14 Aug 2018: UPSC Exam Comprehensive News Analysis

B. GS2 Related

Category: GOVERNANCE

1. Disclose panels on sexual harassment, companies told

D. GS4 Related

E. Editorials

Context

• The overall GDP, after several quarters of low growth, there has been a strong pick-up in the last quarter of 2017-18. If this momentum is maintained, the growth rate (2018-19) will certainly be above 7%.
• Major concerns are- External environment, reviving the banking system, Impact on the fiscal position.

Background

• Agricultural growth may at best be equal to what it was last year. As the monsoon has been somewhat below expectations — the overall rainfall was deficiency.
• The services sector may perform better because public expenditure will be maintained at a high level.
• As of the industrial sector, the data for the Index of Industrial Production (IIP) shows substantial improvement.
• The correlation between the IIP and national income data on manufacturing is poor.
• The problems of the goods and services tax (GST) may have been largely overcome.

Issues

1. External environment

• Trade wars have already started and can get worse.
• The U.S. has raised duties on several products such as steel and aluminum.
• China has retaliated as duties for some of its products has been raised.
• India has also been caught in this exchange.
• Iran, which have a direct impact on crude oil output and prices. India benefited from the fall in crude prices earlier but this position has reversed.
• India’s trade deficit has always remained high.
• The fall in crude oil prices had also affected the export growth.
• With the rising of trade deficit and some outflow of capital, the rupee has depreciated

Solution

• Improved efficiency in production and better infrastructure.
• Make the exports competitive.
• Maintenance of domestic stability.
• Search for an alternative fuel.

2. Reviving the banking system

• A/c to the RBI’s latest report on financial stability, shows that the gross non-performing asset (NPA) ratio of scheduled commercial banks rose.
• The high NPA level has a dampening effect on the provision of new credit. In fact, credit to the industrial sector has slowed down considerably.

Solutions

• Recapitalization of banks.
• Asset reconstruction companies, have been made to resolve the NPA issue.
• Medium-term banking reforms.

3. Impact on the fiscal position

• Central government’s fiscal has been within limits.
• There are two aspects of the fiscal which need to be kept under watch. – One relates to GST. It is estimated that GST revenues are currently running behind budgetary projections.
• The second concern relates to the impact of the proposed minimum support prices (MSPs) for various agricultural commodities. The MSPs have been raised sharply in the case of some commodities.

Solution to MSP (If market prices fall below MSPs)-

• M.P. model- where the State pays the difference between market price and MSP. But this can turn out to be a serious burden if market prices fall steeply. This is apart from the administrative problems involved in implementing the scheme.
• The other alternative is for the government to procure excess production over normal production so that market prices rise. This alternative may be less burdensome. However, this alternative will not work if the MSP is fixed at a level to which the market price will never rise. .

Conclusion

• The expected growth rate of 7.3-7.4% may be reassuring. It may even be the highest in the world economy.
• It is below of what is needed to raise job opportunities and reduce poverty.
• It is true that the external environment is not helpful.
• Hence a stronger push towards a much higher growth is very much the need of the hour.

1. Turkish lira drags rupee down

• Retail inflation eased to a nine-month low of 4.17% in July as food inflation cooled to its lowest level since July 2017.
• Inflation based on the Consumer Price Index (CPI) slowed from the 4.92% pace set in June.
• Within the index, food category inflation was 1.73% in July, easing from 3.11% in June.
• The other significant slowdown in prices was in the pan and tobacco category, which saw growth of 6.34%, down from 8.05% in June.
• Unfavourable base effect of June 2017 turned favourable in July.
• Inflation numbers from July 2017 till June 2018 had adverse base effect due to GST which had led to inflation increasing at a faster pace.
• Internally, food inflation moderated and is expected to behave at this pace for the next two months before the impact of the revision of kharif MSP starts impacting inflation.
• Growth in the fuel and light category accelerated to 7.96% in July, from 7.22% in June.
• The rise in global fuel prices has led to a continuous increase in inflation in the fuel and light segment.
• This category, coupled with the transport and communication group, is expected to exert pressure on retail inflation.

• The government has issued a notification putting on hold the imposition of the safeguard duty on the import of solar cells from China and Malaysia following a stay order by the Orissa High Court.

Background

• The Centre had imposed a safeguard duty of 25% on solar cells imported from China and Malaysia for the period from July 30, 2018, to July 29, 2019, following which the duty was to be reduced to 20% for the next six months, and further to 15% in the six months following that.
• Several firms filed writ petitions in the Orissa High Court against the imposition of the duty.

• Amid debates over how companies store and use customer data, Minister of Electronics and IT Ravi Shankar Prasad has asked Amazon India to set up storage servers in India on priority to store data of its users within the country.
• Data analytics will soon become a big segment of growth, especially given the large amounts of data generated by Indians.
• Every e-commerce transaction generates data and there are concerns about its safety and security as well as the element of users’ consent, particularly on trans-border migration of data.
• Greater clarity, as to what type of data will have to mandatorily be stored in India, will emerge once the law on data protection is finalised.
• Any constructive use of data is welcome.
• In the draft personal data protection bill 2018 released last month, the Justice B.N. Srikrishna-headed panel has also suggested that critical personal data of Indian citizens be processed in data centres located in the country.

• Arunachal Pradesh Chief Minister Pema Khandu has inaugurated two mobile testing laboratories aimed at ensuring safe and potable water supply in rural areas.
• The labs, capable of onsite testing of different water quality parameters, are funded by the State’s Public Health Engineering Department.
• The testing units will also spread awareness about clean drinking water.

• Ahead of the convening of the 73rd session of the UN General Assembly, India has indicated that the campaign against global terrorism will be on top of its UN agenda.

Concerns raised

• External Affairs Minister Sushma Swaraj conveyed India’s concerns regarding the issue to the visiting UNGA president Maria Fernando Espinosa Garces, who maintained that there is not yet a consensus among the member-states about the definition of terrorism.
• The External Affairs Minister emphasised the need for UN Security Council (UNSC) reforms, especially continuation of the Inter-Governmental Negotiations, as well as early finalisation of the Comprehensive Convention on International Terrorism.

• The Supreme Court on Monday agreed to a proposal of the Ministry of Road Transport and Highways (MoRTH) to have hologram-based coloured stickers on vehicles to indicate the nature of the fuel used in them.
• These issues had cropped up when the court was hearing a petition on air pollution in Delhi-NCR.

Proposal

• Hologram-based sticker of light blue colour will be used for petrol and CNG-run vehicles while similar sticker of orange colour would be placed on diesel vehicles.
• The date of registration of the vehicle would also be printed on these stickers.
• Green number plates for electric and hybrid vehicles.

• The Delhi High Court has asked the Centre why it has not yet notified the law to prevent discrimination against HIV and AIDS patients despite the statute receiving Presidential assent in April 2017.
• A Bench of Chief Justice Rajendra Menon and Justice C. Hari Shankar issued notice to the Ministry of Health and the National Aids Control Organisation (NACO) seeking their reply on the issue.

Background

• The High Court was hearing a petition filed in public interest seeking immediate notification of the law to protect rights of the People Living with Human Immunodeficiency Virus (PLHIV).
• The Act, which received Presidential assent on April 20, 2017, prohibits discrimination against PLHIV in accessing healthcare, getting jobs, renting accommodation or in admission to public and private educational institutions.
• Violation of the Act by publishing information about PLHIV or advocating hatred against them would attract imprisonment ranging from three months to two years or a maximum fine of Rs.1 lakh or both.
• Apart from immediate notification of the Act, the plea has also sought a direction to the Centre to submit a report on why there was a delay of more than a year in notifying the statute.

Concerns

• Due to delay in notifying the Human Immunodeficiency Virus (HIV) and Acquired Immune Deficiency Syndrome (AIDS) (Prevention and Control) Act, 2017, the rights guaranteed to PLHIV under the statute are being curtailed.
• There are over 2.1 million PLHIV in India giving it the dubious distinction of being home to the third largest population afflicted by this disease.

• In one of the meetings, the U.K. authorities suggested that the nationality of document-less illegal migrants suspected to be Indians could be established by matching DNA samples of their family members living here.
• India rejected a proposal by the UK to use DNA sampling to establish the nationality of illegal migrants living there citing privacy issues.

Background

• During her first visit to India on November 7, 2016, British Prime Minister Theresa May said the U.K. would consider an improved visa deal if at the same time we can step up the speed and volume of returns of Indians with no right to remain in the U.K.
• Although a Memorandum of Understanding on return of illegal migrants was initialled after due approval of the Union Cabinet in January by Minister of State for Home Kiren Rijiju, India refused to sign the final pact during the visit of Prime Minister Narendra Modi to U.K. in April.
• As per the original MoU, security agencies in India were to verify the antecedents of illegal migrants without documents in the U.K. within 72 days and those with documents within 15 days.
• If no report was given within the stipulated time frame, the illegal migrant would be deported automatically.
• The agreement was put on indefinite hold after National Security Adviser Ajit Doval conveyed that the 15-day limit was unworkable.

Stats

• According to the British government’s estimates, there are around 1,00,000 Indians overstaying their visa in the U.K.
• India has contested this and said that as per their estimate, the number will not be more than 2,000.

10. Coral reefs could survive global warming, says study

• There may be hope for marine reefs to survive modern-day global warming, say scientists who have found that coral-algal partnerships have endured numerous climate change events since the age of dinosaurs.

Background

• The relationship between corals and the mutualistic micro-algae that enable them to build reefs is considerably older and more diverse than previously assumed, according to a study published in the journal Current Biology.
• Past estimates placed the initiation of these symbiotic relationships at 50 to 65 million years ago.

Findings

• The team used genetic evidence — including DNA sequences, phylogenetic analyses and genome comparisons — to calculate the micro-algae’s approximate age of origin.
• They also used classical morphological techniques, in which they compared visual characteristics of these symbionts using light and electron microscopy, along with computer modelling and other methods, to discover that in addition to being older, the algae family is far more diverse than previously perceived.
• The research indicates that modern corals and their algal partners have been entwined with each other for much longer — since the time of the dinosaurs, approximately 160 million years ago.
• They have faced severe episodes of environmental change, but have managed to bounce back.
• The fossil record shows that today’s reef-building corals exploded in diversity around 160 million years ago.
• Finding that the origin of the algal symbionts corresponds to major increases in the abundance and diversity of reef-building corals implies that the partnership with Symbiodiniaceae was one of the major reasons for the success of modern corals.

Zooxanthellae

• The micro-algae, commonly called zooxanthellae, lives inside the cells of corals, allowing them to acquire energy from sunlight and to build the massive, economically valuable reef formations upon which countless marine organisms rely for habitat.

Significance

• This is important because some micro-algal symbionts have characteristics that make them more resilient to environmental changes.

G. Prelims Fact

• Scientists have unveiled a previously unknown species of giant pterosaur (flying reptiles), the first creatures with a backbone to fly under their own power.
• The species, identified through remains found in Utah, had a wing-span of 1.5 metres and 112 teeth, including fang-like spikes sticking out near the snout.

Pterosaur

• They existed during most of the Mesozoic: from the late Triassic to the end of the Cretaceous (228 to 66 million years ago).
• Pterosaurs are the earliest vertebrates known to have evolved powered flight.
• Their wings were formed by a membrane of skin, muscle, and other tissues stretching from the ankles to a dramatically lengthened fourth finger.
• Pterosaurs are more closely related to birds than to crocodiles or any other living reptile.
• Pterosaurs are not Dinosaurs.
• Pterosaur bones were hollow and air-filled, like the bones of birds.

H. Practice Questions for UPSC Prelims Exam

I. UPSC Mains Practice Questions

1. The expected growth rate of 7.3-7.4% may be reassuring but it falls short of India’s potential. It is below of what is needed to raise job opportunities and reduce poverty. Discuss.
2. Discuss the areas of concern which are directly relevant to the problems of internalising integrity and Ethics in democratic governments and the Civil Service.

    

Also, check previous Daily News Analysis