21 Aug 2019: UPSC Exam Comprehensive News Analysis

A.GS1 Related
B.GS2 Related
INTERNATIONAL RELATIONS
1. NRC is an internal matter, Jaishankar tells Bangladesh
C.GS3 Related
SECURITY
1. Aadhaar-social media link: SC concerned over misuse of web
2. Govt. defence test facilities to be opened to private sector
ECONOMY
1. Compliance culture in banks not satisfactory, says RBI’s Jain
2. Resolve stressed assets on time in your interest, RBI tells banks
D. GS4 Related
E. Editorials
INTERNATIONAL RELATIONS
1. China and its quasi-colony
2. Free fall: On the Afghan conflict
F. Tidbits
1. Trump calls Imran on anti¬-India rhetoric
2. Central team to soon visit 11 flood-affected States
G. Prelims Facts
H. UPSC Prelims Practice Questions
I. UPSC Mains Practice Questions

A. GS1 Related

Context:

Addressing a press conference in Dhaka after meeting his counterpart A.K. Abdul Momen, External Affairs Minister S. Jaishankar has remarked that the National Register of Citizens (NRC) process, now underway in Assam, is internal to India.

Issues discussed:

NRC Issue:

Background:

• The NRC process is aimed at identifying illegal immigrants in Assam that borders Bangladesh.
• Assam, which had faced influx of people from Bangladesh since the early 20th century, is the only state having an NRC which was first prepared in 1951.
• When the draft NRC was published on July 30, 2018, there was a huge controversy over the exclusion of 40.7 lakh people from it.
• The draft NRC included the names of 2.9 crore people out of the total 3.29 crore applications.
• In July, Mr. Momen had expressed concern about the possible fallout of the final list on Bangladesh.

Details:

• Jaishankar is in Dhaka on a two-day visit, his first to Bangladesh after taking over the charge of External Affairs Minister.
• His statement is significant as it indicates India’s official position just days before the final NRC list is to be published on August 31.
• The NRC for Assam will be published on August 31, 2019 in keeping with Supreme Court directions, but the Centre can consider corrective measures, including legislation, to set right wrongful inclusions and exclusions.

Rohingya Issue:

• They also discussed the Rohingya issue and agreed on their safe, speedy and sustainable return to Myanmar.
• Bangladesh, is facing a big influx of Rohingya Muslims from Myanmar. It has sought India’s enhanced support in handling the crisis by mounting pressure on Myanmar to take back the refugees who have taken shelter in the country.
• According to the United Nations, over 7,45,000 Rohingya Muslims have fled Myanmar’s Rakhine state into Bangladesh following serious human rights abuses. However, Myanmar denies the allegations.
• Addressing the press with Mr Jaishankar, his Bangladeshi counterpart, A.K. Abdul Momen said the bilateral talks had satisfied the Bangladesh team.
• Both sides had also discussed the repatriation of the Rohingya from refugee camps in Chittagong to Myanmar.
• The Minister of External Affairs also reaffirmed India’s readiness to provide more assistance to the displaced in Bangladesh and to improve socio-economic conditions in Rakhine State.

Teesta water sharing issue:

• The Teesta deal was set to be signed during the then Prime Minister Manmohan Singh’s visit to Bangladesh in September 2011, but was postponed at the last minute due to objections raised by West Bengal Chief Minister Mamata Banerjee.
• Teesta water is crucial for Bangladesh, especially in the leanest period from December to March, when the water flow often temporarily comes down to less than 1,000 cusecs from 5,000 cusecs.
• The external affairs minister asserted that India’s position and commitment to the pending Teesta water deal remained as it was indicating New Delhi’s previous position that it is ready to sign the deal once the West Bengal government agrees to it.
• He said that India is prepared to progress to find a mutually acceptable formula from 54 shared rivers.

Other Issues:

• On energy cooperation, Jaishankar said both countries have stakes in each other’s success.
• On trade, it was said that the progress would be made at a pace which is comfortable for Bangladesh.
• The Minister stressed that India’s partnership with Bangladesh remains an example what neighbours can do together. He also highlighted Prime Minister Narendra Modi’s determination in ensuring that India- Bangladesh partnership remains a “role model” in South Asia.

C. GS3 Related

Category: SECURITY

1. Aadhaar-social media link: SC concerned over misuse of web

Context:

Addressing a long-pending demand of private industries to provide a level playing field in defence manufacturing, Defence Minister Rajnath Singh announced that test facilities of the government and the Services would soon be opened for the private sector.

Background:

• Of late, Indian industries had been manufacturing bigger military platforms but there were no test ranges to evaluate and improve the systems, forcing them to take the hardware abroad.
• The defence products list had been revised for the purpose of issuing licences under the Industry Development and Regulation Act and most of the components, parts, sub-systems and testing and production equipment had been removed from it.

Details:

• It was said that a proposal to provide the test facilities of the government to the private sector after incorporating the comments of the stakeholders participating in indigenous manufacturing has been approved.
• He added that a formal order that would remove the bottlenecks in the way of using test facilities by private entities would be issued.
• Speaking at a seminar on indigenisation and modernisation of the IAF, jointly organised by the Air Force and the Society of Indian Defence Manufacturers, he said that the Indian Air Force (IAF) is a technologically advanced and extremely potent force and the recent offensive strikes on terror outfits in the neighbourhood showed the reach and lethality of this formidable arm of the armed forces.

Significance of the announcement:

• Private sector participation in India’s defence sector has led to fruitful results.
• The involvement of Tata Power SED in building the Samyukta — India’s first major electronic warfare system — and L&T’s contribution to the nuclear submarine programme are noteworthy examples.
• L&T’s in-house development of hull construction technologies for submarines gave the company an opportunity to participate in building INS Arihant — India’s first nuclear submarine, despite severe sanctions.
• Since 2001, the private sector has displayed capability in the complete product life cycle for advanced systems such as missile launchers, rocket launchers, land-based as well as naval engineering systems, sensors such as radars and sonars, avionics, secure communication, and aircraft sub-systems.
• With world-class skills in IT, ITeS and manufacturing, the private sector has augmented India’s indigenous defence production capability.
• The private sector has also built up extensive infrastructure without waiting for any orders from the Ministry of Defence (MoD).
• Despite this track record, the Indian private sector does not enjoy a level playing field vis-à-vis foreign equipment makers and defence PSUs.
• The defence sector should learn from the phenomenal success that India achieved in the strategic nuclear and space sectors.

Context:

RBI Deputy Governor in-charge of banking supervision M.K. Jain said that the compliance culture in the banking system was far from satisfactory, speaking at the FICCI-IBA banking seminar.

Background:

• The Reserve Bank of India (RBI) has come down heavily on commercial banks after slapping a series of penalties for not complying with several regulatory guidelines.
• Between January and July this year, the banking regulator had imposed penalties worth about ₹122.9 crore on 70 occasions on banks for non-compliance.
• In March 2019, RBI imposed penalties worth Rs 71 crore on 36 public, private and foreign banks for non-compliance with various directions on time-bound implementation and strengthening of SWIFT operations.
• In August 2019, RBI issued a notice for Rs 8.5 crore fine on eleven banks for not complying with fraud reporting.
• Some of the weaknesses and irregularities observed have been recurring, in spite of affirmation by bank managements that they have carried out remediation.

Details:

• He stressed on the need for banks to demonstrate good compliance culture.
• He said following the global financial crisis, the importance of compliance had increased significantly, particularly in the areas of know-your-customer, anti-money laundering and appropriateness of banking products, among others.
• He cautioned that a bank or a financial institution can suffer if it does not adhere to laws, rules, regulations and related self-regulatory standards or even codes of conducts applicable to its banking activities.
• He highlighted the fact that some of the banking frauds — for which banks had suffered big losses — could have been avoided if they had had ‘good compliance culture’.
• It was also said that trust generates hidden earnings, which most banks don’t bother to quantify and hence, don’t realise.

Conclusion:

• For many banks, translating the broader risk management framework to a centralized and fundamental process can be daunting. Many still struggle with primary control issues such as compliance literacy, accountability, performance incentives and risk culture.
• Creating a clear link to the bank’s overarching compliance protocol and implementing the right technology backbone that supports their initiatives can create the cultural and structural changes needed to compete in a new time and a new era of compliance.

Context:

• Reserve Bank of India Deputy Governor N.S. Vishwanathan has urged banks for timely resolution of stressed assets in their ‘own interest’.
• Vishwanathan, was speaking at a banking seminar organised by industry body FICCI and the Indian Banks’ Association.

Details:

• He said that the banks should resolve assets under the new framework that was announced by RBI in June to extract the best value.
• He emphasised the need for dealing only in ‘genuine’ cases.
• He emphasised how timely resolution, besides meeting the regulatory requirement, could result in better valuation.
• It was said that RBI is making less intrusive regulations with the hope that banks will use it to deal with genuine stress in their balance sheets to address the problem.

Stressed Assets:

• Stressed assets = Non Performing Assets + Restructured loans + Written off assets
• Stressed assets is a powerful indicator of the health of the banking system.
• NPA means interest or principal is not repaid by the borrower during a specified time period.
• But NPA  alone doesn’t tell the whole story of bad asset quality of loans given by banks. Some of the loans are restructured by banks by giving a further opportunity to the borrower if they default.
• This opportunity is in the form of an extended time period for repayment and a reduced interest rate or such soft conditions. Hence a new classification is made in the form of stressed assets that comprises restructured loans and written off assets besides NPAs.
• Restructured asset or loan are that assets which got an extended repayment period, reduced interest rate, converting a part of the loan into equity, providing additional financing, or some combination of these measures.
• Written off assets are those the bank or lender doesn’t count the money borrower owes to it. The financial statement of the bank will indicate that the written off loans are compensated through some other way.

D. GS4 Related

E. Editorials

Context

• The 15 members of the United Nations Security Council (UNSC) engaged in closed-door informal consultations in response to a letter written by Pakistan’s Foreign Minister Shah Mahmood Qureshi to the President of the United Nations Security Council (UNSC), backed by a request from China, on the situation in Jammu and Kashmir (J&K).

Outcome of the meeting

• There is no official record of the proceedings nor does the informal exchange result in any outcome document.
• In this case, the only consensus that had the backing of the majority of members was that India and Pakistan should resolve matters bilaterally.
• China’s attempts to get the president of the UNSC to issue an informal statement to the media, was curiously backed by the UK, perhaps in the hope of scoring some brownie points with the large domestic constituencies of Pakistanis.
• The UK might also have hoped to curry some favor with China to further its mercantilist interests in the face of an imminent Brexit meltdown.

Human right violations in Pakistan

• Pakistan’s Permanent Representative Maleeha Lodhi made a dishonest and propagandist statement to the media making allegations against India, claiming that “the voice of the people of Kashmir was being heard in the UNSC”.
• But, Islamabad’s own track road in Baluchistan and the fact that it sponsors terrorism in Afghanistan and India is not a secret.
• Pakistan has a long-held policy to create unrest and tensions in neighbouring countries especially in India and Afghanistan by backing jihadist groups.

Pakistan meanwhile should first permit the voice of the Baloch people to be heard, along with that of the oppressed in Gilgit-Baltistan.

Why this has become a major concern for Pakistan?

• The Indian government’s bold step to revoke the special status of J&K, long overdue, has given Pakistan and its cohorts in J&K a big jolt. It has hurt vested interests in the Valley who, for generations, have siphoned off the wealth of the state and waltzed with separatists at the same time.

India’s reaffirmation on resolving border dispute with China

• Earlier, the external affairs minister, S Jaishankar, had clearly conveyed, during his visit to Beijing, that the decisions were internal to India and aimed at providing good governance, promoting social justice and ensuring economic development in J&K.
• He had also pointed out to the Chinese that the constitutional change in India had no bearing on the boundary issue or the Line of Actual Control with China.

China’s deviation tactics

• China is facing global censure for its unbridled human rights violations in Xinjiang province, the mass incarceration of Uighurs in so-called re-education camps and the razing of mosques and other historical places that give the Uighurs their distinct identity.
• The daily images on television screens around the world of the mass unrest in Hong Kong must be galling for a regime that takes pride in its ability to use force to quash dissent and seeks, with vaulting ambition, to emerge as the number one power in the world.
• The long-drawn public protests in Hong Kong are a reaction to the progressive erosion of the special status accorded to Hong Kong Special Administrative Region under the terms of its Basic Law, which protects Hong Kong’s capitalist system, the independence of the judiciary and the media.
• Apart from its undying commitment to Pakistan, it is to deflect scrutiny of its own actions in Xinjiang and Hong Kong that China would have decided to support Pakistan’s request and also to have its permanent representative masquerade as a spokesman for members of the UNSC.

What China needs to note is, Unlike China’s opaque political functioning and decision-making processes, national media control, suppression of dissent and draconian internal security laws, the change in J&K’s constitutional status was done through an open political process — a publicly aired parliamentary debate and voting.

China’s silence when Pakistan made changes in Pakistan occupied Kashmir

China has never commented when Pakistan unilaterally changed the status of regions in PoK exposes its deep bias.

• Gilgit-Baltistan was re-designated by Pakistan as Northern Areas in 1970.
• In 1974, Pakistan unilaterally overturned a law of the erstwhile princely state of Jammu and Kashmir prohibiting outsiders from owning property, and encouraged large-scale settlement by Sunnis in predominantly Shia-populated Gilgit-Baltistan
• Pakistan once again unilaterally issued the Gilgit-Baltistan Empowerment and Self-Governance Order in 2009, without any consultation with the people, with a view to giving itself and China a freer hand to develop Chinese link through PoJ&K to Gwadar.

Besides allowing the presence of China’s military and civilian personnel close to India’s border.

On changes in Tibet

• One should recall that in 1965, when China reorganised the erstwhile Tibet region into the Tibet Autonomous Region, giving it a provincial status, India was not apoplectic, like China has been following the designation of Ladakh as a union territory.
• Based on the principle of non-interference in each other’s internal affairs, India has always refrained from making statements concerning the internal situation of China.

Options with India to weaken china’s call

• India has multiple choices — reiterating India’s claim over Aksai Chin as an unsettled territorial issue on the agenda of the special representatives,
• eliminating Huawei from 5G trials,
• placing curbs on China’s economic inroads into India in sensitive sectors,
• making a statement on developments in Hong Kong because of our concerns on the security of our community there,
• Inviting a Taiwan minister to India officially and giving the Dalai Lama a major platform to speak in Delhi, with an Indian minster in the audience

How has UNSC looked at the Kashmir issue in the past?

• First, the UNSC does not have any agenda item explicitly termed “Jammu and Kashmir”. The only agenda item on its mandate is “The India Pakistan Question”.
• Second, UNSC Resolutions 209, 210, 211, 214 and 215 of September 1965 focussed on a ceasefire during the war and demanded that the two sides cooperate with UNMOGIP.
• Third, the last formal resolution under the agenda item titled “The India Pakistan Question”, was UNSC Resolution 307 of 21 December 1971, which noted India’s unilateral declaration of a ceasefire in the western theatre during that war, Pakistan’s acceptance of it, and, demanded a durable cessation of all hostilities.

Pakistan’s continued insistence of Kashmir issue in UN

• Pakistan’s communications to UN bodies of matters relating to J&K are not a new development. Every year, Pakistan’s permanent representative to the UN in New York writes to the secretary general requesting that the agenda item “The India Pakistan Question” be retained
• With the exception of Pakistan and a few of its supporters, the global community endorses the bilateral framework for resolution of differences between India and Pakistan.
• Pakistan will no doubt try to rake up the issue at the October meeting of the Human Rights Committee at the UNHRC, hoping to capitalise on the insidious report prepared in 2018 by former UN High Commissioner for Human Rights Zeid Ra’ad Al Hussein, a Pakistan sympathiser.

Conclusion

• The global community will no doubt take positive note of the steps being taken by India to restore normalcy in J&K through restoration of landlines, phased lifting of restrictions and the re-opening of government offices and schools.
• And, as Pakistan remains mired in its medieval ways, the world will soon see visible evidence of rapid development in J&K, which will contrast sharply with the backwardness of Pakistan Occupied Kashmir.

Context

• The suicide attack at a crowded wedding hall in Kabul killed at least 63 people and injured more than 180 others is yet another tragic reminder of the perilous security situation in Afghanistan.
• The blast was claimed by the local arm of the Islamic State (IS).

Background

• The U.S. and the Taliban are preparing to announce a peace agreement to end the 18-year-long conflict
• The government in Kabul, backed by the U.S. and the international community, is fighting to preserve the existing system, which despite its faults, at least offers a semblance of democracy.
• But the government is a failure in ensuring safety and security of the people. The Taliban, which controls the mountainous hinterlands, wants to expand its reach to the urban centres.

Peace will remain elusive to people of Afghanistan  

• But if the IS attack is anything to go by, Afghans will not be able to live in peace irrespective of the consensus reached between the Taliban and the U.S.
• It’s now a three-way conflict in Afghanistan — the government, the Taliban insurgents and the global terrorists.
• The IS, which has declared a province (Khorasan) in eastern Afghanistan’s Nangarhar, has emerged as the third player.
• Attacks against civilians, especially the Shia minority, is the central part of its brutal military tactics. Afghanistan’s Hazara Shias were the target of the wedding hall bombing as well.

Concerns

• This complex, mutually destructive nature of the conflict is the biggest challenge before any attempt to establish order and stability in Afghanistan.
• What if the Taliban, which ran most of Afghanistan according to its puritanical interpretation of the Islamic law from 1996 to 2001, turns against Kabul once the Americans are out?
• What if the country plunges into a multi-party civil war as it did after the Soviet Union pulled out in 1989?

Future prospect of the peace deal

• As part of a potential peace deal, the S. is ready to pull troops from Afghanistan in return for assurances from the Taliban that they will not allow the Afghan soil to be used by transnational terrorists such as the IS and al-Qaeda.
• It will be left to the Taliban and the government to have their own peace talks and settle differences.
• Arguably, a peace deal or at least a ceasefire between the Taliban and the Kabul government would allow both sides to rechannel their resources to fighting terrorist groups.

Conclusion

• The IS has demonstrated an ability to survive and strike in Afghanistan despite the U.S.’s heavy air campaign in the east. Ideally, the international community should have strengthened the hands of the Kabul government against all kind of terrorists, before seeking a settlement with the insurgents.
• They should have helped alter the balance of power in the conflict. But it does not seem likely now. And Afghanistan is in a free fall.

F. Tidbits

• In a series of tweets over the weekend, Mr. Khan had called the Narendra Modi government “fascist, racist, Hindu Supremacist” and a threat to Pakistan and minorities in India.
• The U.S. President Donald Trump spoke with Pakistan Prime Minister Imran Khan and asked him to reduce tensions and dial down the rhetoric with India on the Kashmir issue.
• The President reaffirmed the need to avoid escalation of the situation, and urged restraint on both sides.
• The two leaders also agreed to work together to strengthen United States-Pakistan economic and trade cooperation.
• Also, in a telephonic conversation with Prime Minister Narendra Modi, U.S. President Donald Trump sought reduction of tensions between the two countries.

• An Inter-Ministerial Central Team (IMCT) under the Home Ministry will soon visit 11 flood-affected States, including Kerala and Assam, to assess the damage.
• The other States that will be visited by the Central team are Meghalaya, Tripura, Bihar, Uttarakhand, Himachal Pradesh, Gujarat, Rajasthan, Maharashtra and
• In the combined rescue operations in the States affected by floods, landslides etc. during the current monsoon season, the NDRF, Army, Air Force, Navy and Coast Guard have rescued and shifted to safer places more than 1,53,000 people.

Change in rules:

• A Home Ministry statement said, that the IMCT will henceforth be constituted immediately in the aftermath of any natural calamity of severe nature, which will visit the affected areas in the State so as to have first-hand assessment of damages caused and relief work carried out by the State administration.
• The IMCT will again visit the State after submission of the memorandum for detailed assessment of the damage and relief operations conducted for making final recommendations for allocation of additional funds.
• The Ministry has changed rules and from now on, the IMCT will visit the affected areas even before receiving a memorandum from the State concerned. At present, the IMCT visits the affected State only once, after the receipt of the memorandum from the State.
• The Home Ministry statement also said that the funds will be disbursed from the National Disaster Response Fund (NDRF). This additional assistance is over and above the funds released by the Centre in the State Disaster Response Fund (SDRF) already placed at the disposal of States.

G. Prelims Facts

H. Practice Questions for UPSC Prelims Exam

Q1. Consider the following statements:

1. Jagoi is an Indian classical dance form.
2. Its region of origin is Manipur.

Which of the given statement/s is/are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

See

Q2. Which of the following constitutes restructured assets/loans?

a. Loans with extended repayment period
b. Loans with reduced interest rate
c. Converting a part of the loan into equity
d. All of the above

See

Q3. Consider the following statements:

1. SCO is a European political, economic, and military organisation.
2. The Regional Anti-Terrorist Structure(RATS) is a permanent organ of the Shanghai Cooperation Organization (SCO).

Which of the given statement/s is/are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

See

Q4. Consider the following statements:

1. Gross Domestic Product (GDP) is the total market value of all the finished goods and services produced within a country’s borders in a specific time period.
2. Central Statistics Office (CSO) is responsible for the compilation of GDP.

Which of the given statement/s is/are correct?

a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2

See

1. In the backdrop of RBI imposing fines on banks and financial institutions for a lack of compliance culture, discuss the importance of a culture of compliance for financial institutions and banks, in addition to the technology to support it in order to avoid risks. (15 Marks, 250 Words)
2. Critically comment on the consequences of linking Aadhaar to social media accounts. Suggest measures to strike a balance between the right to privacy and rising concerns about spreading fake news and cybercrimes.  (15 Marks, 250 Words)

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