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GS-2

India and neighbors


Dhaka plea made MEA shift stand: (The Hindu)

Context:

  • Shift in India’s position on the Myanmar issue

Introduction:

  • The Government of India has expressed its concerns about the outflow of Rohingya refugees.
  • A series of requests from the Bangladesh government made India to shift its position.

What disappointed the Bangladesh government?

  • Bangladesh was disappointed due to the no-inclusion of the Rohingya refugees’ issue in the India-Myanmar joint statement during India’s Prime Minister’s visit to Myanmar.
  • Indian refused to be a part of the Bali declaration backed by Bangladesh which contains provisions on Rohingyas who have fled to Bangladesh.

What makes India bound to change its earlier position?

  • Foreign secretary level talks on the sidelines of the Indian Ocean Conference in Colombo.
  • Indian High Commission in Dhaka had shared an assessment about the pressure faced by the Bangladesh government.

The disaster next door: (The Hindu, Editorial)

Context:

  • India’s stand on Rohingya refugees’ issues and its implications.

How India’s stance undermines its ties with Bangladesh and its regional leadership?

  • Rohingya refugees from the Rakhine state in Myanmar has put Bangladesh in a difficult situation.
  • Almost 300,000 refugees have taken shelter in squalid, unsanitary camps scattered along Myanmar-Bangladesh border in a span of two weeks.
  • The Myanmar authorities claim that 400 lives have been lost due to military action.

Where is India’s century old policy of Atithi Devo Bhava?

  • The Rohingya refugees have been shunned, denied basic public services in India where they have sought refuge in India.
  • The government has called them to be illegal immigrants and trespassers.
  • India has been generously accommodative towards refugees in the neighborhood fleeing persecution in the past.
  • India accommodated Parsis, Tibetans, Afghans, Sri Lankan Tamils, and Bangladeshis during the war of liberation in 1971.
  • India has prided itself in its tradition of Atithi Devo Bhava.
  • India’s stance on the Rohingya has been disappointing and is contradictory to the values of hospitality and inclusiveness.
  • India has overlooked the atrocities on Rakhine in the India-Myanmar joint statement.
  • Being a resource-constrained country, Bangladesh is badly impacted due to the refugee crisis.

What is the current situation in Bangladesh?

  • Bangladesh has been a role model of friendship in India’s neighborhood.
  • International relief agencies in Bangladesh (UNHCR, World Food Programme etc.) are struggling to attend to a large number of refugees arriving each day on foot or by boat.  
  • Bangladesh, itself one of the world’s most densely populated nations.
  • It has hosted more than 600,000 Rohingya compared to 40,000 by India.
  • It has plans of making another 607 hectares of land available near the Myanmar border for camps.
  • It has also urged the international community to put pressure on Myanmar to take back the refugees and stop the violence against them.

What are the implications?

  • India’s move to dissociate itself from the Bali Declaration puts into question its respect for human rights and the treatment of minorities.
  • The declaration claims to respect human rights of all people in Rakhine state.
  • It weakens India’s moral authority to speak for minorities in other parts of its neighborhood.
  • Small nations like Nepal, Bhutan and Sri Lanka joined the declaration.
  • Since 2009, Bangladesh has been addressing almost all security concerns of India and proved itself as a trusted neighbor.
  • The India-Bangladesh border today is one of the safest for India, enabling massive redeployment of its vital border resources for other purposes.
  • Bangladesh has neither received water from the Teesta or support in times of humanitarian crisis from its biggest neighbor.
  • The promptness is missing when it comes to supporting Bangladesh in distress situation.
  • Being the largest democracy in the region, India has can play an important role in resolving the Rohingya crisis in Myanmar.
  • Although Myanmar is an important stakeholder of India’s ‘Look East Policy’, its stand on the Rohingya crisis reflects lack of moral leadership.
  • India has failed to rise the occasion in extending its influence in the region.

Why has India failed in generating confidence in the region?

  • India fails to generate confidence in the region due to its complex geopolitics based more on political opportunism and economic interests as opposed to principles and values, practiced consistently.

Shifting ties: (Indian Express, Editorial)

Context:

  • PM Modi’s recent visit to Myanmar marked 70 years of diplomatic relations between the two countries.

Issues:

  •  Shifting India-Myanmar ties
  •  Slow pace of India’s reflexes vis-a-vis China to influence neighbours and safeguard their strategic and economic interests.
  •  Rohingya Issue

Shifting India-Myanmar ties

  •  Over the last 25 years, India has shifted its stand in a bid to square a complicated relationship.
  •  On the side of high principle India stood by Aung San Suu Kyi.
  •  Later, India wooed the Myanmar junta which had imprisoned her for nearly two decades.
  •  After Suu Kyi was released and Myanmar transitioned to democracy, India had to make another shift.

Slow pace of India’s initiatives under the Look-East policy

  •  The Kaladan multi-modal project to connect the north-east Indian states to the rest of India via Myanmar is still incomplete.
  •  The contracts for the remaining work on the ambitious trilateral highway project connecting Manipur to Thailand through Myanmar are yet to be awarded.
  •  The offtake of $500 million-dollar credit line for developmental projects is sluggish.

China taking the lead

  •  The Myanmar Army continues to play a major role in domestic politics. The generals are more comfortable doing business with China.
  • China has investments in an already operational oil and gas pipeline from Myanmar to china, port projects, Myanmar-China railway project, mining and hydro-power projects.

Rohingya crisis

  •  Myanmar has been under severe attack from the international community in recent times for what is being considered as ‘genocide’ against the Rohingya Muslims.
  • Considered by the United Nations as the “most persecuted minority group in the world”, the Rohingyas are a stateless group of people concentrated in western Myanmar, facing brutal assaults from the Burmese state and military.
  •  PM Modi, on his visit to Myanmar, called it a security issue and did not acknowledge the human rights dimension of the crisis.
  •  This came as a respite to the Myanmar leadership, who is facing international condemnation for its handling for the crisis.
  •  However, India’s stand has given rise to dissatisfaction in Bangladesh who has been considerably affected by the crisis.
  •  Later, New Delhi had to modify its position on the Rohingya issue, to also acknowledge that there is now a refugee crisis.

GS-3

Indian Economy. Planning, Growth and Employment


Fall in GDP figures structural, not transient, says SBI report: (The Hindu)         

Context

  • India’s falling GDP in the first quarter of the current fiscal shows underscores the problem as more structural than momentary

Is Goods and Sales Tax the reason for the present fall in GDP?

There has been a lot of talks concerning the manufacturing destocking ahead of GST :

  • India’s economic growth slipped to a three-year low of 5.7% cent in April-June, underlining the uncertainty related to the GST
  • A significant destocking in both consumer as well as investment intensive sectors was already taking pace in 2016-17

What is being done by the Government?

  • The government may cut expenditure to meet the 3.2% target with fiscal deficit touching 92.4% of the budget estimate by the end of July
  • In absolute terms, fiscal deficit — the difference between expenditure and revenue — was Rs. 5.04 trillion of budget estimate till July, against 73.7% in the same period last fiscal.
  • However, with uncertainties involving GST, it would not be prudent for the government to reduce spending as other growth catalysts are missing.

‘NPAs: challenge is to avoid delays’: (The Hindu)

Context

  • The Reserve Bank of India (RBI) has come up with a suggestion asking banks to file insolvency and bankruptcy proceedings for 12 loan accounts, in which banks had an exposure of more than Rs. 5,000 crore each.
  • Bankers worry that appeals to other courts and the workload at the National Companies Law Tribunal (NCLT) may push deadlines out further.

What is the issue?

  • The central bank had asked banks to file bankruptcy cases with the National Companies Law Tribunal (NCLT) within June 30.
  • The RBI had also advised banks to make higher provisions for these accounts to be referred to the Tribunal under the Insolvency and Bankruptcy Code (IBC).

Why was this move taken?

  • According to RBI deputy governor Viral Acharya, the move was intended to improve bank provision coverage ratios and to ensure that banks are fully protected against likely losses in the resolution process.

How is it going to function?

  • Recently, RBI sent banks another list comprising 26 accounts, which they must resolve by December 31, failing which those cases have to be taken up for bankruptcy as well.
  • NCLT is expected to admit or reject a case within 14 days of a case being filed. However, bankers said the time taken by NCLT in some of the cases was beyond 14 days.
  • After a case is admitted, insolvency resolution professionals (IRP) are put on the job to find a resolution process.
  • In case no resolution is possible within six months, another three months’ extension can be given.
  • However, if no resolution is reached even in extended period, the company goes for liquidation.
  • Swift, time-bound resolution or liquidation of stressed assets will be critical for de-clogging bank balance sheets and for efficient reallocation of capital.
  • Bankers and insolvency professionals said there is a need to beef up the infrastructure of NCLT as many cases apart from bankruptcy are also being filed at NCLT.

What are pressures on the bench taking decision?

  • The Bench is under pressure because there are not enough number of Judges.
  • The same bench will be hearing IBC matters, other company law matters, other merger matters, conversion of private limited company to public limited company — all issues are going to the same bench.

What is the requirement?

  • A separate bench for insolvency and bankruptcy cases is the need of the hour.
  • Change from single-member benches to double-member benches.

GST: efficiencies have risen in manufacturing: (The Hindu)

Context

  • Until recently, the manufacturing sector was burdened with multiple indirect taxes.
  • Introduction of GST, in the backdrop of the ‘Make in India’ initiative, does away with multi-layered taxation.

What was the concern?

  • State-border check posts, established to scrutinize documents and location-based compliance, adversely impacted the overall production and logistics time, reducing the efficiency of Indian manufacturers.

How GST has come to rescue?

  • State – border check-posts have been abolished with the introduction of GST.
  • The new tax regime is unifying the Indian market and help smooth the flow of goods within the country.
  • Prior to GST, the inter-state sale was subjected to 2% CST without input credit, whereas GST on inter-state supply is available for input credit.

What is there a need to provide input credit?

  • Input credit will lead to removal of an extra level of warehousing in the supply chain resulting in cost benefits.
  • GST contemplates input credit of tax on supply of goods or services.
  • The GST Act provides a list of services for which input credit is not available. Thus, the system aims to provide seamless input credit.
  • This welcome change help business plan well on product pricing and estimating cash flows.
  • Anti-Profiteering rules commands that any reduction in the tax rate or the benefit of input tax credit needs to be passed on by way of proportionate price reduction.
  • Standing committees, both at the Central and State levels, will examine complaints and refer cases for investigation based on merit.

The setup of the standing committee

  • After investigation, the Directorate General of Safeguards will report to the anti-profiteering authority. The authority will review the report before taking a decision.
  • The authority, within a period of two years, has powers to debar an assesse from conducting business, to levy penalty, or to enforce refund of proportionate price reduction.

How to achieve seamless input credit?

  • Administrative machinery has to ensure that input credit is implemented in letter and spirit.
  • The GST Council has to constantly watch developments and give suitable directions to achieving the objective of seamless input credit.
  • The Council should also ensure that actions taken by the anti-profiteering committee are genuine and not arbitrary.
  • This will boost the confidence of the industry in the GST system and inspire them to concentrate on business development.
  • The Council has to take a realistic view in making changes to the tax rate for certain goods and services about which select industries are concerned.

Search for quality: (The Hindu, Editorial)

Context

Securities and Exchange Board of India has released a consultation paper and sought feedback on a new set of rules to improve “market efficiency” and enhance “the governance, accountability and functioning of credit rating agencies”.

Will SEBI’s proposed rules improve the quality of credit rating services?

Credit rating agencies may be in a tough spot as Securities and Exchange Board of India continues to tighten the screws on them.

What are the provisions?

  • New set of rules were drafted to improve “market efficiency” and enhance “the governance, accountability and functioning of credit rating agencies”.
  • Among them are provisions to restrict cross-shareholding between rating agencies without regulatory approval to 10%, and increase the minimum net worth requirement for existing and new agencies from Rs. 5 crore to Rs. 50 crore.
  • Another mandates at least five years’ experience for promoters of rating agencies.
  • SEBI has proposed disclosure norms to improve investor awareness about the operations of rating agencies.

Rationale of the proposed rules

  • The spin-off of non-core operations of rating agencies will allow SEBI to focus on regulating just their credit rating operations.
  • SEBI has spelt out its rationale for proposing each of the rules.
  • SEBI’s predominant concern, apart from improving the information available to investors, seems to be to prevent rating agencies from resorting to collusion in reaching decisions.

What could be the possible impact of the new rules on credit rating services in India?

  • The new rules may not have any substantial impact on the quality of credit rating in India.
  • The intended effects of the rules sound convincing. What is unclear are their unintended effects on competition in the rating space.
  • Also, how the rules will address the problem of “rating shopping” that plagues the business of credit rating in the country is unknown.
  • The present business model of rating agencies is seen to allow considerable room for issuers of securities to shop for a favourable rating or avoid negative ratings by severing their ties with these agencies.
  • Prudential regulation is thus justified to tackle this problem.
  • This criticism, however, ignores the reputational damage these agencies suffer after each corporate default.
  • Repeated failures have not affected the business of rating agencies, primarily due to the lack of alternative service providers who can help out investors.
  • Individual creditors have thus had to trust the ratings of the existing rating agencies at their own peril, even after repeated crises.
  • As is well-known today, the Indian credit rating market is an oligopolistic one due to the high barriers to entry.
  • SEBI’s proposed move to impose further quality requirements on rating agencies is unlikely to change things for the better, or raise further barriers.

Way forward

  • The way forward lies in making it easier for new players to enter the credit rating space and compete against incumbents.
  • This will go a long way towards making credit rating agencies actually serve creditors rather than borrowers.

No feel for the pulse: (Indian Express, Editorial)

Context

In 2016-17, India witnessed its highest ever domestic production of pulses, but in spite of that prices crashed last year

What is the significance of pulses in India agriculture?

  • Pulses are an interesting and unique commodity group in the Indian agri-food space.
  • The country ranks first not only in their production and consumption, but also their import.
  • Domestic absorption in recent years (2012-13 to 2015-16) has hovered between 21 million metric tonnes (MMT) and 23 MMT, while domestic production has ranged from 16.4 MMT to 19.3 MMT.

What is the reason behind the record production in 2016-17?

  • The record production can plausibly be attributed to a normal monsoon in 2016 after two consecutive drought years, and
  • High market prices of pulses prevailing at the time of the kharif sowing and steep hikes in the Minimum Support Prices (MSP) — up to 9.2 per cent for kharif and 16.2 per cent for rabi pulses.
  • These favorable conditions significantly drove up kharif acreage to almost 36 per cent above normal.
  • The production of kharif pulses increased by nearly 70 per cent in 2016-2017 over that of the previous year and the total production of pulses increased by about 40 per cent.

What has gone wrong?

  • Normally, in a year of such bumper production, imports would be expected to fall significantly and one would assume India to have become self-sufficient in pulses — a goal that had its origin in the Technology Mission on Pulses, nearly 27 years ago.
  • However, India imported a record 6.6 MMT of pulses, valued at nearly $4.3 billion at zero import duty
  • As a result, domestic supply of pulses in 2016-17 shot up to 29.6 MMT, way above the typical supply of 22-23 MMT.
  • This caused wholesale prices to crash, despite a bold and first-of-its-kind effort by the government to procure around 1.6 MMT of pulses
  • If there is no change in the government’s methods, we may either witness a decline in production of kharif pulses or another price crash this year. That may spur another round of farm loan waivers.

What is the solution?

  • The landed price of imported pulses should not be below the MSP of domestic pulses, else the MSP is irrelevant.
  • For our farmers to have a level-playing field, exports of all pulses must be opened up without any quantity or minimum export price (MEP) restrictions. Export restrictions betray anti-farmer policies.
  • Pulses should be de-listed from the Agricultural Produce Market Committee (APMC) Act so that farmers can sell freely to whosoever they like, enabling a better realisation for the agriculturalists and a compression of the pulses value-chain.
  • The relevance of the Essential Commodities Act (ECA), especially the provision that imposes stocking limits, must be critically evaluated and the act should be amended drastically
  • It is crucial to give the farmer right incentives — at least some reasonable margin above the cost of production
  • Finally, futures trading should also be allowed for all types of pulses so that planting and selling decisions of farmers are based on a futuristic rather than a backward-looking price information

Why infections picked up in hospitals are the big threat today, how world is trying to cope:

Context

  • A Bengaluru firm has become India’s first to receive the international Combating Antibiotic Resistant Biopharmaceutical Accelerator (CARB-X) grant to develop antibiotics to treat hospital-acquired infections.

What is Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB – X)?

  •  CARB-X, or Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator, is a public-private international partnership.
  •  The partnership provides a new, collaborative approach to speed research, development and delivery of new antibiotics, vaccines, diagnostics, and other innovative products to address the urgent global problem of drug-resistant bacterial infections.

Why was CARB instituted?

  •   It was set up in 2016 to focus on innovations to improve diagnosis and treatment of drug-resistant infections.
  •   It grew out of President Barack Obama’s 2015 Combating Antibiotic Resistant Bacteria (CARB) initiative.
  •  CARB-X is headquartered at BU Law, and will provide grants up to $ 455 million (over Rs 2,900 crore) over a five-year period to firms across the globe for antibiotics R&D.

From where is the CARB funding comes from?

  •    CARB is funded by the London-based biomedical research charity Wellcome Trust, and the Biomedical Advanced Research and Development Authority (BARDA) of the US Department of Health and Human Services.
  •   There were two sets of funding announced on March 30 and July 25, 2017, covering 18 projects in six countries.
  •   All CARB-X funding so far is focused on projects to address the most resistant “Gram-negative” bacteria.

what are Gram-negative bacteria?

  •   Bacteria are classified as Gram-positive and Gram-negative, based on a structural difference in their cell walls that is detectable through a staining technique developed in 1884 by the Danish bacteriologist Hans Christian Gram.
  • Gram-negative bacteria are responsible for 20-25% of infections, and are multi drug resistant, which is the ability of bacteria to defend themselves against drugs that try to kill them.

What is Antibiotics resistance?

  • Antibiotic resistance is a subset of antimicrobial resistance (AMR), which is a wider category that covers resistance in all micro-organisms bacteria, parasites, viruses and fungi to drugs.
  •  Some 700,000 people die of resistant infections every year globally, a number that is estimated to rise to 10 million by 2050.

Why has antibiotic resistance become a global crisis?

  •  Antibiotic resistance has become a global crisis that threatens the management of infections, both in the community and in hospital practice.

Reason behind it are:

  •  The indiscriminate use of antibiotics, including against viral infections;
  •  Their prolonged use in patients admitted to hospitals;
  •  Their abuse in animal husbandry as growth promoters;
  •  Cheaper antibiotics such as penicillin, tetracycline or co-trimoxazole can often no longer cure an infection.
  •  The high-end antibiotics like third- and fourth-generation cephalosporin and carbapenem are commonly used.
  •   In hospital critical care units, more than 50% organisms are now resistant even to these drugs.

How is antimicrobial resistance a serious threat to India?

  •  India, because of its sheer numbers, poor literacy and awareness, and lax controls over medical practices, is on the frontlines of the global AMR public health crisis.
  • A 2015 WHO multi-country survey recorded “widespread public misunderstanding” about antibiotic use in India.
  • The Health Minister J P Nadda, in April 2016, highlighted antimicrobial resistance as a “serious threat to global public health”.
  • As per the National Action Plan on Antimicrobial Resistance (NAP-AMR), the crude mortality from infectious diseases in India is 417 per 100,000, and India is among countries with the highest burden of bacterial infections.

How is India trying to get rid of it?

  •  Two, an Indian company, Bangalore-based Bugworks Research, has received an Initial fund of $ 2.6 million for its work on a new class of antibiotics to fight what is known as the “ESKAPE”.
  • ESKAPE is group of pathogens (Enterococcus faecium, Staphylococcus aureus, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa, and Enterobacter species).
  • ESKAPE pathogens are considered the leading cause of nosocomial (hospital-born) and hospital acquired infections throughout the world.
  • India has formed a National Surveillance System for AMR, and issued National Guidelines for use of antibiotics.
  • A national policy for containment of antimicrobial resistance was formulated in 2011.
  • Health Minister J P Nadda released a multi-sectoral National Action Plan on Antimicrobial Resistance (NAP-AMR) 2017-21 earlier this year.

What is Delhi Declaration?

  • Several Ministers signed a ‘Delhi Declaration’ to strategies together to contain AMR.
  • Specific objectives of the plan include the prevention of emergence and spread of resistant bacteria through infection prevention and control, optimized use of antibiotics in all sectors, and enhanced investments for AMR activities, research and innovations.
  • The plan also aims to enable monitoring and evaluation (M&E) of the implementation of NAP-AMR based on the M&E framework.

India, U.S. in talks for C-17 deal: (The Hindu)

Context

  • India plans to buy another Boeing C-17 Globemaster from the United states

What shall be the terms and conditions of the contract?

  • The aircraft shall be handed over within a month of signing the contract
  • The validity of the contract expires in mid-October
  • The aircraft, along with associated equipment, technical support and warranty, is estimated to cost $366.2 million.
  • The handover will be done in the U.S. itself, and it will be flown to India by Indian pilots

What will be the Significance of this deal?

  • The Boeing C-17 aircraft has become the mainstay of India’s humanitarian assistance and disaster relief efforts.
  • The proposed sale will improve India’s capability to meet the existing and future strategic airlift requirements.
  • India lies in a region prone to natural disasters and will use the additional capability for humanitarian assistance and disaster relief
  • Boeing made 10 additional aircraft without any order and offered them to all existing customers, including India.

 

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