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Q.1) Nepal’s Prime Minister K.P. Sharma Oli recently stated that he will not sign any treaty against Nepal’s interest.  Does this indicate tensed India-Nepal relations? Examine (GS – 2)

Introduction:

  • Nepal’s Prime Minister K.P. Sharma Oli’s trip to India comes amid a hitch in bilateral ties of India and Nepal.
  • P. Sharma Oli had to step down as Nepal’s Prime Minister in 2016 following a blockade on the India-Nepal border.
  • Also Nepal decided to join China’s One Belt One Road policy amid India’s concerns that the Chinese initiative would harm its strategic and economic interests.

Major takeaways from the visit of Nepal’s Prime Minister K.P. Sharma Oli to India are:

  • Expression of readiness to revise and update the 1950 Treaty of Peace and Friendship between India and Nepal.
  • Review of the entire spectrum of multifaceted ties between the two countries,
  • Appreciation of the growing partnership between the two governments, private sector and at the people’s level,
  • Underscoring the importance of regular high-level political exchanges in strengthening bilateral ties.
  • Inauguration of the Integrated Check Post at Birgunj in Nepal.
  • Please note: The Integrated Check Post Enhance cross-border trade and transit of goods and movement of people
  • Enumeration of India’s ‘Sabka Saath Sabka Vikas’ as a guiding framework for India’s engagement with its neighbors’for a shared vision of inclusive development and prosperity.
  • India congratulated the people and the Government of Nepal for successful conduct of local level, federal parliament and first-ever provincial elections in Nepal.
  • Three separate joint statements on the following key areas of mutual interest were issued:
    • India-Nepal Statement on New Partnership in Agriculture
    • India-Nepal Statement on Expanding Rail Linkages: Connecting Raxaul in India to Kathmandu in Nepal, and
    • India-Nepal Statement on New Connectivity through Inland Waterways.

Reason behind not signing any treaty is:

  • The history, size, levels of population and development are different between the two countries which reflects the differences.
  • Nepal won’t sign anything against the interest of the nation because there is a fact.
  • There are such treaties that need to be corrected and updated according to the present time needs of the Nepali people and mutual interests, and for mutual respect.

Conclusion:

  • Thus, being a neighbor country differences will be there, but this trip has surely helped clear misunderstandings and mistrust between the two nations.

Q.2) What is the slew of arguments revolving around 15th Finance Commission’s Terms of Reference (ToR)? Do you think that opposition by the states is justified?

Introduction:

  • After the introduction of 15th Finance Commission, there have been a slew of arguments against its Terms of Reference (ToR).

Major issues revolving around 15th Finance Commission’s Terms of References are as follows:

  • While the terms of reference for the 14th Finance Commission were to use the 1971 Census data for determining devolution of taxes, duties and grants-in-aid.
  • The Central government asked the 15th Finance Commission’s ToR to use the 2011 data.
  • This move would result in lower resource allocation to the southern States.
  • Responses to the concern: (11th April, 2018)
  • Union Finance Minister Arun Jaitley, denied the criticisms.
  • According to him:
    • Finance Commissions use both qualitative and quantitative criteria
    • Population figures serve as a good proxy for the needs of the people in a quantitative sense.
    • Income distance captures the relative poverty, to provide a qualitative analysis.
    • The Terms of References of 15th Finance Commission rightly balance both the “needs”represented by latest population and “progress towards population control”.
    • Also, it recognizes the efforts of all the States which have done well in population control.
  • Please note: The next meeting regarding the issue will be held in May, 2018.
  • Telangana, Tamil Nadu, Delhi, West Bengal, Odisha and Punjab are also expected to take part.

Conclusion:

  • The need of the hour is to address the concerns of stakeholders and evolve principles that lead to an equitable distribution of resources between states and between centre and states.

Q.3) Write short notes on:

a) Earning power in economics (GS – 3)

b) Client politics in political science (GS – 2)

Earning power in economics (GS – 3)

  • Earning power is notion that people care more about the nominal value of money rather than its real value.
  • According to this idea, workers, for instance, would be impressed if their wages double in a year even if the real value of their money were to drop by more than half during the same period.
  • The concept, credited to British economist John Maynard Keynes, has been heavily criticised for its assumption that people are naïve.
  • The theory of rational expectations, which among other things states that people learn from experience and can reset their earlier beliefs, was a response to the idea of money illusion.

Client politics in political science (GS – 2)

  • Client politics is a political situation where government policy is influenced by the interests of a small minority, rather than that of the overwhelming majority.
  • In politics, smaller groups at times can exert a disproportionate influence on government policy by virtue of being more organised than larger groups.
  • Individuals in these smaller groups have more incentive to organise since the benefits they gain from a favourable policy are larger when they are part of a smaller group.
  • In contrast, individuals in larger groups have lesser incentive to organise since the benefits they gain are smaller.
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