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Social issues


It’s time to enact an anti-lynching law: (The Hindu, Editorial)

Context:

  • With escalating numbers of lynching cases, the country needs a concrete anti-lynching law devoid of socio-political loopholes.

The Act against lynching:

  • The The National Campaign Against Mob Lynching’s (NCAML) draft Protection from Lynching Act, 2017 defines, for the first time in Indian legal history, the terms ‘lynching’, ‘mob’ and ‘victim’ of mob lynching.
  • It makes lynching a non-bailable offence, criminalises dereliction of duty by a policeman, criminalises incitement on social media, and stipulates that adequate compensation be paid, within a definite time frame, to victims and survivors.
  • It also guarantees a speedy trial and witness.

The loopholes:

  •  It is difficult to fault the intent or the provisions of the draft legislation. Nonetheless, two aspects merit close scrutiny:
  • The potential for abuse of the legilation, and the underlying premise that a generic anti-lynching law could address India’s lynching problem.
  • On the question of misuse, the provisions empowering local law enforcement officials to take pre-emptive action could easily be invoked to criminalise peaceful public assembly, especially if the gathering is of workers or members of marginalised communities agitating for their rights.For instance:
  • The police could use this law to detain a group of laborers planning a dharna, on the grounds that they constitute a mob that poses a threat to company officials.
  •  A major reason for the recent rise in lynching is impunity, i.e., exemption from punishment.
  • The problem is not mob lynching, but the mob lynching of minorities, for that is where impunity comes in.

The Anti-Communal Violence Bill:

  • The Anti-Communal Violence Bill was buried because it was felt that it threatened the autonomy of States by raising a parallel structure that undermined federalism. But this is a misrepresentation, and the Bill needs to be revived for three reasons:
  • It fixes command responsibility for communal incidents.
  • It recognises that targeted communal violence disproportionately victimises minorities.
  • It creates a mechanism to insulate investigations of communal violence from political interference.
  • Moreover, the draft for anti-lynching law needs to be revised to incorporate these key elements of the Anti-Communal Violence Bill.
  • Also, the demand for an anti-lynching law needs to be supported by a parallel campaign for police reforms.

GS 2

Parliament and State Legislatures


The Iran question: (The Hindu, Editorial)

Context

  • Prime Minister Narendra Modi’s trip to Israel last month was labelled as de-hyphenating the traditional vector of Israel-Palestine in Indian strategic thinking in West Asia, without damaging relations with Arab states. The final say on this balancing, however, will be determined by Iran.

Seen from a new prism

  • The relative quiet across Arab states during Mr. Modi’s visit and conversations with diplomats in the region reveal that India’s West Asia relations are no longer viewed through the prism of Israel-Palestine, but the changing security landscape in the region pertaining to Iran.
  • A new political order in West Asia is in full force, led assertively by Saudi Arabia, and one that regards Iran as the existential threat.
  • The assumption in some sections of the international community, that India’s ties with Israel naturally negate the South Asian power’s relationship with the Arab nations, specifically of the Gulf Cooperation Council (GCC), is misguided.
  • India, in turn, looks to the region for its constantly expanding natural gas and crude oil thirst.
  • Since the Iran nuclear deal, insecurities among Tehran’s rivals, supported increasingly by the Trump White House, have gone into overdrive.
  • That the Iranian leadership is fully aware of these shifting dynamics was on show in the days leading up to Mr. Modi’s Israel visit.
  • Twice in the space of 10 days, Iran’s Supreme Leader Ayatollah Ali Khamenei linked the plight of Muslims in Gaza, Yemen, and Bahrain, with, unexpectedly, those in Kashmir.
  • The Iranians will have been aggrieved by the visit coupled with India’s unambiguous pro-Riyadh tilt.
  • Despite this, ties between India and Iran will not cease any time soon, but run on an independent track.
  • The rising economic stakes in Delhi and a new regional order will mean that India cannot maintain its traditionally equidistant, neutral position in West Asia for long.
  • These pathways will be getting stress-tested soon once India desires a concrete regional strategy beyond tactical visits.

India and neighbors


Is India a good neighbour?: (The Hindu, Editorial)

Context

  • India’s foreign policy of late has come under sharp public scrutiny especially the direction in which it is moving.
  • There is no single yardstick to measure foreign policy successes and failures but the absence of crises is broadly viewed as a sound criterion.

Sour relations

  • India shares an extremely frosty relationship with Pakistan and on the other, the relationship of stability with China built over three decades has been falling apart despite increased diplomatic engagement.
  • Equation with China suffers not only because of Chinese mistakes but also because of the absence of innovative thinking in India to deal with its biggest neighbour.
  • India lacks a coherent means to contain China except for nurturing some myopic ideas.
  • The old time-tested friendship with Russia has been allowed to slip through our fingers by downscaling the levels of engagements and limiting the areas of interest over time.
  • The tragedy is that China has shrewdly neutralised India’s close proximity with Russia while at the same time sustaining its nexus with Pakistan.

Indian Foreign Policy

  • Indian foreign policy relied on its deep resources of wisdom and inner strength based on a percept of it being a civilizational state, that was reflected in its international conduct.
  • To that effect, foreign policy has been driven by peace rather than security. It gives India a global persona of benign international influence.
  • Priority to security has distorted India’s image vis-à-vis its neighbours, especially when policies are pursued through the precolonial security-centric “zero-sum” or “frontier mindset” or even from a Cold War political prism.
  •  In fact, this approach has failed to stop China’s influence in India’s neighbourhood despite the “neighbourhood-first policy”.
  • There is a clear lack of finesse in India’s approach, more so when the world has moved away from a bilateral to a multilateral context.
  • A better option to probe future ties would be to return to the strategic fundamentals.

India – China equation

  •  India might not see China as an object of disdain in perpetuity.
  • An honest attempt to build a new paradigm of India-China trust grounded on the shared historical and cultural awareness, as also on the collective wisdom of ordinary citizens on both sides, may prove to be more effective.
  • For India to emerge as a global power of any reckoning, it has to realize that a narrow tactical pursuit devoid of strategic thinking will lead to nowhere.
  • India needs to reframe its terms of relationship with China; rethink its own posture; rescue it from experiencing a delusion of grandeur and instead persevere to emerge as a confident and aspiring regional power.

GS 3

Infrastructure and investment models


Red light for Spanish racer’s dream run: (The Hindu)

Context:

  •  Despite a successful trail, the train from Spain that could have drastically shortened the duration of a journey appears to have come to a halt.
  • The government is unable to move forward on its plan to rope in Spanish locomotive firm Talgo.

The issue:

  • A series of problems has been highlighted with the ambitious project, including the inability to enlist a single bidder for a large order size, technical changes to train design, and high lease costs.

The successful field trail of Talgo:

  • The Indian Railways had conducted trials of Talgo coaches last year to validate their speed potential and examine the time saved for a journey between New Delhi and Mumbai.
  •  The trains clocked a top speed of 180 km per hour. They completed the 1,384 kilometre journey between the two metros in just 11 hours and 40 minutes, compared to the 15 hours and 50 minutes taken by the Rajdhani Express.
  • This was the first time that the Indian Railways had allowed a foreign train company to conduct a field trial on its tracks.
  • Notably, the successful trial of Talgo’s trains was even highlighted in the list of the NDA government’s achievements in its first two years.

Pollution and conservation


Delhi reports ‘good’ air quality: (The Hindu)

Context:

  • According to a report by the Central Pollution Control Board (CPCB), for the first time in two years, Delhi has seen two days of ‘good’ air quality in July, 2017.

Explanation:

  • The classifications are made depending on a part of 6-grade, color-coded Air Quality Index (AQI) that the government uses to rate air quality.
  • Officials attribute July’s healthy  air to a “combination” of above-normal rain and the various steps taken in the aftermath of the Graded Action Plan, notified this January.
  • The officials further added that although there is no single factor behind this rare phenomenon but weather has played a role. The real test, however, will be during the winter months.
  • Normally, the peak monsoon months of July and August typically see an improvement in air quality because monsoon winds and rain settle noxious particles to the ground.

The average air quality in these months is mostly only ‘moderately’ good, or still not absolutely safe for asthmatics or those with underlying respiratory problems

A half-done reform: (The Hindu, Editorial)

Context:

The government has informed Parliament about its decision to completely do away with the subsidy offered to cooking gas used for household purposes.

Introduction:

  • Recently, public sector oil companies were authorized to incrementally hike the “effective price” of LPG cylinders until the entire subsidy is wiped off by March next year.
  • In July last year, the oil companies were given the green signal to increase the effective price of subsidized cylinders by Rs 2 a month.

Key points:

  • The fall in global crude oil prices, which has reduced the price difference between subsidized and non-subsidised cooking gas in the local market, has already eased the burden on the government.
  •  In the recent Union budget, the government allocated about Rs 25,000 crore towards oil subsidy, which is a fourth of the total oil subsidy bill( of almost Rs 1 lakh crore) incurred in fiscal year 2013.

Impacts:

  • The cut in subsidy would further strengthen fiscal discipline.
  • The implementation of the direct transfer of cash benefits in the last few years has already helped in the better targeting of subsidies to the poor, thus substantially reducing wasteful spending.
  •  The fall in oil prices over the same period may have led the government to believe that his may be the right time to withdraw the cooking gas subsidy without causing much pain to consumers.
  • It is estimated that about 18 crore people, many of them below the poverty line, depend  on subsidized gas cylinder.

Conclusion:

The foremost aim of the government should be sustainably lower the price of cooking gas once and for all, getting the government out of the business of managing subsidies. In the long run, this is the only way to ease the burden on consumers and also free the budget from the pressure of international oil prices.

Centre pings rating agencies on economy in upgrade push: (The Hindu)

Context

  • The finance ministry has begun interacting with global rating agencies through teleconferences and e-mails on a more regular basis to give clarifications and updates regarding the economy.
  • This is done so to convey India’s pitch for a sovereign rating upgrade better.

India on FDI

  • India has done commendably well on attracting foreign direct investment (FDI).
  • But for some reason, its sovereign credit rating has not improved owing to unfavourable debt and deficit indicators.
  • The information was provided by the Department of Industrial Policy and Promotion (DIPP) to the Parliament’s Standing Committee on Commerce.

Committee’s statement

  • The committee had asked the government to explain the rationale behind rating agencies flagging ‘low private investments’ as a constraint towards raising the country’s rating and whether high FDI flows are not sufficient to improve the country’s business outlook.
  • The government also informed the committee that it had taken several steps to improve India’s sovereign credit rating, including introduction of a structural interaction process with rating agencies.

‘NPAs: Banks need more provisioning’: (The Hindu)

Context

A joint report by Assocham and rating agency Crisil says “Banks may require an incremental provisioning of 20% against cumulative debt of 50 large stressed assets worth over Rs. 4.3 lakh crore”.

Introduction:

  • These 50 large accounts are from the sectors such as construction, power and metals, among others and constitute about half of the gross none—performing assets of the banking sector.

Banking provisions for NPA’s

  • The banking regulator formed an IAC (Internal Advisory Committee) which in its first meeting selected 12 large corporate loan accounts which can be immediately referred to the NCLT (National Company Law Tribunal) for resolution.
  •  It is also examining the top 50 accounts with an exposure of over Rs 500 and 60 percent of the loan amount has been classified as non-performing asset (NPA).
  • As per the RBI’s provisioning norms, if an account turns into an NPA, banks are required to set aside 15 percent of the loan amount as provisioning in the first year.
  • The provisioning rises to 25 percent in the second year and 40 percent in the third year. After the third year, banks are required to make 100 percent provisioning against the loan.
  • The IAC also recommended that banks should finalise a resolution plan for the 12 and other corporate accounts being filed to NCLT and within six to nine months if a viable resolution plan is not agreed upon, banks should initiate insolvency proceedings under the Insolvency and Bankruptcy code (IBC).

Conclusion

While banks may have already provisioned for a part of these exposures, they need to adequately capitalise to absorb such losses which could fuel credit growth and support the next leg of economic growth.

‘Make In India’ yet to spur manufacturing, says panel: (The Hindu)

Parliament Committee shows Concern about poor manufacturing growth

Background:

  • The Parliament Standing Committee on Commerce has reviewed the country’s low manufacturing growth despite initiatives such as Make In India, Startup India and FDI reforms that are now more than two years old
  • The Parliament Standing Committee has urged DIPP to take effective steps to implement initiatives such as Make in India in a ‘more robust manner’, and all obstacles to the ‘optimal implementation’ of such programs must be removed in a time-bound manner.

Current Growth:

  • As per the report tabled in Parliament this Marchabout manufacturing growth averaging just 1.6% in the five years till 2015-16 and a 0.5% contraction in the sector in the first 9 months of FY17,

Government Initiative to spur Growth

  • In an action taken report tabled in Parliament on 02.08.2017, the Department of Industrial Policy and Promotion (DIPP), under the Ministry of Commerce and Industry, has listed out the several measures taken by the government to promote manufacturing and ease the business environment which are as under:

1.A new ‘National Industrial Corridor Development Authority’ has been created to  carry out project development activities, apprise and sanction projects, implement and coordinate all central efforts for industrial corridor development of all Industrial Corridors.

  1. Work on 5 smart cities namely, Dholera in Gujarat;Shendra-Bidkin in Maharashtra; Integrated Industrial Township in Greater Noida (UP); Integrated Industrial Township  near Ujjain (MP); Global City in Gurgaon, Haryana is  moving at a fast pace  in Delhi-Mumbai Industrial Corridor (DMIC).

3.The Perspective Plan for Chennai-Bengaluru Industrial Corridor has been completed.

  1. ADB is working on Perspective Plan for the Vizag-Chennai phase of the proposed East Coast Economic Corridor.
  2. Steps taken to expedite the work relating to the Amritsar-Kolkata Industrial Corridor.
  3.  A Memorandum of Understanding (MoU) between China and India has been signed for promoting cooperation between Chinese and Indian enterprises including the development of industrial parks in India, so as to provide a platform for cluster type development of the enterprises of both countries.
  4.  One additional National Investment and Manufacturing Zone (NIMZ) at Kalinganagar, Jajpur district in Odisha has been given in-principle approval, bringing the number of NIMZ’s which have been given in-principle approval to 17.

8.Under the Modified Industrial Infrastructure Up-gradation Scheme, in-principle approval has been accorded to 21 Industrial projects.

  1.  The government intends to provide a robust infrastructure to business through development of various facilities and institutions.  
  2.   Rules and procedures have been simplified and a number of products has been taken off licensing requirements.
  3.   The government intends to provide a robust infrastructure to business through development of various facilities and institutions.
  4.   The Policy in defence sector has been liberalized and FDI cap has been raised from 26% to 49%.
  5.   100% FDI has been allowed in defence sector for modern & state of the art technology on case to case basis.
  6.   100% FDI under automatic route has been permitted in construction, operation and maintenance in Rail Infrastructure project.
  7.   An Investor Facilitation Cell has been created by the government with a dedicated team to guide and assist first-time investors.

‘GPS facility to raise handset costs’: (The Hindu)

Context

The government has made it mandatory to install Global Positioning System (GPS) in all mobile phones, including feature phones that will be sold in India, from January 1, 2018 so as to locate subscribers in emergency situations especially for women

Introduction:

The Telecom Ministry will hold a meeting with handset makers shortly to review the policy’s implications.

Seeking inputs:

  • India Celluler Association (ICA), which represents majority of mobile phone companies in India, has written to the government to use A-GPS technology which can help in locating callers using mobile towers near their location.
  • GPS is the main tool regarding location details of the subscriber in emergency, so government has decided to implement it in all the mobile phone handsets from 1 January 2018 in a positive manner.
  • ICA had said feature phones retail for Rs 500-700 for which bill of material (BOM) used is to the tune of $ 5 (around Rs 330- 350). Adding GPS in such phones will increase the production cost to $ 9-11 per unit.

Controversy between government and companies

  • Handset makers had suggested using an alternate method of triangulation of telecom towers to detect location even when there’s no data connection available.
  • However,  DoT argued that Public Safety Awareness Point operator – part of the central system to handle distress calls on emergency number 112 – cannot accurately detect the location using the triangulation method as effectively as it can with GPS.
  • The representative said that more that 40% of the mobile market still comprises features phones which are sold at an average of about Rs. 1,500.

Implications:

  •  Global Positioning System , a feature that enables tracking the location of a device- to a feature phone is not only technically challenging, but will also lead to at least a 40%-50% jump in the prices of such devices.
  • The GPS device will need more power and memory and it will also increase the cost .
  •  It would not be of any use as data connectivity is not there across the country.

The Bitcoin split is good for progress: (Live Mint, Editorial)

Context:

Bitcoin cash, the new alternative cryptocurrency, is crashing

Introduction:

  •  On Tuesday, bitcoin split in two following a years-long battle in the community over the rules that should guide the cryptocurrency’s network
  • The split resulted in the creation of new cryptocurrency, bitcoin cash, which has the same basic underpinnings, but plays by different rules.
  •  The idea behind the ‘hard fork’ to form bitcoin and bitcoin cash is to increase transaction speed and mainstream acceptance of the cryptocurrecny.

About Bitcoins:

  • Bitcoin is a digital currency that isn’t tied to any bank or government.
  • The coins are created by miners, who operate computer farms that verify other user’s transactions by solving complex mathematical puzzles.
  • These miners receive bitcoin in exchange.
  •   It is also possible to exchange bitcoin for US dollars and other currencies.
  • For bitcoin, with a maximum block size of 1 MB (megabyte), it’s just two or three transactions per second.

Uses of Bitcoins:

  •  Bitcoin is used for multiple purposes including funding companies, investing cash and transferring money without fees.
  • It is commonly associated with criminal activity such as drug dealing, cyber crime and money laundering,  
  •  In 2015, RBI published a financial stability report on disruptions in financial technology. In the report, it highlighted the importance of ‘private blockchains’ which have the potential to transform how bank back-end operations functions, as well increasing the payments.
  • The digital currency can be used to move money inexpensively across borders within a matter of minutes without even having a bank account.

Why is bitcoin splitting?

  • The bitcoin community has been divided on how to solve its scaling issue. Currently, only 1 megabyte of transactions can be processed at any one time, leading to delays.
  • Demand for Bitcoin has been so high in recent months that those creating the cryptocurrency can’t keep up, slowing transactions.
  • For bitcoin to continue to scale and have the potential to become a globally used currency, this slowdown in transactions has to be addressed.

Who is supporting Bitcoin Cash?

  • Bitcoin exchanges are divided on whether or not to support Bitcoin Cash. Several exchanges, such as BitMEX, Bitstamp and Coinbase, have said they will not support or allow trading of Bitcoin Cash on their exchanges, which means investors holding bitcoins on these sites will not receive any new tokens.
  • Some exchanges are also suspending bitcoin trading, withdrawal and deposits around the time of the fork.

Issues involved:

  • The bitcoin network is limited in how quickly it can shuffle around digital money
  • Payment delays have become more common and worrisome
  • A bitcoin payment takes an hour to clear.
  • Bitcoin’s slowness also leads to the proliferation of other cryptocurrencies, or altcoins, some of which claim higher processing speed as an advantage
  • Many exchanges are still hesitating whether to trade bitcoin cash.

Key points:

  • Eight crytocurrencies had a market capitalization of more than $1 billion.
  • Bitcoin is still by far the biggest, with a market cap of more than $44 billion, but that’s not much as far as currencies go, especially global ones.
  • Rivals such as ether, with a $ 20 billion market cap, have the potential to catch up.
  • People who kept their cryptocurrency on their hard drives got a choice between bitcoin and the new version, bitcoin cash.
  • Many investors, who held bitcoin through exchanges that didn’t support the “hard fork”, such as Coinbase, were deprived of the choice.

Conclusion:

Bitcoins have potential to fight counterfeiting in developing countries like India, but not if transaction fees are higher than the living wages. So there is need to transfer money quickly from one address to another with bare minimum fees.For bitcoin to become a simple global payment system for anyone to use, it needs to get over its growing pains. The solution to that is to make a whole new currency using similar software.

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