Read the rest of the analysis here


GS 1

Art and culture


Monumental legislation: (The Hindu, Editorial)

Context:

  • The Ancient Monuments and Archaeological Sites and Remains (Amendment) Bill, 2017, which is pending in the Lok Sabha, attempts to address the issues confronting construction for public works due to proposed plans running through ‘prohibited’ area (100m around a protected monument or area).
  • The Ancient Monuments and Archaeological Sites and Remains Act of 1958 bars any sort of construction within the prohibited area of these structures.

Explanation:

1.The Bill amends Section 20A of the 1958 Act to allow public works in prohibited areas within the monument or archaeological site.

  • Any question as to whether a particular work is of a public nature or not shall be forwarded to a competent authority under the Act, which will make its recommendation and place it before the Centre, whose decision will be final.

2.In case any department of the Central government proposes to carry out any public work within a prohibited area, it will make an application to the competent authority.

  • The authority will make its recommendation and hand it over to the Centre, which will take a final decision and communicate it to the applicant office or department within 10 days of the decision.

3.The Bill also amends Section 20I of the 1958 Act. This is a note to the competent authority to make its recommendations to the Centre only after conducting an archaeological, visual and heritage impact assessment.


GS 2

India and neighbors


‘Pangong scuffle a routine affair’: (The Hindu)

Context

  • A local flag meeting between military commanders of India and China in Eastern Ladakh on Wednesday has agreed to maintain peace in the area.

Brief meeting

  • The meeting came in the wake of incidents of scuffle and stone-throwing between the two sides at Pangong lake on Tuesday.
  • Both sides agreed to ensure that such incidents do not occur and resolve them as per the existing agreements and mechanisms.
  • The Border Personnel Meeting (BPM) was held at Chushul in Eastern Ladakh. It was chaired by Brigadier-level officers and lasted about two hours and half.
  • The developments come as the standoff at Doklam entered the third month.
  •  Military observers believe the Pangong lake incident would not have a bearing on the standoff.
  • A section within the military believed that a better communication strategy was needed to avoid unwanted speculation.
  • The peace along the Line of Actual Control (LAC) has been held because both sides have actually respected the status quo.
  • Every time there is an attempt to disrupt the status quo there is a problem.

Rights groups urge India to honour duty to Rohingyas: (The Hindu)

Days after the United Nations expressed concern over the government’s plans to deport about 40,000 Rohingya immigrants from Myanmar, international human rights agencies Amnesty International and Human Rights Watch called upon India to “abide by international legal obligations” and not force them to return, which they termed an “outrageous” move.

Context

  •  Rohingyas are the muslim minority community of Myanmar who fled to India after violence in the Western Rakhine State of Myanmar. Rohingyas refugees were mainly settled in Jammu, Hyderabad, Haryana, Uttar Pradesh, Delhi-NCR and Rajasthan.
  • The United Nations has expressed concern over the India’s plans to deport about 40,000 Rohingya immigrants from Myanmar.

Human Rights Watch & Amnesty International Concern:

  • International human rights agencies Amnesty International and Human Rights Watch called upon India to “abide by international legal obligations” and not force them to return, which they termed an “outrageous” move.
  • According to the Human Rights Watch While India is not a party to the 1951 Refugee Convention or its 1967 Protocol, it is still bound by customary international law not to forcibly return any refugee to a place where they face a serious risk of persecution or threats to their life or freedom”.
  • The Amnesty International referred international principle of “non-refoulement” adopted by the UN and stated that “Indian authorities are well aware of the human rights violations Rohingya Muslims have had to face in Myanmar and it would be outrageous to abandon them to their fates”.
  • Also, the Office of UN Secretary General had expressed concerns over the Indian Home Ministry statement on identifying and deporting Rohingyas, including about 16,500 who have been registered by the UN High Commission for Refugees in India.

India’s stand on immigration of Rohingyas

  • India is in discussions with the Myanmar and Bangladesh governments on the plans to deport Rohingyas.
  • India has stated that the government was planning to set up “detention centres” for the refugees, and if required “push them back” over the India-Myanmar border, if Myanmar refuses to accept the refugees back.
  • In the Parliament, Mr. Rijiju had said that the government has directed States to conduct surveys and prepare to deport Rohingyas in a “continuous manner.
  • The Home Ministry has issued an advisory to all State governments on August 8 and the state government were told that the “powers to identify and deport the foreign nationals staying illegally in the country” delegated to them, and that they should “sensitise all law enforcement and intelligence agencies” to the risk from Rohingyas.
  • India’s decision is in step with the Myanmar government’s decision to “disassociate itself” from a United Nations Human Rights Council resolution in March this year proposed by the European Union and the United States to enquire into human rights abuses in Myanmar against the Muslim minority Rohingya community.

Conclusion:

  •  India’s decision to deport Rohingys of Mynamar is to check the infiltration from Rakhine State of Myanmar into Indian territory.
  • The illegal immigration of Rohingyas community poses security challenges to India besides being burden on the limited resources of the country

Redrawing the arc of influence: (The Hindu, Editorial)

Indian diplomacy needs to display higher levels of sophistication for New Delhi to play a global role.

Context:

Prime Minister Narendra Modi’s foreign visits has been extremely impressive, and he has managed to inject a degree of dynamism into a system accustomed to a more leisurely pace.

Recent Visits:

U.S. visit:

  • Both sides mainly focus on counter-terrorism and the defence security partnership, avoiding contentious trade-related issues.

Israel visit:

  • In the case of Israel, this being the first ever visit by an Indian Prime Minister to that country.
  • Israel achieved a major propaganda scoop by getting the Indian Prime Minister to visit the memorial of Theodor Herzl, founding father of the Zionist movement
  • The main focus of the visit was on defence cooperation, joint development of defence products and transfer of technology.
  • Both countries also expressed a strong commitment to combat terror.

Importance  of China for Israel

  • China is a bigger investor and trading partner of Israel than India.
  • India and Israel decided to set up a $40 million Innovation Fund to allow Indian and Israeli enterprises to develop innovative technologies and products for commercial applications.
  • Israel-China comprehensive innovation partnership which has an outlay of $300 million.
  • India and Israel also have differences over China’s BRI.

Key points:

  • China in Asia is already exercising some of the political and economic leverages that the U.S. previously possessed.
  • China has a significant presence in East and Southeast Asia, is steadily enlarging its presence in South Asia, and is also beginning to expand into West Asia.
  • China’s influence in Iran today appears to be at an all-time high, whereas India’s influence seems to be diminishing
  • India has refused to be inveigled by China’s blandishments, including the BRI.
  • Few other countries in Asia are willing or in a position to tangle with China.
  • A divided ASEAN again has provided China with an opportunity to demonstrate its economic and military muscle.
  • Most countries in the region also demonstrate a desire to join China-based initiatives.
  • Even in South Asia, despite India’s commanding presence, China has been successful in winning quite a few friends among India’s neighbours such as Bangladesh, Nepal, Sri Lanka and the Maldives.

India-Russia:

  • Russia is undergoing a strategic resurgence of sorts, sustained in good measure by the close relations recently established with China.
  • Buoyed by developments in the Ukraine and Crimea, and the uncertainties surrounding U.S. commitment to NATO, the new Russia-China ‘strategic congruence’ is certain to impact Asia.
  • The problem for India and Indian diplomacy is that at this time India-Russia relations appear less robust than at any time in the past half century
  •  India’s ‘Act East and Look West’ policies have given a new dimension to Indian diplomacy in both East and West Asia.
  • In both regions, especially in West Asia, Indian diplomacy still lacks the nimbleness required to deal with fast-changing situations.
  • In West Asia, despite its long time presence in the region, a 9-million strong diaspora, and the region being its principal source of oil, India is not major player presently.
  • Both Russia and China have overtaken India in the affairs of the region. This is particularly true of Iran where the Russia-China-Iran relationship has greatly blossomed, almost marginalising India’s influence.

In West Asia:

  • India’s absence from, and its inability to play a role in, West Asia, even as the region confronts a split down the line between the Arab and the non-Arab world is unfortunate.
  • There is the possibility of a series of confrontations between an increasingly powerful Shiite Iran and a weakening Saudi Arabia.
  • The most recent challenge is the one posed by Qatar to the existing order in the West Asian region.
  • The fallout of all this will impact India adversely and Indian diplomacy’s inability to make its presence felt will matter.
  • An additional concern for India would be that growing uncertainties in the region could further fuel radical Islamist terror in the region.

Conclusion:

Indian diplomacy presently need to do is to look out ways to steer amid an assertive China, a hostile Pakistan,  an uncertain South Asian and West Asian neighbourhood and an unstable world.


GS 3

Indian Economy. Planning, Growth and Employment


Use coal while economical, says CEA: (The Hindu)

Context:

Chief Economic Advisor Arvind Subharmanian said on Thursday, India should leverage its coal assets while it is still economical to do so before ramping up its renewable energy capacity.

Introduction:

  •   The country should still have coal as a major fuel and avoid getting distracted by the global debate on “carbon imperialism” said chief economic advisor Arvind Subramanian.
  • The low tariffs seen in the renewable sector do not include several implicit costs that are, so far, being subsidized.
  • Subramanian suggested ramping up coal production dramatically in the short run and slowing down renewable energy capacity addition.
  •  Subramanian emphasized that coal can be slowed down and renewable energy ramped up, when social cost for the latter would change in its favour.

Key points:

  •   The burden of combating climate change should be consistent historically and equitably
  •  Recently second volume Economic Survey noted last week that the transition to increasing role of renewable it the energy mix is likely to adversely affect conventional energy generation assets.
  •    Coal would remain at the centre stage in India with its share in the energy mix not declining below 46% in 2047, as per the report titled ‘Energizing India’, jointly prepared by the Niti Aayog and the Institute of Energy Economics, Japan.
  •  Country intends to generate at least 40% of its electricity from non-fossil sources by 2030.
  •   It aims to add 175 GW of renewable energy-based installed capacity by 2022.
  •  Total installed capacity in the country presently stands at about 350 GW.
  •  In FY 17, coal power plant generated more than 85% of the total electricity produced in the country.

That sinking feeling: (The Hindu, Editorial)

Context

  • Prime Minister Narendra Modi, in his Independence Day address, spoke triumphantly about how demonetization drove Rs. 3 lakh crore of unaccounted money into the banking system.

Result of the survey

  • The Reserve Bank of India (RBI) is still counting old notes, and unaccounted money cases are ongoing. Thus, this number is at best a guesstimate, and cannot be taken seriously.
  • The Survey states that, “A number of indicators — GDP, core GVA (GVA excluding agriculture and government), the Index of Industrial Production (IIP), credit, investment and capacity utilization point to a deceleration in real activity since the first quarter of 2016-17, and a further deceleration since the third quarter.”
  • The Survey thus settles that demonetization ambushed a slowing economy.
  • The Survey shows how demonetization devastated the informal sector, using two-wheeler sales as a proxy indicator.
  • These dropped steeply for two quarters after demonetization. Construction, which absorbs migrant labour, was also badly hit.
  • The Survey thus supports the Opposition’s argument that Finance Minister Arun Jaitley’s “record” allocation for MGNREGS merely reflects displaced migrant workers returning to villages and exercising their right to social insurance.
  • Demonetization badly affected farmers’ incomes resulting in a loss of demand, lowering food prices.
  • Consequently, inflation has hit lows below the RBI’s targeted band. Low inflation levels come at a human cost, farmers and those in the informal economy are losing their limited purchasing power.
  • Additionally, hasty implementation of the Goods and Services Tax (GST) has paralyzed the informal manufacturing sector which lives on the edge, often saddled with debt.
  • Protests in the textile hub of Surat reflect how GST is affecting medium, small and micro-scale enterprises.
  • Formalization of the economy should not shut down businesses and extinguish livelihoods.
  • Similarly, leather, another labour-intensive sector, is in trouble due to restrictions on cattle slaughter.
  • Banks are not lending. In the year ending March 2017, credit growth plunged to 5.1%, lowest in 60 years.
  • The private sector is not borrowing and the manufacturing sector is operating at a historically low capacity utilization of 70%. The latest IIP shows a contraction of 0.1% in June 2017.
  • Neither credit nor investment will increase until the government addresses the “twin balance sheets” problem.
  • Sadly, the Modi government’s early focus was on undoing the 2013 land acquisition law instead of addressing non-performing assets (NPAs).
  • Bank lending is the lifeblood of the economy but government inaction has brought investments to a halt.
  • In March 2014, NPAs were Rs. 1,73,800 crore. Today they are about Rs. 7,79,163 crore. Instead the government talks up foreign investment (only 2-3% of GDP) or aggressively lobbies the RBI to cut interest rates, which is unlikely to achieve much.
  • As State governments find their fiscal space narrowing, private investment falters, and demand slows, we are entering a deflationary environment.
  • Still there are fiscal policy measures that the Union government can deploy.
  • It can belatedly share the benefits of low oil prices by cutting excise duties on petroleum to give people and businesses more spending power, boosting demand.

Job destruction

  • The Centre for Monitoring Indian Economy reports that 1.5 million jobs were lost during January-April 2017.
  • Ignoring his own promise of creating two crore jobs a year, Mr. Modi exhorted jobseekers to become job creators.
  • But international experience, in developed OECD (Organisation for Economic Co-operation and Development) countries, shows self-employment is only about 15% of total employment.
  • Mr. Modi extolled the job-creating impact of the MUDRA loan scheme.
  • In contrast, MUDRA’s CEO is on record saying that it cannot be verified that the agency has created large numbers of jobs.
  • Another misguided Union minister recently triumphed about “job creation” under MGNREGS — not realizing that it is a social protection scheme that people turn to when they have no alternative employment and not exactly a reason for cheer.
  • Overall, the real state of India’s economy is deeply worrying. The latest RBI surveys of consumer confidence, industrial outlook, and professional forecasters point to pessimism on all fronts except inflation management.
  • Mr. Modi spoke of how a train slows down as it changes tracks. Unfortunately, Economic Survey II’s numbers suggest that the economy has actually been derailed.

Don’t be cautious, RBI: (Indian Express, Editorial)

Context

  • The Reserve Bank of India’s decision to lower the repo rate was a move in the right direction.

Importance of repo rate?

  • The repo rate is the interest rate at which banks can borrow money from RBI for short durations.
  • It stands to reason that, if this is lowered, banks can lend to their borrowers at lower rates.
  • This is the reason why changing this rate usually influences interest rates across the economy and in the same direction.
  • Raising the repo rate lowers inflation but also confines growth, while lowering it pushes up the growth rate but fuels inflation.
  • India’s inflation has been falling over several months and is now well below 2 per cent.

India’s risk of low Inflation

  • India now has a risk of sustained low inflation, which we know from the experience of other countries, most notably, Japan, can cause overall stagnation.
  • As a result of the liquidity crunch associated with last November’s demonetization, overall GDP growth in India is now down to 6.1 per cent per annum.
  • India’s investment-to-GDP ratio had risen since 2003 and was holding steady at above 35 per cent.
  • This was a major factor fueling the country’s high growth. This has now dropped to approximately 28 per cent.
  • The positive relation between how much money a country allocates to investment, especially in long-run infrastructure, and how fast its GDP grows is one of the more enduring findings in economics.
  • If one of these countries raises interest rates, in today’s globalized world, money will flow into the country from the other economies in order to earn the higher return.
  • And as more players try to buy this country’s currency to invest in it, the currency will appreciate, causing exports to suffer.
  • India is erring by holding on to high interest rates, it is attracting capital flows into the country, as evidenced by the large foreign exchange reserve held by the Reserve Bank.
  • This is causing the rupee to be stronger than it should be and this is, in turn, stunting exports, and also growth.

Infrastructure and investment models

Prelims Related News


E-toll lane on all national highways from Sept. 1:

All toll plazas on national highways will have electronic toll collection facility with at least one lane dedicated to vehicles with electronic tag device, known as FASTags.

Context:

  • All toll plazas on national highways of India will have electronic toll collection facility with at least one lane dedicated to vehicles with electronic tag device, known as FASTags, beginning September 1, 2017.

Explanation:

  • FASTags is a device that can be installed on the windshield of any vehicle, and toll payments can be made directly from the pre-paid account linked to it.
  • Hence such vehicles do not have to stop at toll plazas for payment of fees.
  • Moreover the installation and integration of Radio-frequency identification (RFID) tags at all toll plaza lanes are under progress and was likely be completed by October 31.

Army to get six Apache helicopters:

Context:

  • The Indian Army on 17th August, 2017 got a step closer to having its own dedicated fleet of attack helicopters, with the Defence Ministry approving the purchase of six AH-64 Apache attack helicopters from the U.S.

Key facts about the purchase:

  • The Defence Acquisition Council (DAC) cleared total capital acquisitions worth about Rs. 4,700 crore for the purchase.
  • The cost of Apaches, including associated equipment, spares, training, weapons and armaments, is about Rs. 4,168 crore.
  • In another deal, the Defence Acquisition Council DAC gave approval for procuring two gas turbine engines from Ukraine, to be fitted on the two stealth frigates under construction in Russia.

Ancient species of giant sloth discovered:

Mexican scientists have discovered the fossilised remains of a previously unknown species of giant sloth that lived 10,000 years ago and died at the bottom of a sinkhole.

Context:

  • Mexican scientists have discovered the fossilised remains of a previously unknown species of giant sloth that lived 10,000 years ago and died at the bottom of a sinkhole.

Explanation:

  • The remains were found in 2010, but were so deep inside the water-filled sinkhole that researchers were only gradually able to piece them together.
  • Scientists have so far hauled up the skull, jawbone, and a mixed bag of vertebrae, ribs, claws and other bones, but the rest of the skeleton remains some 50 metres under water.
  • They have named the new species Xibalbaonyx oviceps .
  • An initial analysis suggests that the sloth lived between 10,647 and 10,305 years ago, an era when giant creatures of all kinds roamed the earth.
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