News Juice 15th October 2020

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1. What can be done to make Quad successful?
Relevant for GS Prelims & Mains Paper II; IOBR
Regardless of how or when China’s misbegotten military adventure is going to wind down
in Ladakh, one thing is clear: it has breathed fresh life into the Quadrilateral Security
Dialogue as a loose, consultative entente of like-minded democracies in the Indo-Pacific. On
October 6, the foreign ministers of Australia, India, Japan and the U.S. held a standalone
meeting in Tokyo. If the Quad is to prosper as a geopolitical construct, it would do well to
heed four lessons drawn from the long arc of Asia’s history and geopolitics.
No Indo-Pacific system
First, there is no such thing as an ‘Indo-Pacific system’. There has never been one, as such,
ever since the rise of the port-based kingdoms of Indochina in the first half of the second
millennium. Rather, there were two Asian systems — an Indian Ocean system and an East
Asian system — with intricate sub-regional balances. The sprawling British empire never
managed to combine the Indo and the Pacific into a unitary system and the effort by a U.S.
in global retreat and relative decline to artificially manufacture one to encircle China will
be no more successful.
Second, the Indo-Pacific region possesses no prior experience of enduring peace,

prosperity and stability engineered from its maritime fringes. Rather, dynamic long cycles
of Chinese influence radiating outwards have alternated with sharp periods of centripetal
turmoil as China and the Asian system collapsed upon itself.
The emerging practice of ASEAN-centred multilateralism is more in tune with regional

tradition and historical circumstance than the post-18th century European ‘balance of
power’ system, where the ‘flanking powers’ (Britain and Russia) resisted revisionist
challengers to periodically restore the continent’s equilibrium. For their part, the Indo-
Pacific’s ‘flanking powers’, India and Japan, have never balanced Chinese power throughout
their illustrious histories.
Third, the sea lines of communication constitute the connective tissue that links the Indian
Ocean to the Western Pacific. It is also a valuable arena of leverage vis-à-vis Chinese
shipping and resource flows. This leverage must be wielded judiciously on India’s terms,
not on the Quad’s terms. The latter, after all, has little to offer materially with regard to
New Delhi’s continental two-front dilemma but ceding this chokepoint leverage will invite
overwhelming Chinese pressure against the full range of India’s South Asian interests — to
which the other Quad members possess neither will nor desire to answer. For the threat of
interdiction to be credible furthermore, it must not be brandished off-handedly. Except
during a general war, no sustained and significant campaign to interdict the maritime trade
of a major power has ever been successfully mounted since the Napoleonic Wars of the
19th century.
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A check on China’s ambitions

Finally, the Quad has a valuable role to play as a check on China’s Indian Ocean ambitions.
India must develop ingrained habits of interoperable cooperation with its Quad partners
and, thereby, pre-emptively dissuade China from mounting a naval challenge in its
backyard. On the other hand, it will be more than a decade or two before the People’s
Liberation Army Navy will be credibly capable of projecting power in these waters.
The shores of the Indo-Pacific littoral are strewn with the bones of Cold War-vintage, pan-
regional architectures that were divorced from the underlying security dynamics. The Quad
must resist this temptation for precipitate design over purpose.
In 2018, in his keynote address at the Shangri La Dialogue, Prime Minister Narendra Modi
noted that India would “work with [its friends] individually or in formats of three or more
for a stable and peaceful region, but [that these] friendships are not alliances of
containment”. Reconciling this capacity to resist armed revisionism while nudging the
region’s geopolitics towards cooperation as opposed to conflict should be India’s, and the
Quad’s, priority.
Source: The Hindu
2. The coal blocks allocation cases Explained: allegations, investigation,

and what next
Relevant for GS Prelims & Mains Paper II; Polity & Governance
Last week, a special CBI court convicted Dilip Ray, Minister of State for Coal in the A B
Vajpayee government in 1999, for his alleged involvement in the coal block allocation
scandal. Hearings on the quantum of Ray’s sentencing are set to begin on Wednesday,
While convicting him, the court observed that Ray “abused his official position”, as his
decision of “relaxation of policy without any logical or legal basis amounts to gross abuse of
his powers by the minister”.
The case against Dilip Ray

It relates to allocation of a coal block in Giridih district of Jharkhand to a private company
in violation of guidelines. Ray represented the BJD then; he later joined the BJP only to quit
it in the face of these allegations.
The CBI had noted that the Coal Ministry through its guidelines had specifically said no
company engaged in production of iron and steel or sponge iron could get a captive coal
mine if its production capacity was less than 1 metric tonne per annum (MTPA) in opencast
mining. However, when private company Castron Technologies Ltd applied for Brahmadiha
Coal Block in Giridih, the minister agreed to relax guidelines and allow the grant despite it
not being eligible, the CBI found.

Ray has been convicted along with five others: CTL; its director Mahendra Kumar
Agarwalla; Castron Mining Ltd; then additional secretary, Coal, and chairman, 14th
Screening Committee Pradip Kumar Banerjee; and Nitya Nand Gautam, the then adviser
(projects), Coal Ministry, and member-convener, 14th Screening Committee.
Why it is significant
The 2G spectrum scam and the coal blocks allocation cases were among the reasons that
the UPA II government came to be perceived as corrupt. Comptroller and Auditor General
(CAG) reports on the two matters had put the loss to exchequer at Rs 1.75 lakh crore and
Rs 1.8 lakh crore respectively with the latter being called “the mother of all scams”.
While there have been several convictions in the wide range of coal blocks cases, this is the
first time that an NDA minister has been convicted. When the allegations surfaced, Ray was
a member of the BJP.
The coal blocks scam

In the early 1990s, the government decided to allocate such coal blocks to private
companies that were not part of the production plan of PSUs Coal India Ltd and Singareni
Collieries Company Limited (SCCL). Initially a list of 143 coal blocks was prepared, later
inflated to 216. At that time there were no concrete guidelines for allocation of blocks as
coal mining was largely restricted to PSUs and many geographic locations were seen as
unsuitable for profitable mining. The guidelines were periodically revised through 1993,
1998 and 2003.
Between 1993 and 2005, 70 coal mines were allocated. Then between 2006 and 2010, a
further 146 blocks were allocated taking the total tally to 216. However, some blocks were
de-allocated owing to companies not starting work and the final list stood at 194.
In March 2012, a leaked draft report of the CAG revealed irregularities in the allocation of
blocks and pegged the loss to the exchequer at Rs 10.76 lakh crore. Although the CAG’s final
report tabled in Parliament in August 2012 whittled down the loss to Rs 1.8 lakh crore, it
was still the biggest scam India had seen. The CAG had argued that the government had the
authority to auction the coal blocks but chose not to and as a result allocatees received a
“windfall gain”.
As the Opposition targeted the Manmohan Singh government on corruption, BJP leaders
Prakash Javadekar and Hansraj Ahir approached the Central Vigilance Commission (CVC)
with complaints. The CVC referred them to the CBI which over the next few months
registered over 40 FIRs. Meanwhile, a Parliamentary Standing Committee report said coal
blocks distributed between 1993-2008 were done in unauthorised manner, bringing even
the NDA period under scanner. The Supreme Court took matters into its own hands
directing the CBI to directly report to it and not the government.

Some big names of the political and corporate world got embroiled in the controversy, from
Congress politician and industrialist Naveen Jindal and Dasari Narayan Rao (now deceased)
to RJD’s Prem Chand Gupta and BJP’s Ajay Sancheti. CBI even examined Manmohan Singh at
a later stage.
UPA’s defence
Then PM Singh rebutted allegations of fraud and even questioned CAG’s computations in
Parliament. He had argued that West Bengal, Chhattisgarh, Jharkhand, Orissa and Rajasthan
— which were ruled by Opposition parties then — were strongly opposed to a switchover
to competitive bidding as they felt it would increase the cost of coal, adversely impact value
addition and development of industries in their areas and would dilute their prerogative in
the selection of lessees.
On the idea of “windfall gains”, Singh said computation of extractable reserves based on
averages would not be correct. He said the cost of production of coal varies significantly
from mine to mine even for CIL due to various conditions. He pointed out that CIL had been
generally mining in areas with better infrastructure and more favourable conditions,
whereas the coal blocks offered for captive mining were generally in areas with more
difficult geological conditions.
Arguing against a loss to the exchequer, Singh said part of the gains would in any case get
appropriated by the government through taxation, with corporates being made to allocate
26% of their profits for local area development.
State of the probe

The coal blocks allocation cases are among the CBI’s longest running probes, with the
agency last registering a fresh FIR in the case in January 2020. It has since 2012 filed
multiple chargesheets and even closed many cases for lack of evidence or culpability.
Unlike the 2G spectrum case, where all the accused have been acquitted, CBI has secured
multiple convictions in the coal cases. Through 2017 and 2018, a special CBI court
convicted former Coal Secretary H C Gupta in three different cases. Two other bureaucrats
— K S Kropha and K C Samria —were convicted in two of these cases. They were all
sentenced to imprisonment of two-three years. The court also sentenced several office-
bearers of companies associated with these cases.
In the Vini Iron and Steel case, where HC Gupta had been convicted, the court also
convicted and sentenced former Jharkhand chief minister Madhu Koda to three years of
imprisonment.
Source: The Indian Express

3. As Fake TRP scam bust-up brings cat out of the bag, brands decide to
act tough by blacklisting rogue channels
Relevant for GS Prelims & Mains Paper II; Polity & Governance
The recently unearthed Fake TRP scandal involving some TV news channels has quite
understandably, sent shockwaves across major advertising brands and media agencies.
They have now decided to keep a close watch as well as re-evaluate their media spending
on such channels that have been accused of manipulating their television rating points
(TRPs).
The issue came to light on Thursday when the Mumbai police claimed to have busted a
scam under which, Republic TV and two Marathi Channels were allegedly paying money to
some households to keep their channels switched on throughout the day.
These households are those where viewership monitoring meters have been installed.
Notably, this investigation took place on the complaint by TV viewership measurement

agency, Broadcast Audience Research Council (BARC).
About the TRP game

High TRPs are extremely crucial for any TV channel as they bring more ads and
subsequently higher revenues.
They are based on the data collected by a TRP device that is attached to the TV sets.
These devices record the duration for which TV programmes are watched in various
households.
After doing calculations for a seven-day period฀, BARC releases this data every Thursday
to all TV channels.
They then treat it as a sample figure for understanding the audiences in different
geographical and demographic sectors.
A Costly affair!
This alleged rating scam can very well dent the revenue of news channels, ahead of the
festival season despite them, enjoying a considerable reach.
One of the leading food brands, Parle Products has already announced that it will not
advertise on such news channels that broadcast ‘toxic’ content, ‘spread rumours’ and
promote hatred.

Along the same lines, Bajaj Auto has also decided to blacklist three unnamed channels.
4. Covid fallout results in banks flush with deposits, searching for elusive
borrowers
Relevant for GS Prelims & Mains Paper III; Economics
The Covid crisis has put the Indian banks in a difficult situation. While their deposits are
constantly on the rise, they are struggling to find clients who would borrow from them.
This has resulted in a significant decrease in their credit-deposit ratio.
About it
Credit-deposit ratio is obtained by dividing total loans given by banks by the total deposits
they have on any given date. As on 27th March 2020, this figure stood at 76.4% in the
context of Indian banks.
Since banks need to maintain a proportion of their deposits as a cash-reserve ratio with the
RBI and also maintain a statutory liquidity ratio by compulsorily investing a proportion of
the deposits in approved govt. securities, this credit-deposit ratio was quite satisfactory.
However, it has been falling steadily since March-end due to the coronavirus outbreak. As
on 11th Sept. 2020 it stood at 71.8%. Thus, between the above-mentioned dates, the total
amount of loans, given by banks shrunk by 1.4% to Rs.102 lakh crores.
Meanwhile, the deposits of banks during the same period, expanded by 5% or Rs. 6.8 lakh
crores to Rs. 142 lakh crores.
A worrying mismatch!
The shrinking of overall loans along with the increase in deposits clearly demonstrates that
both corporates and individuals have become hesitant in taking loans that they will most
likely, not be able to repay.
On the other end, people have been increasing their savings in view of the severe economic
downturn and uncertain future prospects.
Despite the lowering of interest rates, fixed deposits with banks have gone up by Rs. 7.8
lakh crores between March-end and 11 September. Meanwhile, demand deposits have
contracted by Rs. 1 lakh crores.
This is due to the fact that people who have lost their jobs or have witnessed a decline in
their incomes following the pandemic, are withdrawing money from their savings accounts
to meet their expenditures.

5. India’s economy to contract by 10.3%, says International Monetary

Fund
Relevant for GS Prelims & Mains Paper III; Economics
With the country and world reeling under the impact of the coronavirus pandemic, the
Indian economy is expected to grow at -10.3 % (i.e., a contraction) in 2020 as per the
International Monetary Fund (IMF). Global growth is projected to be -4.4% (i.e., a
contraction in output of 4.4%) for this year, the IMF said with the release of its World
Economic Outlook October 2020 report titled, “A Long and Difficult Ascent”.
The 2020 projection for India is a downgrade of -5.8 percentage points from the IMF’s June
projection for the country. India is expected to rebound in 2021 with 8.8 percent growth –
an upgrade of 2.8 percentage points relative to the June update.
“Revisions to the forecast are particularly large for India, where GDP contracted much
more severely than expected in the second quarter,” the report said. Consumer prices in
India are expected to grow at 4.9% this year and 3.7% in 2021. The current account
balance is projected to grow by 0.3% this year and -0.9% (i.e., a contraction) next year.

For the world as a whole, the 2020 growth projection has been revised upwards by 0.8
percentage points relative to June– a result of a less dire second quarter and signs of a
stronger recovery in the third quarter, partly offset by downgrades in certain developing
countries and emerging economies (except China).
The recovery in 2021 is projected to be at 5.2% - lower than the June 2020 projections.
After 2021, global growth is expected to ease off at 3.5% in the medium term. Except for
China, where output this year is expected to exceed 2019 levels, advanced, developing and
emerging market economies are expected to see lower output even next year, IMF Chief
Economist Gita Gopinath said in a note that illustrated the uneven recovery across country
groups.
The U.S. economy is expected to grow by -4.3 % this year (i.e., contract) and grow by 3.1%
next year. The corresponding numbers for the Euro Area are -8.3% and 5.2%. For China
they are 1.9% and 8.2% respectively.
Source: The Hindu


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For updates on WhatsApp, share your Name, City & Email ID on

WhatsApp No. 88986-30000

1. What can be done to make Quad successful?

Relevant for GS Prelims & Mains Paper II; IOBR

Second, the Indo-Pacific region possesses no prior experience of enduring peace,

The emerging practice of ASEAN-centred multilateralism is more in tune with regional

Website: www.prepmate.in Telegram Channel: @upscprepmate

A check on China’s ambitions

Source: The Hindu

2. The coal blocks allocation cases Explained: allegations, investigation,

The case against Dilip Ray

Website: www.prepmate.in Telegram Channel: @upscprepmate

The coal blocks scam

Website: www.prepmate.in Telegram Channel: @upscprepmate

State of the probe

Source: The Indian Express

Website: www.prepmate.in Telegram Channel: @upscprepmate

Notably, this investigation took place on the complaint by TV viewership measurement

About the TRP game

Website: www.prepmate.in Telegram Channel: @upscprepmate

Relevant for GS Prelims & Mains Paper III; Economics

Website: www.prepmate.in Telegram Channel: @upscprepmate

5. India’s economy to contract by 10.3%, says International Monetary

Relevant for GS Prelims & Mains Paper III; Economics

Website: www.prepmate.in Telegram Channel: @upscprepmate

Source: The Hindu

Website: www.prepmate.in Telegram Channel: @upscprepmate

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