanism, with the mandate and instruments that would allow it to regulate global
liquidity in addition to its other functions.
IMF should be provided with a stronger governance framework that reflects the
rising role of emerging markets, a mandate for effective surveillance, stabilisation of
global liquidity and exchange rates, mechanisms for reducing the risk of disorderly
spillovers, and for dealing with debt restructuring. Eventually, the IMF would need to
be better equipped with a monetary asset instrument to deal with changing global
liquidity.
Such a transformed IMF could be charged, in cooperation with national and
international central banks, with continuously monitoring global liquidity flows and
taking the regulatory decisions needed to manage the same.
Undoubtedly, it will take time to build the necessary global consensus. To achieve it,
international public opinion needs to be better informed of the ongoing risks of
instability inherent in the current system.
In fact, in today’s climate, it is highly desirable for major stakeholders to take this
initiative forward and convene a new Bretton Woods II conference to consider the
necessary changes in the Articles of Agreement of the IMF.
1. Highlight the factors and global structural weaknesses that affect Indian Economy and
examine why there is an urgent requirement for India to fully engage in the emerging
G20-led international policy agenda to address the rising structural weaknesses.
2. Highlight why there is an urgent requirement for a transformed and strengthened IMF in
a changing global economy.
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TOPIC:
General Studies 2
Government policies and interventions for development in various sectors and issues
arising out of their design and implementation
General Studies 3
Indian economy and issues relating to planning, mobilization of resources, growth,
development and employment
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Why in news?
The Union Cabinet has given approval to amend the Benami Transactions Act 1988 vide
Benami Transaction (Provision) (Amendment) Bill 2015
It is in continuation with government’s efforts to curb black money.
Provides for: confiscation of assets held in name of another person or a fictitious name to
avoid taxation or obtain wealth illegally.
Similar scheme to curb black money: Black Money (Undisclosed Foreign Income and Assets)
and Imposition of Tax Act, 2015 to catch those with undisclosed foreign assets.
Estimated Figure: Around $460 billion a year. Bigger than GDP of Argentina
Reasons for black money
More than half of India’s output comes from small, informal sector. Dealing in cash is a
norm
Taxes are cumbersome to pay, easy to avoid
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Direct tax contributes only 35% of the total tax collected. (OECD ideal is two-thirds). The
upper class is benefited most by existing tax benefits
Indirect taxes are distortionary and regressive due to excess dependence on indirect
levies such as sales tax and excise tax.
Banking revolution: Can push up the need of cashless transaction.
It already provides for most sophisticated public payments infrastructure in the world.
Introduction of Unified Payment Interface by RBI- easier for consumers to use mobile
phones for money transfer
The ideas is to shift from
Low-volume, high-value, high-cost and high fees high-volume, low-value, low cost and no
fees money transactions
Thus, concentrated efforts of government to barricade black money transactions from all
sides viz.domestic laws, foreign agreements, banking reforms etc. is the need of the hour.
Refer:
Black Money Law-will it act as deterrent?
http://iasbaba.com/2015/05/big-picture-black-money-law/
No immunity for wealth generated from graft
http://iasbaba.com/2015/07/iasbabas-daily-current-affairs-07th-july-2015/
Measures taken by the Government to Curb Black Money in the Country
http://iasbaba.com/2016/05/iasbaba-press-information-bureau-pib-25th-april-to-1st-may-
2016/
TOPIC:
General Studies 3
• Indian economy and issues relating to planning, mobilization of resources, growth,
development and employment
General Studies 2
Important International institutions, agencies and fora- their structure, mandate.
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Trade misinvoicing was revealed to be the largest component of illicit financial flows
(IFF) from developing countries
It accounted for 83.4% of all illicit flows
Figures say it all:
$1.1 trillion that flowed illicitly out of developing countries in 2013 was greater than what
they received by the combined foreign direct investment (FDI) and net official development
assistance (ODA).
Context:
Increasing exports form one of the most important routes to develop fortunes of a
developing country.
But, there is a possibility that what the developing countries might rightfully gain
through trade may get usurped by others through various means and methods.
Trade misinvoicingis an important route contributing to it.
Hence, UNSDGs has incorporated curbing IFFs into its framework.
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Although the Indian importer is buying $1 million worth of cars from the U.S. exporter,
he uses a Mauritius intermediary to re-invoice the amount up to $1,500,000.
The U.S. exporter gets paid $1 million.
The $500,000 that is left over is then diverted to an offshore bank account owned by the
Indian importer. This is case of import over-invoicing
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Conclusion
These statistics show how despite significant exports, developing countries are failing to
realise the gains from trade.
Nearly 90 developing countries are losing commodity export earnings worth billions of
dollars in valuable foreign exchange earnings, taxes and income that might otherwise be
spent on development.
In India, through encouraging exports via Make in India, there seems to be considerable
scope for tapping illegal flow of funds.
India has been a recent signatory to the agreements facilitating autonomous exchange
of tax information between countries and is much better placed to tackle the menace.
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Related Articles:
Illicit Financial Flows
http://iasbaba.com/2016/01/iasbabas-daily-current-affairs-11th-january-2016/
As India celebrates 25th anniversary of the 1991 reforms, there have been a flood of
retrospective assessments in the national media.
This article deals with some of the key messages and highlighting their implications for the
future.
Highlights:
There was a huge criticism and fears that the dismantling of government controls and
greater reliance upon the private sector and market forces would be ruinous for the
economy.
However, results of many assessments shows that India has done quite well after the
reforms.
1991 reforms have transformed India from a low-income economy at the start of the
reforms to one at the lower end of what the world bank calls the middle-income
range.
We are also currently the fastest growing emerging market country at a time when
both the industrialized countries and the major emerging market countries have
slowed down.
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If we judge only by gross domestic product (gdp), we can say the reforms succeeded.
2. External vulnerability
Another criticism in 1991 was that the opening of the economy to trade and capital flows
would make us vulnerable externally, and the international monetary fund (imf) loan would
be a precursor to continuous recourse to IMF and extended submission to its intrusive
conditionalities. This fear too was ill-founded.
After reforms, India went to IMF in 1981, and again in 1991, but we have not needed
IMF since then.
India did experience external difficulties a few years ago when the current account
deficit increased to almost 4% of gdp in 2012-13, actually worse than in 1990-91. The
fiscal deficit had also worsened because of the fiscal stimulus.
Rupee was depreciated to some extent in the face of market pressure.
However, we were able to handle the crisis without having to call in IMF. The situation was
brought to normal very quickly due to the credibility provided by the large reserves (thanks
to 1991 reforms).
The decision in 1992 to open up to foreign institutional investment (FII) was much criticized
at the time as making the country vulnerable to hot money flows. The fact is that while
there was some outflow of FII money, it was for a brief period only, and was easily
managed.
The impact of the reforms on the poor is obviously a critical factor in any retrospective
assessment.
In the pre-reform period the percentage of the population below the poverty line
(based on the lakdawala committee estimates that were then used) increased
marginally from 44.5% in 1983 to 45.3% in 1993-94 and the absolute number of the
poor increased from 323 million to 404 million.
In the immediate post-reform period 1993-94 to 2004-05, the percentage in
poverty (using the latest tendulkar committee estimates) declined, from 45.3% in
1993-94 to 37.2% in 2004-05.
However, because population had increased, the absolute numbers increased marginally by
3.5 million.
In more recent years, when growth accelerated sharply, the percentage of the
population in poverty declined much faster than before from 37.2% in 2004-05 to
21.9% in 2011-12.
For the first time ever, the absolute numbers declined by almost 140 million from
407 million in 2004-05 to 269 million in 2011-12.
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This achievement is now internationally recognized, with the world bank highlighting it as a
major positive development in the fight against poverty globally.
However, there is no doubt that the numbers in poverty are still too large. To have 269
million below the poverty line, and a very austere poverty line at that, is not something
that should be seen as a victory.
Nevertheless, we can say that if we can grow at 8% or so, and the growth is as inclusive
as it has been in the recent past, we can expect to see poverty reduced to a truly
marginal level in another 20 years.
It is a different matter that by then our goalposts will have changed and government will
have to meet higher expectations.
The real failure is perhaps less in reducing poverty defined in terms of consumption
expenditures and more in the failure to deliver basic services such as education, health,
clean drinking water and sanitation to the mass of our population.
Access to these services is critical for human welfare. It is also critical for growth since they
affect the productivity of the labour force and an unhealthy and inadequately
educated/skilled workforce cannot sustain high growth.
These shortcomings are all interconnected because poor sanitation and poor quality of
drinking water leads to ill health and reduced learning outcomes.
A) Improving performance in these areas should be a priority for governments for the next
10 years.
B) Additional financial resources will be needed, but there is also the problem of the
institutional capacity to spend money well.
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C) Both central and state governments have to put combined efforts and should be
accountable in regard to institutions for delivery and personnel in these areas.
For instance, some years ago, the organisation for economic co-operation and
development-sponsored programme for international student assessment (pisa)
survey, which is conducted in several countries, was conducted in india for the first time
on a pilot basis.
It showed that the levels achieved by students from two relatively advanced states
(tamil nadu and himachal pradesh) ranked at the very bottom of developing countries!
Lant pritchett, a professor at harvard university, has pointed out that india’s top 100,000
students compare with the best anywhere, but quality collapses beyond this thin layer.
Rapid growth cannot be achieved on the basis of a thin layer of excellence. It has to be
based on a much broader level of quality, and our public educational system is very far
from getting there.
However, unless there is agreement that a problem exists, we cannot expect a solution.
D) A systematic resort to pisa type testing in all states, after allowing for cultural
differences which could skew results, is essential to form an independent opinion on the
quality of outcomes. There is considerable evidence from other countries that once the
problem is identified and accepted, corrective steps do help.
Perhaps the greatest unhappiness about the reforms is because the growth process they
have produced has not yielded a sufficient expansion of job opportunities, and the
opportunities created are of poor quality. (jobless growth)
Rapid growth is certainly necessary for this outcome, but it is not enough. It must be
accompanied by growth in more labour-intensive sectors.
Small and medium manufacturing units are a part of the solution because they are
typically more labour using.
However, the objective must be to create an environment in which even large units
in labour-intensive sectors can do well, even as smaller units in the same sectors
expand in size.
Policies that discriminate against organized sector units in favour of unorganized
sector production, for example, modern retail formats, need to be reviewed because
they discourage the expansion of the organized labour force.
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Some of what is needed has been on the reform agenda for some time and is
uncontroversial, though complex. This includes the provision of good quality
infrastructure to all parts of the country, building an efficient banking system and the
related set of financial sector reforms, including the new bankruptcy code and its
supporting infrastructure, ease of doing business, etc.
Some of what is necessary is controversial, notably labour reform. Leaving it to state
governments could help, but it is important to be sure that states implement the right
kind of reforms. What we need is flexibility of the right kind, available to firms
employing many more workers.
6. Corruption
A common worry of many people is that the reforms have increased the level of corruption.
The fact is that the elimination of industrial licensing and import licensing
eliminated corruption and cronyism from areas where it was once widespread.
Where scams are alleged today are the areas that were not reformed, notably
allocation of spectrum, mining rights and land.
Land is a state subject. In the case of mining rights and spectrum a decision was
taken in united progressive alliance (upa)-ii that all future allocations would be by
auction.
In these areas there should be no problems in future and very successful spectrum auctions
were conducted under upa-ii and this is continuing under the present regime.
Conclusions
The central message coming out of the anniversary celebrations is that the reforms did
well in many fields, but not as well as might have been hoped in some important areas.
India has to renew its efforts in what remains undone.
Meanwhile, an economy that has moved into middle income status is bound to face new
challenges. If the government doesn’t respond, we run the risk of getting stuck in what
has been called the “middle income trap”.
The lesson is clear: we need more reforms and not less, but as the economy becomes
more complex, the reforms have to be much more carefully designed.
1. India is celebrating the 25th anniversary of the 1991 reforms. Critically analyze their
achievements and highlight their implications for the future.
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2. In future India may run the risk of getting stuck in what has been called the “middle
income trap”. What do you mean by this “middle income trap”? Suggest some suitable
reforms to escape from this trap?
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Software-as-a-Service—What is it?
A software distribution model in which a third-party provider hosts applications and makes
them available to customers over the Internet
Demand Drivers:
Benefits of Saas:
Removes the need for organizations to install and run applications on their own
computers or in their own data centres, eliminating the expense of hardware
acquisition, provisioning and maintenance, as well as software licensing, installation and
support.
They pay for this service on a monthly basis using a pay-as-you-go model allowing
businesses to exercise better and more predictable budgeting with the flexibility to
terminate SaaS offerings at any time to stop those recurring costs.
Offer high scalability, which gives customers the option to access more, or fewer,
services or features on-demand
Automatically perform updates and patch management
Statistics:
The U.S. and Europe account for more than 80 per cent of the demand for Indian SaaS
solutions
India SaaS based products have received close to $450 million in the first two quarters of
2015
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ENVIRONMENT
India has sizeable water resources, but the country faces huge challenges in the water
sector as the distribution of water varies widely by season and region owing to the
growing scarcity; increasing pollution; enhanced competition, conflicts and trans-
boundary water sharing issues; that have dominated the national discourse in current
times.
Although industry is the largest contributor to India’s GDP, agriculture accounts for
nearly 90% of water use. Two-thirds of India’s irrigation needs and 80% of domestic
water needs are met using groundwater, contributing to the significant groundwater
depletion rate. Although India has one of the world’s largest irrigation systems, it is
characterised by high levels of inefficient water use
The country is also facing the potent threat of climate change, which may have complex
implications on the pattern of availability of water resources including changes in
pattern and intensity of rainfall and glacial melt resulting in altered river flows, changes
in ground water recharge, more intense floods, severe droughts in many parts of the
country, salt water intrusion in coastal aquifers, and a number of water quality issues.
With total water demand in India expected to rise by over 70% by 2025, a huge demand-
supply gap is expected in the coming years and will act as a potentially significant
constraint on economic growth
The alarming rate of groundwater depletion
Declining water tables means increased cost of pumping, salty irrigation water as a
result of over-abstraction leading to crop and revenue losses for farmers, and long-term
consequences for water availability.
Poor water quality and lack of adequate access to sanitation are also major causes of
disease and poor health
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Need for a complete assessment on water availability (use and future demand)
updated in real time on the size and sustainable levels of exploitation
Build a data infrastructure around the multiple sources of water in the city:
Creation of a flexible, responsive water management system
Utilization of Data: To integrate surface and groundwater sources more wisely.
Community-based modelling of Water Usage
Better understanding of its groundwater reserves and ensuring adequate recharge;
groundwater being a common pool resource—consensus must be built to get users to
bear the true ecological and social cost of using that water privately
Building local capacity of both citizen groups and government, allows cities to have a
reliable, cost-efficient system. If the city also gets real-time data, partly with crowd-
sourced, citizen-led information, the system can become more sustainable over time
Models of decentralized groundwater governance— Installation of a wastewater
treatment plant—public reporting on the volume and quality of water they treat and
release, then communities residing there could do more to ensure the health of water
bodies around them (influence innovation and new policy alike).
Water-use efficiency would increase multi-fold:
By the adoption of low-cost technologies
Better demand management
Effective recycling and reuse
Efficient Regulation Mechanism:
By a statutory regulatory authority; Water pricing should be shifted away from the shadows
of politics and be assigned to a statutory regulatory authority
Determining water tariff for cost recovery allowing for reasonable costs
Hear all stakeholders and formulate a standard mechanism for pricing
No alteration be allowed from government
Government should be allowed to introduce a subsidy which can be paid directly to the
targeted consumers after making necessary provision in the budget—making the pricing
of water transparent, and help begin the transition to a system of public debate on the
importance of cost recovery and scrutiny of cost elements.
Also Refer:
A strained relationship: ULB’s & Water
http://iasbaba.com/2016/06/iasbabas-daily-current-affairs-25th-june-2016/
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TOPIC:General Studies 3
Environment and Ecology, Bio diversity - Conservation, environmental degradation,
environmental impact assessment, Environment versus Development
Issues relating to e-wastes
e-Wasteis technically all waste electrical and electronic equipment (WEEE) discarded
without the intent of reuse.
It’s all around us—in the form of discarded microwaves, toaster, television sets, mobile
phones, air-conditioners, computers, printers, etc.
It is one of the fastest growing waste streams in both developed and developing
countries.
A 'smart city' is an urban region that is highly advanced in terms of overall infrastructure,
sustainable real estate, communications and market viability.
It is a city where information technology is the principal infrastructure and the basis for
providing essential services to residents.
There are many technological platforms involved, including but not limited to
automated sensor networks and data centres.
Concerns:
Smart Cities will use technology. And the technology will use hardware which will
eventually become e-waste.
The United Nations University (UNU) has calculated that about 42 million tons of e-
waste was generated globally in 2014. And between 2014 and 2017, we will have a 36%
rise in e-waste globally.
India is estimated to be the fifth largest producer of e-waste in the world.
Within India,
1. Mumbai is the highest generator of e-waste with 96,000 tonnes per annum,
Estimates are that only about 15% of all e-waste globally is recycled. This probably
means that only 15% is recycled by formal actors.
A significant chunk is collected, dismantled and recycled by the informal sector— whose
trading and work stands condemned as polluted.
Over 80% of India’s e-waste is being recycled by the informal sector.
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They typically extract metals by dipping motherboards in acid vats, then burning them.
They extract gold by a process that involves cyanide in a home-made furnace. These
crude processes result in intense pollution.
The new rules issued by the Ministry of Environment and Forests to manage electronic
waste must be implemented with firm political will to close the gap between growing
volumes of hazardous trash and inadequate recycling infrastructure.
Producers and consumers of electronic goods have a responsibility under the E-waste
(Management and Handling) Rules 2011 to ensure proper disposal, but progress has
been slow for various reasons.
Now the E-waste (Management) Rules 2016 provide several options to manufacturers —
such as collection of a refundable deposit and paying for the return of goods — to meet
the requirements of law.
In spite of its growing environmental footprint, sound management of electronic waste has
received low priority. Urban solid waste management policy has focussed on cleaning
streets and transferring garbage to landfills, ignoring the legal obligation to segregate and
recycle. Hazardous materials, including heavy metals, are dumped in garbage yards,
polluting soil and water.
An awareness campaign on e-waste will make it easier to implement the rules. Often,
consumers do not let go of defunct gadgets. Several Indian households also stock e-waste
items.
The success of the new rules will depend on incentivising such consumers to enter the
formal recycling channel using the producer-operated buy-back scheme.
They will come on board when the repurchase offer is better than that of the
unorganised sector and a collection mechanism is available.
The Centre and the States have a responsibility to ensure that producers contribute to
the e-waste management system, which has been designed with their inputs.
The collection targets, that will touch 70 per cent in seven years, are realistic. A healthy
environment demands that the targets get more ambitious.
A smart city—most are existing cities that will be upgraded—should plan to formalize
the space, and train the workers there—most of whom will be traders and
dismantlers—to work safely.
It can license them to work in a cluster, if they adhere to safety standards and keep
paper work to show they are sending the e-waste they are buying to authorized
recyclers.
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In this way, not only will the authorities know more about the e-waste flows in their city,
but they can also monitor these.
This will need small loans, space and capacity building for municipal authorities
themselves. Only a few cities will actually have metal extraction in the formal sector.
Where they do, their work will have to be piloted with technical institutes and
carefully monitored, before it is scaled up. Since data is key here, good dashboards—
used and shared with the workers—will be absolutely key to an e-waste solution.
If any of the smart cities had to be given an award, it should be for how they’ve used tech
and IT to solve the challenges that all other cities struggle with—pollution, waste, jobs,
youth and above all, shifting from a linear to a circular economy that makes for
sustainability.
Connecting the dots:
1. Recently the Ministry of Environment and Forests hasissued new norms regarding
management of e-waste. Discuss the significance of these rules.
2. India is estimated to be the fifth largest producer of e-waste in the world and over 80%
of India’s e-waste is being recycled by the informal sector. In your opinion, what
strategies can be taken to avoid the above concerns? Discuss.
Average Global Temperatures are rising rapidly: What India has to do?
Big concern
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We know that, at the Paris Conference of Parties (COP-21) last December, world leaders
agreed to limit global warming to well below 2°C while still making an effort to keep the
average rise to below 1.5°C.
However, many scientists and analysts actually consider staying within a long-term rise of
1.5°C to be an impossible goal unless some far-fetched method of sucking carbon out of the
air or burying it forever becomes viable.
The above concerns present a very bleak picture. Therefore, the article deals with – what
India has done so far and what India has to do to come out of this bleak setting?
In 2007, the Indian government established the Prime Minister’s Council on Climate
Change, out of which emerged the National Action Plan on Climate Change
(NAPCC).
The NAPCC also rolled out a fair number of programmes and strategies under its
eight missions.
Core Missions are –
1) National Solar Mission
2) National Mission for Enhanced Energy Efficiency
3) National Mission on Sustainable Habitat
4) National Water Mission
5) National Mission for Sustaining the Himalayan Ecosystem
6) National Mission for a “Green India”
7) National Mission for Sustainable Agriculture
8) National Mission on Strategic Knowledge for Climate Change
Each of the States then developed State-level climate action plans, which are
currently being implemented. The State-level studies and plans have also in effect
alerted the States to begin the task of incorporating climate change into their
planning.
The NAPCC essentially announced to the world that India was willing to act on its
global responsibility to limit GHG emissions.
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This was despite the fact that the country has low per capita emissions (less than 2
tonnes per capita, which is lower than the world average) and has historically often
taken the lead in calling for equity in international climate policy and the allocation
of a fair carbon budget.
At COP-21, India proposed that it would reduce the emissions intensity of its GDP
(GHG emissions per unit of GDP) by about a third compared with its 2005 levels,
and has committed itself to depending on non-fossil fuel sources for 40 per cent of
its generation capacity by 2030.
Adaptation was also mentioned in India’s Nationally Determined Contribution
(NDC) along with several details in different sectors.
The Paris Agreement calls for comprehensive reviews, regular “global stocktaking”
and ratcheting up of targets periodically.
We know that India will experience severe effects of global warming. The recent
floods in Jammu and Kashmir and Tamil Nadu, and severe drought in many districts,
are probably just an indication of the harsh implications for the future.
Given these pressures and commitments that have been made, India now needs to
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These various aspects need to be considered in fulfilling the Paris Agreement now, but also
for developing clear and sustainable goals for the future.
Although ratification of the Paris Agreement is already being considered, the deliverables on
adaptation are far from clear. In fact, there are no agreed-upon adaptation goalsat the
global level.
It would therefore be interesting and useful for India to formulate adaptation strategies at
State levels and demonstrate if and how these could be meaningful for the country as a
whole.
With the challenges that India faces and the need to provide human services in a sustainable
manner to its vast underserved population, the country requires social and economic
transformation at a scale that has not been attempted before.
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Ministry of Water Resources, River Development & Ganga Rejuvenation placed 2 Draft
Bills in public domain for comments (before 2 months).
Unfortunately, till now, the Bills have not raised the public debate that they are
supposed to evoke, given the fact that there are sufficient elements that deserve to be
discussed and debated.
The NFWB seems to be a follow-up on the action taken on The National Water Policy
2012,that talked about the “..need to evolve a National Framework Law as an
umbrella law that governs the general principles and manages water needs”.
The NWFB has been placed in public domain at a time when the world is witnessing the
emergence of a new paradigm in water management, which is continually enriched by
incremental accrual of new knowledge, both disciplinary and interdisciplinary.
However, water policy formulation in India has been largely disconnected from the
ongoing conceptual changes in water management.
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There is a clear disconnect between holistic science and fragmented policy making
and has resulted in the domination of a reductionist engineering paradigm to
manage water without any concern to the ecological concerns.
(i.e. provisions in policy is focusing more on water management techniques that
do not consider or take care of ecological concerns)
Though the policy documents related to water in South Asian nations often allude
of terms like “integrated river basin management” (IRBM), “demand management”,
etc. they prove to be rather decorative when it comes to concepts and project
design.
(i.e. provisions in policies talk more and act less)
1. First concern emerges from the fact that the two bills are separated, and hardly
any linkage has been created between the two.
As such, groundwater and surface water are integral components of the global
ecohydrological cycle, and need to be seen through an integrated holistic lens
of water management and property rights.
Separate bills create the impression of fragmented approach to water
management, as the interactivity between surface water and groundwater,
which is also acknowledged in the water balance equation, seems to have been
ignored.
The draft NWFB suggests for maintaining certain percentage of natural flow of
water in rivers (i.e. adherence to the reductionist arithmetic hydrology)
adequate to preserve and protect a river basin as a hydrological and ecological
system.
However, it is highly difficult for the very science to arrive at a measure of “how
much water a river needs”
It is only in India that there is an over-reliance on a specified quantitative
measure on how the environmental water needs of a river.
Policy makers have failed to have an ecological scientific thinking; they should
understand that no studies can tell exactly what level of natural water flow is
required for maintaining certain ecosystem services.
3. Third, despite the reference of the “River Basin Authority” (RBA) in the NWFB, the
role of the RBA seems to have been confined to creating master-plans for the
basins.
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4. Fourth, it needs to be noted that the moot point lies with the promotion of
Integrated River Basin Management (IRBM).
5. Fifth, the draft makes very important recommendation regarding “differential” and
“full cost pricing”.
This pricing instrument should be designed as not merely covering only the
O&M costs (operation and maintenance costs).
The pricing should reflect the scarcity value of water not merely of its
economic use, but also the scarcity value of the ecosystem services. This implies
that the users may cover part of the “environmental costs” that their use of
water entails.
6. Sixth, the composition and role of the statutory Water Regulatory Authority is not
clearly defined.
It is not clear how such an authority will operate: Is it under the aegis of the
river basin authority? Or should it exist as a separate structure?
Conclusion:
Therefore, the scope for improvement in this draft remains. While forwarding this
IRBM agenda, it is important that the various knowledge gaps are addressed
through the creation of a comprehensive research agenda.
This will define the overarching principles for managing trade-offs between water
for development and water for ecology, and trade-offs arising out of water
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allocations across competing sectors and sustainable abstraction limits so that the
ecosystem integrity is maintained.
At an institutional level, there needs to be constant evaluation of the effectiveness
of various institutions at various levels, including the river basin master plans.
Critically comment on the provisions of Draft National Water Framework Bill 2016
(NWFB)
TOPIC:General Studies 3
Environment and Ecology, Bio diversity – Conservation, environmental degradation,
environmental impact assessment, Environment versus Development
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Improving agriculture water efficiency and releasing water from it. (Agriculture
counts for 80% of total water use in country)
Recycling water
Recycled water: drinking water, sewerage and wastewater treatment, stormwater
drains and solid waste management be planned and managed in an integrated manner.
However, recycling has a fragmented approach.
Some services are managed in silos, some by ULBs and some by Parastatal
institutions (Metro Boards) of state governments
Solid waste management is under Swachh Bharat Abhiyan and also under AMRUT.
Also, it is a part of city development plan in which all activities are attached.
State of water delivery
It is deficient
62% urban households have access to treated tap water
Little over 50% households are directly connected to piped networks
Approx. two hours per day is water availability to connected household
33% of urban household has piped sewer system
40% dependent on septic tanks
13% still defecate in open
Drains
Inadequate and ill-maintained stormwater drains
Natural drains provide exit to stormwater including flood water. But, either they are
encroached or carry sewage.
Natural recharge zones not taken into account in urban planning
Wastewater treatment has been neglected even when it is important to keep rivers and
groundwater clean
Sewage treatment capacity
Sewage or waste water treatment capacity is only 37% of the total need of the country.
Actual treatment is even lesser- 30%
It is sometimes redundantly utilised where treated waste water is discharged in drains
where it mixes with untreated sewage flowing in natural stormwater drains.
The polluted mixture is discharged in river finally.
CPCB observation supplements it: Out of total pollution in rivers, 75% is from municipal
waste and 25% from industrial effluents.
Groundwater survey: high level of microbial contamination from municipal sewage
WHO: Effect of polluted and unsafe water and poor sanitation facilities has led to
increased water-borne disease in India. This causes serious public health issues.
Water market
When water policies fail to deliver their goals, the private players fill in the gap by
creating water markets
Water tankers become critical source of water availability, which in turn become
extremely expensive.
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Even here, the groundwater is extensively drawn to meet the demand deficit
Tanker mafias are known to exist in Delhi!
Hence, though it is generally not realised but India’s water crisis is graver than energy crisis.
Alternative energy sources:
Solar and wind energy
Gradually becoming cost effective
Alternative water sources:
Desalination
Very expensive
Conclusion
Groundwater realities:
India is largest user of groundwater in world, surpassing china
The groundwater abstraction is at 251 cubic km per year (China has its half)
Groundwater use is in excess to what is being recharged
Situation is grim in four northern states of Punjab, Haryana, Rajasthan and Delhi
NASA assessment: The decline in water table of Punjab, Haryana, Rajasthan and Delhi is
at an average rate of 4 cm per annum.
th
12 Five Year Plan
Has called for a paradigm shift
Has proposed a comprehensive programme for the mapping of India’s aquifers as a
prerequisite and a precursor to a National Ground Water Management Programme
Aquifer Mapping and Management
Launch of Aquifer Mapping and Management project
Objective: to prepare Management Plans in consultation with stakeholders and State
Governments and then identify the recharge and other measures to replenish the
declining trend of groundwater
The mapping would assist in estimating the quantity and quality of groundwater in an
aquifer and would help in assessment of sustainable level of groundwater extraction
Also help in making the India climate change resilient.
An aquifer is an underground layer of water-bearing rock, from which groundwater can
be extracted.
Groundwater governance
Governed by British common law sanctified by the Indian Easement Act of 1882
In this, landowner has the absolute right to draw any amount of ground water from
under the land owned by him.
Water being a state subject, the centre’s attempt at legislative reforms has focused
mostly on allocation and setting up a public regulatory authority for groundwater
regulation and management.
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Central government is expected to bring out a national water framework bill and a
model groundwater bill.
The need is to address the challenge of equitable access and aquifer protection and
move away from focus on link between land ownership and control over groundwater.
Groundwater has to be treated as a common pool resource only for public good.
Related articles:
World Water Day (March 22nd) – The importance of Water Management
http://iasbaba.com/2016/03/iasbabas-daily-current-affairs-22nd-march-2016/
Draft water bills: Address gaps through comprehensive research agenda
http://iasbaba.com/2016/07/iasbabas-daily-current-affairs-25th-july-2016/
India is the biggest virtual exporter of water
http://www.livemint.com/Opinion/bPPHFHv19qBaA5qrPa6SuN/India-is-the-biggest-virtual-
exporter-of-water.html
TOPIC:
General Studies 3
India has set ambitious goals to achieve 175GW of renewable energy by 2022.
A large share of this goal — 100GW — is expected to come from solar energy
A relatively smaller share — 10GW — from bio-energy
The below article discusses the difference between Solar photovoltaic (PV) technology,
Solar thermal technology, biomass-based technologies and importance of hybridisation
model.
Today, the Indian market is dominated by the photovoltaic (PV) technology, which
has an installed capacity of almost 7000 MW.
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Also worth noticing is the fact that the price of solar PV fell from Rs. 17 to Rs. 5 per
unit (1 unit = 1 kWh) in the past few years, while the price of solar thermal has
remained above Rs. 10/kWh.
As solar energy is available only a few hours in a day, it is desirable to store it, to be
able to dispatch power when required.
However, battery storage is expensive and unviable for long-term use, as batteries
need to be replaced at least every five years.
Hence, PV with battery storage, using current technologies, looks unviable as a long-
term solution for dispatchable and reliable power.
Solar thermal, which concentrates sun’s rays to produce heat (steam), is used to
drive turbines. This heat energy can be stored and used to generate electricity when
there is no sunlight; this makes it cost-effectivein comparison with battery storage.
Worldwide, most solar thermal power plants have incorporated thermal storage.
Solar thermal with storage facility can be used to overcome intermittency and
provide steady power to grids; however, the inclusion of thermal storage increases
the capital cost further.
In India, solar thermal technology had limited success in the initial phase of the
National Solar Mission owing to challenges in terms of financial closure, sourcing of
critical components of the power plant, etc., and this led to a substantial delay in
their commissioning. This also resulted in a reduction of the allotted target in the
subsequent phases.
Also, the capital cost of solar PV reduced from Rs. 12.5 crore/MW to Rs. 5.8
crore/MW, whereas that of solar thermal remained at Rs. 12 crore/MW. This led to
the dominance of PV in the Indian market. Hence, solar thermal has not been able
to compete with solar PV.
Conclusion: Solar thermal technology is far effective and better for longer term than solar
battery or photovoltaic (PV) technology. But Indian government in its National Solar Mission
is pushing for solar photovoltaic (PV) technology which will be helpful for just short-term.
On the other hand, biomass-based technologies are relatively mature here, with
investment and generation costs of about Rs. 6.5 crore/MW and Rs. 4.5/unit, respectively.
However, biomass plants are also not able to progress due to various reasons such as
availability (lack of a well-established supply chain) and variations in costs of biomass.
Considering above issues, India must have a mix of both thermal and PV technologies
to achieve 100GW.
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And to bring down the cost of solar thermal, one of the options is to have thermal
storage or to hybridise solar thermal power plants with biomass.
Biomass is predominantly used by combustion and gasification technologies to
generate power. It is estimated that 120-150 million tonne of surplus biomass is
available in India annually, which has a potential of generating 18GW.
However, the typical capital cost for setting up a biomass-based plant is about Rs. 6.5
crore/MW, while the benchmark cost of biomass-based power is Rs. 4.5/kWh.
Hence, biomass-based standalone power plants have not been popular in India.
Both solar thermal and biomass technologies work on the same principle. The heat
generated is used to produce steam, which is in turn fed into a turbine to generate
electricity. Thus, a hybrid of a solar thermal plant and a biomass plant is a viable option.
For example, based on the Central Electricity Regulatory Commission guidelines, the capital
cost of a 3MW hybrid plant is about Rs. 30 crore, whereas the cost of a standalone solar
thermal plant is about Rs. 45 crore and that of a biomass-based plant of equal capacity
would be about Rs. 20 crore. The capital cost of a hybrid plant reduces due to the use of
common equipment (turbine generator set, cooling systems, etc).
Though a biomass plant costs less compared to a hybrid one, the latter scores on
operational parameters. Operating costs of a biomass plant increase with the rise in
fuel requirements. Biomass prices also fluctuate typically between Rs. 3-6 per kg, or
even more.
The availability of biomass and supply chain is also a major issue. Hybrid plants also
score because they require considerably lower quantity of biomass as it is used in
combination with solar radiation.
A comparison of the tariffs of the power generated from a standalone solar thermal
and a hybrid system shows that the costs range from Rs. 14-16/kWh and Rs. 8/kWh,
respectively. These estimates are based on a normal eight-hour operation
considering only solar hours. If the plant runs 24 hours, the cost comes down
to Rs. 5.4/ kWh.
Hybridisation will increase the capacity utilisation factor of a plant threefold, as it
will generate electricity from biomass in the absence of sunlight. This will make the
plant financially viable.
Also, biomass-based power can help overcome the intermittency without adding
thermal storage. A standalone biomass-based power plant requires a continuous
supply of biomass in large quantities. Hybridisation with solar thermal will reduce
the biomass requirement, and in the case of a temporary shortage of biomass,
power production will be curtailed but the plant will remain functional throughout
the year.
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Some hurdles
The learnings from the operations of this power plant will lead to a better understanding of
the technical challenges associated with hybrid systems, and can lead to better policy
frameworks and tariff pricing mechanisms.
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DEFENCE/SECURITY
Extremists have carried out four massive attacks in three continents since the beginning of
Ramzan this year, the holy month in the Islamic calendar. All the attacks were directly or
indirectly linked to the Islamic State (IS) terror group.
1. Orlando, U.S.
2. Istanbul, Turkey
3. Dhaka , Bangladesh
4. Baghdad, Iraq
Out of these, the IS has claimed direct responsibility for the July 3 bombing in Baghdad that
killed more than 200 people.
In other three attacks, most of the attackers have pledged their allegiance to the IS or not
an IS-directed assault but an inspired one.
The U.S. government says Orlando was not an IS-directed assault but an inspired one.
In Turkey, the outfit did not claim responsibility (something unusual when compared to
the boastful claims it makes after terror strikes elsewhere)
In Bangladesh, the government has rejected the IS’s claims, blaming local militant
networks instead.
Baghdad could be the only incident in this set where there’s a consensus on the identity
of the perpetrator.
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The IS is expanding its reach through its ideology even as it’s facing organisational setbacks
at its core.
All attackers in the above discussed four cities may not have got directions from Abu
Bakr al-Baghdadi or his core team.
There need not be an organisational link between the IS in Iraq and Syria and the terror
cells in Dhaka or Jhenaidah.
What connects these men is the deadly world view the IS is propagating.
For the IS, everyone who doesn’t subscribe to its vision is an enemy and it divides these
enemies into different sects — crusaders (largely Christians), apostates (mostly non-
Sunni Muslims) and sinners (it could be anyone from gays to rebels).
Evolving strategy
In the three years of its existence, the IS has adopted several tactical approaches to stay
relevant as a global jihadist force.
(This approach was different from the al-Qaeda-type terror organisations which were
mainly hit-and-run groups.)
Enemies could easily target such groups by attacking the areas they control. The IS
started facing the heat when its multiple enemies such as Russia, the U.S., Iran and
the Kurds launched separate attacks from all sides of the Caliphate.
When the IS lost most of its territories and when they were repelled by the Kurdish fighters,
the IS shifted its strategy by started attacking faraway locations using suicide bombers at
the same time. (Especially when it lostKobane, the Syrian border town which the IS laid
siege too briefly.)
So, till Kobane, the IS’s focus was largely on Iraq and Syria. But Kobane shattered the myth
of invincibility, prompting the group to change tack.
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Incidents of IS attacks –
These attacks were largely planned at the core and executed elsewhere — or the al-Qaeda
style of suicide attacks. In all these attacks, the jihadists were trained in Syria and sent out
to carry out the “missions”.
Even this tactic had its limitations. Terror modules could attract the attention of
intelligence agencies in countries with functional institutions.There’s a higher chance
for them to be busted than attacks being carried out.
On the other side, the IS’s core territory kept shrinking. It lost Palmyra in Syria, and
Ramadi and Fallujah in Iraq.
The group is facing enormous pressure from all sides of the Caliphate — the Iraqis
are set to march towards Mosul, while Kurdish forces backed by U.S. aircraft are
breathing down on Raqqa.
The IS wanted to strike anywhere outside Iraq and Syria (which is relatively easy for the
group) to continue to stay in the business of jihadism.
This desperation was apparent in the Ramzan message released by IS spokesperson Abu
Muhammad al-Adnani, who called for “a month of calamity everywhere for non-believers”.
The group’s propaganda has urged “supporters and soldiers of the Caliphate” to pledge
allegiance to the Caliph and then carry out mass murder.
IS issued an audio message - “The smallest action you do in the heart of their land is dearer
to us than the largest action by us”
The recent attacks since the beginning of Ramzan this year – Orlando, Turkey and Dhaka
attacks – show that this tactic is paying off.
This is a far more dangerous phase.
Al-Qaeda usually operates from its hideouts through its networks or autonomous cells.
The IS has territory (the Caliphate); it has networks and affiliates (from Afghanistan to
Nigeria); autonomous cells (possibly the Istanbul attack was carried out by such a cell
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and that’s why the IS leadership doesn’t claim the assault); and lone wolves and local
groups that have subscribed to its world view (Orlando and Dhaka).
Conclusion:
Irrespective of the setbacks it suffered at its core, the IS has transformed its ideology, which
at the advent of the group was seen as an isolated, barbaric world view propagated by a few
wicked human beings, into that of a globalised force. This means that even if the IS is
defeated in Mosul and Raqqa, the threat it poses to the modern world is not going to
subside anytime soon.
The recent attacks by IS either directly or indirectly reflects its new phase or tactic,
which the security experts claim, “is a far more dangerous phase”. Do you agree?
Discuss your view point. Also discuss, how Islamic State approach differs from the al-
Qaeda-type terror organisations?
“The recent attacks by IS are not an IS-directed assault but an inspired one”. Give some
strategies/suggestions, both from a domestic viewpoint and at global level, how to
tackle these kinds of attacks which are carried out by its autonomous cells or lone
wolves or local extremist groups that have subscribed to its (IS’s) world view.
BACKGROUND:
(Before Independence)
The British annexed Assam in 1826, and in 1881, the Naga Hills too became part of
British India.
The first sign of Naga resistance can be seen in the formation of the Naga Club in 1918,
which told the Simon Commission in 1929 “to leave them alone to determine for
themselves as in ancient times”.
In 1946 came the Naga National Council (NNC), which, under the leadership of Angami
Zapu Phizo, declared Nagaland an independent state on August 14, 1947.
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(After Independence)
The NNC resolved to establish a “sovereign Naga state” and conducted a “referendum”
in 1951, in which “99 per cent” supported an “independent” Nagaland.
On March 22, 1952, Phizo formed the underground Naga Federal Government (NFG)
and the Naga Federal Army (NFA).
The Government of India sent in the Army to crush the insurgency and, in 1958, enacted
the Armed Forces (Special Powers) Act.
The Naga Hills, a district of Assam, was upgraded to a state in 1963.
In 1964, Jai Prakash Narain, then Assam Chief Minister Bimala Prasad Chaliha and Rev.
Michael Scott formed a Peace Mission, and got the government and NNC to sign an
agreement to suspend operations. But the NNC/NFG/NFA continued to indulge in
violence, and after six rounds of talks, the Peace Mission was abandoned in 1967, and a
massive counter-insurgency operation launched.
On November 11, 1975, the government got a section of NNC leaders to sign the
Shillong Accord, under which this section of NNC and NFG agreed to give up arms.
However, a group of about 140 members led by Thuingaleng Muivah, who were at that
time in China, refused to accept the Shillong Accord, and formed the National Socialist
Council of Nagaland in 1980. Muivah also had Isak Chisi Swu and S S Khaplang with him.
In 1988, the NSCN split into NSCN (IM) and NSCN (K) after a violent clash. While the NNC
began to fade away, and Phizo died in London in 1991, the NSCN (IM) came to be seen
as the “mother of all insurgencies” in the region.
After NSCN(I-M) and NSCN(K) more factions like NSCN(K-K), NSCN (Reformation), NSCN
(Unification), etc. sprang up. The faction, NSCN (K-K), led by Khole Konyak, a Konyak
Naga from Mon district and Kitovi Zhimomi, a Sumi Naga of Zunheboto district, merged
not long ago into the NSCN(I-M).
All these outfits agreed to strengthen reconciliation process to unite Nagas for the
purpose of achieving their “historical and political rights.”
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Prime Minister P V Narasimha Rao met Muivah, Swu and other top NSCN (IM) leaders in
Paris on June 15, 1995. In November 1995, then MoS (Home) Rajesh Pilot met them in
Bangkok.
Subsequently, Prime Minister H D Deve Gowda met them in Zurich on February 3, 1997,
which was followed by meetings with officers in Geneva and Bangkok.
Prime Minister Atal Bihari Vajpayee met them in Paris on September 30, 1998.
The Government of India signed a ceasefire agreement with NSCN (IM) on July 25,
1997, which came into effect on August 1, 1997. Over 80 rounds of talks between the
two sides were held subsequently.
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The peace process entered a crucial phase with the NSCN (Khaplang) faction formally
announcing its unilateral cease-fire decision on April 9, 2000 and indicating that it is
willing to hold peace talks with the Centre.
On Aug 3, 2015, latest agreement was signed with NSCN (I-M), and other Naga armed
groups such as NSCN (Khole-Kitovi) etc. (however, NSCN (K) was excluded)
On August 25, at a People’s Consultative Meeting on the accord, Mr. Muivah spoke
about the criticality of getting the other Naga armed actors on board.
While explaining the idea of a pan-Naga Hoho (a proposed statutory body as part of the
framework agreement) that will enjoy independent executive and budgetary powers to
look after the welfare of Naga inhabited areas outside Nagaland, Mr. Muivah again
called for mutual understanding and dialogue among the Nagas.
However, the biggest breakthrough is that the NSCN (I-M), and other Naga armed
groups such as NSCN (Khole-Kitovi) have agreed to give up violence and resolve all issues
peacefully (thanks to Isak Chishi Swu).
The demise of Isak Chishi Swu, Chairman of the Naga rebel outfit, National Socialist
Council of Nagaland (Isak-Muivah), and President of the outfit’s ‘government’, the
Government of the People’s Republic of Nagaland (GPRN), is a great loss to the Nagas,
particularly to those in Nagaland.
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Will Swu’s departure complicate the above discussed matter further? Will the rebel
outfit with a new chairman be able to unite different rebel factions and command
respect and trust of different Naga civil society groups?
As Isak Chishi Swu’s death complicates the Naga question, the Government of India’s
approach towards Northeast India would be healthier if it was based on a policy framed
for holistic development of the region as a unit as against meek responses to claims or
demands of different warring ethnic groups.
Looking for solutions to problems on ethnic lines is a sure way to breed problems of
greater complexity. A comprehensive plan with flexibility that is prepared on the ground
in broad consultation with stakeholders for development of the region is the need of the
hour.
It is understandable that without significantly developing all the states in the Northeast,
realising the vision of the Act East policy from all dimensions remain to be a difficult
proposition.
There is a need to comprehensively engage India’s Northeast with the strategic
community based in New Delhi and to transform the NER as a gateway for trade and
commerce with ASEAN countries.
Blind pouring of money alone will not integrate the Northeast into the mainstream. The
region will remain a boiling pot until the time the Government of India looks seriously,
sincerely and with an open mind towards the Northeast to develop it as an integral part
of the nation.
Therefore, any attempt to find a way out of the present imbroglio would require an
impartial stand on the part of the Centre. The Government cannot afford to be seen as
favouring one or the other faction. For any meaningful outcome, all factions of the
undergrounds even including overgrounds, shall have to be involved, otherwise
piecemeal peace/dialogue will not bring a satisfactory political solution.
A lasting solution lies in more autonomy to the state, genuine economic development,
accelerated infrastructural development, new trade routes, less Central funds and a little
bit of pressure on militant groups to accept the peace proposal. Sincerity on the part of
political and insurgent leadership alone can bring 'peace to the land of the exhilarating
Nagas'.
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