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Daily News Analysis 02-11-2015

S.NO.

NEWS ITEM

SYLLUBUS

ESSENCE OF THE ARTICLE

1.         

 

Indonesia is our key ally, says Vice-President (Page 13)

a)     I.R

a)     Vice-President Hamid Ansari said that key agreements in maritime security cooperation, bilateral trade and cultural exchange would be soon signed with Indonesia (the single-most important and biggest country in ASEAN) and a key strategic partner.

2.

On UK trip, Modi to meet Queen (Page 13)

a)     I.R

a)     Although PM Modis official visit to the United Kingdom is less than 12 days away, there is still no official announcement of his programme either from the Indian High Commission or the British Foreign Office.

3.

S. Korea, Japan, China agree to mend relations (Page 14)

a)     International

a)     A joint statement issued after the meeting said the sides agreed to try to resolve history-related issues by facing history squarely and advancing toward the future.

4.

Case against coercion (Page 10)

a)     International

a)     After 35 years, China is set to change its one-child policy, allowing all couples to have at most two children. Since its introduction in 1980 with the aim of slowing population growth in the worlds most populous country, an estimated 400 million births have been prevented in China.

5.

Centre readies blueprint to check IS influence (Pages 1 and 12)

a)     National

a)     The NDA government is ready with a blueprint to tackle the influence of the Islamic State in India, and newly created Telangana has a major role to play in it.

6.

For a truer decentralization (Page 11)

a)     National

b)     Polity

a)     Despite its uneven history in India, decentralisation is vital to strengthen participatory democracy, facilitate responsive governance and enable public service delivery.

7.

5-member panel proposed to decide monetary policy (Pages 1 and 12)

a)     National

b)     Economy

a)     After four months of debate and discussion, the RBI and the Finance Ministry have overcome the stalemate on the proposed amendments to the RBI Act to reset the responsibility of deciding Indias monetary policy.

8.

Tough challenges on the trade front (Page 16)

a)     Economy

a)     Indian policy makers face a number of stiff challenges as they prepare for the 10th ministerial meet of the World Trade Organisation to be held in Nairobi, Kenya during the middle of next month.

9.

India to emerge as largest cotton producer (Page15)

a)     Economy

a)     With domestic trade estimating cotton production at around 400 lakh bales, India is expected to emerge as the largest cotton producer in the world in 2015-16.

10.

BrahMos test-fired from new warship (Page 13)

a)     National

b)     S&T

a)     Indias supersonic cruise missile BrahMos demonstrated its prowess yet again when it was test-fired from the countrys newest stealth-destroyer INS Kochi off the west coast.

 

S.NO.

NEWS ITEM

SYLLUBUS

BACKGROUND

IMPORTANT POINTS

1.         

 

Indonesia is our key ally, says Vice-President (Page 13)

a)     I.R

a)     India – Indonesia relations

b)     Maritime security cooperation

c)     ASEAN-India Summit

d)     ASEAN

a)     Vice-President Hamid Ansari said that key agreements in maritime security cooperation, bilateral trade and cultural exchange would be soon signed with Indonesia (the single-most important and biggest country in ASEAN) and a key strategic partner.

b)    He underlined the 3 crucial MoUs under consideration in Jakarta. One was a cooperation between the AYUSH Ministry and Balis Uddiyana University in field of Ayurveda. Another related to a cultural exchange programme. Notes would be exchanged on the Extradition Treaty signed in 2011.

c)     Ansari lamented that this happened to be the first Indian high-level bilateral visit to the Kingdom of Brunei, which was a key source of crude oil and home to around 10,000 Indian expatriates. The last visit by an Indian dignitary was in October 2013, when then Prime Minister Manmohan Singh visited Bandar Seri Begawan to attend the 11th ASEAN-India Summit.

2.

On UK trip, Modi to meet Queen (Page 13)

a)     I.R

a)     India – UK relations

b)     India-UK Business agreements

 

a)     Although PM Modis official visit to the United Kingdom is less than 12 days away, there is still no official announcement of his programme either from the Indian High Commission or the British Foreign Office.

b)     According to souces, Modi arrives on the morning of Nov 12 and goes straight to 10 Downing Street for talks with Prime Minister David Cameron. More business agreements will be signed in the visit.

c)     Additionally, he will meet Queen Elizabeth II, an honour no Indian prime minister in recent times has been accorded.

3.

S. Korea, Japan, China agree to mend relations (Page 14)

a)     International

a)     South Korea, Japan and China relations

b)     Free trade agreements

c)     North Koreas nuclear weapons programme

a)     The biggest result of the first meeting of South Korean, Chinese and Japanese leaders in more than 3 years. The long-running spat between Seoul and Tokyo (crucial US allies) has been especially worrying for US as it looks to counter Chinas rise and North Koreas pursuit of nuclear bombs.

b)     A joint statement issued after the meeting said the sides agreed to try to resolve history-related issues by facing history squarely and advancing toward the future.

c)     The countries also pledged to hold a leaders summit every year and push to deepen their economic cooperation by accelerating free trade negotiations among themselves. They also reaffirmed a resolve to resume stalled international negotiations on North Koreas nuclear weapons programme.

4.

Case against coercion (Page 10)

a)     International

a)     Chinas one-child policy

b)     Population

c)     Demographic dividends

d)     Dependancy ratio

a)     After 35 years, China is set to change its one-child policy, allowing all couples to have at most two children. Since its introduction in 1980 with the aim of slowing population growth in the worlds most populous country, an estimated 400 million births have been prevented in China.

b)    From 5.5 births per woman in 1970, the countrys fertility rate is now well below the replacement level of 2.1. The policy also led to countless forced abortions, maternal and child deaths, untold trauma especially to mothers, and one of the worlds most skewed sex ratios.

c)    For one, the limit on family size has simply moved from one child to two children, and coercive restrictions on what should be a private decision remain. Second, the decision has been taken in response to the decline in Chinas working population relative to its elderly population. Chinas dependancy ratio (the ratio of children and elderly to its working age population) has declined from 63.4 in 1950 to 34.5 in 2010, as against 56.3 for India, meaning far fewer working people support a far larger number of dependants.

d)     All countries will move through cycles of demographic dividends followed by rapid ageing, and must plan for their own unique challenges without intervening in family lives to engineer change.

e)     India too has had its experiments with state coercion in limiting family size. Undoubtedly the worst of these were the horrific violations during the Emergency, when Sanjay Gandhi spearheaded a sterilisation campaign.

f)    In the late-1990s and early-2000s, 11 States enacted laws restricting eligibility in local body elections to persons with two or fewer children; research shows that this move did have the impact of lowering family sizes in general population, but it also worsened the sex ratio.

g)     Indias push for female sterilisation as the preferred means of family planning, with targets set for field workers, financial incentives and limited information for impoverished women undergoing these surgical procedures, often nudges sterilisation drives from voluntary into coercive territory.

h)     Every country in the world, and Indias southern States, lowered fertility rates without state coercion but as an immediate effect of education for women, better access to health, and rising incomes. China and Indias latent fascists would do well to abandon forced limits on family size, and allow human progress to chart its natural course.

5.

Centre readies blueprint to check IS influence (Pages 1 and 12)

a)     National

a)     Islamic State (IS)

b)     UKs Research Information and Communication Unit

a)     The NDA govt is ready with a blueprint to tackle the influence of the IS in India, and newly created Telangana has a major role to play in it.

b)     The Ministry of Home Affairs will circulate among all States a model framework for de-radicalisation and counter-radicalisation. The model is based on a presentation from the Telangana police. In its presentation, Telangana asked the Home Ministry to empower the States to intercept encrypted communication.

c)     Telangana has been at the forefront when it comes to identifying vulnerable youths planning to join IS. While they have an excellent technological set-up, their human intelligence is also worth following. Maharashtra is another State that is doing well on this front.

d)     The State also suggested that India follow the UK model and set up a separate unit to tackle violent extremism. The Research Information and Communication Unit of UK (created after the 2005 London train bombings) draws officials from the Home, Foreign & Commonwealth Office.

6.

For a truer decentralization (Page 11)

a)     National

b)     Polity

a)     Decentralisation in India

b)     73rd and 74th Constitutional amendments

c)     Article 243 of the Constitution

d)     Article 280 of the Constitution

e)     Village Panchayat

f)     State Finance Commission (SFC)

g)     Fourteenth Finance Commission (FFC)

h)     Thirteenth Finance Commission (TFC)

a)     Much has been written on decentralisation in India though (on the ground), there is very little to show despite the 73rd and 74th Constitutional amendments. The rationale for decentralisation comes from the need to strengthen participatory democracy, facilitate responsive governance, ensure greater accountability and enable public service delivery according to diversified preferences of the people.

b)     The possibility of greater visibility and linkage between revenue-expenditure decisions is supposed to ensure greater responsiveness and accountability. There are some who advocate decentralisation as an end itself while others take this as a means to strengthen the democratic fabric through participatory governance and responsive and accountable public service delivery.

c)     The history of decentralisation in India is somewhat chequered. Although the village panchayats as institutions of governance and justice existed for a long time, the founding fathers of the Constitution were not keen to empower them.

d)    Dr. Ambedkar was worried that in the hierarchical society with highly skewed nature of asset and power distribution, vesting more powers at the village level would only perpetuate exploitation of the dispossessed. Not surprisingly, the Constitution placed local governance in the State List (Entry 5).

e)     Rajiv Gandhi wanted to energise the local bodies in rural and urban areas to make them the institutions of self-govt by effecting 73rd and 74th Constitutional amendments. Part IX was inserted into the Constitution with Article 243(A to O) specifying matters such as the constitution, elections and the functions to be devolved for panchayats and for urban local bodies under Article 243P to Z.

f)  Article 243I and Y mandated the appointment of the State Finance Commission by the Governor every five years to balance their functions with funds. Article 280 was seeded with an additional term of reference to the Union Finance Commission to take cognisance of the resource requirements of local bodies. However, the role envisaged in this seeding is only tangential or supplemental.

g)     There are five important issues for understanding the legal framework for the decentralisation process in the country. First, the Constitution assigns decentralisation including funding entirely to the discretion of State govts. While this may be to evolve the system of decentralisation appropriate to a State considering the strength of its history, economy and capacity, it also hinders the process. It is entirely left to the States to decide, what and how much powers and functions should be devolved to the local bodies.

h)   Secondly, the constitutional framework does not prescribe any pattern, standard or model of decentralisation which again is left to the discretion of State govts. Third, there are no easy mechanisms to ensure compliance of even prescribed provisions of the Constitution by States. Most States have not complied with the requirement of having to appoint gram sabhas (243A), ward committees, district planning committees and metropolitan planning committees.

i)     Fourth, on the financial side, local bodies do not have any independent revenues. There is no separate list of tax bases assigned to them in the Constitution and they have to depend on the State govts to levy the taxes. There is also the problem of administrative capacity and interest groups resisting payment of taxes and user charges.

j)    In this context, the criticism that the Fourteenth Finance Commission did not continue the decentralisation reform initiated by the Thirteenth Finance Commission needs explanation. Specifically, while the TFC initiated a package of conditionalities for availing the performance grants which was not continued by the FFC. The important features of the TFC recommendations included linking the grants to local governments to previous years divisible pool of taxes and linking a significant proportion of the grants for performance.

k)     In contrast, the FFC while recommending a much higher level of transfers, did not see Constitutional validity in linking the transfers to the divisible pool. It continued the performance grants, but linked them directly to the actions by panchayats and municipalities rather than the State govts.

l)     Thus, the FFC in its report explained that it did not carry on the scheme of rewards and punishment because truthful adherence to the Constitutional framework did not permit it to do so. It is another issue that only a fraction of performance grants recommended by the TFC were actually utilised and the Union government was the beneficiary in the process.

m)     So it is important to have clarity in the assignment of functions and the local governments should have clear and independent sources of finance. There should be clear mechanisms to ensure that States comply with the constitutional provisions, particularly in the appointment and implementation of the recommendations of the SFCs. Sustainable decentralisation comes from the demands of the people and advocacy should focus on a decentralisation agenda.

7.

5-member panel proposed to decide monetary policy (Pages 1 and 12)

a)     National

b)     Economy

a)     Monetary policy

b)     Monetary Policy Committee (MPC)

c)     Indian Financial Code (IFC)

d)     RBI Act

 

a)     After four months of debate and discussion, the RBI and the Finance Ministry have overcome the stalemate on the proposed amendments to the RBI Act to reset the responsibility of deciding Indias monetary policy.

b)     The Ministrys note for the Cabinets approval proposes a five-member MPC. The govt will nominate two members and the RBI three members. Each of the five members would have one vote and the RBI Governor (chair of the committee) will have a casting vote in the event of a tie in situations such as the absence of a member.

c)     The inflation target for the RBI in each financial year will be determined by the Govt in consultation with the RBI itself.

d)     At present, the Governor is advised by a technical committee but can veto decisions, being singularly responsible for monetary policy. A draft of the IFC that the Ministry had posted on its website in July proposed to strip the Governor of veto vote on the monetary policy. The draft proposed a six-member monetary policy committee, besides powers for the govt to appoint 4 of the 6 members.

8.

Tough challenges on the trade front (Page 16)

a)     Economy

a)     World Trade Organisation (WTO) Ministerial Meeting

b)     Bali declaration

c)     Trade Facilitation Agreement (TFA)

d)     Trans-pacific Partnership (TPP)

e)     Regional Comprehensive Economic Partnership (RCEP)

f)     ASEAN

a)     Indian policy makers face a number of stiff challenges as they prepare for the 10th ministerial meet of WTO to be held in Nairobi, Kenya during the middle of next month. The ministerial meet is the highest policy making body of the WTO covering 161 members.

b)     The September foreign trade data showed Indian exports declining for 10 straight months in row. The slowing Chinese economy is a significant factor impacting global demand and investment. Other countries, both emerging as well as developed ones are reckoning with the declining Chinese demand and not just for raw materials. The sad fact is emerging market countries as a group have become a drag on global trade.

c)     A more ominous threat is to the orderly conduct of world trade. Less than two months before the Nairobi ministerial, the very relevance of the WTO and more specifically its Doha development round is once again being called into question. India might be wrongly accused of single-handedly blocking the TFA, which has been the only tangible success of the WTOs Doha round so far.

d)  Indias persistence in seeking a simultaneous agreement on an extended food stocking might go well with certain domestic constituencies but has done nothing to dispel its image as a tough and often difficult negotiator. In days to come, Indian policy makers have to take cognisance of new trade blocs and alignments taking place. These may strike at the very structure of the WTO and more importantly the multilateral trading it embodies.

e)     The reference is to the emerging mega trade deals involving some, but not even a majority of WTO members. Referred to as plurilateral deals, to distinguish them from bilateral or multilateral these are bound to alter the structure of world trade.

f)     Two important trade blocs are on the anvil - the TPP (which excludes India) and RCEP (which includes India and ten members of the ASEAN plus Australia, China, Indonesia, Japan, South Korea and New Zealand).

g)     Very recently, the US concluded negotiations with 12 countries of the Pacific RIM to create what is called a TPP. Although two major economic powers of the region (China and South Korea) are not yet in, the TPP includes the US, Canada, Australia, New Zealand and Japan among the large economies and Chile, Peru, Mexico, Vietnam, Singapore, Brunei and Malaysia among the smaller economies.

h)     The TPP seeks to ease the flow of goods, services and investments among its members and to strengthen the rules on labour standards, environmental issues, origin criteria and intellectual property. Tariff reduction will hardly been an issue as much has been achieved already.

i)     For India, the TPP might signal the erosion of the competitive edge its goods and services enjoy especially in the traditional markets of EU and the US. India might also have to meet the challenge of a new rule bound trade architecture.

j) The emergence of plurilateral agreements is a warning that the world will simply pass by ignoring Indias interests. It has been reported that China will soon seek membership of the TPP, a move India should emulate, if possible at all.

k)     At the global level, the TPP has been welcomed but with a few qualifications. The fine print of agreement has not been released but those in the know of things say that it could boost the GDP of its members by 1 percent by 2025, with the emerging markets among the signatories gaining more.

l)     The biggest loser is multilateral trade and its main sponsor the WTO which has been trying and largely failing to negotiate a deal since 2001. The 10th ministerial of WTO is bound to take note of the perils of plurilateral trade deals.

9.

India to emerge as largest cotton producer (Page 15)

a)     Economy

a)     Cotton production in India

b)     United States Department of Agriculture (USDA)

a)     With domestic trade estimating cotton production at around 400 lakh bales, India is expected to emerge as the largest cotton producer in the world in 2015-16.

b)     Cotton output in all major producing countries in the year (barring India) has been anticipated to be lower than the previous season.

c)     Quoting reports of USDA, the sources said global cotton production during 2015-16 had been estimated at 23.68 million tonnes, 8.6 percent lower than the previous season production of 25.90 million tonnes.

10.

BrahMos test-fired from new warship (Page 13)

a)     National

b)     S&T

a)     BrahMos

b)     INS Kochi

a)     Indias supersonic cruise missile BrahMos demonstrated its prowess yet again when it was test-fired from the countrys newest stealth-destroyer INS Kochi off the west coast.

b)     BrahMos would ensure the warships capability by engaging targets at long ranges on the sea, thus making the destroyer another lethal platform of the Indian Navy.

c)     The two-stage BrahMos can fly at a supersonic speed of 2.8 Mach and at a height of ten metres during the final stages of its flight. It carries conventional warheads. It can be launched from ships, land and submarines.

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