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Daily News Analysis 18-08-2015

S.NO.

NEWS ITEM

SYLLUBUS

ESSENCE OF THE ARTICLE

1.         

 

India, UAE decry state-sponsored terror (Pages 1 and 12)

a)     I.R

a)     India and the UAE elevated their relationship to a comprehensive strategic partnership and undertook to co-ordinate efforts to fight radicalisation and misuse of religion by groups and countries for inciting hatred, perpetrating and justifying terrorism or pursuing political aims.

2.

Russia backs Indias bid for a permanent UNSC seat (Pages 1, 12)

a)     I.R

a)     After the United States, Russia too has clarified that it is open to supporting Indias bid for a permanent seat in the United Nations Security Council.

3.

Much-needed reform (Page 10)

a)     I.R

a)     The move by US to oppose any large-scale reforms in UNSC does not match the promise President Obama made to India, that it would back New Delhis candidacy for a permanent seat at the global decision-making body.

4.

Indian envoy summoned over ceasefire violations (Pg 12)

a)     I.R

a)     In a tit-for-tat move, Pakistan summoned Indias Deputy High Commissioner to complain against what it alleges was unprovoked firing by the Indian forces along the border in J&K.

5.

Show of admirable restraint (Page 11)

a)     I.R

a)     That we have moved from no talks until terror stops to talk about terror proves how crucial diplomatic engagement is in any Indian govts Pakistan policy.

6.

Beijings riposte on S. China Sea slams Philippines, Japan (Page 14)

a)     International

a)    China has mounted an energetic counter to a spate of accusations about its naval activism in South China Sea, pointing out that it was defending its legitimate rights in these waters, anchored in history and international law.

7.

Reject mercy pleas of 2 convicts, Pranab told (Page 1)

a)     National

b)     Polity

a)     The Ministry of Home Affairs has recommended to the President that mercy petitions of two convicts (sentenced to death for rapes and murder) be rejected.

8.

Panel for phased implementation of no-detention policy in schools (Page 13)

a)     National

b)     Social issue

a)     Armed with a growing chorus against the no-detention policy at elementary school level (up to Class VIII), the Union HRD Ministry is likely to make a case for reconsidering this provision of the RTE 2009, at the first meeting of the Central Advisory Board of Education under the Modi governments watch on Aug 19.

9.

Going beyond inflation targeting (Page 10)

a)     National

b)     Economy

a)    The Reserve Bank of India should focus on output at least as much as it does on inflation, but this sits uncomfortably with the mandate of inflation targeting proposed in the draft Indian Financial Code.

 

S.NO.

NEWS ITEM

SYLLUBUS

BACKGROUND

IMPORTANT POINTS

1.         

 

India, UAE decry state-sponsored terror (Pages 1 and 12)

a)     I.R

a)     India – UAE relations

b)     Terrorism

c)     Security cooperation

d)     Maritime cooperation

e)     Defence cooperation agreement

a)     India and the UAE elevated their relationship to a comprehensive strategic partnership and undertook to co-ordinate efforts to fight radicalisation and misuse of religion by groups and countries for inciting hatred, perpetrating and justifying terrorism or pursuing political aims.

b)     This was announced in a joint statement after bilateral talks between Modi and Crown Prince Sheikh Mohammad Bin Zayed Al Nahyan in Abu Dhabi. The statement which encompasses joint military exercises and greater security cooperation is also significant in the way it indicts Pakistan and state-sponsored terror without naming the country.

c)     The statement said the two nations condemn efforts (including by states) to use religion to justify, support and sponsor terrorism against other countries. They also deplore efforts by countries to give religious and sectarian colour to political issues and disputes including in West and South Asia and use terrorism to pursue their aims.

d)     It further said that the two countries called on all nations to fully respect and sincerely implement their commitments to resolve disputes bilaterally and peacefully without resorting to violence and terrorism, a direct allusion to the Kashmir issue.

e)     They also agreed to cooperate in interdicting illegal flows of funds and take action against individuals and organisations linked to radicalisation activities.

f)     The announcement of a strategic partnership between the two countries is being seen as a significant elevation of ties as well as a sign of Indias shift in the region. Equally it is a shift in foreign policy where security and terrorism take precedence over diplomacy in driving Indias interests.

g)     Like the UAE, India has signed defence agreements with several countries in the region including Bahrain, Saudi Arabia, Qatar, and Oman. While they have had some counter-terror cooperation on exchanging information, they have seen closer maritime cooperation under a Defence cooperation agreement signed in 2003.

2.

Russia backs Indias bid for a permanent UNSC seat (Pages 1 and 12)

a)     I.R

a)     United Nations Security Council (UNSC)

b)     UNGA

 

a)     Russian Foreign Minister said that while Russia supports the candidature of India and Brazil for permanent membership in the UNSC, it also feels that the presence of an African country in this structure is also necessary.

b)     Russias explanation comes days after it was made known that along with the US and China, Moscow was opposed to negotiations to reform the UN body, which would have paved the way for Indias inclusion in the group with the P-5.

c)     China too remains a big roadblock as it has neither clarified its position on support for India nor is it expected to support the adoption of UNSC expansion process if it comes to a vote by September 15, when the current UNGA session ends.

d)     India (which will be competing for a permanent seat with Germany, Japan and Brazil) already has the support of France and the UK, and has long held that as one of the biggest democracies and a growing economy it is poised to take its place in the UNSC complete with the veto.  

3.

Much-needed reform (Page 10)

a)     I.R

a)     United Nations Security Council (UNSC)

a)    The move by US to oppose any large-scale reforms in the UNSC does not match the promise President Obama made to India, that it would back Indias candidacy for a permanent seat at the global decision-making body.

b)     If US is keen on reforming the Council, why did it team up with Russia and China to oppose negotiations on reforms? And the assertion by these countries that the prerogatives (including the veto power) of existing permanent members should remain intact even if there are reforms, is equivalent to pre-empting any major reform.

c)     UNSC (created in the post-War context) does not actually reflect the changes that have occurred in international system after the end of the Cold War. In a quarter century, the global economic architecture has undergone massive changes. The developing nations (including India) now play a bigger role in international affairs. But within the UN, the five permanent veto-wielding members still effectively take all the crucial decisions.

d)     The Indian position is that this democracy deficit in the UN prevents effective multilateralism in the global arena. The way the UNSC handled some of the recent crises would underscore the soundness of Indian position.

e)     Take the examples of Libya and Syria. While the western nations are accused of distorting the UNSC mandate in Libya, the Security Council failed to reach a consensus on how the Syrian crisis may be resolved. This clearly points to a worsening institutional crisis within the UNSC.

f)     Meaningful reform of the Council to make it more representative and democratic would strengthen UN to address the challenges of a changing world more effectively. Indias demand for a permanent seat has to be looked into, duly considering the merits of the case. It is the worlds largest democracy and Asias third largest economy. The Indian Army is the largest contributor to the UN peacekeeping mission since the inception of the mission.

g)     More important, Indias foreign policy has historically been aligned with world peace, and not with conflicts. As a permanent member of the UNSC it will be able to play a larger role concerning pressing international issues. India should continue its efforts to build a democratically evolved global consensus on restructuring UNSC, at the same time pursuing bilateral diplomacy with the big powers.

4.

Indian envoy summoned over ceasefire violations (Page 12)

a)     I.R

a)     India – Pakistan relations

b)     Border disputes

c)     LoC

d)     International Border (IB)

a)     In a tit-for-tat move, Pakistan summoned Indias Deputy High Commissioner to complain against what it alleges was unprovoked firing by the Indian forces along the border in J&K. The protest comes a day after India summoned Pakistans High Commissioner Abdul Basit to register its strong protest against continued ceasefire violations along the international border in J&K.

b)     The instances of ceasefire violations have peaked in the run up to the Aug 23-24 talks scheduled between the NSAs.

c)   Deputy High Commissioner was conveyed that the Indian side must investigate the incident, share findings of the investigations with Pakistan, instruct its troops to respect the Ceasefire (in letter and spirit) and maintain peace on the LoC in Jammu and Kashmir.

5.

Show of admirable restraint (Page 11)

a)     I.R

a)     India – Pakistan relations

b)     Border disputes

c)     LoC

d)     UN General Assembly (UNGA)

e)     Director Generals of Military Operations (DGMO)

f)     Most-Favoured Nation (MFN) status

g)     Ufa summit

h)     SAARC summit

a)     In Aug 2013, some experts wrote a letter to the then PM Manmohan Singh on Pakistan. Their letter urged the PM to cancel the planned talks with Pakistan PM Nawaz Sharif on the sidelines of UNGA in Sept 2013, and to call off dialogue with Pakistan altogether.

b)     So, it is ironic that one of the chief signatories to the letter is now the man who will lead the next round of talks with Pakistan, NSA Ajit Doval. In his new role, Doval has been protecting talks from multiple challenges. When Pakistan began mortar shelling just days after the Ufa summit, it was the NSA who picked up the phone and called Pakistan High Commissioner Abdul Basit three times to try and lower tensions.

c)     Dovals task as he prepares to meet Pakistan NSA Sartaj Aziz on Aug 23 in Delhi is 3-fold: first, to put forth Indias case on terror emanating from Pakistan; second, to blunt Azizs attempts to draw an equivalence to alleged Indian activities in Balochistan Khyber; and third, to put in place a series of interactions that ensure a productive visit to Pakistan by PM Modi for the SAARC summit in 2016.

d)     However, there is no question that regardless of all that is on the agenda, it is the LoC that needs attention immediately. Casualties on both sides of the LoC have been rising at an alarming rate, and the ceasefire is practically deceased. A study by US finds that the Kashmir divide has become far more volatile since late 2012. According to the study, the rate of ceasefire violations has more than doubled in 2014-15 over preceding years.

e)     The two NSAs would do well to move the Ufa agreement on holding a meet of DGMO, and perhaps include the MEA and even intelligence officials.

f)    On the main issue of terror, there is no question that Doval will have a stock of evidence for Aziz. However, India must focus on the ongoing 26/11 trial in Pakistan, for two reasons. First, because the trial is under way and represents the hope that some of the perpetrators may be brought to justice. Second because it represents a unique case where Pakistani investigators have independently confirmed all that India has said about terror groups inside that country.

g)     However, none of these issues can be discussed unless there is a steady channel for talks between Indian and Pak interlocutors. A key takeaway from the NSA-level meeting could be an agreement to set up such a channel, whether a back-channel of the kind PMs Vajpayee and Manmohan Singh set up with Musharraf, or regular meetings of the NSAs, Foreign and Home Secretaries.

h)     The govt must continue to carry out its responsibilities, whether at the border or anti-terror operations. Only then can India and Pakistan start work on the last part of the Ufa agenda - to construct a basket of agreements and announcements that would make Modis 2016 visit worthwhile. Many of these (such as a new visa regime, MFN-status from Pakistan, and the Sir Creek settlement) have already been negotiated and require only political will to be implemented.

i)  Cynics of Track-1 diplomatic efforts between two countries could take heart from the resilience of Track-2 process. The Chaophraya Dialogue that met this month for 16th Round continues to draw in diplomats, generals, and other officials who till recently were inside Indian and Pak establishments.

j)     These are men and women with decades of public experience and meet regularly to discuss issues confronting India-Pak relations. Despite differences, they continue to meet and build a conversation that is eventually conveyed back to their respective govts. Interestingly, they now include some of those who wrote that letter in August 2013.

6.

Beijings riposte on S. China Sea slams Philippines, Japan (Page 14)

a)     International

a)     South China Sea

b)     ASEAN Regional Forum (ARF)

c)     Cairo Declaration

d)     Potsdam Proclamation

e)     Nansha (Spratly) Islands

f)     Xisha (Paracel) Islands

a)     Faced with a barrage of allegations (mainly by the Philippines and Japan) that Beijings behaviour in the South China Sea could threaten freedom of navigation, Chinese Foreign Minister Wang Yi countered the core arguments at a recent meeting of the ARF.

b)     He asserted that Chinas status on the South China Sea rested on firm legal foundations of the Cairo Declaration and the Potsdam Proclamation, which were central in defining the post-war global architecture.

c)     He observed that seventy years ago, pursuant to the Cairo Declaration and the Potsdam Proclamation, China lawfully recovered the Nansha (Spratly) and Xisha (Paracel) Islands, which were illegally occupied by Japan and resumed exercise of sovereignty. As a matter of fact, the military vessels China used in recovering the islands were provided by the US, an allied nation.

d)     He added that it was not until the 1970s when there were reports about oil under South China Sea that some countries began to invade and occupy Nansha (Spratly) islands and reefs, undermining Chinas lawful rights and interests.

e)   He criticised the Philippines for staging 4 military operations after the 1970s, and illegally invading and occupying eight islands and reefs of Chinas Nansha (Spratly) Islands.

7.

Reject mercy pleas of 2 convicts, Pranab told (Page 1)

a)     National

b)     Polity

a)     Mercy petition

b)     Death penalty

c)     President

d)     Supreme Court

 

a)     Ministry of Home Affairs has recommended to President that mercy petitions of two convicts (sentenced to death for rapes and murder) be rejected.

b)    The Supreme Court upheld their death sentence and their mercy petitions were rejected by the Maharashtra Governor. As a last resort, the convicts sought clemency from President Pranab Mukherjee.

c)     President is bound by the advice of Council of Ministers in deciding cases of mercy petitions, the Home Ministry in this case. The decision has been endorsed by Union Home Minister Rajnath Singh.

d)     The President has so far rejected 22 mercy petitions, including that of 1993 Mumbai blasts convict Yakub Memon, who was hanged on July 30.

8.

Panel for phased implementation of no-detention policy in schools (Page 13)

a)     National

b)     Social issue

a)     Right to Education Act (RTE)

b)     Central Advisory Board of Education (CABE)

c)     Continuous and Comprehensive Evaluation (CCE)

a)     Armed with a growing chorus against the no-detention policy at elementary school level (up to Class VIII), the HRD Ministry is likely to make a case for reconsidering this provision of RTE 2009, at the first meeting of CABE under Modi govt watch on Aug 19.

b)     The report of the CABE Committee on Assessment and Implementation of CCE in the context of the No-Detention Provision under the RTE Act is one of the items on the agenda.

c)     Also on CABEs agenda will be RTEs extension to cover education from pre-school to Class X; instead of just 6-to-14 year-olds.

9.

Going beyond inflation targeting (Page 10)

a)     National

b)     Economy

a)     Monetary Policy Committee (MPC)

b)     Indian Financial Code (IFC)

c)     RBI

d)     US Federal Reserve

e)     Unconventional monetary policy

f)     Great Depression

 

a)    In a commendable infusion of transparency into policy making, the Govt of India has uploaded on the net a draft of the proposed IFC. However, though the Code will apply to a wide range of matters financial, much of the response has concerned the monetary policy function. Within this, the focus has been on the relative power of the RBI and the govt in setting the policy interest rate. The draft proposes that govt should have greater say as govts nominees are set to dominate the MPC envisaged in it.

b)   This issue is easily resolved in principle. There can be no question that if the RBI is to be held accountable for monetary policy it should have full power to set the interest rate. An impression has been given that the proposal is itself only a manifestation of govts attempt to cut RBI leadership down to size. It concerns the goal of monetary policy, and it is worrying that on this there is actually no disagreement between the govt and the RBI.

c)     The draft IFC proposes that the goal of monetary policy shall be inflation targeting. Inflation targeting implies that Central bank will give priority to rise in prices. This had been substantive recommendation of The Expert Committee to Revise and Strengthen the Monetary Policy Framework, constituted by the RBI in 2013.

d)     To anyone who rightly worries about inflation, it is appropriate that Central bank should be concerned with it. But to recommend that a Central bank focus on inflation does ask two questions. First, how effectively can RBI control inflation? And, second, are there possibly adverse effects of attempting such control? The promise of inflation targeting is that inflation can be controlled by monetary policy and that there are no trade-offs to a policy of inflation targeting.

e)     Going by recent history, there is reason for some doubt about the RBIs ability to control the inflation rate. From 2008 onwards, inflation had shifted gear upwards for 5 years. The point of recounting this history is to suggest that it is far from clear that the RBI can fine-tune the inflation rate as is conveyed in Draft IFC which states that objective of monetary policy in India should be price stability, in the context to be understood as a stable inflation rate.

f)     However, let us set aside our doubt and assume that a Central bank can control the inflation rate. Would inflation targeting be desirable now? We can best answer this by looking at recent experience in the US. For a decade from mid-1990s, the inflation rate there had been low and steady, obtaining the name the Great Moderation.

g)     But this phase had masked the infusing of a financial crisis in the form of an asset bubble, responsibility for which American commentators trace to the Federal Reserve that had (in view of the low inflation) maintained unusually low interest rates. When the bubble finally burst and house prices collapsed, the banks that had financed their purchase found themselves holding worthless assets.

h)     A spectacular intervention by the Federal Reserve (termed unconventional monetary policy) saved the day for US economy. This episode shows two things that financial crises are possible even with low inflation and that the Central bank can make a difference with respect to output. Though a US-style crisis is unlikely in India given so large a presence of the public sector, it does point to the need for the Central bank to be concerned with financial stability.

i)     The policy response in US following the financial crisis was also mediated by political consideration that an output collapse should be avoided at all cost. Collective memory has a role to play in the political choices nations make. There is a lesson in this for us, that Indias institutional architecture should reflect its own peculiarities and goals rather than be guided by pure theoretical constructs allegedly based on universal truth.

j)     The Draft IFC declares that the objective of monetary policy is to achieve price stability while striking a balance with the objective of Central Govt to achieve growth. The point is that if the RBI is to pursue an inflation target set by the government it must accept the growth that is got.

k)     So, RBI should focus on output at least as much as it does on inflation, but this sits uncomfortably with the mandate of inflation targeting that is proposed in draft IFC. Then it should continue its historic role of supervising the financial system, in which task it has done the Indian citizen proud by discharging itself without fear or favour.

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