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Entrance Test 07 and 11th June 2018

GS 2

Modi likely to take the spirit of Wuhan to Qingdao

SCO, India-China, world order


  1. India will be participating in Shanghai Cooperation Organization (SCO) summit scheduled in Qingdao as a permanent member for the first time

Important Facts:

  1. The full members of SCO include China, Russia, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan, India and Pakistan.
  2. India and Pakistan became full time members of the Shanghai Cooperation Organization in 2017.
  3. The SCO summit is expected to reject the concept of anti-globalization and unilateralism and promote Multilateralism.
  4. The “America-first” doctrine of U.S. which has encouraged protectionism and threat of trade wars had provided an underlying meaning to the Wuhan summit.
  5. The issue of China-Pakistan Economic Corridor (CPEC) is expected to be discussed  in the summit.
  6. The positive side of Wuhan and Sochi summit.
  • In the Wuhan Summit consensus which was reached between India and China would be reflected at the SCO summit.
  • The positives of the Sochi Summit would be carried over to the SCO Summit
  • Russia, China and India are likely to emerge as the core of the SCO

Questions of promotion



Faizan Mustafa, VC of NALSAR University analyses Supreme Court’s recent verdict on reservation in promotions

Important Analysis:

  1. The Supreme Court has given an interim order permitting the Centre to provide reservation inpromotionfor SC/ST employee “as per law”
  2. However, the reservations in promotions can be challenged on the basis of conditions laid down by earlier judgements. According to Article 141, these judgements are law declared by Supreme court and binding on all courts

Important Supreme Court Verdicts

  1. State of Madras vs. Srimathi Champakam Dorairajan, 1951
  • The case related to medical and engineering seats
  • Madras High Court had eliminated the reservation policy
  • This judgement led to the introduction of Clause (4) in Article 15, through an amendment in 1951
  • Article 15(4) empowers the state to make special provisions for advancement of socially and educationally backwards or SC/STs.
  1. Balaji, 1962

SC Verdict

  • Prior to formulation of reservation policy, the government does not need to appoint a commission to determine backwardness
  • The executive orders providing reservation was held valid
  • Though important, caste is not the only determining factor of backwardness
  • ‘Caste’ and ‘class’ are not synonymous
  • SC removed the distinction between ‘backward’ and ‘more backward’
  • Introduced a 50% upper limit on reservation
  1. Devasan, 1963:
  • The provision of ‘carry forward’ in reservations was removed
  • Carry forward means that if the reserved seats remained unfilled in a year, they would be carried forward in next year
  1. A. Rajendran, 1967
  • In this case, the government’s reservation policy of 1963 which did not provide for reservations of post in Class1 and Class2 posts was challenged
  • The SC upheld the policy and observed that reservations in appointments and promotions were discretionary and not constitutional duty of the state
  1. State of Kerala vs. N.M Thomas, 1975
  • Did not extend reservations in promotions
  • However, provided 2 years exemption to SC/ST candidates in passing tests
  1. Indira Sawheny, 1992
  • The 27% reservation quota for backward classes was challenged in SC


  • Article 16(4) is not an exception to Article 16(1)
  • Caste is quite often a social class in India; SC and STs are definitely socially backward
  • Classification between ‘backward’ and ‘most backward’ is constitutionally permissible
  • Creamy layer to be removed from reservation for OBCs
  • There should be no reservations in promotions
  • Reservation should not apply to some services and certain posts
  • 77th Amendment, 1995: To enable the government to provide reservation in promotion.
  1. Virpal Singh Chauhan (1995) and Ajit Singh (1999)
  • SC introduced ‘catch up rule’.
  • This was to enable general candidates to regain their seniority immediately on promotions of SC/STs who had been promoted earlier through reservations
  • 85th Amendment, 2001: To provide consequential seniority to SC and ST candidates promoted by giving reservation.
  1. V Chinaiah, 2004
  • Upheld that SCs are most backward among all backwards.
  1. Nagaraj, 2006:
  • 77th and 85th amendments were challenged
  • SC held that was it not mandatory for the state to maintain reservations for SCs/STs in promotions.
  • If the state wishes to do so, should first gather quantifiable data to show backwardness of the communities and their inadequate representation in public employment.
  1. Ashoka Kumar Thakur, 2008
  • SC observed that creamy layer doctrine is not relevant in SC/St reservation
  1. Authors’ View on Efficiency of employees:
  • The author criticises the notion that employees who have been appointed in the non-reserved posts perform better than those who appointed under reserved category
  • He further observes that there has been no research which establishes that SC/STs are less efficient than employees appointed under general category.

U.S. wants India out of S-400 deal

US-India-Russia, S-400


  1. The state department of U.S. has warned India against the violation of Countering America’s Adversaries through Sanction Act or CAATSA.

Important Facts:

  1. About Countering America’s Adversaries through Sanction Act or CAATSA.
  • Countering America’s Adversaries through Sanction Act was enacted in August 2017.
  • The Act empowers the U.S. to impose a sanction on the countries that have significant defence cooperation with Russia, Iran and North Korea.
  • CAATSA aims to counter the aggression by Iran, Russia and North Korea through punitive measures.
  1. India is planning to buy five S-400 Triumf air defence systems for around $4.5 billion from Russia.
  2. The US has initially signalled waiver for India but their instance seems to be changed now.
  3. The US said that they tried to find a way so that defence preparedness of India won’t be impacted.

Indonesia wins UNSC vote

UNSC non-permanent member


  1. The UN Security Council has selected Indonesia as a non-permanent member.

Important Facts:

  1. The Maldives and Indonesia had contested for the seat in the UN Security Council.
  2. Indonesia secured 144 votes whereas Maldives won 46 out of total 190 votes.
  3. Indonesia has been elected as a non-permanent member for a two-year term on the Security Council starting on Jan. 1, 2019.
  4. A total of 190 members participated in the UN Security Council voting.
  5. To be a member of the council the concerned country has to get more than a two-thirds majority or 127 votes.
  6. Other newly elected non-permanent members include Germany, Belgium, Dominican Republic and South Africa.


‘Uranium contamination in Rajasthan groundwater’

Uranium pollutant


  1. Recently a study conducted by Duke University, USA and Central Groundwater Board of India has found widespread uranium contamination in groundwater from aquifers in 16 Indian states.

Important Facts:

  1. WHO and US Environmental Protection Agency (EPA) standards for uranium level for safe drinking water: 30 micrograms of uranium/litre
  2. However, in India Uranium is not included in list of contaminants monitored in drinking water specifications provided by the Bureau of Indian Standards
  3. Extent of uranium contamination:
  • 16 states in north western, southern and south-eastern India
  • High prevalence in Rajasthan and Andhra Pradesh

  1. Causes:
  • Primarily natural factors.
  • Aggravated by human factors such as a groundwater-table decline and nitrate pollution
  • Decline in groundwater table induces oxidation conditions. As a result, uranium enrichment in shallow groundwater is enhanced.

An unexceptional economic performance

Economic growth


  1. Prof Pulapre Balkrishnan discusses the issues with current state of Indian economy in the backdrop of recently released CSO data on GDP growth rate

Important Analysis:

  1. Annual GDP growth rate in FY 2013-14 was 6.9%. Since 2014, it increased at first and then declined to 6.6% in FY 2017-18. However, the growth rate in Q4 FY18 has indicated acceleration of growth.
  2. The current govt’s policy reforms have focussed primarily on the supply side of the economy- to increase productivity.

Factors affecting Domestic Growth:

  1. Fiscal:
  • Fiscal consolidation has decreased aggregate demand.
  • Supporters of fiscal consolidation argue that crowding out effect will work in reverse and will boost private investment. However, this has not happen in India.
  • The government has failed to successfully deal with the demand-contracting effect of fiscal consolidation.
  1. Budget:
  • Comparatively lower budgetary outlay in last 5 years
  • Total expenditure has declined, although capital expenditure has remained same
  • Increase in government final consumption expenditure which have boosted growth
  1. Monetary Policy:
  • Decline in producer price inflation since 2014
  • However, RBI’s policy rate has been unchanged until last monetary policy review. The RBI has increased the Repo rate due to higher inflationary trends (rising oil prices and other factors)
  • India has an inflation targeting; however there is a lack of an effective anti-inflationary policy. For example, during food price inflation there is no policy to ensure food supply at effective price.
  1. Agriculture and Manufacturing Sector Performance:
  • Demonetization has adversely affected agriculture and manufacturing
  1. External Factors:
  • Until recently, the global crude oil prices have been low. However, this gain has not been used effectively to boost public demand by ensuring a better infrastructure.
  • India’s export performance since 2014 has been poor- less than immediate 5 years post 2007-08 global economic crisis.
  • India’s foreign reserves have been increasing not due to earnings from exports but due to short term capital inflow. This has adverse effects on the economy as it increases the interest rates and impacts demand.

Panel to mull ARC for stressed assets



1 The finance ministry has set up a committee to examine the possibility of setting up an asset reconstruction company or an asset management company.

Important Facts:

  1. The committee will be headed by Punjab National Bank’s non-executive Sunil Mehta.

The committee include 2 more member

  • Bank of Baroda’s MD and CEO P.S. Jayakumar
  • One member to be nominated from State Bank of India
  1. The Asset reconstruction company or an asset management company would enable the fast track resolution of stressed assets.
  2. The committee is expected to submit its report within two weeks.
  3. Issues
  • Improving credit flow.
  • Vacant executive positions in public sector banks.
  • At present, five state-run banks do not have a chief executive and several executive directors’ positions are also vacant.
  1. The government has allocated ₹65,000 crore for capital infusion into 21 public sector banks during the current financial year.
  2. The Rating agency Moody has pointed out that the government’s recapitalization plan for the 21 public sector banks will take care of the provisioning requirement for bad loans but will not be sufficient to support credit growth.


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