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GS: 2

International relations:

India, UAE to deepen strategic ties, counter terror(The Hindu)

The External Affairs Ministry has recently announced that India and the UAE will hold a bilateral naval exercise.


  • It has been declared that India and the UAE will hold naval exercise as maritime security becomes a crucial domain of cooperation focussing on Indian Ocean and the Gulf region.
  • This declaration came during Prime Minister Narendra Modi’s discussion with the leadership of the Gulf country with both sides agreeing to deepen the strategic partnership and counter terrorism and threats to stability in the region.
  • The decision to conduct the first bilateral Naval Exercise during 2018 was first taken during the latest round of JDCC [Joint Defence Cooperation Committee] held in New Delhi in December 2017.
  • Both India and the UAE have resolved to continue working together towards the adoption of India’s proposed Comprehensive Convention on International Terrorism in the United Nations.
  • The countries have affirmed partnership on the cyber front and declared that joint research and development centres of excellence to fight cyber threats will be expedited.
  • Further, India and UAE has also reviewed contribution from UAE’s sovereign wealth fund ADIA (Abu Dhabi Investment Authority)
  • Prime Minister Modi has also welcomed ADIA’s participation in India’s National Infrastructure Investment Fund as an anchor investor and welcomed DP World’s agreement with NIIF to create a joint investment platform for ports, terminals, and transportation and logistics businesses in India
  • There has also been a landmark concession to an ONGC-led energy consortium by ADMA-OPCO in lower Zakum oil fields of UAE

Let the chips fall where they may(The Hindu Opinion)

Dealing with the unfolding political drama in the Maldives requires a great deal of craft, patience and diplomacy.


  • Instead of restoring democracy and civil liberties in Male, India must look after its strategic interests in the increasingly chaotic Indian Ocean Region.

What is in news?

  • Ever since Abdulla Yameen Abdul Gayoom became the President of the island nation in 2013, the country has grown closer to China.
  • There are also fears that Male might eventually allow Chinese military presence on its soil, thereby providing China with a strategic military base in the Indian Ocean.
  • The current events, therefore, have India worried, and rightly so.

Changing dynamics:

  • India’s fundamental concern is not the suspension of civil liberties or setback to democracy in the Maldives.
  • It is how China would increase its stocks in Male at the expense of India.
  • India has of late been anxious about its steadily losing stature in the neighborhood i.e. its inability to act in the Maldives will only further accentuate this reality.
  • South Asia traditionally had one hegemon, India; today it has two, India and China.
  • India should desist from undertaking “civilising missions” to educate its neighbours on civil liberties and democracy.

Costs of an Indian intervention:

  • The costs of an Indian intervention gone wrong would far outweigh any potential benefits from a successful intervention.
  • An Indian intervention, especially by an overtly Hindu-right wing government, will push the Maldives towards more Islamist politics, something the Gayoom regime will use to its advantage.
  • There is no guarantee that a military or some other overt form of intervention in the Maldives would ensure a rift between China and the Maldives; instead, it may even have the reverse effect.
  • Indian intervention could also complicate life for over 25,000 Indian expatriates who live and work in the Maldives.
  • Sermons about civil liberties and democracy are a double-edged sword that could easily come back to haunt us.


  • Intervening in what is strictly a domestic political issue of the Maldives would also be in breach of India’s traditional approach to dealing with crises in its neighbourhood.

Indian Constitution and Polity:

Govt. ignoring the plight of children: SC(The Hindu)

The Supreme Court has criticised the government for being slow in implementing juvenile justice laws and ignoring the plight of the children

Highlights of the Judgement:
The Social Justice Bench of Justices Madan B. Lokur and Deepak Gupta has described the government’s negligence of children

This included:

  • Pendency of cases of orphaned, abandoned and surrendered children,
  • The poor conditions of children in observation and care homes,
  • The increasing number of vacancies in juvenile justice institutions
    The lack of initiatives by legal services authorities despite the Juvenile Justice (Care and Protection of Children) Act, 2000, and its improved version passed in 2015

The Bench commented that is high time for the state to strongly and proactively acknowledge that even children in the country have fundamental rights and human rights. These rights and they need to be enforced strongly



Why the fuss about fiscal deficit?(The Hindu)


  • India’s fiscal deficit in the past ten years (based on actuals) has hovered between 3.5% and 6.4% of nominal GDP.

Expenses overshoot

  • In FY18, the Centre’s total income (as per the revised estimates) from taxes, non-tax revenues and capital items is estimated at Rs. 16.23 lakh crore.
  • But it expects to incur a total expenditure of Rs. 22.17 lakh crore.
  • Expenditure will thus overshoot income by about 36.5%, leaving a shortfall of Rs. 5.94 lakh crore.

Fiscal deficit:

  • The fiscal deficit paints a more complimentary picture of government finances than necessary, because it counts both one-off receipts (from asset sales, recovery of loans etc) and recurring items (taxes) as part of the government’s ‘income’.
  • India’s fiscal deficit in the past ten years (based on actuals) has hovered between 3.5% and 6.4% of nominal GDP.


  • The borrowing target for the year is closely watched by the bond market because the larger the government’s loan-taking, the less room for other borrowers — companies, small businesses, individuals — to raise funds from India’s relatively shallow bond market.
  • By end-March 2018, the outstanding loans of the Central government are estimated to hit Rs. 82.32 lakh crore.

Unproductive spending:

  • The bulk of the expenditure each year is absorbed by just three recurring items — interest payments, pensions and subsidies.
  • In the FY18 revised estimates, for instance, interest payments (by far the largest item of expense) were expected to absorb Rs. 5.3 lakh crore, pensions Rs. 1.5 lakh crore and subsidies Rs. 2.3 lakh crore.
  • Servicing interest payouts alone will take up 32% of the Centre’s earnings this year, while pensions and subsidies absorb another 23%.
  • With 23% allocated to State grants and 16% to defence expenditure, these repetitive expenses will effectively mop up 95% of the total Budget receipts.
  • In FY18, just 12% of the budget was defrayed in capital spending.

Fiscal Responsibility and Budget Management (FRBM) Act

  •  Responsibility and Budget Management (FRBM) Act which enjoins the government to steadily tighten its fiscal and revenue deficits over the years, while reining in its debt-GDP ratio.
  • It must also ensure that its receipts grow at a far faster pace than expenses in future, so that the debt can be paid down.

Progress on fiscal consolidation post-FY14:

  • For starters, in the four fiscal years between FY14  and FY18, the Centre’s receipts have grown at a faster pace than its expenditure.
  • The Centre’s total receipts (excluding borrowings) have shot up by 50% between FY14 and FY18.
  • Total expenditure in the same period registered a slower 39% increase.
  • Even better, spending on interest, pensions and subsidies rose by a much lower 30%, thus freeing up room for other expenditure.
  • The reined-in deficit has meant lower recourse to borrowings in order to bankroll spending.
  • In FY14, as much as 32% of annual Budget spending came from borrowings, but by FY18 it was down to 27%.


  • It is important for government to stick to its path of  fiscal consolidation.

Hardly a gamechanger(The Hindu Opinion)


The National Health Protection Scheme announced in this year’s Budget has generated a lot of debate.

Why in news?

  • The government has committed to “providing coverage up to Rs. 5 lakh per family per year for secondary and tertiary care hospitalisation” for 10 crore poor families, with approximately 50 crore people as beneficiaries.

Targets :

  • The National Sample Survey (NSS) 71st round (2014) unit record data for “Social Consumption in India.
  • Health” shows that only 11.3% of the bottom 40% (10.5% covered by government insurance) population has any insurance coverage as against 17.9% for the top 60% (14.3% covered by government insurance).
  • The latest official data for 15 States show, starting from 2008, only 66% of the target below poverty line population has come under coverage of the Rashtriya Swasthya Bima Yojana (RSBY).
  • The government-run health insurance programme for the poor in 2017-18, the government allocated only Rs. 1,000 crore for RSBY, covering roughly 10% of the bottom 40% of the population.

The problem in terms of the rate of hospitalisation and reimbursement of expenses

  • The rate of hospitalisation for those covered under some kind of health expenditure support is higher than those without any cover, for the bottom 40% as well as the entire population.
  • Reimbursement as a percentage of medical cost of hospitalisation in government schemes is abysmally low, especially for the bottom 40% of the population.
  • This raises questions about the efficacy of government schemes.
  • The proportion of hospitalisation cost reimbursed is much higher for insurance schemes directly bought by households than government ones.

For private players:

  •    Health insurance creates a larger market for private players.

‘Inflation to moderate to 5% for Jan.’(The Hindu)


Foreign brokerage Morgan Stanley has recently stated in its report that retail inflation is expected to moderate at 5% for January

Highlights of the Report:

  • The report has stated improvement in both inflation and trade deficit numbers for January
  • Improvement in inflation numbers has been helped largely by the seasonal dip in vegetable prices
  • However, the report has flagged concern that “moderate risks to macro stability are emerging on account of the wider-than-targeted fiscal deficits.”

Additional Information:

  • Consumer price inflation (CPI) stood at 5.2% in December
  • Official data for consumer price inflation (CPI) for January would be released by the government soon.

New rubber policy soon: Alphons(The Hindu)


  • The Central government will soon come out with a new Rubber Policy which will ensure remunerative prices for natural rubber.

Focus areas:

  • All the issues, including minimum support price for natural rubber, possibility of introducing Minimum Import Price for the produce, and concerns over the introduction of BIS for cup lump as a precursor to its import, would be looked into before formulating the policy.

Safeguard measures for rubber against import:

  • The Central government had brought in anti-dumping duty for tyre imports from China.
  • The Central government needs to pass on the huge accruals in the form of import duty on rubber to the farmer.

Cryptocurrency: ‘trustless’ nature irks regulators(The Hindu)


  • Last October, the Board of the International Organization of Securities Commissions (IOSCO) discussed the growing usage of Initial Coin Offerings (ICOs) to raise capital as an area of concern.

The risk factors:

  • ICOs typically involve the creation of digital tokens and using distributed ledger technology and their sale to investors in return for a cryptocurrency.
  • It also said that the term ICO, stems from “initial public offering” (IPO), i.e. a floatation on a stock exchange.
  • ICOs are highly speculative investments in which investors were putting their entire invested capital at risk.
  • In Budget 2018, the government did not consider cryptocurrencies legal tender and would aim to eliminate their use in financing illegitimate activities.
  • Acquisition of cryptocurrency coins may result in substantial risks for investors.
  • These currencies are highlighted as “trustless” nature and are “not backed by anything real” such as gold.


  • Investors should go beyond the headlines and try hard to understand the risks associated with investments in cryptocurrencies, as well as cryptocurrency futures contracts and other financial products.
  • As ICOs are a highly speculative form of investment, investors should be prepared for the possibility of losing their investment completely.

15 months on, RBI still processing returned notes(The Hindu)


  • After demonetization, the Reserve Bank of India has said that Rs. 500 and Rs. 1,000 notes are still being processed for their arithmetical accuracy and genuineness.

Number of demonetised notes:

  • The estimated value of specified bank notes received as on June 30, 2017 is Rs. 15.28 trillion (lakh crore).
  • As to finish the counting of demonetised notes specified bank notes are being processed in an expedited manner.

New initiatives:

  • The RBI will also soon have greater flexibility in terms of managing its liquidity operations with the addition of one more tool ‘Standing Deposit Facility Scheme’.
  • This would provide the RBI a new tool for liquidity management, particularly in times when the money market liquidity is in excess to deal with post-demonetisation like scenario.
  • Finance Minister Arun Jaitley, in his Budget, had proposed to amend the RBI Act to empower the central bank to come up with an additional instrument for liquidity management.

CRR hike:

  • Post-demonetisation, the RBI ran out of securities to offer as collateral.
  • It had to temporarily hike its cash reserve ratio (CRR) to force banks to park extra deposits with it.
  • The CRR is the portion of deposits that banks have to compulsorily park with the RBI.
  • Currently, the CRR is pegged at 4%.

States of health(The Hindu)


NITI Aayog’s first Health Index has provided a platform for wider public debate.

About the Report:

  • The report titled “Healthy States, Progressive India”, measured the health index through various indicators
  • The reference year for most indicators is 2015 or 2016 and the base years to gauge improvement are between one and three years before the reference year.
  • The health index has been evolved through comprehensive study and inputs from World Bank and Ministry of Health and Family Welfare
  • Health Index report, for the first time, has attempted to establish an annual systematic tool to measure and understand the heterogeneity and complexity of India’s performance in the health sector

Highlights of the Report:

  • Kerala, Punjab and Tamil Nadu were the top rankers in the Health Index
  • Uttar Pradesh was the worst performing state.
  • Manipur registered maximum incremental progress in indicators such as PLHIV on ART, first trimester antenatal care registration, grading quality parameters of Community Health Centres, average occupancy of key state-level officers and good reporting on the Integrated Disease Surveillance Programme (IDSP).
  • Lakshadweep showed the highest improvement in indicators such as institutional deliveries, TB treatment success rate, and transfer of National Health Mission funds from the state treasury to implementation agency.
  • Kerala has ranked first in overall performance. However, there has been least incremental change as it had already achieved low levels of Neonatal Mortality Rate, Under-five Mortality Rate and replacement level fertility, leaving limited space for any further improvement

What are the common challenges for most states and UTs which need to be addressed?

  • The need to focus on addressing vacancies in key staff,
  • Establishment of functional district cardiac care units,
  • Quality accreditation of public health facilities and institutionalisation of human resources management information system
  • Almost all larger states need to focus on improving the Sex Ratio at Birth

Significance of the Index

  • The Index is expected to nudge states towards further achieving a rapid transformation of their health systems and population health outcomes
  •  Health care is not a mainstream political issue in India. The Index, with all its limitations given uneven data availability, is expected to make a difference in this by encouraging a competitive approach for potentially better outcomes.

Turf war(The Hindu Opinion)


  • The National Stock Exchange, the Bombay Stock Exchange and the Metropolitan Stock Exchange of India decides to stop providing data feed and other support to overseas exchanges that list derivatives linked to Indian stocks and indices.
  • Any existing agreement allowing data-sharing with foreign bourses, except that which is related to exchange-traded funds, will expire in six months.

Reasons for the present move:

  • Offshore derivatives could be causing migration of liquidity from India, which is not in the best interest of Indian markets.
  • Given that the volume of derivatives linked to Indian stocks trading in the offshore market is higher than volumes in the domestic bourses.
  • Ambitious endeavors may also benefit from the crackdown on offshore derivative markets.
  • In India, the securities transaction tax and the capital gains tax discourage foreign investment in financial assets.
  • The proposal to extend trading hours in order to attract investors too has failed to take off.
  • The present move, thus, is unlikely to rein in the vast offshore market for Indian derivatives.

Way forward:

  • India’s policymakers should address the structural problems that have caused trading in Indian derivatives to move offshore.

Internal security:

Cyberspace shouldn’t help trigger terror: PM(The Hindu)


  • Prime Minister Narendra Modi at the World Government Summit cautioned the world that technology should be harnessed as a tool for development, not destruction.

Key highlights of Prime Ministers Narendra Modi’s speech:

  • The Prime Minister highlighted the following points:
  • India is aspiring to assume leadership position in Artificial Intelligence, Nano, cybersecurity and cloud computing.
  • It is important to assimilate technology with governance to ensure equitable growth and prosperity for all.
  • There are concerns over attempts by some people to radicalise cyberspace with the use of technology, for example, its use by jihadists to recruit cadres online.


Poachers kill rhino, escape with horn(The Hindu)


Assam Governor Mukhi has directed authorities to take all measures to prevent poaching of rhinos.

What has happened?

  •  Recently, an adult rhino has been killed by poachers in the Western range of the Kaziranga
  •  The incident took place at Polokata near the Sitamari area — a sandbar island in the Brahmaputra -south of the Baghmari powergrid station under the Lahorijan forest camp.

Previous instances

  • This is the second rhino poaching incident in Kaziranga in 2018
  • During the ongoing budget session of the Assam Assembly, Forest Minister Pramila Rani Brahma had said that altogether 74 rhinos have been killed by poachers in Assam since 2015
  • As many as 21 rhinos were killed in 2015, 22 in 2016 and 9 in 2017

A plan to save the Great Indian Bustard(The Hindu)


  • The Forest Department is framing an action plan to save Great Indian Bustard in Karnataka where its numbers are fast decreasing.

About Great Indian Bustard:

  • The Great Indian Bustard or Indian bustard is a bustard found in India and the adjoining regions of Pakistan.
  • A large bird with a horizontal body and long bare legs, giving it an ostrich like appearance, this bird is among the heaviest of the flying birds.
  • Once common on the dry plains of the Indian subcontinent, as few as 250 individuals were estimated in 2011 to survive and the species is critically endangered by hunting and loss of its habitat, which consists of large expanses of dry grassland and scrub.
  • These birds are often found associated in the same habitat as blackbuck. It is protected under Wildlife Protection Act 1972 of India.
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