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Daily News Analysis 03-08-2015

S.NO.

NEWS ITEM

SYLLUBUS

ESSENCE OF THE ARTICLE

1.         

 

India to host meeting of 14 Pacific island nations (Page 12)

a)     I.R

a)     After trying to keep pace with China in relations with Africa and Central Asia, India is now trying to match it neighbours growing footprint in South Pacific. On Aug 21, India will host the heads of 14 island nations at the Forum for India-Pacific Islands Cooperation.

2.

A tale of two deals (Page 11)

a)     I.R

a)     The Iran deal marked a new beginning in Iran-US relations, while the India deal was a culmination of a process of rapprochement.

3.

Militants wore gloves Made in Pakistan (Pages 1 and 12)

a)     I.R

a)     The post-mortem examination of 3 militants killed during Gurdaspur terror strike has shown that the gloves of one of them has been made in Pakistan, strengthening Indias stand that it was a cross-border operation.

4.

India foils UK firms bid to patent Ayurvedic mix (Page 12)

a)     I.R

a)    India has once again prevented an attempt by a major European major dermaceutical company to take patent on a medicinal composition containing turmeric, pine bark and green tea for treating hair loss.

5.

US, Egypt resume strategic talks (Page 14)

a)     International

a)     The US and Egypt took a step towards repairing cracks in their relationship when they launched their first strategic dialogue since 2009 on a wide range of topics including human rights and an Islamist insurgency in Egypt.

6.

IS has managed to repulse most of the world (Page 11)

a)     International

a)     Foreign fighters who manage to get out say the Caliphate is more brutal than they expected.

7.

Land Bill: govt may take ordinance route again (Page 12)

a)     National

b)     Polity

a)     The contentious Land acquisition Bill could be heading for the ordinance route for the fourth time in 8 months as Joint Committee on Parliament scrutinising the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill 2015, is scheduled to seek more time to finalise its report.

8.

Centre denies plans to build DNA database, but experts fault Bill (Page 13)

a)     National

b)     Social issue

a)     The Union govt has denied plans to develop a DNA database of citizens (similar to the biometric database of Aadhaar), as feared by many when the Human DNA Profiling Bill was introduced in the Monsoon Session of Parliament.

9.

Problems aplenty (Page 16)

a)     Economy

a)     It is conceded that a monetary policy committee is better suited to decide on interest rates. At present, the Governor consults an advisory committee but is not bound by its advice. A committee approach is better suited.

 

S.NO.

NEWS ITEM

SYLLUBUS

BACKGROUND

IMPORTANT POINTS

1.         

 

India to host meeting of 14 Pacific island nations (Page 12)

a)     I.R

a)     Forum for India-Pacific Islands Cooperation (FIPIC)

a)     After trying to keep pace with China in relations with Africa and Central Asia, India is now trying to match it neighbours growing footprint in South Pacific. On Aug 21, India will host the heads of 14 island nations at the FIPIC, in what is seen as a first step towards greater engagement with the region, which is important from an economic and geostrategic standpoint.

b)     The upcoming summit in Jaipur is expected to pave way for agreements in agriculture, food processing, fisheries, solar energy, e-networks for coordination in telemedicine and tele-education, space cooperation and climate change, all of which were mentioned as areas of potential cooperation by PM Modi during his visit to Fiji in 2014.

c)     Modi had then proposed that FIPIC summits be held regularly. He had set the ball rolling for reinforcing ties with the island nations by announcing visa on arrival for their nationals, funds for small business, line of credit for a co-generation power plant for Fiji, and a special adaptation fund for technical assistance and capacity building for countering global warming.

d)     Even as India has begun charting out a plan for forging bilateral and regional ties with these island nations, China has significantly expanded its foothold in the region, from increasing business and trade ties to setting up diplomatic missions in each of these countries.

e)    Chinas foray into the South Pacific (which began as a move to offset Taiwans interests in the region) is becoming a cause for concern for India, which now wants to have economic and strategic engagements with the 14 island nations.

2.

A tale of two deals (Page 11)

a)     I.R

a)     Iran – P5+1 nuclear deal

b)     India – US nuclear deal

c)     Indias Civil Liability for Nuclear Damage Law 2010

d)     Comprehensive Test Ban Treaty (CTBT)

e)     IAEA

f)     UNSC

g)     Nuclear Suppliers Group (NSG)

h)     NPT

i)     Fukushima disaster

 

a)     The finalisation of Iran – P5+1 nuclear deal coincided with the tenth anniversary of India-US nuclear deal by sheer chance. But the two deals reveal American strategy to deal with nuclear proliferation in two distinct situations and two different times. The US appeared to make concessions in both cases, but the deals served their immediate strategic interests.

b)     The objective was to put the nuclear genie back in the bottle in both cases, though it looked positive in the case of India and negative in the case of Iran. The US was alarmed by weapon tests of India in 1998 even more than the revelation in 2002 of Irans nuclear activities. Imposition of sanctions against India and Iran were sudden and severe, once it became clear that India would not sign the CTBT and Iran would not abandon enrichment.

c)    The position of strength the US had in both cases derived from crippling sanctions that India and Iran feared, though in the case of India, the sanctions had disappeared for extraneous reasons even before the negotiations on the deal began. However, the sanctions were hanging over head of Jaswant Singh when he negotiated with Strobe Talbott for two years, which actually led to the India-US nuclear deal.

d)     Iran was aware that the major difference between the two countries was that India was not a signatory to the NPT, but expected that it could make up for it by hide-and- seek. Iran expressed readiness to allow inspection of their facilities, but each time the inspectors came back with more questions than answers. The IAEA concluded that there was something bad in the state of Denmark but could not locate the source of stench.

e)     Iran realized that the game was up when the matter went to the UNSC, with the support of India, which was in the middle of the negotiations for its own deal with the US. Though the Indian vote was in keeping with the position that India had taken since 2002, it was believed that the Indian vote was cast at the instance of US. The subsequent massive sanctions and the dire situation of Iranian economy forced Iran to take the bitter medicine of curtailing its nuclear activities to revitalize its economy.

f)     In the case of India, the negotiations were between two countries, which had a long history of engagement, though occasionally alienated. George Bush Administration was only taking the next steps in a strategic partnership established by the Clinton Administration. In the case of Iran, it was a matter of breaking the ice and proceeding to negotiate a deal, which was hard for a proud nation to swallow.

g)     In the case of India, the US was confident enough to accept the reality of its nuclear capability and seek limitations only in the future development of nuclear weapons. In the case of Iran, the effort was to halt and roll back the capability that Iran could acquire.

h)   Ten years down the line, the Indo-US nuclear deal looks like a major concession to India, without any concomitant benefits to US. But at the time of the negotiations, there were multiple levels of political dialogue at the levels of Govts, the US Congress and members of the NSG, all aimed at tying India in knots.

i)     Today, India remains unaffected by the political restraints imposed on it. Even after problems arose in nuclear trade between the US and India, there is little acrimony between them on the provisions of the deal. The deal liberated India from the shackles of being a non-signatory of the NPT.

j)     In a sense, the deal has liberated Iran from the threats of war and crippling sanctions, without having to abandon its nuclear programme altogether. It is more transformational to the region and the world than India deal. The Iran deal marked a new beginning in Iran-US relations, while the India deal was a culmination of a process of rapproachment.

k)     The nuclear opening that India gained by the US-India deal fell short of expectations because of the Civil Nuclear Liability Law and Fukushima disaster, but it played a role in the emergence of India as an economic power. In the case of Iran, the deal will be more transformational for the country and game changing for the world.

3.

Militants wore gloves Made in Pakistan (Pages 1 and 12)

a)     I.R

a)     India – Pakistan relations

b)     Border disputes

c)     Gurdaspur terror attack

d)     Ravi river

a)     The post-mortem examination of 3 militants killed during Gurdaspur terror strike has shown that the gloves of one of them has been made in Pakistan, strengthening Indias stand that it was a cross-border operation.

b)     The pre-set coordinates of a tracker indicated that they had infiltrated into India by crossing the Ravi river via Tash village in Gurdaspur.

c)     Manufacturing marks of their weapons had been erased. The grenades they carried were of Chinese make. A night-vision device seized from them was found to be of US make.

4.

India foils UK firms bid to patent Ayurvedic mix (Page 12)

a)     I.R

a)     India – UK relations

b)     Traditional Knowledge Digital Library

c)     Ayurveda

d)     Unani

a)    India has once again prevented an attempt by a major European major dermaceutical company to take patent on a medicinal composition containing turmeric, pine bark and green tea for treating hair loss.

b)     Traditional Knowledge Digital Library located the patent application filed at European Patent Office and filed pre-grant opposition along with prior-art evidences from TKDL (proving that turmeric, pine bark and green tea) are being used for treating  hair loss, since long in Ayurveda and Unani.

5.

US, Egypt resume strategic talks (Page 14)

a)     International

a)     US – Egypt relations

b)     Human rights issue in Egypt

c)     Islamic insurgency in Egypt

a)     The US and Egypt took a step towards repairing cracks in their relationship when they launched their first strategic dialogue since 2009 on a wide range of topics including human rights and an Islamist insurgency in Egypt.

b)     Despite Washingtons concerns about Egypts lagging democratic reforms, Cairo remains one of its closest security allies in the region.

6.

IS has managed to repulse most of the world (Page 11)

a)     International

a)     Islamic State (IS)

b)     Syria and Iraq crisis

c)     Islamic State of Khurasan

d)     Taliban

a)     Given the terror outfit IS of Iraq and Syria meteoric rise and its enormous appeal among Muslim youth all over the world (including India) no nation can afford to ignore its threats. This becomes more imperative after a recent report carried by USA Today that IS is contemplating an attack on India.

b)     The fact that as obdurate a nation as Turkey has at last chosen to join the US and other allies in war against IS would point to a global consensus that the civilised world will have to pay a heavy price if it cannot tame the outlaw.

c)     Jessica Stern of Kennedy School of Government in Harvard University is acknowledged as an expert on terrorist organisations and a policy consultant. She has written extensively on the subject. She is known to have personally met members of terror groups such as Taliban.

d)     She said that IS is a hybrid organisation that combines elements of a proto-state, a millenarian cult able to attract recruits from all over the world, an organised crime ring, and an insurgent army led by highly skilled, former Baathist military and intelligence personnel.

e)     ISs tempt is mainly based on its marketing skill and the way it has figured out how to sell its version of jihad to different audiences. For some the declaration of the Caliphate (the holding of territory), the claim to be a true IS is critical to ISs appeal. For others, salaries, free housing, free food, and wives are clearly important. For still others, the extra-lethal violence must be part of appeal.

f)     Foreign fighters who manage to get out say that the Caliphate is more brutal than they expected, and that they narrowly avoided death in trying to escape. Inside Iraq and Syria, the organisation exploits the disenfranchisement and fear of Sunni Arabs.

g)    IS is exploiting the Internet in a way no previous jihadist group has before. Social media plays an important role in the recruitment of foreign fighters, whereas the disenfranchisement of Sunni Arabs is more important locally.

h)     IS has repeatedly made clear that its apocalyptic goals include provoking a series of sectarian wars leading up to the Final Battle and Endtimes. The outfit has made some headway in Afghanistan and Pakistan. In Jan of this year, it announced the establishment of a new province called IS of Khurasan and said that numerous groups in both Afghanistan and Pakistan had joined the new province.

i)     But so far, the groups that have joined the ISK appear to be small, or splinter groups from TTP and other groups. The announcement of Mullah Omars death (if true) will lead to additional defections to ISK. But that does not mean that sparking a war in India is credible.

7.

Land Bill: govt may take ordinance route again (Page 12)

a)     National

b)     Polity

a)     Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill 2015

b)     Right to Fair Compensation and Transparency

c)     Social Impact Assessment

a)     The contentious Land acquisition Bill could be heading for the ordinance route for the fourth time in 8 months as Joint Committee on Parliament scrutinising the Right to Fair Compensation and Transparency in LARR (Second Amendment) Bill 2015, is scheduled to seek more time to finalise its report.

8.

Centre denies plans to build DNA database, but experts fault Bill (Page 13)

a)     National

b)     Social issue

a)     Human DNA Profiling Bill 

b)     Evidence Act

c)     DNA fingerprinting

d)     Aadhaar

a)   Union govt has denied plans to develop a DNA database of citizens (similar to the biometric database of Aadhaar), as feared by many when the Human DNA Profiling Bill was introduced in the Monsoon Session of Parliament.

b)     Official said the DNA data that is proposed to be collected in the Bill will be restricted to criminal cases and civil disputes, and for identifying missing individuals in the event of a natural disaster.

c)     He said in criminal justice cases, one only does DNA fingerprinting case by case. Spending thousands of crores of public money on creating a general database may not be worth it. The proper thing to do would be to bring DNA fingerprinting within the ambit of Evidence Act, so that DNA-based evidence is admissible in a court. But that is not what the govt is proposing right now.

9.

Problems aplenty (Page 16)

a)     Economy

a)     Monetary Policy Committee (MPC)

b)     Indian Financial Code (IFC)

c)     Inflation

d)     CPI inflation

e)     Index of Industrial Production (IIP)

f)     RBI

g)     US Federal Reserve

a)     Speculation as to whether there will be a rate action or not remains common even as the RBI prepares to announce its next instalment of monetary policy on Aug 1. This is despite the fact that consensus among experts is for no rate action, meaning that central bank will not effect any change.

b)     A similar consensus had emerged in June also. That was proved right by the RBI holding the rates in June. The absence of a rate cut seemed vindicated as CPI inflation numbers for June were higher than for the previous month.

c)     Since then, the pressure on food prices appear to have eased a bit. At its mid-way mark, the South-West monsoon has been spatially well distributed and does not appear to be as deficient as was feared. The easing of pressures on food front has been accompanied by the fall in petroleum prices which are at their 6-month low.

d)     The real economy is yet to gain momentum. Industrial output (as measured by IIP numbers) is sluggish. Bank credit disbursements are running below their targets. The big jump in the indirect tax collection seems out of line with other developments and requires corroboration.

e)     In such a situation, the RBIs traditional dilemma whether to cut rates or not, becomes even more acute. But that is not all. What make the task of monetary policy particularly hard this time are two developments.

f)     First, the US Fed has indicated its intention to finally increase its policy rates from their rock bottom levels. This widely anticipated move is expected to draw in footloose private capital. Many others (including portfolio managers and institutional investors) might decide to go back to the US. The likely impact of all this on Indias external situation is indistinct at the moment.

g)     The second development is more threatening, and is specific to India. Unpleasant efforts to dilute the role of the RBI in monetary policy need to be resisted. The need is to strengthen and not weaken the inflation-targeting approach of the central bank.

h)     It is conceded that a MPC is better suited to decide on interest rates. At present, the Governor consults an advisory committee but is not bound by its advice. A committee approach is better suited. Among its other advantages, it is more transparent.

i)     Recently, the govt released a draft of the IFC which recommends that govt-appointed members should be in the majority. Further, a provision that in exceptional circumstances the RBI governor can veto the recommendations of the committee has been dropped. Various suggestions to implement the IFC without compromising on the RBIs powers are doing the rounds.

j)     It is important to realise that monetary policy works best in an atmosphere of mutual trust between the RBI and the govt. Moreover, from the point of view of financial markets, the confidence that the present Governor enjoys is invaluable and nothing should be done to undermine it.

k)     At another level, the performance of major public sector banks is a stark reminder that the problem of non-performing assets will not go away. By reducing the capacity of banks to lend, the problem significantly obstructs economic growth.

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