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Daily News Analysis 10-08-2015

S.NO.

NEWS ITEM

SYLLUBUS

ESSENCE OF THE ARTICLE

1.         

 

Trade, terror high on PMs Gulf agenda (Page 12)

a)     I.R

a)     PM Modi will make his first visit to the Gulf region and West Asia this weekend (with a trip to the United Arab Emirates), marking the first time an Indian PM will land in the UAE in more than three decades.

2.

Sikorsky ups navy chopper price, talks to begin afresh (Page 13)

a)     I.R

a)    Govt said negotiations for 16 multi-role helicopters for the Navy with Sikorsky of the US will begin afresh as price escalation requested by company is not acceptable in accordance with the Defence Procurement Procedure.

3.

Nepal inks breakthrough pact on new Constitution (Page 14)

a)     International

a)     Nepals PM said that Nepals rival parties have signed an agreement drawing up the countrys internal borders in a development that paves the way for a new national Constitution.

4.

Peace pact only a formula to a final accord, says Nagaland CM (Pages 1 and 12)

a)     National

a)     A day after meeting PM Modi, Nagaland CM T.R. Zeliang said that the Naga peace pact was only a formula to a final accord.

5.

Democracys essence (Page 10)

a)     National

a)     Indias fundamental belief in democracy is often taken as a given, but it is instructive to understand the basis and strength of this belief.

6.

Ensure smooth passage of GST Bill (Page 10)

a)     National

b)     Polity

a)     Close on the heels of industrialist Adi Godrej raising concerns over disruptions in Parliament stalling legislation for introduction of GST, the Confederation of All India Traders appealed to political parties not to put roadblocks before the economic reform.

7.

Privacy, a non-negotiable right (Page 10)

a)     National

b)     Polity

a)     Whether it was required of the Attorney General to question the citizens right to privacy to defend legality of Aadhaar is indeed questionable as the constitutional status of this right has been decisively answered in successive and understandably articulated judgments.

8.

Thanks to juvenile law, man walks free 39 years after murder (Page 13)

a)     National

b)     Polity

a)     The Supreme Court has ordered the release of a life convict who spent 10 years in jail for a murder he committed about four decades ago.

9.

New financial commission: a faulty road map (Page 11)

a)     National

b)     Economy

a)     While countries in the West are giving their central banks more authority and regulatory powers, India is proposing a system to reduce the RBI to a shadow of itself.

10.

Economy shifting gears, results of CII survey show (Pages 1 and 12)

a)     National

b)     Economy

a)     At a time when government data give mixed signals of an economic recovery, a survey by the Confederation of Indian Industrys Associations Council sees early signs of a revival.

 

S.NO.

NEWS ITEM

SYLLUBUS

BACKGROUND

IMPORTANT POINTS

1.         

 

Trade, terror high on PMs Gulf agenda (Page 12)

a)     I.R

a)     India – UAE relations

b)     Trade ties

c)     Free Trade Agreement (FTA)

d)     Gulf Cooperation Council (GCC)

a)   PM Modi will make his first visit to Gulf region and West Asia this weekend (with a trip to UAE), marking the first time an Indian PM will land in UAE in more than three decades.

b)     Sources said Modis visit would give a boost to bilateral cooperation in key areas and boost trade and investment ties, which are the cornerstone of the UAE-India partnership. In 2014-2015, trade between India and UAE crossed $59 billion with balance of trade in favour of India, making UAE one of Indias biggest trading partners. Modi was also keen to discuss more investment in India, as well as a revival of the India-GCC free trade agreement.

c)     Modi will also push for greater cooperation on terrorism with Dubai, which has in past assisted India with information on criminals and terrorists who had operations based out of the emirates, especially after two countries signed two bilateral security agreements in 2011, on transfer of sentenced persons and on combating terrorism.

d)     The last time an Indian PM visited UAE was Indira Gandhi in 1981, while President Pratibha Patil made a 5-day state visit in 2010.

2.

Sikorsky ups navy chopper price, talks to begin afresh (Page 13)

a)     I.R

a)     India – US defence ties

b)     Defence Procurement Procedure (DPP)

c)     Contract Negotiation Committee (CNC)

 

a)    Govt said negotiations for 16 multi-role helicopters for the Navy with Sikorsky of US will begin afresh as price escalation requested by company is not acceptable in accordance with the DPP.

b)  Stating that the procurement proposal is being processed in accordance with the DPP, Defence Minister Parrikar said that the request of Sikorsky for price escalation was not found acceptable by the CNC.

c)     In 2008, the Navy had floated a global tender for 16 MRHs to operate from its warships with an option for eight more. Finmeccanica with its NH-90 and Sikorsky with S-70B were in the evaluation race which Sikorsky actually won as it was the sole bid left after a partial ban was imposed on Finmeccanica in another deal.

d)     S-70B is the naval variant of the US Armys Black Hawk UH 60 helicopter. It can be used both for anti-surface and anti-submarine warfare.

3.

Nepal inks breakthrough pact on new Constitution (Page 14)

a)     International

a)     Nepals internal issues

b)     New Constitution process

a)     Nepals PM said that Nepals rival parties have signed an agreement drawing up the countrys internal borders in a development that paves the way for a new national Constitution.

b)     Nepals parties struck a historic deal in June to divide the country into eight provinces but left the crucial task of delineating state borders to a federal commission.

c)    The new agreement came after days of negotiation and resolves a major issue that has blocked progress on the charter since 2008. As a result, the commission will no longer be required to set state boundaries.

4.

Peace pact only a formula to a final accord, says Nagaland CM (Pages 1 and 12)

a)     National

a)     Naga Peace Accord

b)     National Socialist Council of Nagalim (Isak-Muivah)

c)     NSCN (Khaplang)

a)     A day after meeting PM Modi, Nagaland CM Zeliang said that Naga peace pact was only a formula to a final accord.

b)     Voicing confidence that other rebel groups would come on board after the signing of the agreement between Union govt and NSCN(I-M), he said that a 16-member Naga delegation would visit Myanmar to meet S.S. Khaplang (the chief of the NSCN(K)), which had violated the ceasefire agreement and attacked an Army convoy in Manipur in June.

c)     With the CMs of Assam, Manipur and Arunachal Pradesh protesting that they had not been consulted before the signing of peace accord with NSCN (I-M), Zeliang said that he would speak personally to them to allay their worries. The three CMs have said that they will not cede an inch of land of their States under the accord.

d)     Highlighting the key aspects of the formula, he said the Centre would respect the Naga customary system and landholding system based on the unique history of Nagas across Naga-inhabited areas of the Northeast, including in Assam, Manipur and Arunachal Pradesh.

5.

Democracys essence (Page 10)

a)     National

a)     Democracy in India

b)     Authoritarianism

c)     Patriotism

a)     Indias fundamental belief in democracy is often taken as a given, but it is instructive to understand the basis and strength of this belief.

b)     A new national survey by the Centre for the Study of Developing Societies shows that in 2013, under half the country unequivocally preferred democracy as the best form of govt in all cases; the outcome was the same when a similar survey was conducted in 2005.

c)     Satisfaction in functioning of democracy has declined sharply in India, and with it, the belief that a form of govt in which one notionally has a voice is the most desirable.

d)     Preference for authoritarianism was higher among those with the highest media exposure, those who lived in metros, those who were rich and those who were college-educated - groups for which democracy has delivered much more than for the marginalised sections, yet among whom such conservative views are growing.

e)     India would do well to watch out for the growth of such authoritarian tendencies, especially when they come in the cover of patriotism. Simultaneously, the govt would do well to not misunderstand the nature of its democratic compact with its people, especially the poor.

f)     Top among the essential characteristics of democracy as rated by respondents in survey was the freedom to take part in protests and demonstrations, evidence of a country that holds the right to dissent dear. Several welfarist ideals (provision of basic necessities such as food, clothing and shelter, as well as a narrowing gap between rich and poor and job opportunities for all) came next in list of most cherished beliefs of democracy.

g)    Majoritarian and patriotism notions of democracy are not what the people of India are looking for, but a welfarist democracy that delivers.

6.

Ensure smooth passage of GST Bill (Page 10)

a)     National

b)     Polity

a)     Goods & Services Tax (GST)

b)     Confederation of All India Traders (CAIT)

a)     Close on the heels of industrialist Adi Godrej raising concerns over disruptions in Parliament stalling legislation for introduction of GST, the CAIT appealed to political parties not to put roadblocks before the economic reform.

b)     The confederation called for a consensus to be evolved among the political parties to ensure a safe and smooth passage of the biggest taxation reform in Independent India.

c)     About six crore business enterprises are deeply upset over the continuing deadlock in Rajya Sabha which has blocked smooth passage of Constitution Amendment Bill meant for the introduction of GST.

d)     He said the GST has much value to the trading community since it is deeply webbed into excess of tax laws and regulations of multiple tax authorities. Trading community hopes to get a simplified cohesive business environment which may lead to ease in doing business in country and hopes to abolish colonial working of tax administration system.

7.

Privacy, a non-negotiable right (Page 10)

a)     National

b)     Polity

a)     Privacy of citizens

b)     Constitutional rights

c)     Aadhaar scheme

d)     Fundamental rights

e)     Article 21

f)     Supreme Court

g)     Attorney General

 

a)     According to author, this piece seeks to contest Attorney-Generals somewhat surprising assertion before the Supreme Court that Indians do not have a constitutional right to privacy.

b)     Posed the question on whether making a citizen part with vital personal data under the Aadhaar scheme does not amount to intrusion of privacy, the Centre replied in Supreme Court last month that privacy was not a fundamental right.

c)     Attorney-General Rohatgi said the right to privacy had been a vague concept all these years, a subject of varying conclusions from the Supreme Court. He told a three-judge Bench that the Constitution-makers had never intended to make it a fundamental right. He then quoted a majority 1962 judgment of the Supreme Court in the Kharak Singh case that held that privacy was not a guaranteed right under the Constitution.

d)     The submissions came during the hearing of a batch of petitions seeking to stop the implementation of the scheme. The govt said it was too late to do that as Rs. 5,000 crore had been spent on Aadhaar, which had accessed 80 crore people. Speaking through the Attorney General, the govt has sought consideration of the issue by a larger Bench to clarify the constitutional status of the right to privacy.

e)    Thus, the question raised is indeed of critical importance to future of our liberal democracy. But it stands decisively answered in successive and understandably articulated judgments of the final Court. Whether it was required of the Attorney General to question the citizens right to privacy to defend the legality of Aadhaar is indeed questionable.

f)  A trade-off between Aadhaar and the right to privacy is incomprehensible. The position taken by the govt on the issue is wholly unarguable for reasons which follow. Our evolving constitutional jurisprudence on privacy rights post Sharma (supra) unambiguously affirms the right to privacy as an integral component of the right to life and personal liberty envisaged in the expansive interpretation of Article 21.

g)     The right to dignity has since been declared by the Supreme Court as a non-negotiable constitutional right flowing from the spirit of the Constitution and the explicitly guaranteed right to life and personal liberty in Article 21.

h)     The right to dignity which inheres in each individual as a human being is incomplete without the right to privacy and reputation. Like the right to privacy, the right to reputation (though not specifically spelt out in the Constitution) has been traced to a right to life with dignity under Article 21. Thus, the right to privacy stands included in the sweep of Article 21 itself and the penumbras of the guaranteed rights

i)     Declaring that Article 21 clubs life and liberty, Justice Krishna Iyer reminded us (in the context of the interplay of Articles 14, 19 and 21) that man is not dissectible into separate limbs and, likewise cardinal rights in, an organic constitution which make man human have a synthesis.

j)   A holistic reading of current state of our constitutional jurisprudence would demonstrate that the right to privacy is firmly embedded in our constitutional scheme as a non-negotiable imperative that owes no apology to a narrow view of our republican charter.

k)     Indeed, considering the fundamental principles of the nation as not rules for passing hour, but principles for an expanding future, the apex court has given fundamental rights their meaning in new settings consistent with the aspirations of our people. This is so that we may have a living constitution which can protect, preserve and defend inviolable libertarian values that remain the bedrock of the Republic and constitute the core of the Constitution.

l)     Rather than deny us our constitutional right, the Union Govt ought to enact a privacy legislation to clearly define the rights of citizens consistent with the promise of the Constitution.

8.

Thanks to juvenile law, man walks free 39 years after murder (Page 13)

a)     National

b)     Polity

a)     Juvenile Justice Act

b)     Supreme Court

a)     In a judgment on Aug 7, a Supreme Court Bench set a 55-year-old man free on finding that he was a juvenile at the time of the crime. Ram Narain deadly shot Nathi Lal on Dec 21 1976. In 2004, the Supreme Court confirmed he was guilty and upheld the life sentence.

b)     However, in 2013, he moved the Juvenile Justice Board claiming that he was a minor at the time of incident. After going through the records, the Board decided that he (at the time of the crime) was 15 years 11 months 26 days, thus making him a juvenile.

c)     The Bench ordered that the petitioner-applicant should get the benefit under the said Juvenile Justice Act since he was a juvenile on the date of commission of the offence.

9.

New financial commission: a faulty road map (Page 11)

a)     National

b)     Economy

a)     Monetary Policy Committee (MPC)

b)     New Financial Code (NFC)

c)     Indian Financial Code (IFC)

d)     RBI Act

e)     Financial Stability and Development Council (FSDC)

f)     Public Debt Management Agency (PDMA)

g)     Securities and Exchange Board of India (SEBI)

h)     Insurance Regulatory and Development Authority (IRDA)

i)     Non-Banking Financial Companies (NBFCs)

j)     Deposit Insurance and Credit Guarantee Corporation (DICGC)

k)     UKs Financial Services Authority (FSA)

l)     Banking supervision in the European Union (EU)

m)     European Central Bank (ECB

n)     US Federal Reserve

a)     Amid all the talk about a NFC and the outcry about the govts apparent attempt to cut the powers of RBI, some deeper questions seem to have been missed: what is the exact aim of proposed IFC? What is it trying to fix? Is a need for a fix at all?

b)    Much of the discussion has revolved around the proposed creation of a MPC, which is to be responsible for all matters relating to monetary policy. The argument in favour of an MPC is that: it is standard practice worldwide to have a committee in charge of monetary policy. So far, India has given that responsibility to the RBI and to its Board of Directors.

c)     Though there is no specific provision for this in RBI Act, the Board has (by and large) entrusted RBI Governor with that responsibility. So, the fact that the RBI has cut or raised interest rates is synonymous with Governor himself doing it.

d)     The proposed MPC (composed of seven members, the majority of whom are to be nominated by govt) will take over from the RBI all aspects of monetary policy, including the setting of interest rates. This has angered up a large section of economists, bankers and central bankers. They said that the govt should not be in charge of monetary policy.

e)     So far, the govt has been interested in securing high growth rates, not only as an electoral board but also as a means to finance various expenditure schemes proposed in each Budget. On other hand, RBI is tasked with controlling inflation, which often accompanies high growth rates. Raising interest rates is the best tool to achieve this, but it also puts a dampener on growth.

f)    RBIs primary responsibility includes monetary policy. It is also responsible for maintaining financial stability; regulation and supervision of banks as well as of NBFCs. It also accumulates and maintains Indias forex reserves and works in the forex, govt securities and derivatives markets. And, it has the responsibility of handling Indias public debt and currency rates, as well as heading the DICGC, which basically insures all bank deposits. In addition, the RBI is the highest authority when it comes to payment and settlement systems in the country.

g)     According to the IFC, the RBI will continue to be in charge of monetary policy (via the MPC); the supervision and regulation of scheduled banks; currency management; and payments and settlements systems. There is no clarity yet on its role regarding foreign exchange reserves, but lacking any mention in the Code, the assumption is that it will retain control over them.

h)     The Code goes on to say that regulation and supervision of NBFCs, and activities in the forex, derivatives and govt securities markets will be under a proposed financial authority. It is to regulate all financial services other than banking and payment systems, and will have a mix of nominated members from both the govt and the RBI.

i)   Incidentally, there is already some ground for conflict between RBI and this financial authority - namely, the regulation of NBFCs. The IFC defines a bank as a financial services provider in business of accepting deposits from the public. Under this definition, all deposit-taking NBFCs would then become banks. Then, who would regulate them: the RBI or the financial authority?

j)     The IFC also envisages the creation of a FSDC, a statutory agency for promoting stability and resilience of the financial system. Other bodies being created include a PDMA and a Resolution Corporation, which will take over the role of the DICGC.

k)     Indian financial sector is governed by a host of different laws that were enacted as and when needed to form various regulatory bodies like the RBI; the SEBI and the IRDA. Each of these bodies has taken a while to settle down and start working efficiently. For example, SEBI has taken about 20-25 years to be effective.

l)     The IFC is looking to combine all these agencies into the proposed financial authority that will deem the RBI as just one of many financial agencies, with the Governor and Deputy-Governors being designated as Chairman and members.

m)     So, while developed countries in the West are busy giving their central banks more authority and regulatory powers following the financial crisis in late 2000s, India is proposing a system whereby the RBI is provided a shadow of its former self. In the UK, the FSA has been brought back under the Bank of England. Banking supervision in the EU is coming under ECB, and similar moves are being made in the US with regard to the Federal Reserve.

n)     Separating banking regulation from that of other, non-bank credit institutions will create many possibilities of regulatory arbitrage, and could lead to financial instability. Given the wide-ranging and cascading effect of such a policy decision, a far fuller discussion of all the issues and not just those relating to monetary policy, is needed.

10.

Economy shifting gears, results of CII survey show (Pages 1 and 12)

a)     National

b)     Economy

a)     Economic growth

b)     GDP

c)     Confederation of Indian Industrys Associations Council (CII ASCON)

d)     Index of Industrial Production (IIP)

a)     A survey by CII ASCON sees early signs of economic revival. Of 93 sectors surveyed, the proportion that recorded excellent growth (faster than 20 percent) during the April-June quarter of 2015-16 was higher (at 16.1 percent) than the 7.1 percent in the corresponding quarter of the last fiscal.

b)     The survey has suggested revival of stalled projects, de-bottlenecking of supply side linkages and easing of interest rates as the most significant steps to strengthen growth.

c)     The study has found that more sectors have clocked excellent growth during the first quarter of the current financial year, though govt data show there is no clear pattern regarding industry performance as the Index of Industrial Production and Index of Eight Core Industries move from depicting acceleration to deceleration on a monthly basis.

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