9 PM Daily Brief December

9 PM Daily Brief 1 December 2015
Written by F O R U M I A S | December 28, 2015 8 Comments | B R I E F
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A brief of newspaper articles for the day bearing

relevance to Civil Services preparation
National
[1]. Call for pact on emission cuts
What has happened?
World leaders meeting at the Paris for the 21st session of Conference of Parties, delivered statements at the leaders event held on 30 th Nov 2015.
What did U.S and China say?
U.S. President Barack Obama and his Chinese counterpart, Xi Jinping, representing the two top emitters of greenhouse gases in the world, made a firm commitment at the Paris Climate Change conference to
work for change, and called for an agreement that would cut carbon emissions and pave the way for a global transition to a green economy.
French President called for a progressive tax on carbon use. So, what is carbon tax?
Carbon tax is one of the two major market based options to lower the emissions.
1. Carbon Tax
2. Cap and Trade schemes
Carbon tax
Carbon tax is a form of pollution tax. It levies a fee on the production, distribution or use of fossil fuels based on how much carbon their combustion emits. It is a form of carbon pricing. Carbon is present in
every hydrocarbon fuel (coal, petroleum, and natural gas) and is released as carbon dioxide when they are burnt.
Since GHG emissions caused by the combustion of fossil fuels are closely related to the carbon content present in them, a tax on these emissions is levied by taxing the carbon content of fossil fuels at any point in
the product cycle of the fuel.
Principle
Carbon tax is based on the economic principle of negative externalities.
Externality: It is a cost or benefit that affects a party who did not choose to incur that cost or benefit.
Types of externalities,
1. Negative
2. Positive
3. Positional
4. Inframarginal
5. Technological
We will talk only about negative externality here.
What is negative externality?
A negative externality (also called external cost or external diseconomy) is an economic activity that imposes a negative effect on an unrelated third party. It can arise either during the production or the
consumption of a good or service.
For example: Pollution to the environment is also a negative externality. Environment didnt choose to be polluted. Moreover, it is also not compensated for that externality.
Benefits of carbon tax
1. Shift to cleaner technology: As carbon content is taxed, it forces the businesses to shift to a cleaner alternative or to reduce the carbon content through proper technologies i.e. it would force the
industry to increase its energy efficiency.
2. Cost-competitiveness: Carbon tax helps in making the clean energy alternatives more competitive and viable because in absence of such a tax, coal, for example, would always be cheaper than,
say solar power.
3. Funds: Money raised through such tax can be channelled into environmental programs.
Carbon Tax and India
On July 1, 2010 India introduced a nationwide carbon tax of 50 rupees per metric tonne ($1.07/t) of coal both produced and imported into India.
In a budget speech on 2014, the finance Minister increased the Price to 100 rupees per metric tonne ( $1.60/t at $60.5 conversion) . In India coal is used to power more than half of the countrys electricity
generation.
With the new government in India under PM Narendra Modi, the carbon tax has been further increased form 100Rs per tonne to 200Rs per tonne in the Budget 2015-16.
National Clean Energy Fund (NCEF)
Using the carbon tax imposed in India from 2010-11, a National Clean Energy Fund was created.
Aim: Its purpose is to fund research and innovative projects in clean energy technologies of public sector or private sector entities, upto the extent of 40% of the total project cost.
[2]. Modi launches International solar alliance

What has happened?
India launched an International Solar Alliance (ISA) at the CoP21 Climate Conference
What is this ISA all about?
The new body, which has invited all countries located fully or partly between the tropics of Cancer and Capricorn to join, is to function from the National Institute of Solar Energy in India, Gurgaon. The Centre
will provide land and $30 million to form a secretariat for the Alliance, and also support it for five years
The launch resolution of ISA says,
1. Helping member nations to reduce the cost of finance and technology needed to deploy solar power widely
2. Provide training,
3. co-operation in building institutions
[2]. New militant tactics draw army into long-drawn siege
What has happened?
Signalling a new insurgent strategy, at least three small militant groups have continued to engage the Army. These groups attack on security forces and then retreat into heavily forested ranges of Handwara,
Kupwara and Bandipora. Operations against them have continued for weeks now.
Source: The Hindu
Army has restrained them to the forested areas and is waiting for the winter to make their job easier. Terrorists are trying to cross over from the forest to the hinterland areas to protect themselves from harsh winter
conditions which they would have to confront if they continue to stay in the forest.
Conflict
The continuous siege of populated areas, however has come under criticism from human rights activists and political leaders.
Local politicians are accusing army of the unnecessary crackdown due to which villagers are facing problems and education of children is also getting affected, as no one is being allowed to enter the restricted
area.
International
[1]. IS taxes masses to swell its coffers
What has happened?

Across areas of Syria and Iraq, the Islamic Sate (IS), with the goal of building a credible government, has set up a predatory and violent bureaucracy that wrings every last U.S. dollar, Iraqi dinar and Syrian pound
it can from those who live under its control, or pass through its territory.
IS is exacting money from,
1. Tolls and traffic tickets
2. Rent for government buildings
3. Utility bills for water and electricity
4. Taxes on income, crops and cattle
5. Fines for smoking or wearing the wrong clothes
Money from these collections is approaching around $10Billion a year.
Other sources of finance include,
1. Smuggling oil,
2. Plundering bank vaults,
3. Looting antiquities,
4. Ransoming kidnapped foreigners
5. Donations from wealthy supporters in the Persian Gulf
The biggest source of cash for IS appears to be the,
1. people it rules, and
2. the businesses it controls
Under ISIS
1. Office of services: In Raqqa, the Syrian city now serving as the de-facto Capital of IS a department called Diwan al-Khadamat, or the Office of Services, sends officials through the city markets to
collect a cleaning tax 2,500 to 5,000 Syrian pounds (about $7 to $14) per month.
2. A cut in business: Militants demand a cut in business. Businessmen pay either in money or in olive oil depending upon the profit
3. The group has also taken over the collection of car-registration fees and made students pay for textbooks
[2]. China hosts first BRICS media summit
What is BRICS?
BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa. The grouping was originally known as BRIC before the inclusion of South
Africa in 2010. The BRICS members are all developing or newly industrialised countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs;
all five are G-20 members
What has happened?
China has taken the initiative for creating an alternative media platform for the emerging economies by hosting the first media summit of countries belonging to the Brazil-Russia-India-China-South Africa
(BRICS) grouping.
Who is behind this initiative?
Chinas Xinhua news agency has been the initiator of the project.
Other media organisations that are a part of this initiative,
1. The Hindu group of publications,
2. The Brazil Communication Company,
3. Russia Today International News Agency,
4. South Africas Independent Media
What is being hoped to achieve through this new initiative?
1. Create a new institutional framework that would be tailored to benefit the media of five emerging economies
2. Yield an agenda-setting consensus among the BRICS media on coordinating the coverage of G-20 summits, in tune with the priorities of the emerging economies.
During the 1st media summit following were proposed,
Formation of a BRICS Media Foundation, supporting and protecting journalists belonging to the grouping
Formation of a liaison office for BRICS Media Summit, which will become an executive body responsible for the organisation and coordination of the Summit.
Opinions & Editorials
[1]. Why government must hire more?
What the author is arguing in this article?
Author argues in favour of the recent pay hike recommended by the 7 th pay commission
What are his reasons?
1. To ensure a better governance, the government servants should be paid well
2. To reduce corruption: Better pay can certainly reduce corruption
3. Better pay shall prevent the good and honest from leaving the system for greener pastures
On the issue of maximum governance, minimum governance
Author says that the above expression doesnt means that the number of people working for the government should be reduced. It means that the scope of what government does should be reduced not the quantity
of the officials.
Low ratio of civil servants: Despite the perception that our government is overstaffed, the reality is that India has very low numbers of civil servants who are necessary to carry out the basic functions of
government. The Seventh Pay Commission refers to this in its report, noting that in the United States, the federal government has 668 employees per 1,00,000 population. In comparison, the Union government
employs 139. This is not even considering the fact that under Indias constitutional structure, the Union government has a bigger charter than its American counterpart.
Low ratio of government employees: Government employment ratios in the rich and better governed West are much higher: around 15 per cent in Scandinavian countries and 6-8 per cent in the U.S. and Western
Europe. In India it is less than 1.5% as per a study by World Bank in 1990s.
Author says that better pay, perks and pensions are not enough.
Restructuring bureaucracy
Author says the recommendations of 2nd ARC report should be implemented to affect any real change in the bureaucracy.
What is Administrative Reform Commission?
The Administrative Reforms Commission or ARC is the committee appointed by the Government of India for giving recommendations for reviewing the public administration system of India. The first ARC
was established on 5 January 1966
Restructuring involves,
1. a review of what government employees do
2. What incentives they face
3. What type of people are attracted to the job
[2]. Losing the story in Nepal
Nepal-India crisis: How it started?
In the decade after 1996, Nepal in the grip of Maoist war took help from India wherein India facilitated an agreement between the Maoist party and the other national political parties in 2004.
The major point in the 12-point agreement was this,
Future roadmap for the political development in Nepal
The unintended side-effect of this brokered deal was that it established India as a key political player in Nepal.
Indias influence has only grown since then. There is no national consensus in Nepal as to the role which India should play.
2008: The tensions amidst India and Nepal grew as Nepal began to act on its own. Constituent assembly was elected in Nepal in 2008, after which there was no real need for India to meddle in Nepals affairs but
India continued to play its role. This lead to a general feeling that India is bullying its neighbour to secure its own interests like hydropower energy, development projects, business and trade.
India continued to tell Nepal what it should and should not do. This led to a cooling of relations between the Indian establishment and Nepali leaders. Tensions then ratcheted up in June, when Nepals leaders,
challenged by the devastating earthquake, decided to expedite the process of promulgating the new constitution, after five years of delay. This was a collective decision by Nepals major parties, although it was
not free from contention within Nepal.
Nepals new constitution
September 20th 2015: After 10 years of post-conflict transition and two constituent assembly elections, Nepal finally adopted a constitution. The constitution was backed by more than 90% of the assembly.
Indias displeasure
Indias reaction was not of an excited neighbour, it was more like that of a passive bystander,
1. India felt that it was not given due respect when Nepal finally reached its momentous decision. On the day Nepal celebrated the new constitution; India merely took note of it and expressed
concerns over tensions in the border regions. India was specifically indicating the ongoing protests by some Madheshis who felt that their concerns were not addressed in the constitution.
Why India reacted this way?
India said that Nepals constitution denies the rights of the Nepalese Madheshis living on Indias border, many of whom have close familial ties with Indians. A discontented Madhesh is of course an issue for India
after all, unrest in southern Nepal bordering India has the potential to destabilize the Indian side of the border. But India should have addressed these concerns by engaging with the central elected authority of
Nepal.
Genuine Madheshi concerns
The new constitution does not really promise to end the longstanding political and cultural hegemony over the Madheshi people. It is also true that Nepals political leaders have failed to engage Madheshi
communities and broaden ownership of the new constitution. Still, these are all internal issues for Nepal, and a process of constitutional amendment has already begun
Root of the Nepal crisis
1. The geopolitical crisis around the Nepal Constitution arose not simply because India wanted more of a role in Nepal. In making major decisions about the constitution, especially delineating the
provinces of the new Nepal, many news reports and intellectuals argue that a Pahade (namely, related to the hill people who dominate Nepals national politics) hegemonic mentality dominated the decision,
ignoring some of the genuine concerns of the Tharu and Madheshi peoples. The national political parties are dominated by hill Brahmins, followed by Chhetri and Newars, all of whom are of hills origin. The
root of the crisis of representation is that these parties have failed to bring members of agitating groups into the national parties, at a time when inclusive governance was particularly critical in post-
monarchy Nepal, as multiple communities suddenly became aware of their rights. This failure of the Kathmandu leaders provided a hotbed for agitation in Madhesh, whose people enjoyed the support of the
Modi government.
2. The Madheshi agitation for rights is only the tip of the iceberg. The more serious issue of exclusion goes unspoken: the Dalits and landless people forced to work as bonded labor of the landed
aristocrats in the Terai are not in the Madheshi movement. For this reason, even if the current Madheshi movement succeeds in negotiating power with the central authority in Nepal, it is very likely that
Dalits and marginalized groups including women in the Madhesh will not receive their rights. If Nepalese politics seeks to ensure proportional representation of disadvantaged groups, then the pressing issue
is not just Madheshi inclusion, but more importantly the Dalits of both Madesh and hill origins.
What is the situation now?
There is a general feeling in Nepal that India is behind the blockade. The blockade has given rise to serious humanitarian concerns in Nepal as shortage of medicines and other necessary supplies is being
anticipated.
Many Nepalese believe that some of the Madheshis demands are actually framed in terms of Indias strategic interests. The demand for the creation of two states across Nepal Terai is a case in point. If heeded,
two Madheshi provinces will run all of 800 kilometers long, but only 20-30 kilometers wide, forming a long strip on the southern plain of the country to Indias benefit and Nepals disadvantage. Particularly given
the perception that India and the Madheshis have worked together to impose the blockade, many Nepalese believe that the establishment of two Terai provinces as a threat to Nepals integrity.
Ceding ground to Foreign countries
Its decisions to raise criticism of Nepal at the United Nations and the Human Rights Council, and to insert critical references to Nepal and Maldives into the joint statement with the U.K., have been hailed by the
foreign office as evidence of support for Indias stand. However, conversely, it also denotes the insertion of the U.K. and other countries into Indias relations with its neighbours, one that may have a more long-
standing impact. All of this denotes a disquieting desire to look for international approval for Indian actions, which comes at the cost of losing influence with the neighbouring countries being castigated.
Instead of forcing itself on its neighbour, India should employ a constructive bilateral engagement instead of an aggressive stands on the internal matters of Nepal and raising the matter internationally to its own
detriment.
Economic Digest
[1]. Airtel to invest Rs.70, 000 crore in Project Leap
What has happened?
The countrys largest telecom services provider, Bharti Airtel, announced that it will invest Rs.60,000 crore over the next three-years to upgrade its networks to provide quality services amid increasing
competition.
Context: The announcement from Airtel comes amid rising complaints of frequent call drops faced by the customers. The government had pointed out that lack of investments in networks by operators was the
primary reason for poor quality of services.
What is Project Leap?
1. Under Project Leap, Airtel will deploy over 70,000 base stations in the current fiscal, its largest deployment in a single year since inception. Over three years, more than 160,000 base stations will
be set up nationwide.
2. Airtel would expand its mobile broadband coverage to all towns and over 2,50,000 villages by March, and in three years, it plans to offer mobile broadband to over 500,000 villages in the country.
Articles to read:http://www.moneycontrol.com/news/buzzing-stocks/bharti-slips-4-credit-suisse-cuts-targetproject-leap_4397981.html
[2]. Unshackling the states from central schemes
Context: A Sub-group, under the aegis of NITI Ayog, on Rationalization of Centrally Sponsored Schemes had been constituted on 8th February 2015.
27th October, 2015: The sub-group submitted its report
The author in this article cites the recommendations of that sub-group and demands a fiscal devolution wherein the centrally sponsored schemes are reduced and States are given more freedom under the aegis of
co-operative federalism.
Why is author in support of pruning CSS?
Author reasons that,
Increasing number of CSS has curbed the autonomy of the states which goes against the spirit of co-operative federalism. More number of CSS means a major part of funds given to states by the
centre is tied to the flagship schemes under CSS.
Sub-groups recommendations,
1. The sub-group has recommended pruning the number of CSS down to 30 from 50 in 2015-16 and 66 the year before.
2. The sub-group has further asked the CSS to be divided into core schemes and optional schemes
Core schemes: The core schemes will require mandatory implementation by the states, and the centre will fund 100% share for the Union territories, 90% for the eight north-eastern (NE) and three Himalayan
states, and 60% for the rest of the states.
Optional schemes: In the proposed structure, the states will have the flexibility of choosing the optional schemes they want to implement. The fund meant for the scheme opted out by any state can be used in
other schemes. The states will be free to deselect some components of a scheme they are implementing
Increasing the Flexi-funds: The sub-group also recommends increasing the flexi-fundsmeant to provide greater flexibility to spend on diverse requirements under the overall objective of the
schemefrom 10% to 25%
Implications of using the term 8NE and 3 Himalayan states
The use of the phrase 8 NE and 3 Himalayan states instead of special category states has important implications if this report is accepted.
1. One, it means the generous terms of funding from the Union government for central schemes in these states is likely to be retained.
2. Two, the discontinuation of block grants undertaken in 2015-16 seems irreversible. The special category states were disproportionate beneficiaries of the block grantsincluding Normal Central
Assistance, one-time Additional Central Assistance, Special Central Assistance and Special Plan Assistance
3. Three, the phrase special category may eventually be phased out. The formulation of these states as 8 NE and 3 Himalayan states is a step in that direction.
4. Four, this will bring a much-needed end to the practice of states queuing up for special category status.
[3]. Pressing the GST pedal; where do we go from here?
What has happened?
PM has invited leaders of Congress party to discuss their concerns regarding the GST bill.
Concerns put forward by the Congress party,
The first and the most important is the levy of 1% tax on inter-state transactions in goods and services.
Arguments for: This is a legitimate concern as levying of this tax would put unnecessary burden on consumers of less developed states. Moreover, it will bring additional complications when dealing with inter-
state transactions and e-commerce.
What states say?
They say that they are levying 1% tax to compensate for infrastructural spending.
The argument that the levy is meant to compensate states for the spending on infrastructure is fallacious because infrastructure is created to accelerate growth in output and employment. Indeed, many states, in
addition, give generous incentives to attract investments. Ironically, while exports to other countries are not taxed under GST, tax is sought to be levied on inter-state trade!
Capping the tax rate: Need to cap the rate of tax at 18% in the Constitution Amendment Bill. It is undesirable because it does not allow the Union and states to vary the rates as and when needed. This will erode
the autonomy of the states further.
Dispute redressal mechanism: The third issue of disagreement relates to the dispute resolution mechanism. Given that the interests of the Union and states do not always coincide, leading to conflicts, it may not
be possible to resolve the conflicts among them in the GST Council. Therefore, it may be worthwhile providing for a conflict resolution mechanism in the Bill. The modalities of having an acceptable mechanism
can be left to the GST Council
[3]. The $100Billion-question
What is OECD?
The Organisation for European Economic Cooperation (OEEC) was established in 1948 to run the US-financed Marshall Plan for reconstruction of a continent ravaged by war. By making individual
governments recognise the interdependence of their economies, it paved the way for a new era of cooperation that was to change the face of Europe. Encouraged by its success and the prospect of carrying its work
forward on a global stage, Canada and the US joined OEEC members in signing the new OECD Convention on 14 December 1960. The Organisation for Economic Co-operation and Development (OECD) was
officially born on 30 September 1961, when the Convention entered into force.
What has happened?

The OECD, in partnership with Climate Policy Initiative (OECD-CPI), recently released a paper Climate Finance in 2013-14 and the $100 billion goal.
The paper has claimed significant progress towards that goal. The preliminary estimates were that the mobilisation of climate change finance from developed to developing countries had reached $62 billion in
2014 and $52 billion in 2013, equivalent to an annual average over the two years of $57 billion.
Department of Economic Affairs secretary Shaktikanta Das has raised concerns regarding the credibility of the data and the report of OECD. He points out that,
1. The data is specious since it refers to pledges to climate funds, not actual disbursements;
2. It includes any existing multilateral aid that has even the slightest climate co-benefit, even debt flows at commercial/near-commercial terms and FDI
For example: Even a $22Billion dollar investment in Indias solar industry over a decade by SoftBank would be considered as developmental financing by OECD despite the fact that India is offering commercial
returns to it.
India should tread with caution
India and other developing countries should tread cautiously before jumping the clean energy bandwagon to placate USs interests. In case of India, coal is the best bet as compared to expensive renewable sources
of energy. India should focus on a global green-and-clean coal initiative maintaining absolute caution with the Wests move to phase out fossil fuels.
India should stand against this carbon imperialism.
What is carbon imperialism?
The opinion that West is putting undue pressure on developing countries to shift to cleaner fuels is seen as Wests imperialism wrt usage of carbon. The West gobbled up the carbon space and left very little for
others and now it wants developing countries to shift to costlier cleaner energy alternatives without providing any assistance or a meagre assistance at the most.
The way forward for India
India has to push for far greater R&D in areas to help both prevent and adapt to climate change. Research on heat/drought/flood/saline-resistant foodgrain as also any technology that reduces the carbon-intensity
of production also needs to be stepped up dramatically
By: ForumIAS Editorial Team

9 PM Daily Brief 2nd December 2015

National
[1].Gujarats controversial labour law bill gets presidential assent
What has happened?
President Pranab Mukherjee has given his assent to the controversial Labour Laws bill, 2015.
Why the controversy?
Bill has certain provisions against which it has been termed as anti-labour and pro-private by the opposition parties in Gujarat.
1. Time limit: The time limit for workers to raise objections to the decisions of the industries has been reduced to one year from three years.
2. Dispute settlement: out of court settlement of disputes wherein a set amount of penalty would be deposited by the employer with the government and 75% amount would be given to the
affected labourer. Gujarat government says that this has been done to arrive at quick solution in a dispute as such matters drag for years in courts.
3. Strikes: ban strikes in public utility services for up to one year
State laws sent to President this year = 65
State laws given assent = 34

Sikkim Promotion of Local Employment Bill, 2008
The President refused to give assent to the Sikkim Promotion of Local Employment Bill, 2008, which proposed 80 per cent employment in the private sector for people carrying the Sikkim Subject Certificate.
Why?
It violated Sections 14 (Equality before law), 15 (Prohibition of discrimination on the grounds of religion, race, caste, sex or place of birth) and 19 (Protection of certain rights regarding freedom of speech etc) of
the Constitution.
Are all state laws sent for presidential assent?
No. Only those laws which run against the central laws and national policies & whose legal and constitutional validity can be challenged are sent for presidential assent.
[2]. A synthetic mridangam sans animal skin
What has happened?
Bengaluru-based vocalist and scientist K. Varadarangan has designed a mridangam without using animal skin.
Construction of mridangam
The mridangam is a double-sided drum whose body is usually made using a hollowed piece of jackfruit wood about an inch thick. The two mouths or apertures of the drum are covered with a goatskin and laced
to each other with leather straps around the circumference of drum. These straps are put into a state of high tension to stretch out the circular membranes on either side of the hull, allowing them to resonate when
struck.
Mridangam
The new design consists of synthetic fibreglass shell mridangam with polyester films and rubber material used for drumheads.
It has been named as SRI Mridangam.
Significance of Mridangam in Hindu culture
In ancient Hindu sculpture, painting, and mythology, the mridangam is often depicted as the instrument of choice for a number of deities including Ganesha (the remover of obstacles) and Nandi, who is the
vehicle and follower of Shiva. Nandi is said to have played the mridangam during Shivas primordialtandava dance, causing a divine rhythm to resound across the heavens. The mridangam is thus also known as
Deva Vaadyam, or Divine Instrument
Significance in Tamil culture
In Tamil culture, it is called a tannumai. The earliest mention of the mridangam in Tamil literature is found perhaps in the Sangam literature where the instrument is known as tannumai. In later works like
the Silappadikaram also we find detailed references to it as in the Natyasastra. During the Sangam period, it was one of the principal percussion instruments to sound the beginning of war.
The mridangam is nicknamed as the King of Percussion.
What is a percussion instrument?
A percussion instrument is a musical instrument that is sounded by being struck or scraped by a beater (including attached or enclosed beaters or rattles); struck, scraped or rubbed by hand; or struck against
another similar instrument.
International
[1]. 13th Amendment to be basis of constitutional reforms: Chandrika

Kumaratunga
Former Srilankan President has said that the 13th Amendment would be a part of the basis of the constitutional reforms vis-a-vis ethnic issues plaguing Srilanka.
What is this 13th Amendment?
The Thirteenth Amendment (13A) to the Constitution of Sri Lanka is amendment to the Constitution of Sri Lanka which created Provincial Councils in Sri Lanka. This also made Sinhala and Tamil as the
official language of the country and English as link language. This amendment was done after the Indo-Lanka accord of 29 th July 1987 between Rajiv Gandhi and Sri Lankan president J.R Jayawardene.
What is Indo-Lanka accord?
The Indo-Sri Lanka Peace Accord was an accord signed in Colombo on 29 July, 1987, between Indian Prime Minister Rajiv Gandhi and Sri Lankan President J. R. Jayewardene. The accord was expected to
resolve the Sri Lankan civil war. Under the terms of the agreement, Colombo agreed to a devolution of power to the provinces, the Sri Lankan troops were to be withdrawn to their barracks in the north and the
Tamil rebels were to surrender their arms.
[2]. Terror, climate among BRICS focus areas

What has happened?
1st media summit of BRICS was hosted in Beijing.

6-point agreement was finalised at the summit. Major points in the agreement are,
1. Institutional development in the BRICS countries
2. Establishing a BRICS media foundation,
3. A liaison office that would coordinate summit activities,
4. Training of media personnel
5. Coordination of BRICS media covering G-20 summits,
6. Holding a photo exhibition along BRICS summits
7. Setting up BRICS Media Journalism Awards.
[3]. Rajan keeps repo rate unchanged, stresses accommodative stance to

continue
What has happened?
The Repo rate has been kept unchanged by the RBI at 6.75%.
What is Repo rate?
It is the interest rate at which RBI lends money to the banks.
RBI had reduced the repo rate by 125bps in 2015 to boost growth (as Banks can borrow money for lesser interests).
Impact of change in Repo rate (Image
source www.riksbank.se)
Transmission mechanism: The way in which Repo rate affects inflation and the rest of the economy is called as Transmission mechanism.
An increase in Repo rate = decrease in inflation
A decrease in Repo rate (as done by RBI in 2015) = increase in inflation. Inflation is on the increase as denoted by Consumer Price inflation (CPI) which stands close to 5% but RBI has set a target of 6%
inflation by January so this trend is on the expected lines.
Factors that influenced RBIs decision,
1. Recently announced pay hike by 7th pay commission can increase inflation but RBI is banking on governments fiscal consolidation. Fiscal deficit has decreased from 5.7% of the GDP in 2011-12
to 4% last year. A number of subsidy reducing measures and steps to improve tax revenue have contributed to this.
2. Food inflation has also lowered
Conclusion
Repo rate is a tool used by RBI to control inflation. This time it has been kept unchanged as results of previous Repo rate decrease have been favourable and economy is on the recovery plane.
[2]. Manufacturing sector growth drops to 25-month low
What has happened?
Indias manufacturing sector grew at its slowest pace in 25 months in November on sluggish pace of new business orders.
Indian output manufacturing growth has continued to decline for the 4 th consecutive month as per the monthly Purchasing Managers Index (PMI) survey conducted by Markit and Nikkei India.
What is Purchasing Managers Index (PMI)?

An indicator of the economic health of the manufacturing sector, the PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
A PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change.
Contraction is a phase of the business cycle in which the economy as a whole is in decline.
PMI fell to a 25-month low of 50.3 in November, from 50.7 in October.
[3]. IMF gives Chinas currency prized reserve asset status
What has happened?
The International Monetary Fund admitted Chinas yuan into its benchmark currency basket on 30 thNovember 2015, in a victory for Beijings campaign for recognition as a global economic power.
The decision to add the yuan, also known as the renminbi, to the Special Drawing Rights (SDR) basket alongside the dollar, euro, pound sterling and yen, is an important milestone in Chinas integration into
global finances and a nod to the progress it has made with reforms.
What is SDR?
It is an international type of monetary reserve currency, created by the International Monetary Fund (IMF) in 1969, which operates as a supplement to the existing reserves of member countries.
SDR Basket contains key international currencies like Dollar, Euro, Pound, Sterling etc. To this basket Yuan or renminbi has also been added
What has China done to achieve this?
Many reforms have been carried out like,
1. better access for foreigners to Chinese currency markets,
2. more frequent debt issuance
3. Expansion of Yuan trading hours.
[4]. Govt to announce Rs 10,000-crore corpus to push electronics

manufacturing, innovation
What has happened?
The government will announce a corpus of Rs 10,000 crore towards an Electronics Development Fund. The fund will start with an initial corpus of Rs.2500 Crore.
Why this fund has been created?
This fund has been created to provide financial assistance to domestic companies so as to encourage electronics manufacturing and innovation in the sector.
1. This will fund venture capitalists, who in turn will fund domestic companies in the field of electronics system design and manufacturing
2. It will be used to encourage innovation and support entrepreneurship.

[5]. Nominal GDP Growth Rate at 10-Year Low
Why corporate profits are decreasing despite an increase in GDP growth rate of 7.4% during 2015-16?
It is because the 7.4% growth rate is actually the real growth rate not the Nominal growth rate on which the corporate profitability is measured.
Calculation of Real growth rate
The inflation rate (popularly known as GDP price deflator) is reduced from nominal GDP growth rate to calculate the real GDP growth rate
Nominal GDP growth rates are measures at current market prices
In the past, Indias Nominal GDP growth rates were in the range of 12% 15% & inflation was at 4% 8%
So, Real GDP growth rate was = 6%-9%
What is happening now?
Now, the inflation is falling and Nominal GDP growth rate is also falling so real GDP growth rate is still holding to a respectable level of 7.4%
The GDP price deflator or inflation rate now is negative 2.2%. If it had been positive our Real growth rate would have been 5.2%
[6]. India Lags in Net Access, Ranks 131 in ICT Index
What is ICT development Index?
The ICT Development Index (IDI) is an index published by the United Nations International Telecommunication Union based on internationally agreed information and communication technologies (ICT)
indicators. This makes it a valuable tool for benchmarking the most important indicators for measuring the information society. The IDI is a standard tool that governments, operators, development agencies,
researchers and others can use to measure the digital divide and compare ICT performance within and across countries.
What has happened?
India has been ranked 131 out of 167 countries by the ICT Development Index
1. Although India has made tremendous progress in raising its telecom density, the country remains far behind when it comes to providing internet access.
2. Only 18% Indians have access to the internet
3. 3% of households have internet access in India
Must see infographic: http://epaperbeta.timesofindia.com/Gallery.aspx?eid=31816&id=02_12_2015_007_006_003&type=P&artUrl=India-Lags-in-Net-Access-Ranks-131-in-02122015007006
[1]. No diplomacy by stealth
What has happened?

At the ongoing Paris COP-21 summit PM Narendra Modi and Pakistans PM Nawaz Sharif shook hands with each other. Author in this article talks about various issues plaguing bilateral relations of India and
Pakistan coupled by the conclusion that both countries should be clear about this fact that non-engagement is not an option
Issues
1. The implementation of a liberalised visa regime,
2. Upgradation of trade checkpoint infrastructure at the international border and the Line of Control,
3. bank facilities to further trade
4. Indias concerns about Pakistan giving free rein to terrorists like Hafiz Saeed and establishment support to terror groups
Addressing these issues through bilateral engagement is the only way forward. Indias initiative in bilateral arena would give it considerable leverage when PM shall attend SAARC summit in 2016 in Pakistan.
[2]. Time to abolish criminal defamation

What has happened?
SC has recently made an observation that political leaders should not take criticism as personal insults.
Why SC made this remark?
The courts remark came in the context of several of cases of defamation reaching its portals in recent years. For example: 100-odd cases of defamation have been filed by Tamilnadu government against
politicians and media houses
Sections 499 and 500 of the Indian Penal Code, which criminalise defamation in India, have been challenged in the Supreme Court.
Why criminal defamation should be scrapped?
1. Against free speech: coercing the media to observe self-censorship and self-restraint undermines the ideal of free speech
2. Discourages expositions: In 2011, the Human Rights Committee of the International Covenant on Civil and Political Rights called upon states to abolish criminal defamation, noting that it
intimidates citizens and makes them shy away from exposing wrongdoing.
3. Instrument of harassment: Its misuse as an instrument of harassment is pervasive in India. Often, the prosecutors complaint is taken at face value by courts, which send out routine notices for
the appearance of defendants without any preliminary examination whether the offending comments or reports come under one of the exceptions spelt out in Section 499. Thus, the process itself becomes
the punishment.
[3]. Prelude to next big conflict?

What has happened?
A Russian jet was shot down by the Turkish armed forces after it intruded into its airspace over its border with Syria.
Russian stance
Russia claims that the plane was never inside the Turkish airspace. After the downing of the jet, Russian government has only hardened its stance against anything Turkish. Like,
1. Russian President Vladimir Putin has already stepped up the political war by calling Turkeys Islamist government an accomplice of terrorists, accusing it of supporting jihadist groups in Syria,
buying oil from the Islamic State (IS) and driving Turkey towards the path of radical Islam.
2. He has also turned down Turkish President Recep Tayyip Erdogans request to meet in Paris, where world heads of state have gathered for the United Nations Climate Change Conference.
3. Russian officials have announced they are suspending military cooperation with Ankara and cancelling visa-free travel for Turkish citizens.
4. Moscow has advised its own citizens millions of whom visit Turkeys Mediterranean coast every year to stay away from the country,
5. A number of Turkish firms have been raided and
6. Imports have been sent back,
7. Joint energy and infrastructure projects might also be halted,
8. A draft law has been submitted to the Duma (Russian parliament) that would criminalise the denial of the 1915 genocide of Armenians by the Ottoman Empire, a charge that Turkey officially
rejects.
Turkish stance
1. President Erdoan has ruled out any apology for what his government insists was a legitimate reaction to the alleged violation of its airspace by a foreign warplane. This is the official Turkish
justification for its role in the crisis. The underlying motive, however, is Ankaras frustration with Russias recent military operations in Syria, officially against IS, but in fact targeting a wide range of groups
fighting the regime of Bashar al-Assad, including those supported by Turkey and the U.S.
2. Nationalist sentiments have been swelling among Turks on the back of pro-government media reporting of alleged Russian atrocities against the Turkmen community of northwest Syria, which has
ethnic and historical ties to Turkey. (Moscow claims it is targeting jihadists fighting alongside IS or the al-Qaeda affiliated al-Nusra Front; Ankara argues that these are civilians defending themselves against
the Syrian regime.) It was in this mountainous area that the Russian plane was shot down.
How author sees this grandstanding by both Russian and Turkey?
Two macho men with oversized egos, Mr. Erdogan and Mr. Putin see themselves as the heirs to the defunct Ottoman and Russian empires, driven by a sense of mission to restore their nations past imperial glory.
The main issue which is IS should be the one which is dealt with such show of pride and strength. Engaging with each other is only going to further the terrorist organisations hideous agenda.
[4]. Now, dont pass the buck

Context: The article deals with the Sec 377 of the Indian Penal Code and it alludes to the Koushal vs Naz foundation case verdict which decriminalised consensual homosexual sex between consenting adults.
What is Sec 377?
Section 377 of the Indian Penal Code, introduced during British rule of India, criminalizes carnal intercourse against the order of nature. This phrase was interpreted to mean all forms of sexual activity other
than heterosexual penile-vaginal intercourse
The verdict is overturned
On December 11, 2013, the Supreme Courts two member bench (Justices G. S. Singhvi and S. J. Mukhopadhaya) overturned the decision of the Delhi High Court. It said that the 2009 order of the High Court is
constitutionally unsustainable as only Parliament can change a law, not courts.
Author says that what court did in 2013 court by passing the buck to the legislature to amend the law is being done by the legislature now, as it is now asking courts to reconsider its decision rather than taking a
pro-active approach and amending the law on its own.
[5]. In Paris, a chance to lead

Context: How India can benefit from a credible Paris agreement is what has been discussed in this article by the author
Why India should work for a cleaner economy?

1. Human casualties: About one in five premature deaths in India perhaps 2 million each year is caused by environmental factors. Household air pollution, from burning solid fuels, accounts
for half of these. Outdoor particulate matter pollution, from burning fossil fuels for power and transport, caused an estimated 6, 30, 000 premature deaths in India in 2010, and costs the equivalent of 5.5-7.5
per cent of GDP each year.
2. Polluted cities: Half the worlds most polluted cities are here in India, including the top four: Delhi, Patna, Gwalior and Raipur.
3. Financial cost: Domestic energy production has not kept pace with growth in demand, which is doubling every 15 years. As a consequence, energy imports have surged. Between 2008 and
2012, we spent an average of 6.4 per cent of GDP importing fuel from overseas
What should India do?
1. Distributed, small-scale renewable energy can deliver to rural communities the social and economic benefits of electrification much more quickly than if we rely solely on extending the electric
grid.
2. Solar power, potentially coupled with batteries, can improve public health, enable access to education and provide economic opportunities.
3. Reducing reliance on coal: Reducing our reliance on dirty coal-fired power plants will help improve air quality. Providing poor people with clean cookstoves would also help address indoor
pollution.
4. Improving urban planning: Addressing some of the problems in Indias existing model of urban planning could benefit the economy and the climate. For example, compact, connected and well-
coordinated cities are more energy efficient. The World Bank estimates that for every 1,000 km of new bus rapid transit lanes, 1,28,000 new jobs are created and 27,000 premature deaths from pollution and
accidents are avoided, all the while simultaneously reducing greenhouse gas emissions.
5. More than 42 of the largest businesses in the country voluntarily participate in the India GHG (greenhouse gas) programme an initiative that facilitates measurement and management of GHG
emissions.
Conclusion
Greater ambition on renewable energy and reducing carbon intensity would lead to greater economic benefits for India. It is in our countrys interest to capitalise on the low-carbon economy. It will allow us to
enjoy cleaner air in more liveable cities and, hopefully, in a more stable and hospitable climate.
[6]. Balance the force
What has happened?
The Union home ministry has decided to discontinue collection and publication of data on the share of Muslims in the police.
In this article author declares this decision as being a misguided one.
Why?
This data helped the policymakers in deciding that whether the police force which is serving the society truly reflects the diversity that exists in it.
Why we need a diverse police force?
A diverse police force encompassing representation from all the sections of the society helps in building trust and credibility amongst the masses. Minority should not feel that the force is a tool which majority can
use to rule over them.
What Sachar Committee report says regarding attitude of police force wrt Muslims?
The Sachar Committee reported that Muslims lacked a sense of security and felt that every bearded man is considered an ISI agent by the police and, should any incident occur, immediately, and likely
unjustly, picked up this may explain why, according to NCRB data, 21 per cent of jailed undertrials are Muslims. Indeed, the report suggests that this intense vulnerability and fear is accentuated by a
diminished Muslim presence in the police, which also heightens insecurities in communally sensitive moments, and recommends that more Muslims be inducted into the force.
Conclusion
A diverse police force having members from all the sections of the society helps ward off the feelings of institutionalised racism and prejudice. This decision is therefore a misguided one and should be reverted
back in the interest of our nation.

9 PM Daily Brief 3rd December 2015

National
[1]. Reforming criminals has not worked
What has happened?
A majority judgement of five-judge constitution bench led by Chief Justice of India H.L Dattu observed that any further lenience shown in the matter of imposition of sentence vis-a-vis capital punishment and life
imprisonment would only lead to chaos and anarchy in the country.
What was the case that SC was dealing with?
The court was delivering its verdict on Tamil Nadu governments decision to cancel the life sentences of convicts in the Rajiv Gandhi assassination case.
In 2014, a three-judge Bench led by then Chief Justice of India P. Sathasivam had prepared a set of seven questions for the Constitution Bench to declare the law on,
1. Does imprisonment for life in terms of Section 53 read with Section 45 of the Indian Penal Code mean imprisonment for the rest of the life of the prisoner or a convict undergoing life imprisonment
has a right to claim remission?
2. Can a special category of sentence be made for the very few cases where the death penalty might be substituted with imprisonment for life or imprisonment for a term in excess of 14 years and
can that category be put beyond the application of remission?
3. Is the appropriate government permitted to exercise the power of remission under Section 432/433 of the Cr.PC after parallel power has been exercised by the President under Article 72 or by
the Governor under Article 161 or by this court in its constitutional power under Article 32 as in this case?
4. Does Section 432(7) of the Cr.PC clearly give primacy to the executive power of the Union and exclude the executive power of the State where the power of the Union is co-extensive?
5. Which has primacy, the Union or the State, over the subject matter in List III of the Seventh Schedule of the Constitution for exercise of the power of remission?
6. Can there be two appropriate governments in a given case under Section 432(7) of the Cr.PC? Is suo motu exercise of the power of remission under Section 432(1) permissible? If, yes, is the
procedure prescribed in the same Section mandatory or not?
7. Does the term consultation stipulated in Section 435(1) of Cr.PC imply concurrence?
Verdict
1. Primacy of the centre: A State government has no suo motu power to remit sentences of persons who were convicted under a Central law and cases investigated by a central agency like the
CBI. Centre and not State government will have the primacy in deciding whether persons convicted in matters of the CBI or central agency should be released or not on remission as in the Rajiv Gandhi
killers case.
2. Interpretation of Sec 435 (2) of CrPC: the judgment held that the word consultation means concurrence. This means that TN govt should have got the prior consent of the Centre before issuing
its February 19 order to remit the sentences.
3. Constitutionality of special sentence: This special sentencing was introduced in 2008 Swami Shraddananda murder case. Under this category, a prisoner is deprived of his statutory right to
apply for remission for 20 to 40 years. SC upheld the constitutionality of such special sentencing.
Why SC has upheld the special sentencing?
SC gave following reasons,
1. Absence of proper infrastructure: Unless there was infrastructure to provide education and induce repentance in a criminal, prolonged periods of imprisonment without remission was an
effective way to keep them away from society.
2. Keep criminals in check: Such harsh measures were required to tame heartless, hardened, money-minded, lecherous, paid assassins who preyed on the common man and the vulnerable.
3. Failure of state: It is a hard reality that the state machinery is not able to protect or guarantee the life and liberty of the common man. Therefore, any sympathy shown will only amount to a
misplaced one which the courts cannot afford to take.
[2]. Child Friendly TB drugs launched

What has happened?
For the first time, child-friendly TB drugs was launched by TB Alliance, UNITAID and WHO (World Health Organisation) at the 46th Union World Conference on Lung Health in Cape Town, South Africa on
2nd Dec 2015
What has been achieved?
Flavoured tablets for TB have been launched. These tablets are in fixed dosages as per the requirement and need not be crushed in order to be administered to children.
How it will help?
Earlier, children had to be given multiple pills designed for adults and had to be crushed or split in order to be given to children which often lead to miscalculation of exact dosages. Moreover, crushing made the
tablet taste bitter but now with the flavoured tablets administering tablets to children would not be a problem.
According to the WHO, each year, at least 1 million children become ill with TB.
What is TB alliance?
TB Alliance is a not-for-profit organization dedicated to the discovery and development of better, faster-acting, and affordable tuberculosis drugs that are available to those who need them
UNITAID
Established in 2006 by Brazil, Chile, France, Norway and the United Kingdom to provide an innovative approach to global health, UNITAID plays an important part in the global effort to defeat HIV/AIDS,
tuberculosis and malaria, by facilitating and speeding up the availability of improved health tools, including medicines and diagnostics.
UNITAID identifies health solutions that show promise and invests in them to establish their viability so that partner organisations can then make them widely available.
[3]. Centre to amend 2 laws to meet climate goals

What has happened?
India will amend the Electricity Act and the Energy Conservation Act in order to achieve the efficiencies that it has pledged to the U.N. Framework Convention on Climate Change (UNFCCC) meeting at Paris.
Has India undertaken a similar step in the past?
Yes. India too similar measures for the Montreal Protocol when it issued the Ozone Rules to prevent the release of substances that affect the ozone layer, notably chlorofluorocarbons.
Indias companies, particularly in the cement and steel sectors, have been able to achieve globally reckoned energy efficiencies. Under the Perform, Achieve, Trade (PAT) scheme for industries that was in force
until March 2015, trading of the energy savings certificates by those industries that achieved a surplus would start in January
PAT Scheme
With the aim to make the industrial sector energy efficient, Indias Bureau of Energy Efficiency (BEE) launched its Perform, Achieve and Trade (PAT) scheme on July 4, 2012. The scheme set energy efficiency
targets for industries. Those that failed to achieve targets had to pay penalty.
PAT was launched under the National Mission for Enhanced Energy Efficiency, one of the eight missions under the umbrella National Action Plan on Climate Change, launched in June 2008
National Action Plan for Climate Change (NACP)
On June 30, 2008, Prime Minister Manmohan Singh released Indias first National Action Plan on Climate Change (NAPCC) outlining existing and future policies and programs addressing climate mitigation and
adaptation.
Eight core missions: The plan identifies eight core national missions running through 2017 and directs ministries to submit detailed implementation plans to the Prime Ministers Council on
Climate Change by December 2008.
National Solar Mission: The NAPCC aims to promote the development and use of solar energy for power generation and other uses with the ultimate objective of making solar competitive with fossil-based
energy options. The plan includes:
1. Specific goals for increasing use of solar thermal technologies in urban areas, industry, and commercial establishments;
2. A goal of increasing production of photovoltaics to 1000 MW/year; and
3. A goal of deploying at least 1000 MW of solar thermal power generation.

Other objectives include the establishment of a solar research center, increased international collaboration on technology development, strengthening of domestic manufacturing capacity, and increased
government funding and international support.
National Mission for Enhanced Energy Efficiency: Current initiatives are expected to yield savings of 10,000 MW by 2012. Building on the Energy Conservation Act 2001, the plan recommends:
1. Mandating specific energy consumption decreases in large energy-consuming industries, with a system for companies to trade energy-savings certificates;
2. Energy incentives, including reduced taxes on energy-efficient appliances; and

3. Financing for public-private partnerships to reduce energy consumption through demand-side management programs in the municipal, buildings and agricultural sectors.
National Mission on Sustainable Habitat: To promote energy efficiency as a core component of urban planning, the plan calls for:
1. Extending the existing Energy Conservation Building Code;
2. A greater emphasis on urban waste management and recycling, including power production from waste;
3. Strengthening the enforcement of automotive fuel economy standards and using pricing measures to encourage the purchase of efficient vehicles; and
4. Incentives for the use of public transportation.
National Water Mission: With water scarcity projected to worsen as a result of climate change, the plan sets a goal of a 20% improvement in water use efficiency through pricing and other measures.
National Mission for Sustaining the Himalayan Ecosystem: The plan aims to conserve biodiversity, forest cover, and other ecological values in the Himalayan region, where glaciers that are a major source of
Indias water supply are projected to recede as a result of global warming.
National Mission for a Green India: Goals include the Afforestation of 6 million hectares of degraded forest lands and expanding forest cover from 23% to 33% of Indias territory.
National Mission for Sustainable Agriculture: The plan aims to support climate adaptation in agriculture through the development of climate-resilient crops, expansion of weather insurance mechanisms, and
agricultural practices.
National Mission on Strategic Knowledge for Climate Change: To gain a better understanding of climate science, impacts and challenges, the plan envisions a new Climate Science Research Fund, improved
climate modelling, and increased international collaboration. It also encourages private sector initiatives to develop adaptation and mitigation technologies through venture capital funds.
[4]. Uniqueness of Indias smart cities

Context: PMs commitment to make 100 smart cities in India is a laudable one but it should be seen that the project is implemented keeping mind Indias needs and is not simply a copy-paste job from efforts
going on elsewhere in the world.
Author says that,
1. Technology-first approach to smart city development, without a clear understanding of local conditions, traditions and realities, will often fail to result in sustained, community-wide change.
2. Instead of focussing on smart cities of developed countries like San Francisco, Toronto, Helsinki India should focus on smart-cities built in the developing countries like Nairobi. The focus should
be on clean and reliable energy, safe and secure streets, transparency and citizen engagement
3. Governance of smart-cities: Globally, most smart cities are governed at the city level; this is not the case in India. Though State governments are at liberty to engage directly with other countries to
attract foreign investment and are largely responsible for all infrastructure development, further devolution of powers to local governance like municipalities is required. It is critical for the success of smart-
cities.
4. Different cities, different solutions: 3 cities currently under US-India smart city partnership are, Allahabad, Vizag and Ajmer. Alll three cities have different economies, different specialisations like
for Vizag its trade and transport, for Allahabad its unregistered manufacturing and for Ajmer its agriculture. So, keeping these individualistic factors in mind while designing a roadmap for these cities is
critical. Roadmaps for smart-city development should be centered on each citys core strengths instead of a one size fits all approach.
[5]. Managing artificial intelligence and robotics

Context: This article re-iterates what most of us already know. A future where machines augment human efforts is not far away.
Examples of intelligent robotic systems,
1. IBMs Watson
2. Rethink Robotics Baxter,
3. Deep-Mind,
4. Googles driverless car
How much can we automate presently?
Presently, fewer than 5% of occupations can be entirely automated using current technology.
Also, about 60% of occupations could have 30% or more of their constituent activities automated.
Author concludes by saying that, machines can augment human capabilities to a high degree, and amplify the value of expertise by increasing an individuals work capacity and freeing the employee to focus on
work of higher value.
[6]. Land Bill Twists

What has happened?
As centre has put Land Acquisition Bill in the cold corner, States are now taking the lead to seek an exemption from the 2013 Act passed by the previous UPA government to get around provisions such as land
owners consent and social impact assessment. Tamilnadu has already brought changes while Andhra Pradesh, Rajasthan and MP are looking to follow the suit. The National Commission for Scheduled Tribes
(NCST) has now served a notice to the Rajasthan government for not weaving in special safeguards for Scheduled Tribes (STs)
Changes Tamilnadu has brought,
Tamil Nadu amended the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 by inserting a new section Section 105 that exempts land acquisition
for industrial purposes and highways from the provisions of the Centres land Act.
NCST (the National Commission for Scheduled Tribes) says,
That the state government has flouted Article 338A of the Constitution, which specifies that all matters relating to STs should be sent to the NCST and state commissions for vetting. Considering that land
acquisition is a List-III, Entry 42 subject in the Concurrent List, any state law needs Presidential assent before it becomes law.
Author says that,
Instead of creating hurdles in the way of land acquisition the NCST should work towards ensuring that ST candidates get jobs in the units that are eventually set up. That would lead to quicker improvement in
their financial status.
[7]. Tricky terrains in Child Labour Bill
What has happened?
The government plans to seek the passage of the Child Labour (Prohibition & Regulation) Amendment Bill 2012 (CLPRA) in the ongoing winter session of Parliament. This article deals with few pitfalls in this
new amendment.
What new amendment proposes?
The Bill proposes banning all kinds of child labour under the age of 14 years. This was done to align the child labour law with the Right to Free and Compulsory Education Act 2009, which makes education a
fundamental right for all children in the age group of 6-14.
While the Child Labour (Prohibition and Regulation) Act of 1986 banned the employment of children up to the age of 14 in hazardous occupations, this proposed amendment prohibits employment of children
below 14 years in all occupations and processes.
Exemption: Children under 14 years can be employed in non-hazardous or entertainment industry but only after school hours or during holidays.
Employment of children
Original: banned employment of children below 14 years of age in only 18 hazardous industries.
New: prohibits employment of children below 14 years in all occupations and processes.
Penal criteria for 1st and repeat offence
Original: Penalty for first offence is 20000rs. The penalty for second or subsequent offence of employing any child in contravention of the law is imprisonment for a minimum term of six months, which may
extend to two years.
New: Penalty for first offence has been increased from 20000rs to 50000rs for the employer along with six month jail that can extend upto 2 years. In case of a second or subsequent offence of employing any
child or adolescent in contravention of the law, the minimum imprisonment would be one year, which may extend to three years.
A cognizable offence
The Bill adds that the offence of employing any child or adolescent (14-18years) in contravention of the Act by an employer will be cognizable, which will allow police to arrest without a warrant.
Child and Adolescent Labour Rehabilitation Fund: This fund will be used to rehabilitate rescued children and adults
What critics are saying?
Critics point out that this new amendment has in a way legitimised child labour.
1. The amendment is in direct conflict with Right to Education. Under the garb of family enterprises, these children can be made to work in labour-intensive areas like in brick kilns, carpet-weaving,
zari and beedi-making units, diamond cutting, domestic help, etc
2. Anomaly: Different acts have different definitions of child which needs to be corrected. While the RTE Act 2009 and CLPRA 2012 define a child as a 14-year-old, the Juvenile Justice (Care and
Protection of Children) Act 2000 considers this to be 18 years. The definition of child should be uniform
3. Earlier, there were 83 hazardous occupations, which have been brought down to just threemines, explosives and inflammables as hazardous processes as per Factories Act 1948. It is a very
serious issue because it means that children will be allowed to work in many occupations where they were not allowed to work in the past.
Conclusion
However, the key challenge would be the implementation part. Do we have the necessary infrastructure to ensure that parents or employers would not go scot-free in case of violations? Is policing enough? Should
we not motivate parents to send their wards to the school? What will happen in case the unfortunate young girl/boy is the only bread-winner for the family? Framing rules and regulations without properly judging
the ground reality is like hurling stones in the sky. There could be sound and fury; but it would not signify much
[8]. At WTO talks, India to oppose bid at dilution

Context: At the coming Nairobi ministerial meeting of the World Trade Organisation (WTO), India is likely to oppose efforts by rich countries to dilute the development dimension of the Doha Round
negotiations, which are aimed at reaching an agreement to liberalise global trade.
When is the meeting?
The WTO meeting will be held at the Kenyan capital during December 15-18. This would be 10 thministerial conference.
What is ministerial conference?
It is the topmost decision making body of WTO. There have been nine conferences from 1996 to 2013, usually every two years.
The Doha Round

The WTO launched the current round of negotiations, the Doha Development Agenda (DDA) or Doha Round, at the Fourth Ministerial Conference in Doha, Qatar in November 2001. The Doha round was to be
an ambitious effort to make globalisation more inclusive and help the worlds poor, particularly by slashing barriers and subsidies in farming.
The initial agenda comprised both further trade liberalization and new rule-making, underpinned by commitments to strengthen substantial assistance to developing countries.
The negotiations have been highly contentious and agreement has not been reached, despite the intense negotiations at several Ministerial Conferences and at other sessions. As of 2008, disagreements still
continued over several key areas including agriculture subsidies.
Agenda of developed world
At the meeting, it is being expected that the developed world will try to create divisions amongst the developing countries. Attempts were being made by some developed countries to categorise nations such as
India (now developing) as emerging economies by making unsubstantiated allegations that such emerging economies were cornering the benefits meant for developing countries.
WTOs stand
The WTO does not define developing or developed countries. Members can apply the principle of self-election and themselves decide if they are to be labelled as developing countries.
Other members can question any member about its decision to label itself as developing with an aim to take advantage of provisions available to developing countries. However, the WTO recognizes the least
developed countries as designated.
International
[1]. ISIS statehood project lies in tatters
What has happened?
The IS that has claimed to be more than a militant group, selling itself as a government for the worlds Muslims that provides a range of services in the territory it controls has its statehood project in tatters.
Why ISIS statehood project is in tatters?
1. Under pressure from airstrikes by several countries,
2. New ground offensives by Kurdish and Shiite militias
3. Important services have been failing because of poor maintenance. And as its smuggling and oil businesses have faltered, the Islamic State has fallen back on ever-increasing taxes and tolls
imposed on its squeezed citizens
ISIS in need of experts
The caliphate is in more need than ever before for experts, professionals and specialists who can help contribute to strengthening its structure and tending to the needs of their Muslim brothers.
Economy
[1]. Manipal Hospitals fight cancer using IBMs Watson
What has happened?
Manipal Hospitals corporate and teaching facilities will adopt IBMs supercomputer, called Watson, to fight cancer.
This is first deployment of Watson in India as per IBM
Watson
1. It analyses large amounts of medical data to speed up diagnostic process. It would reveal insights that would help oncologists (a doctor who specializes in treating people with cancer) provide
cancer patients with individualized healthcare. This includes assessing individual tumours to suggest which drug should be used to target them.
2. IBM said the machines learning capability enables it to continuously learn about oncology over time.
Cancer in India
Cancers of all type claim approximately 6,80,000 lives each year in India, making it the leading cause of death in the country after heart diseases, according to the World Health Organization. There are one million
new cancer cases diagnosed every year in India, and this is expected to rise fivefold by 2020.
What is cognitive computing?
It is the simulation of human thought processes in a computerized model. Cognitive computinginvolves self-learning systems that use data mining, pattern recognition and natural language processing to mimic
the way the human brain works.
Conclusion
This engagement represents a major step in the transformation of healthcare in India. With IBM Watson cognitive computing has come to the healthcare ecosystem to help deliver greater value to patients in India.
[2]. What is New Development Bank (NDB)?

NDB The New Development Bank (NDB), formerly referred to as the BRICS Development Bank,[1] is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South
Africa) as an alternative to the existing American and European-dominated World Bank and International Monetary Fund.
Goal of NDB: The goal of the bank is to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries. The bank is
headquartered in Shanghai, China. Each participant country holds an equal number of shares and equal voting rights, and none of the countries will have veto power.
[3]. How much of commercial bank money is being created by one unit of
central bank money?
Indias money multiplier has been gradually rising over the years due to steady decline in cash holdings
Every one rupee of central bank money in India is able to generate around 6 rupees of money supply in the economy. Indias ratio remains lower than that of Europe, but higher than that of the US.
Why is money multiplier important?
A higher value for this ratio, called the money multiplier, indicates that the banking system generates a higher money supply out of money given by central bank
Factors on which money multiplier depends,
1. How much individuals (and businesses) hold in cash: The more individuals hold cash in hand, the less the banking system will be able to create money and hence a lower value for the
multiplier. In other words, cash in hand acts as a leakage for the banking system.
2. How much banks hold as reserves: Reserves that banks hold with the central bank also amount to a leakage, which again reduces the money multiplier. It should be noted that central banks
generally tell the banks to maintain a part of their deposits as reserves, called the Cash Reserve Ratio (CRR). So in essence, it is only the excess reserves (that banks maintain over and above the central
banks requirement) that constitute leakages.
Indian people hold more cash which lowers the multiplier but Indian banks hold lower cash reserve than their European and American counterparts.
Why European and American banks have higher cash reserves?
After the global financial crisis, banks have been reluctant to lend money and have kept higher cash reserves with the Central bank. Consequently, the money multiplier in both the US and Europe has fallen in the
recent years.
Financial inclusion and Money multiplier
The recent rise in Indias money multiplier is primarily due to the decline in tendency to hold cash in hand, rather than any significant changes in banks reserves as the behaviour of banks is regulated by RBIs
cash reserve ratio, currently at 4%.
The decline in tendency to hold cash has come in the backdrop of a rise in the proportion of population holding bank accounts.
High dormancy rate
Despite the fact that India has made progress in financial inclusion, the issue of dormant accounts remains an area of concern. A World Bank report of April 2015 said that 43% of Indian adults with an account at a
financial institution did not make any deposit or withdrawal in the past 12 months. In contrast, in high-income OECD economies the dormancy rate is 5%.
Conclusion
India has still a lot of ground to cover as its currency circulation is still higher than most economies.
[4]. Indias monetary policy doesnt reflect its current deflation

What is Inflation?
Inflation is defined as increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every Rupee you own buys a smaller percentage of a good or
service.
What is Deflation?
Deflation is a decrease in the general price level of goods and services. It occurs when the inflation rate falls below 0% (a negative inflation rate)Deflation is negative price inflation.
1. Deflation is not necessarily bad, but often periods of deflation / low inflation can lead to economic stagnation and periods of high unemployment.
2. This is because deflation can discourage spending because things will be cheaper in the future.
3. Deflation can also increase real debt burdens reducing the spending power of firms and consumers.
4. In such conditions it is not possible to service any debt & that puts paid to the financial system.
Inflation is measured via three methods
1. WPI
2. CPI
3. GDP deflator.
1. Inflation is measured in terms of annualized change in price indices. In India, the wholesale price index (WPI) for goods was commonly used.
2. There were and there still are several consumer price indices (CPI) for different situations.
3. The CPI has the advantage of capturing retail prices and services.
4. But it has never been aligned to the structure of the economy.
The WPI, however, is so aligned.
The new CPI (starting 2010) uses the expenditures reported by the National Sample Survey of Household Consumption Expenditures to derive weights.
These surveys have been found to under-report aggregate consumption in the economy by over 50%.
The ratio is much better for food and much worse for manufactured consumer goods and services. Hence, the weights tilt excessively to food items.
1. The third method to measure inflation is the implicit GDP deflator.
2. Like the consumer price index (CPI), the GDP deflator is a measure of price inflation/deflation with respect to a specific base year; the GDP deflator of the base year itself is equal to 100.
3. That is the rate derived from the GDP current and constant prices data. Cross-country data since 2000 shows that inflation as measured by the CPI and the implicit GDP deflator vary, but not by
much.
Of the three measures, the implicit GDP deflator fully reflects the structure of the economy and is a good ex post indicator of what happened with inflation.
Current scenario
1. India has been in deflation in 2015 and steeply declining rates (direction) since the middle of 2014.
2. Our monetary policy does not reflect this. It is still battling an inflation that does not exist in the GDP data.
What lies ahead?
1. There is a great challenge ahead in 2016 in the way monetary policy will unfold globally.
2. After seven years of near-zero policy rates and liquidity creation via asset purchases, the US Federal Reserve is set to normalize monetary policy over the coming years.
o The European Central Bank already has a negative deposit rate and a main lending rate of 0.05%. It may or may not move to negative lending rates.
o But it is certain to maintain near zero rates. Thus, there will be an unprecedented divergence in which the main economic regions the US and Eurozone (and Japan) will
move in 2016, and the consequential pulls may be tidal.
Impact on India
That is a very serious challenge for everyone, India included.
1. Yet, we are in disinflation and have a monetary stance befitting of a moderately high positive inflation trajectory.
2. Our domestic demand is still in an early phase of recovery. And our public sector banks are under pressure from weak asset quality and squeezed margins that cannot support rebuilding their
balance sheets.
Opinion & Editorial
[1]. On hold and accommodative

What has happened?
RBI in its policy review kept its Repo Rate unchanged.
Author is trying to analyse RBIs move. He is trying to ascertain the reason behind RBIs move to not to move from its earlier stance.
Reasons,
1. External demand continues to remain weak
2. A slowing China
3. A U.S. economy coping with an accumulation of inventory, year-low consumer confidence and a strengthening dollar
4. Consumption demand, due consequent to poor monsoon has been weakened
5. The Purchasing Managers Index (PMI) survey pointed at the slowest growth rate of manufacturing sector in 2 years.
6. Retail inflation has increased due to sharp increase in food costs
RBI is currently focussing on taking steps to ensure that the rate cut benefits reach the borrowers. At present only half of the 125bps point cut has been conveyed forward to the borrowers.
[2]. Constitution day after

What has happened?
India observed constitution day on 26th November 2015. The day has also been declared as the Constitution Day to spread awareness about the its architect Dr B.R. Ambedkar.
Winter session of the Parliament began with a debate on intolerance.
Author delineates principles that Baba Saheb Ambedkar laid down and which seems to have been forgotten in the current times.
Baba Saheb said Bhakti in religion may be a road to the salvation of the soul. But in politics, bhakti or hero-worship is a sure road to degradation and to eventual dictatorship. How do we avoid
this degradation caused to national life by acts of routine political sycophancy?
Author says that,
Unique constitutional feature: Ours is the only constitution that declares as an aspect of fundamental rights certain social practices as an offence, which are to be redressed by parliamentary legislation and
oversight under Article 35. The laws framed are not implemented with any firmness. Atrocities against untouchables continue, and these notably include arson, rape and gangrape, mass and individual murder,
stripping and parading, pursuit of obnoxious occupations as well as thousands of unspeakable daily horrors. Changes have happened but the pace needs to be increased.
Child labour: Census 2001 figures revealed 1.26 crore working children in the age group of 5-14, as compared to the total child population of 25.2 crore; approximately 12 lakh children work in hazardous
occupations/ processes. Progress seems to have been made, if we take on board the National Sample Survey Organisations 2004-05 data, which estimates the number of working children at 90.75 lakh, and
Census 2011, which places the number of working children in the age group of 5-14 years at 43.53 lakh.
Plight of the poor: the plight of Indias impoverished must always be recalled. We were told in 2010 the good news that Indias poverty rate was set to decline from 51 per cent of the population in 1990 to 24 per
cent over the next five years. But this analysis by the London-based Overseas Development Institute and the UN Millennium Campaign did not prove accurate.
Conclusion
This overall picture would be a little less depressing if Parliament were to demonstrate the collective political will to celebrate Ambedkar Jayanti by declaring war on these unconstitutional evils and developing a
timeline for eliminating them

9 PM Daily Brief 4th December 2015

National
[1]. G77, China mount sharp attack on rich nations
What has happened?
The developing country bloc of G77 and China on 3rd Dec 15, launched a sharp attack on some developed countries at the climate talks here for trying to amend the UN Framework Convention on Climate Change
(UNFCCC) by tying finance to conditionalities in the draft agreement.
What is the accusation of the G77+China bloc?
The developing country bloc has aired its criticism on following two issues,
1. Inclusion of loosely defined text The bloc raised its concern over developed countries tries to include following words into the text, like
1). Draft says that developed countries in a position to do so will provide finances to help developing countries adapt.
1. Conditionalities to financing Developed countries are trying to include conditionalities to financing. Developing countries on the other hand say that it is only on the basis of proper financial
and technological commitments that Paris agreement would be a success.
2. Foregrounding of decarbonisation In the draft, the term decarbonisation has been foregrounded meaning it has been emphasized as compared to other words surrounding it. This term has
not been mentioned in UNFCC and including it in Paris agreement can be dangerous as it can be used as a means to impose sanctions.
What is G77?
The Group of 77 (G-77) was established on 15 June 1964 by seventy-seven developing countries signatories of the Joint Declaration of the Seventy-Seven Developing Countries issued at the end of the first
session of the United Nations Conference on Trade and Development (UNCTAD) in Geneva.
First ministerial meeting: Beginning with the first Ministerial Meeting of the Group of 77 in Algiers (Algeria) on 10 25 October 1967, which adopted the Charter of Algiers, a permanent institutional
structure gradually developed which led to the creation of Chapters of the G-77 with Liaison offices in
1. Geneva (UNCTAD),
2. Nairobi (UNEP)
3. Paris (UNESCO),
4. Rome (FAO/IFAD),
5. Vienna (UNIDO),
6. Group of 24 (G-24) in Washington, D.C. (IMF and World Bank)
Although the members of the G-77 have increased to 134 countries, the original name was retained due to its historic significance.
Aim of G77
The Group of 77 is the largest intergovernmental organization of developing countries in the United Nations, which provides the means for the countries of the South to,
1. Collective interest: Articulate and promote their collective economic interests
2. Negotiating capacity: Enhance their joint negotiating capacity on all major international economic issues within the United Nations system,
3. Co-operation: Promote South-South cooperation for development.

What is Group of 24 or G-24?
The Group of 24 (G-24) is a chapter of the G-77 that was established in 1971 to coordinate the positions of developing countries on international monetary and development finance issues and to ensure that their
interests were adequately represented in negotiations on international monetary matters.
G-24 is not a part of IMF
The Group of 24, which is officially called the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, is not an organ of the International Monetary Fund, but the IMF
provides secretariat services for the Group. Its meetings usually take place twice a year, prior to the IMFC and Development Committee meetings, to enable developing country members to discuss agenda items
beforehand.
Membership of G-24
Although membership in the G-24 is strictly limited to 24 countries, any member of the G-77 can join discussions (Mexico is the only G-24 member that is not a G-77 member, when it left the G-77 without
resigning its G-24 membership).
China has been a special invitee since the Gabon meetings of 1981. Naglaa El-Ehwany, Minister of International Cooperation, Egypt, is the current chairman of the G-24.
Conclusion
Developed countries, instead of trying to subvert the interests of developing countries through subterfuge and wordplay, should focus on creating a Paris agreement which is just and equitable.
[2]. Myanmars best hope

Context: In this article author states that, although military has accepted the Myanmar electionmandate and will co-operate in the smooth transition of power, it still wont cede full control of the government to
Ms Aung San Suu Kyis party.
Ms Aung San Suu Kyis National League for democracy won the national election in Myanmar with an absolute majority. She had called Myanmars President Thein Sein and military chief General Min Aung
Hlaing for a meeting.
Author says,
1. Election comes as a new hope for the Myanmar people but military leadership would still control important ministries like Defence, interior and border security
2. Constitution of Myanmar is also written by army. Army has maintained that constitution shall not be changed in any case. As per the constitution, Ms Aung San Suu kyi cant become a president,
as her children are not Burmese.
Author goes on to say that,
1. Ms Suu Kyi is the best chance that Myanmar has got as she is a stout democrat and very popular
Problems before Myanmar
1. Discrimination: The Rohingya community, Muslims castigated as illegal immigrants, have been widely discriminated against by sections of the Buddhist majority. The governments efforts to end
the civil war with ethnic groups through negotiated agreements were only partially successful as rebels in the region bordering China refused to sign ceasefire pacts in October
2. Economic challenges
Conclusion
A large number of people inside and outside the country believe that, under the circumstances Ms. Suu Kyi may be the best person to take up the challenge. But the question is whether the generals would let her
do it. For her part, Ms. Suu Kyi needs to be more forthright in articulating an inclusive agenda, for example vis--vis the Rohingya, that addresses ethnic tensions, and gives democracy in Myanmar a stronger
chance.
Business & Economy
[1]. Governments gold bond scheme may not attain target

Gold Monetisation Scheme, Sovereign Gold Bond and India Gold Coin are the new investment arenas in gold initiated by the Government.
What is Sovereign Gold Bond (SGB)? Who is the issuer?
1. SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in
cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.
Why should one buy SGB rather than physical gold? What are the benefits?
1. The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption.
2. The SGB offers a superior alternative to holding gold in physical form.
3. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest.
4. SGB is free from issues like making charges and purity in the case of gold in jewellery form.
5. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.
Who is eligible to invest in the SGBs?
1. Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities, charitable
institutions, etc.
2. The minimum investment limit is 2 units (2 grams) and a maximum is 500 grams. Investors can apply for 2 grams and in multiples of one gram.
Who are the authorized agencies selling the SGBs?
1. Bonds are sold through scheduled commercial banks and designated Post Offices either directly or through their agents like NBFCs, NSC agents, etc.
Whats all in news about it
1. The recently launched schemes on gold are primarily intended to reduce the countrys reliance on import and to manage the widening current account deficit.
2. The government says its Sovereign Gold Bond Scheme got off to a successful start. However,industry officials say more needs to be done to ensure its success.
3. Presently, only banks and post offices are allowed to distribute the scheme. The issue is that the banks (distributors) need to be commercially incentivised to run the scheme, officials said.
4. The current scheme price was fixed for a long period which was turned out to be higher than the prevailing market prices.
Issues and Actions
1. The commercial details are left to the banks, which were not yet been announced.
2. It can become more popular if more touch points or agents are allowed to market it, where consumers find it comfortable to go
3. The government is hoping to make the scheme more attractive to customers and reduce large scale import of gold.
4. Increased accessibility to the product is an indeed requirement to draw more retail participation.
5. Since the product is largely focused on retail investors, permission given to NBFCs and retail broking companies to sell the product along with banks and selected post offices would attract more
investor attention into the platform.
Current Scenario/Further Indications
1. As the price of gold is slowing down in the international market, according to sources, imports of gold in the current fiscal likely to escalate compared to previous years gold import.
2. India imported Rs.2.10 lakh crore worth of gold (other than jewellery) in financial year 2014-15. Between April-September 2016, Rs.1.12 lakh crore worth of gold has been imported.
3. In the current market price, it would be at around Rs.12,735 crore.(So, its nearly profitable)
4. This amount was calculated on the basis of the draft document prepared by the Government in July 2015.
5. The government plans to distribute bonds worth 50 tonnes of gold in this financial year 2015-16, which is worth around Rs.13,500 crore.
6. The extension of the issue date of Sovereign Gold Bond indicated that the new scheme had a positive response.
[2]. RBI to comb bank books to unearth hidden bad loans

Let us understand a little more about NPAs but before learning about NPAs, let us talk about assets.
What is an asset?
For a bank, an asset is a loan which it gives to individuals or companies and it gets regular income from it in the form of interest.
What is NPA?
When these assets stop generating regular cash flow (or become non-performing), they are known as NPAs.
Example: If you have taken an education loan and have been unable to repay the interest or the principal amount for three months, the bank from where you have taken this loan will record it in its books as NPA.
Types of assets
Standard asset An asset which is generating regular income to the bank
Sub-standard asset If an asset remains non-performing for a period less than or equal to 12 months, it would be classified as a sub-standard asset. These assets attract a provisioning, the money that a bank
should set aside to cover potential losses, of 15%.
Doubtful asset If an asset remains in the sub-standard category for 12 months, it would be considered a doubtful asset with 25-100% provisioning
Loss asset Assets which are doubtful and considered as non-recoverable by bank, internal or external auditor or central bank inspectors.
Sub-standard assets, Doubtful assets and Loss assets are classified as NPAs. A majority of NPAs for banks come from small and medium enterprises and companies.
What has happened?

The Reserve Bank of India Bank is set to intensify its scrutiny of banks financial accounts during the annual financial inspection process as the banking regulator races to achieve the goal of cleaning up bank
balance sheets by March 2017
Why is RBI intensifying the scrutiny?
1. Increase in NPAs: Non-Performing Assets have risen to 6% in June 2015, up from 5.2% in March 2015.
2. Difference in actual stressed assets: Time and again RBI has found that a discrepancy in the non-performing asset numbers that banks report and what the central bank finds during the annual
inspections. It is often the case that a loan is kept as a standard asset despite there being incipient signs of stress
[3]. India opposes attempts of rich nations to stall WTOs Doha Round talks
What has happened?
The government opposed alleged attempts of the developed world to abandon the 14-year-old Doha Round talks of the World Trade Organization (WTO) at the coming Nairobi ministerial meeting by citing the
slow progress of negotiations to liberalize world trade.
What India wants from Nairobi ministerial?
1. Successful completion: Doha Round to be successfully concluded expeditiously, but only after ensuring that the development dimension of the round is fulfilled in all aspects
2. Special Safeguard Mechanism (SSM): In order to protect interests of its poor farmers, India has been trying to push forward SSM, a tool that will allow developing countries to raise tariffs
temporarily to deal with import surges or price falls.
3. Reduction of subsidies: India also wants the rich countries to drastically reduce their trade distorting farm subsidies
4. Stock-holding: Permanent solution to the issue of public food stockholding in developing countries for the purpose of food security
When is Nairobi ministerial?
Nairobi ministerial is from December 15th 18th
What some developed nations are trying to do?
A). Rich nations are trying to end Doha round by saying that the progress has been slow. Moreover, they are trying to introduce new issues into the round, like,
1. Labour and environmental standards
2. E-commerce
3. Global value chains and promotion of supply chains
4. Environmental and sustainable goods produced using clean and green energy
5. Transparency in government procurement, state-owned enterprises and designated monopolies
6. Competition and investment provisions
B). Attempts are also being made to categorise countries such as India, China and Indonesia as emerging market economies (as opposed to them currently being termed as developing countries) and asking
them to undertake greater market opening commitments.
[4]. An elusive quest to internationalize renminbi
What has happened?
Chinas Yuan or renminbi has been included in the Special Drawing Right (SDR) basket by IMF. It became a world reserve currency on Nov 30 th 2015. Starting in October of 2016, it will account for 10.92% of
the IMF total reserve currency. This would make Chinese Yuan the fifth reserve currency after US dollar, Euro, British pound sterling and Japanese yen
Author says that adding Yuan to SDR and declaring it a reserve currency wont make it a preferable reserve currency.
Authors reasons are,
1. World contribution very low: China is the third largest exporter in the world; its currency contributes just about 1% of the total reserves held globally, according to IMF data. The use of the
renminbi has increased in cross-border payments in recent years but that number is still a small fraction of the transactions settled in dollars or euros
2. SDRs significance: Author says that SDR has lost much of its significance after the collapse of the fixed exchange rate regime in the early 1970s and the subsequent development of financial
markets which has allowed countries to maintain reserves in globally traded currencies.
What China needs to do?
It needs to do following things,
1. Open up its financial markets
2. Let go of Capital controls
3. Building a robust regulatory architecture
Why it is unlikely that China would open up its financial markets?
There are questions over the extent to which the Chinese government would be willing to cede control and allow market forces to play a greater role. China is already suffering from a slowdown and it is trying to
shift from a manufacturing based export-led growth to a service oriented economy. At such a point it is unlikely that the Chinese government would want to open up the financial sector in a hurry and induce more
uncertainty.
What India should do now?
Inclusion of Yuan in SDR and being declared as a reserve currency is a symbolic victory for China but India should not be worried. It should continue with its own efforts to increase the international use of the
rupee.
1. Allowing Indian corporations to issues rupee denominated bondsthe so-called masala bondsin overseas markets is a step in the right direction
Must read: http://www.cnbc.com/2015/12/02/who-loses-when-the-renminbi-joins-the-imf-basket.html
[5]. Declining per capita protein intake spells trouble

What has happened?
UN has declared 2016 as the International Year of Pulses (IYOP)
Why has UN done so?
To achieve following objectives,
1. Increase awareness about nutritional benefits of pulses,
2. Give a boost to production of pulses and crop rotation
3. Address challenges in the pulses trade

Indian food habits
Key sources of protein include pulses, milk, dairy products, eggs, fish and meat.
1. Consumption: In terms of quantity, India happens to be the largest global consumer of dairy, pulses, sugar and spices.
2. Production: On the production side, India is the worlds third-largest producer of food grains and the largest producer of milk and spices.
3. Demand & Supply gap: Yet apart from cereals and dairy, demand outpaces supply in most other food categoriesnamely pulses, edible oil, fruits and vegetablesresulting in rising levels of
inflation.
Increase in the price of pulses
Based on WPI, it is observed that prices of pulses increased by 53% between October 2014 and October 2015.
Change in food habits of Indians
1. A fall in cereal intake and a non-significant rise in consumption of other food items, especially in the rural areas
2. Increasing preference for packaged food among consumers
Impact of changing food habits
This change in consumption behaviour has resulted in declining average per capita calorie and protein intake despite the rise in expenditure levels. It means that although expenditure on food items is increasing,
the average calorie intake is not improving much. This is due to the fact that consumers are moving towards expensive calories
Scope of improvement
As per the Indian Consumer market 2020 report, there is substantial inter-state variation in the pattern of spending on protein food.
Top three protein-food markets in terms of size in financial year 2015,
1. Uttar Pradesh
2. Maharashtra
3. Tamil Nadu
Above states together make up for 31% share of all India market. Thus, unlike many other product categories, there is still scope for growth in protein food consumption in large markets in India. The pace of
growth in case of the largest market, Uttar Pradesh (6.3%) is little slower than the all India average of 6.6% per annum.
Market size vs spending intensity
While the size of a market reflects the total magnitude of expenditure, spending intensity (average spending per household) tells us how much an average household is ready to spend on that product category.
Significantly, none of the top five states in terms of market size appears in the list of top five in terms of spending intensity. While the largest market (Uttar Pradesh) occupies the 11th position in terms of spending
intensity, the second- and third-largest markets (Maharashtra and Tamil Nadu) have been ranked at 13th and 10th positions respectively.
Conclusion
Given the huge nutritional benefits of protein food, it is important for all states to take up sustained efforts to increase awareness among the general public about pulses, take appropriate measures to enable
improvement of yields and remove supply side constraints.
The demand-supply mismatch is expected to become much more acute in the next decade unless these initiatives are initiated without further delay.
Opinion & Editorial
[1]. Need to go beyond GST

Context: Author in this article has stated that it is high time that government and opposition work together to sort out their differences over GST bill and ensure that other important bills are not left untouched
during the winter session of the parliament.
1. Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Amendment Bill 2015,
2. The Whistle Blowers Protection (Amendment) Bill 2015
3. The Juvenile Justice (Care and Protection of Children) Bill 2015
4. The Prevention of Corruption (Amendment) Bill 2013
5. The Child Labour (Prohibition and Regulation) Amendment Bill 2012
6. The Negotiable Instruments (Amendment) Bill 2015
7. The Real Estate (Regulation and Development) Bill 2013
8. Bankruptcy Bill
Bankruptcy bill is critical
Bankruptcy bill, as per author is a critical one because despite several laws to make it easier for creditors (those who lend money) to secure their rights, borrowers manage to get stay orders from various courts,
and the result is there for all to see, there is no single case that can be cited of a bank being able to take over a company in default quickly and sell it off to recover debt.
To fasten the pace of lending, passage of this bill is necessary.
[2]. Is India actually free of polio?

Context: Author in this article states that despite being declared polio free country by WHO, India still is not free from it. Different types of polio exists and certification from WHO is only for a particular kind of
polio.
WHO certification
India received the polio-free country certificate in 2014 as from January 2012 it didnt report a single case of polio. This certification is for eradication of Wild Polio Virus (WPV).
There is another strain of polio known as Vaccine-Derived Polio Virus (VDPV).
What is VDPV?
Oral polio vaccine (OPV) contains an attenuated (weakened) vaccine-virus, activating an immune response in the body. When a child is immunized with OPV, the weakened vaccine-virus replicates in the intestine
for a limited period, thereby developing immunity by building up antibodies. During this time, the vaccine-virus is also excreted. In areas of inadequate sanitation, this excreted vaccine-virus can spread in the
immediate community (and this can offer protection to other children through passive immunization), before eventually dying out.
On rare occasions, if a population is seriously under-immunized, an excreted vaccine-virus can continue to circulate for an extended period of time. The longer it is allowed to survive, the more genetic changes it
undergoes. In very rare instances, the vaccine-virus can genetically change into a form that can paralyse this is what is known as a circulating vaccine-derived poliovirus (cVDPV)
Acute Flaccid Paralysis (AFP)
The polio virus causes paralysis medically known as an acute flaccid paralysis (AFP) which is characterised by sudden muscle weakness, and fever in one or more limbs. AFP can occur due to many
reasons, one of which is vaccine-linked.
Other cases of the same condition are called non-polio AFP.
Hidden truth behind statistics
Between January 2014 and March 2015, India reported four cases from four different States, of vaccine-derived polio (VPD).
Until November 2015, India has reported 36,968 cases of non-polio AFP.
A surge in non-polio AFP
There has been a surge of non-polio AFP since India eradicated polio. The number of cases reported
1. in 2012 was 59,436,
2. in 2013 it was 53,421,
3. in 2014 it was 53,383.
Three years after India reported its last case of WPV, the country has, in one form or another, been reporting around 50,000 cases of flaccid paralysis that, clinically, is exactly like polio, indicating how hollow the
polio-free status is.
Link between increase in incidence of non-Polio AFP (NAFP) and the number of OPV doses delivered in any region. Low immunity communities are at a risk of VPDV.
Low vaccine coverage
The problem is not with the vaccine itself, but low vaccination coverage. That VDPV is circulating in the community that is under-immunised marks the failure of the Central government
What steps government is taking?
Addition of Injectable Polio vaccine (IPV) to routine immunization programme
switch from trivalent to bivalent Oral polio vaccine
To prevent re-emergence a booster dose of inactivated polio vaccine (IPV) is recommended in routine immunization, prior to the switch.
Conclusion
We may be polio-free but we are reporting the worlds largest number of NPAFP. Realistically speaking, we need an urgent policy intervention to address NPAFP and VDPV with the same urgency and political
will with which we addressed the wild polio virus cases
[3]. Intolerance fuels radicalization

Context: In light of recent rise in incidents of anti-minority violence, author expresses his fears that we are giving terrorist organizations like IS a reason to get a stronghold amidst ourselves.
Recent incidents cited by author,

1. When Amir khan expressed concern over rising anti-minority violence, he was made a target of hateful tweets and comments
2. Black ink was spilled on the Observer Research Foundations Sudheendra Kulkarni in November for organising a book release event for a former Pakistani foreign Minister
3. mob lynching of Mohammad Akhlaq in Dadri, Uttar Pradesh, over rumours that he had stored beef in his home
4. Augusts murder of notable rationalist M.M. Kalburgi, who was shot dead after being threatened for his criticism of idolatry in Hinduism
Why India should stop such incidents?
1. Respect for Indias constitutionally protected secular credentials,
2. The maintenance of broader societal peace and harmony between communities
3. The alarming proliferation of support for Islamic State (IS), the jihadist terror outfit that controls parts of Syria and Iraq.
Recruitment from India by IS is increasing slowly and steadily, which spells bad signs for our nation as a whole.
Persons from Cuddalore to engineers from Bangalore to Kashmir valley, IS has managed to woo Indian youth from a diverse background.
Conclusion
Unless there is a concerted effort to neutralize the impunity of extremist elements that regularly engage in anti-Muslim violence, there may be little to halt the drift of a few members of an overwhelmingly
moderate community into the arms of IS radicals.
[4]. The myth of intolerant India

Context: Author in this article has stated that the outcry against intolerance is unjustified
Author examines the following questions,
Has India really become intolerant, particularly in the past 15 months? Are religious minorities now unsafe? Are they being systematically targeted and marginalised?
1. One Dadri does not make a country of 1.24 billion people intolerant. The noise over banning beef, the disruption of Valentines Day celebrations, the chopping-off of a professors hand and the
banning of the works of Taslima Nasreen and Salman Rushdie are isolated, regrettable incidents and are not indicators of a nations intolerance
Constitutional safeguards and provisions that indicate we are not intolerant nation
1. Secularism: A country is intolerant if its institutions and the constitution is intolerant, which is not the case. Secularism (positive) has been declared a part of the basic structure of the constitution
by Supreme court in Aruna Roy vs Union of India (2002) and S.R. Bommai vs Union of India (1994)
2. Article 25, 29, 30: Article 25 of our constitution confers on all persons, including non-citizens, a fundamental right to freely profess, practice and propagate their religion a right that is exercised
effectively to convert people to another faith every day. Articles 29 and 30 constitutionally protect the language, script and culture of minorities and give them the right to establish educational institutions of
their choice. Can the same be said of countries that systematically target churches and individuals of other religions?
3. Article 15(5): Minority communities are not required to reserve 25% of the seats, free of cost, for economically and socially backward students, in their educational institutions as is required of the
other communities under The Right of Children to Free and Compulsory Education Act, 2009
4. Shah Bano Case: Author cites the Shah Bano case as an evidence of the tolerance of views of the minority wherein a SC judgement was overruled by the Parliament when it enacted Muslim
Women (Protection of Rights on Divorce) Act, 1986, which took away the rights of divorced Muslim women to claim maintenance under the Code of Criminal Procedure.
5. No Uniform Civil Code yet: It is only the tolerance and respect for minorities, particularly Muslims, that has restrained our lawmakers from enacting a Uniform Civil Code for all citizens despite a
mandate under Article 44 of the Constitution
Selective show of anguish not justified

Not one artist complained about the extreme intolerance in the Kashmir Valley that drove out thousands of Kashmiri Pandits. Did anyone protest against the desecration of temples in the Valley? Is that less worthy
of condemnation than the attack on churches?
Conclusion
The unfortunate existence of a few intolerant Indians does not make India intolerant.


National
[1]. Austrian anthropologist Haimendorf is all but forgotten

Context: In this article author states that the Austrian anthropologist Haimendorf who worked tirelessly for the welfare of the adivasis has been forgotten.
Who is an anthropologist?
The scientific study of the origin, the behavior, and the physical, social, and cultural development of humans is termed as anthropology.
An anthropologist is the one who has an extensive knowledge of anthropology and he uses it to solve problems specific to humanity.
Who is Christopher von Furer-Haimendorf?
He was an Austrian anthropologist. He was born in an Austrian aristocratic family. Very early he developed an interest in Indian culture, having read Rabindranath Tagore as a young man.
He spent forty years of his life doing fieldwork in Northeast India and in the central region of what is now the state of Telangana and in Nepal.
He came to Adilabad district in December 1941

His contributions,
1. He made in-depth studies of the customs and traditions of the Gond people, among other tribes and he also influenced the Nizam of Hyderabad to bring in protective legislation to insulate them
from exploitation by non-tribals
2. Legislation of Hyderabad Tribal Areas Regulation 1356 Fasli (1946) and establishment of teacher training schools in 1943 to deal with the debilitating illiteracy
3. Haimendorf patta: In his capacity of advisor to the Nizams government on tribal and backward classes affairs, Haimendorf persuaded the government to de-reserve 1.6 lakh acres of forest land
and allocate it to 12,000 tribal families, the patta or title then known as Haimendorf Patta
No statue has been installed and no building has been named after him to keep his memory alive.
Even the Integrated Tribal Development Agency (ITDA) at Utnoor, the nerve centre of all tribal activity in the district is without any portrait signifying works of Haimendorf.
Conclusion
Haimendorfs memory is dying a slow death and no efforts from the government or civil society are visible to stop it.
International
[1]. Now, Germany joins anti-IS war
What has happened?
German parliament has approved plans for Germany to take direct role in war against IS answering Frances appeal for help after Paris attacks. The mission would be Germanys biggest deployment aboard.
What has been agreed?
Parliament agreed to the mandate for the deployment of Tornado reconnaissance jets, a frigate and up to 1,200 troops by an overwhelming majority of 445 votes in favour and 146 against.
Why has Germany offered its help?
France, after witnessing gruesome Paris attacks, invoked a clause requiring EU states to provide military assistance to wipe out the IS group in Iraq and Syria.
The mutual defence clause
France invoked the mutual defence clause citing that it is unable to beef up security at home in the wake of its military commitments outside of the country.
1. The clause article 42.7 of the Treaty on European Union says that if a member state is the victim of armed aggression on its territory, the other member states shall have toward it an
obligation of aid and assistance by all the means in their power.
2. However, the article adds: This shall not prejudice the specific character of the security and defence policy of certain member states. The latter sentence means that the neutrality of countries
such as Ireland, Austria, and Sweden cannot be impugned, while the emphasis on help from member states
Fact: France became the first European country to invoke the mutual defence clause
1. As a result of the train attacks in Spain in 2004, the EU inserted mutual defence measures into the Lisbon treaty similar to the Nato alliances article five, which obliges all member countries to
come to the defence of one of their number if attacked.
Business & Economy
[1]. China consolidates in Africa following $60 billion pledge
FOCAC
The Forum on ChinaAfrica Cooperation (FOCAC) is an official forum between the Peoples Republic of China and the states in Africa.
Must read: http://www.iol.co.za/business/news/what-you-need-to-know-about-focac-1.1955148#.VmLNkclVWb8
African Union (AU)
The advent of the African Union (AU) can be described as an event of great magnitude in the institutional evolution of the continent. On 9.9.1999, the Heads of State and Government of the Organisation of
African Unity issued a Declaration (the Sirte Declaration) calling for the establishment of an African Union, with a view, to accelerating the process of integration in the continent to enable it play its rightful role
in the global economy while addressing multifaceted social, economic and political problems compounded as they are by certain negative aspects of globalisation.
Africa 2063
Agenda 2063 is an approach to how the continent should effectively learn from the lessons of the past, build on the progress now underway and strategically exploit all possible opportunities available in the
immediate and medium term, so as to ensure positive socioeconomic transformation within the next 50 years
Aim: At its heart, this new roadmap, emphasizes the importance to success of rekindling the passion for Pan-Africanism, a sense of unity, self-reliance, integration and solidarity that was a highlight of the
triumphs of the 20th century.
US-Africa Command
The United States Africa Command (U.S. AFRICOM (official abbreviation), USAFRICOM, orAFRICOM) is one of nine Unified Combatant Commands of the United States Armed Forces, headquartered at
Kelley Barracks, Stuttgart, Germany.
Responsibilities: It is responsible for U.S. military operations and military relations with 53 African nations. Its area of responsibility covers all of Africa except Egypt, which is within the area of responsibility of
the United States Central Command.
What has happened?
Chinese President Xi Jinping announced a $ 60-billion-dollar package that will benefit Africa.
What was the occasion?
He was addressing the opening ceremony of the Johannesburg meeting of Forum on China-Africa Co-operation (FOCAC)
Announcements made by Xi Jinping
1. a $ 60-billion-dollar package that will benefit Africa in 10 major areas: industry, agriculture, infrastructure, financial services, green development, trade and investment facilitation, poverty reduction
and public welfare, public health, people-to-people exchanges, and peace and security.
Africa-China
1. China has developed enormous overcapacity in the steel, construction materials, cement and glass sector, as domestic demand has dropped drastically on account of the slowdown in the real
estate sector, and exports have slid because of a tepid international market. Africas growing appetite in these areas and in railways, highways, ports and power is what China is looking to invest in.
2. Surge in investment: A likely surge in Chinese direct investment is anticipated, which had already scaled $30 billion last year. Trade had also zoomed to $220 billion Africas highest with any
single country though this could taper somewhat as Chinas thirst for raw materials recedes following the economic downturn, and its tighter focus on investments in Africa.
3. Agenda 2063: The Chinese want to synchronise Africas Agenda 2063 a 50 year developmental framework drawn by the African Union with Chinas Belt and Road blueprint of connecting
Eurasia with roads, railways, cyber-optic highways, industrial parks and smart cities.
4. Opportunities: Chinese companies could find further opportunities in Africas North-South Corridor, which stretches from Durban in South Africa to Dar es Salaam in Tanzania. In between it
passes through eight countries in eastern and southern Africa: Botswana, the Democratic Republic of Congo, Malawi, Mozambique, South Africa, United Republic of Tanzania, Zambia and Zimbabwe.
Conclusion
Resource-rich Africa could prove to be another battleground for Beijing and Washington following the establishment of the U.S. Africa Command. China has also declared that it has established a logistics base
in Djiboutia move that critics say is a cover for a military base in Africa.
Must read: http://bigstory.ap.org/article/5cadce033c4c408c975f6e64be00b6cd/china-talks-djibouti-establishing-logistics-base
[2]. Climate Justice

Context: Author states that at the ongoing Paris COP21 meet, world leaders should come out with a binding solution on reduction of emission.
India and the findings of IPCC
Indias per capita emissions are a fraction of those in the West and per capita energy consumption is one of the lowest among emerging economies.
Energy consumption Image source: Financial express
The findings of IPCC indicate that there was 0.4 degree centigrade change in the surface temperature in India. In fact, the World Bank has estimated an additional 100 million people globally will fall into extreme
poverty by 2030 on account of climate change, of which 45 million will be in India.
[3]. Reducing child malnutrition

Context: Trying to tackle all issues related to child development is beyond the capacity of any one agency or department, let alone the government. So, governments, corporate, non-profits and civil society have
to come together to evolve solutions to these problems.
Child malnutrition & India
Indiawith 44% of under-6 children underweight and 48% of under-6 children stuntedis in the same league as countries with far more pressing social, economic and political problems.
What government has been doing is inadequate?
As per the Rapid Survey of Children carried out by the Ministry of women and child development (MWCD) and UNICEF there is a huge gap between the better performing states and those states which are
lagging behind.
This is in spite of India having one of the oldest programmes (since 1975)the Integrated Child Development Services (ICDS)dedicated to improving maternal and child health and nutrition. The problem
clearly does not lie in the intent; it lies in the inability of governments at the national and state levels to adopt a systemic approach to tackling this issue.
Disaggregated data
Disaggregated data refers to numerical or non-numerical information that has been broken down in component parts or smaller units of data.
Four steps that government must take, as per the authors experience with Maharashtras Rajmata Jijau Mother-Child Health & Nutrition Mission (the Maharashtra mission) which he headed from 2005 to
2010,
1. Data & Disaggregation: Government should utilize the disaggregated data to inform policy direction. Ensuring that each and every one of the children are regularly weighed gives comprehensive
monthly data on the nutrition status of children in each habitation and enables taking corrective nutrition and health measures in a timely manner. The availability of disaggregated data, including nutrition
outcome indicators, draws the attention of policy-makers to the worst affected areas and enables concentration of financial and human resources in those areas. More recently, geographic information
system (GIS) tools like Jatak (see www.issnip.jatak.org) have been developed to track individual child nutrition status and take steps to improve the health and nutrition status of children. Using interactive
voice response systems (IVRS), data on key child nutrition indicators are received from front-line nutrition workers as voice files and converted into data at a central facility.
2. Design: Growth monitoring is one area where significant systemic weaknesses can be seen in nearly all states. Maintaining monthly weight records of under-6 children and monitoring their growth
progress enables the anganwadi worker to refer children at risk to medical facilities for early treatment of childhood illnesses or congenital diseases. The focus in the ICDS system, thus far, has been only on
under-6 child underweight status. However, extensive research has shown that stunting (height related) and wasting (weight to height related) indicators are also crucial to the healthy development of the
child. Close coordination between ICDS and health systems at village and health centre levels is required in this case.
3. Delivery: The focus on reducing moderate and severe underweight and wasting rates in under-6 children requires revamping of delivery systems in the ICDS sector through building up
motivation, skills and knowledge in anganwadi workers, supervisors and child development project officers. The negative mentality of blaming field workers for high rates of child malnutrition has to give way
to an appreciation of the severe constraints they operate under, movingas the Maharashtra mission termed itfrom a fault-finding to a fact-finding approach. Anganwadi workers are paid a pittance
often after a delay of many monthsfor the devoted services they render to the community and are handicapped by a severe shortage of infrastructure and equipment essential to the effective performance
of their duties, as well as voluminous reporting requirements and absence of on-the-job training. The awareness that they are contributing to the raising of the next generation needs to be imprinted in the
minds of all ICDS functionaries. It is not that monetary incentives alone motivate peoplenon-monetary recognition, through an appreciation of work by those higher in the hierarchy and giving publicity to
achievers, can be a major inspiration to workers. At the same time, senior officer levels in ICDS need to take on team leadershipthey should be available 247 for solving implementation problems and
making available resources to front-line workers to enable them to give of their best.
Conclusion
The above approach combines responsive governance with the intelligent use of data in a systematic, disciplined manner, adopting a standard operating protocol, which can yield rich dividends where improving
child nutrition outcomes are concerned.
[4]. Four ways how women suffer more from climate change than men
Context: Author states that women suffer differently than men as far as impact of climate change in concerned
Four ways in which women suffer more,
1. More women die than men during natural disasters: Research on natural disasters has shown that women suffer more. A United Nations Population Fund (UNFPA) study shows that in a
natural disaster, women and children are 14 times more likely to die than men. During the 2004 tsunami in Asia, more than 70% of the dead were women. This is not due to physiological or biological
reasons, but cultural norms.
For instance, the International Union for Conservation of Nature (IUCN) has noted that in Sri Lanka, men survived the tsunami more easily than women as the latter are usually not taught to swim or climb trees:
skills which can prove life-saving when natural disasters strike. Cultural norms which privilege men can also see food and relief material directed more towards men than women.
However, there can be regional differences to this. An analysis of natural hazards during 2004 to 2013 in the US also showed that more men died than women. This may be the result of cultural expectations that
encourage men to take more risk (without taking adequate precautions) during natural disasters.
2. Water stress impacts women more adversely: Climate change also leads to droughts and water scarcity. This adversely affects women and young girls as the burden of water collection largely
falls on them. This is especially true for India where only about half the households have access to clean water on their premises.
Example: Studies in Kenya have shown that finding and fetching water can consume up to 85% of a womans daily energy intake. Drought situations can see women spend up to eight hours a day searching for
water. Similarly, collecting firewood is also predominantly a womans responsibility in many countries. Dwindling forest resources also mean greater hardships for women who have to travel longer distances just
for gathering solid fuel source
3. Climate change increases health risks for women: Women and children are more vulnerable to the health effects of climate change. For instance, data for 2000 and 2012 from South-east Asia
show that diarrhoeal diseases, which are common during instances of flooding, killed more women than men. This is due to gender inequality which results in unequal access to health services as
well as a general neglect of womens health in unequal societies. Studies in India, Bangladesh and Indonesia showed that the sex of a child influences the extent of the care given. Delayed
hospitalization and lower rates of hospitalization is more common for girls than boys.
Women are primary caregivers for families and this responsibility increases during times of emergency and disaster. Women are also more likely to suffer from malnutrition following a disaster as the nutritional
needs of pregnant and breastfeeding mothers may be neglected, owing to food hierarchies that favour men.
4. Women farmers face greater hurdles in adapting to climate change: Across the world, women make up 43% of the agricultural force. However, they often have smaller landholdings and face
greater hurdles in accessing farm credit and technical know-how. The Food and Agricultural Organization (FAO) has noted that gender gap exists in agriculture, whereby women farmers
productivity is hurt due to the challenges women experience in accessing, using, and supervising male farm labour and the fact that women use less fertilizer and of lower quality, among other
things. This vulnerability raises the risks women farmers face from climate change.
Opinion & Editorial
[1]. What the law says and what the court ruled
Context: A two-minute video clip uploaded on Facebook and YouTube before being removed shows cinema goers heckling the family for disrespecting the national anthem, before bursting into applause after
the family is evicted from the theatre.
What constitutes as an insult?
Standing during the national anthem does not necessarily mean respect for the national anthem. Nor does sitting during the anthem mean disrespect or qualify as a crime. What qualifies as crime is a willful act
committed to insult the National Anthem.
Article 51A of the Constitution, states that it is the constitutional duty of every citizen to respect its ideals and institutions, the National Flag and the National Anthem.
Section 3 of the Prevention of Insults to National Honour Act, 1971 (as amended in 2005) does not dictate whether a person should sit or stand when the anthem is playing or sung.
Section 2 of the Insults Act leaves nothing to imagination when it specifies what constitutes an insult to the national flag and the Constitution. These include public acts of burning, mutilating, defacing, defiling,
disfiguring, destroying, trampling upon the National Flag or the Constitution.
Commercial purposes
The Emblems and Names (Prevention of Improper Use) Act takes care that national symbols are not taken undue advantage of and used for crass commercial purposes.
Examples: In May 2010, luxury giant Montblanc had to give an assurance to the Supreme Court that it will not sell its limited edition pens sporting the name and image of Mahatma Gandhi.
The Karnataka High Court, in a 2007 judgment in N.R. Narayana Murthy vs. Kannada Rakshana Vakeelara , describes the national flag, national anthem and the Constitution of India as the symbols of
sovereignty and the integrity of the Nation.
Court has always taken into account the diverse faiths and beliefs practiced by the citizens like
The 1986 Supreme Court judgment in Bijoe Emmanuel vs. State of Kerala dealing with the expulsion of three children who belonged to the Jehovahs Witnesses sect, for refusing to sing the national anthem in
school, said this was contrary to fundamental rights of free speech and freedom to practise their religion.
In the 2004 Naveen Jindal judgment, a three-judge Supreme Court Bench led by then Chief Justice of India V.N. Khare upheld the citizens fundamental right to fly the national flag freely with respect and dignity.
[2]. National Pride and Prejudice

Context: In this article author debates whether it is necessary to stand while national anthem is being played. Whether standing during national anthem really means one is patriotic and the one who is sitting is a
traitor.
Author poses these questions,
What if I choose to sit as the national anthem plays at the start of a commercial potboiler?
What if I decide that playing the anthem before the film titles roll denigrates the grandeur of the anthem?
What if I dont stand to attention when the national flag is being hoisted before a cricket match, or when the national anthem is played after an Indian wins a medal at a tournament? I mean no
disrespect to either the team or the flag or the anthem.
What if I choose not to cheer the Indian cricket team and my surname is Khan? Does the solution lie in sending me to Pakistan?
What the law says on this matter,
Prevention of Insults to National Honour Act, 1971
A reading of the Prevention of Insults to National Honour Act, 1971, passed by Parliament after the Bangladesh War and amended in 2005, actually reveals that it was not the person who sitting but the man/men
who kept heckling him who were creating a law and order problem.
Section 3 of the Act says, Whoever intentionally prevents the singing of the Indian National Anthem or causes disturbance shall be punished with imprisonment for a term which may extend to three years, or
with fine, or with both.
Governments stand
Central governments stand on the issue is made clear by the General Provision of Order of January 5, 2015 when it said, Whenever the National Anthem is sung or played, the audience shall stand to
attention. However, when in the course of a newsreel or documentary, the Anthem is played as a part of the film, it is not expected of the audience to stand as standing is bound to interrupt the exhibition of the
film and would create disorder and confusion rather than add to the dignity of the Anthem.
Religious intolerance and stereotyping

When Vice-President Hamid Ansari, mindful of the protocol befitting his office, did not salute the national flag on Republic Day this year, Why didnt Hamid Ansari salute the national flag? started trending on
Twitter.
Some offensively trolled that the Vice-President was a jihadi sympathiser. More outrage followed and someone even advised Mr. Ansari to join the IS. The Vice-Presidents office was forced to issue a statement
explaining the position of the Vice-President and the protocol of the office he holds.
We are reaching a stage where patriotism is a badge you must wear to which you must adhere to. A greater premium is being placed on nationalism vis--vis these symbols and Muslims have to prove their fidelity.
Wests stand
America: America tolerates burning the flag
United Kingdom: Allows individuals to make a fashion statement of the Union Jack
Why in India we are becoming so radical when it comes to national symbols?
Middle-class, upper-caste urban India gets stirred by calls of nation in danger much more than any other section of Indian society. This, is rooted in an insecurity about education-employment-housing, which get
reflected in and magnified as feelings of national insecurity. This expresses itself in the kind of aggressive patriotism seen in the Mumbai cinema hall
Conclusion
As these symbols get entangled in defining and redefining nationalism and as people are increasingly called upon to prove their patriotism, the debate is likely to continue.


National
[1]. PSLV bags two more U.S. launch orders
Context: US based commercial weather satellite company PlanetiQ has given contract to ISRO for launch of two of their satellites through Polar Satellite Launch Vehicle (PSLV).
What is PSLV?
The Polar Satellite Launch Vehicle (usually known by its abbreviation, PSLV) is an expendable launch system operated by the Indian Space Research Organisation (ISRO). It was developed to allow India to
launch its Indian Remote Sensing (IRS) satellites into sun synchronous orbits, a service that was, until the advent of the PSLV, commercially viable only from Russia. PSLV can also launch small size satellites
into geostationary transfer orbit (GTO).
Different Types of Satellite Orbits:
SATELLITE ORBIT DEFINITION
ORBITAL
ALTITUDE
ORBIT
ORBIT NAME (KM above Details
INITIALS
earths
surface)
Low Earth
LEO 200 1200
Orbit
Medium Earth 1200
MEO
Orbit 35790
GeosynchronousGSO 35790 Orbits
Orbit once a day,
but not
necessarily
in the
same
direction
as the
rotation of
the Earth
not
necessarily
stationary
Geostationary GEO 35790 Orbits
Orbit once a day
and moves
in the
same
direction
as the
Earth and
therefore
appears
stationary
above the
same point
on the
Earths
surface.
Can only
be above
the
Equator.
High Earth Above
HEO
orbit 35790
Some Facts:
Antrix: Commercial arm of Indian Space Research Organisation (ISRO)
Other Launch Vehicle in category of PSLV: Dnepr, Soyuz Russia; Vega European Union
PSLV first US Customer: Spire Global (Satellite Names: Lemur 1 and 2)
Indias first space startup: Earth2Orbit
International
[1]. Proposal to achieve zero emission by 2060-80
Final Draft of Paris Climate Summit agreement has been released by United NationFramwork Convention on Climate Change (UNFCCC).
Hurdles/Contentious Issues:
1. Instituting a review mechanism to monitor compliance on carbon emissions by countries
2. Transfer of climate-friendly technologies to developing nations
3. Long-term quantified emissions reduction for a 2050 target
4. Updated targets for countries based on stocktaking of carbon dioxide
5. Equitable distribution of the remaining carbon budget for the world
6. Making explicit the responsibility of developing countries versus developed nations
Indias Stand:
India felt that a transparency and accountability regime should not treat rich and poor nations alike. For example, India does not have the capacity to measure automotive emissions based on vehicle use
accurately, while the U.S. does that every year.
The Future:
Achieving zero GHG emissions growth by 2060-80 is proposed.
Note: The COP21 Paris Climate Summit will be carried out in detail once the summit is over.
[2]. Chinas world bank makes the U.S. balk

Context: A competition between China and US to counter each other influence in geopolitics through financial institutions.
Asian Infrastructure Investment Bank is in the limelight as it started picking first projects to finance.
Asian Infrastructure Bank:
Purpose: Crediting
Headquarters: Beijing, China
Region Served: Asia and Oceania
Formation: 24 October, 2014
Legal Status: Treaty
President: Jin Liqun
New multinational, multi billion-dollar bank to finance roads, rails and power grids across Asia under the stewardship of China. The bank would tackle the slow development in poor countries that was holding the
region back from becoming the wealth centre of the world.
The Debate:
With bank in stage of picking its first projects, the world waits to see whether the AIIB will be a tool for China to achieve its selfish ambitions or will actually prioritise projects which will benefit Asia.
While America feels the danger of loosing its financial influence over the world; the domestic political quagmire adding to the woes.
China is taking direct aim at the current development regime, the Bretton Woods system established under U.S. leadership after World War II to help stabilise currencies and promote growth. With IMF granting
Chinese Renminbi a stature of reserve currency, this seems to strengthen Chinas position.
Another setback was many of its allies including UK, Germany, Australia and South Korea signing up for AIIB with a vision that any negative tactics of China can be countered by conditioning bank working from
inside.
The Initiative:
As a complement to the new bank, China is rolling out the One Belt, One Road program for the construction of a network of roads, rails and pipelines along the old Silk Road route that runs through Central
Asia to Europe. A maritime equivalent calls for building ports from Southeast Asia to East Africa to the Mediterranean.
Conclusion:
China seems to has taken up stewardship to develop economies in Asia for better future. There are doubts in mind of nations about the ambitions that China wants to serve through the bank. Also, China is hardly
yielding control, raising concerns about where the bank will land on major issues like climate change and labour rights. A lot of countries has joined the bank to shape it from inside and counter any negative
tactics by China.
Business
[1]. OPEC fails to agree on production cap after Iran pledges output boost
Context: Falling crude oil prices but there seems no cutting down of production to rationalise the prices.
Organization of the Petroleum Exporting Countries (OPEC):
Headquarters: Vienna, Austria

Legal Status: Cartel
Member Nations: 13 (Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela)
Established: 10 14 September 1960, at Baghdad, Iraq
OPECs objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum
to consuming nations; and a fair return on capital to those investing in the industry. Saudi Arabia being the largest producer is the de-facto leader of the cartel.
Oil Market Current Scenario Oversupply of oil, prices halved in last 18 months.
A danger of incapacity to store excess of oil. The current trend of oversupply can bring down prices to $20/barrel.
Iran Stand:
Iran said it would not consider any production curbs until it restores output scaled back for years under Western sanctions
The Problem:
Poor countries in OPEC has very badly skewed balance-sheets due to continuous fall in prices.
Environment
[1]. Warm up to Climate Change
Context: Ongoing COP-21

Written by F O R U M I A S | December 28, 2015 1 Comment | B R I E F

National
[1]. Supreme court will ensure rule of law, says CJI Thakur
What has happened?
Chief Justice of India Tirath Singh Thakur while commenting on the whole issue of religious intolerance, said that India is an inclusive society where people of all faiths and religions flourish with mutual respect
and the Supreme Court will ensure that the rule of law reigns supreme.
What is Rule of Law?
Rule of law is a concept propounded by A.V Dicey, a British Jurist. The concept has following three elements,
1. Absence of arbitrary power: No man can be punished except for a breach of law
2. Equality before law: Equal subjection of all citizens (rich or poor, high or low, official or non-official) to the ordinary law of the land administered by ordinary law courts
3. The primacy of the rights of an individual: Constitution is not the source of the individual rights. Constitution is the result of the rights of the individual as defined and enforced by the courts of law.
Only first and second elements are applicable to Indian system. In India constitution is the source of the rights of the individual.
Supreme Court held that Rule of Law as embodied in Article 14 is the basic feature of the constitution. Hence, it cant be destroyed even by an amendment.
Article 14: It says that the State shall not deny to any person equality before law or equal protection of the laws within the territory of India.
Equality before law British origin
Equal protection of laws American constitution
Why the highest judiciary did not use its extraordinary jurisdiction powers to take suo motu cognizance of murders of activists and writers like Dabholkar, Pansare and Kalburgi?
CJI replied that an order from SC wont stop intolerant people from committing such crimes. Society as a whole should nurture spirit of tolerance, mutual respect for religions.
[2]. India may ratify WTO trade facilitation pact
What the article says?
The article is in context of the recent to be held Nairobi ministerial of the WTO where India is likely to ratify the TFA (Trade Facilitation Agreement)
What is TFA?
1. Trade facilitation agreement (TFA) is a trade protocol aiming to give a spur and do away with the stumbling blocks in doing international trade between various countries.
2. The deadline to sign the agreement is July 31 and the deal has to come into force fully by 2015.
3. It is being believed, especially by the proponents of the agreement that deal could add $1 trillion to global GDP and also can generate 21 million jobs by slashing red tape and streamlining
customs.
4. The developing country especially India and South Africa wants that before pushing for this TFA thing why WTO dont discuss and allay our concern on food subsidy which is a lifeline for lakhs of
BPL people in these countries
Indias concern
1. India has problems with two issues, food subsidies and stockpiling of food grains.
2. India at present is running a massive food procurement programmes by providing minimum supporting price to the farmers and giving subsidised food to lakhs of BPL families through its public
distribution system (PDS).
3. The new WTO agreement limits the value of food subsidies at 10 percent of the total food grain production. India is flexing muscle on the issue because subsidies have been calculated by WTO
taking 1986 as base year into account which will largely affect food procurement programme through MSP.
4. India is raising its concerns by saying that while US is providing 120 billion as agriculture subsidy then why India cant give even one tenth (USD 12 billion) to their farmers.
5. India which is home to about 25 percent of the worlds hungry has a viewpoint that it is a Governments responsibility and duty to ensure availability of proper food to its people.
6. Moreover, Indias food programme is largely domestic so it doesnt distort global food trade. The Indian sources say that once the TFA will be implemented it will be difficult to bargain on the food
subsidy thing and that is why India has this brazen attitude.
Must read: http://www.oneindia.com/feature/why-modi-government-is-up-arms-against-wto-s-trade-facilitat-1489740.html
TFA requires a 2/3rd majority
In November last year, WTO member countries had adopted a protocol of amendment to make the TFA a part of the overall WTO Agreement. However, the TFA will become operational only after two-thirds of
the members ratify it. So far, only 53 of the 162 member countries have done so.
Indias stand now
India is planning to ratify TFA as part of its initiative to attract more investment by improving Indias ranking in the World Banks ease of doing business report.
Currently, Indias position is at 130 out of 189 countries.
What experts say
Experts believe that ratifying TFA would mean that India would lose another bargaining chip to secure its interests as there are issues which need to be resolved like public stockholding for food security
[3]. Indian cities are crying for better governance

Context: Author in this article points out towards the fact that Indian cities are facing loads of problems including traffic congestion, pollution, waste water treatment etc. He further points out that not enough is
being done to help out our cities in terms of infrastructure and regulation
Flooding in Chennai Author cites the example of Chennai floods where hundreds of lives have been lost as the city was not prepared to deal with the calamity of this magnitude. The development of urban
infrastructure over marshes and river basins, with scant regard to regulatory norms, means that the accumulated water had hardly any escape route.
Deadly air-trap of Delhi Author says that coastal cities have one advantage that the air is in constant circulation resulting in fresh sea breeze which neutralises problem of air pollution to some extent. On the
other hand a land-locked capital city like Delhi creates a deadly air-trap for its residents. It has been termed as the most polluted city in the world. Delhi government has announced that private vehicles with odd
and even registration numbers will be allowed on roads on alternate days starting from January 2016
Effluent waste in Bengaluru Bengaluru has seen the rise of a different kind of pollution i.e. discharge of untreated industrial waste that has converted lakes into toxic froth. Winds carry this froth to the streets
and into homes, greatly inconveniencing commuters and residents. With added inflow of combustible fuels, flames have been spotted in these lakes
Urbanization It is a population shift from rural to urban areas, the gradual increase in the proportion of people living in urban areas, and the ways in which each society adapts to the change.
Urbanization is happening in India at a rapid pace but poor administrative design, utter lack of foresight by policymakers and acute deficiency of regulatory capacity has made sure that the process is toxic for us.
Must Read: http://www.insightsonindia.com/2014/10/29/urbanization-in-india-facts-and-issues/
Author says that cities are the engines of growth for India. They need following measures to be implemented,
1. Better infrastructure,
2. Intelligent regulation of city activities and transparent enforcement,
3. A modern public transport system with much higher capacity,
4. Capabilities to deal with borderless problems like terror and climate change,
5. Better pricing strategies for energy use and amenities like roads and parking spaces,
6. Greater devolution of fiscal, administrative and political capital.
[4]. Avoiding a cop out in Paris

Context: At the ongoing COP 21 meeting at Paris, a draft agreement has been finalised which has around 938 sections of bracketed text, on which there is no agreement so far. Except the draft agreement, 3 of the
most exciting initiatives have emerged on the sidelines of the official deliberations, and Indians have played a prominent role in all of them.
3 initiatives are,
1. Breakthrough Energy Coalition (BEC), spearheaded by Bill Gates, which includes Ratan Tata and Mukesh Ambani from India as well as four leading Chinese entrepreneurs. This coalition aims
to provide venture capital to bring riskier and untested new technologies related to electricity generation and storage, transportation, industrial use, agriculture and energy system efficiency to the market
2. Launch of Mission Innovation, a dramatic initiative to accelerate public and private partnership to address global climate change, provide affordable clean energy to consumers, including in the
developing world, and create additional commercial opportunities in clean energy. The most interesting aspect of this initiative is its move to leverage public-private partnershipboth in the global North and
Southto promote joint ventures that can make clean energy economically viable.
3. The Indo-French-led International Solar Energy Alliance, supported by more than 120 countries, hopes to raise $1 trillion to scale up solar energy development by 2030, particularly in the
tropical sun-drenched countries.
Significance of these initiatives vis-a-vis Delhis role in addressing climate change
These initiatives underline New Delhis efforts to play a proactive role in shaping the norms, mechanisms and institutions to deal with climate change, both nationally and globally.
Author says that apart from above 3 initiatives, India can think to lead 2 other initiatives,
1. Global Coalition initiative to build a global coalition to enhance the resilience of mega cities to deal with the threats of extreme climate events. Against the backdrop of the devastating floods
that have battered Chennaipartly on account of climate change factorssuch an initiative would be both timely and popular. It would also strengthen the case for the governments smart cities project.
2. ITER In a bid to enhance its clean energy options, India could also refocus attention on the ambitious ITER (International Thermonuclear Experimental Reactor) megaproject, which seeks to
produce clean energy from nuclear fusion.
The meeting is being held at a place called Le Bourget. Charles Lindbergh in 1927 landed at Le Bourget Field at the end of his epochal maiden solo, non-stop transatlantic flight between New York and Paris in
1927
Who is Charles Lindbergh?
Charles Augustus Lindbergh (February 4, 1902 August 26, 1974) was an American aviator, author, inventor, military officer, explorer, and social activist.
As a 25-year-old U.S. Air Mail pilot, Lindbergh emerged suddenly from virtual obscurity to instantaneous world fame as the result of his Orteig Prize-winning solo nonstop flight on May 2021, 1927, made from
the Roosevelt Field in Garden City on New Yorks Long Island to Le Bourget Field in Paris, France
Author draws parallel between the spirit shown by Lindbergh in carrying out his journey by pushing the conventional norm and the gathering of world leaders at Paris who are engaged in such a pursuit only.
[5]. El-Nino may wither wheat crop
What has happened?
Rising temperatures due to greenhouse gases and El Nino are said to be taking a toll on the wheat crop as late planting in the hottest year on record is set to delay the harvest and severely hit farm yields,
magnifying rural distress.
Why the late sowing?
The late onset of winter and exceptionally dry conditions after the weak monsoon has prompted late crop sowing by farmers. They have suffered crop damage due to two consecutive failed monsoons and
unseasonal rain and hailstorms in February and March, which damaged the winter-sown crop just before harvest time.
Harmful impact of delayed sowing
Wheat planting is already 27% lower than last year. Even if weather conditions improve and farmers resume planting, the crop will mature by May, denying it the cool weather for better yields.
Delayed sowing will expose the crop to higher temperature at the time of maturity. Winter chill is crucial for grain formation as the high temperature reduces output. Sow ing of wheat has been affected in high-
production zones in UP, Madhya Pradesh, Haryana, Bihar and Rajasthan. Weather scientists said the effects of El Nino is exacerbating the situation
Hottest year
The World Meteorological Organisation (WMO) said 2015 is likely to be the hottest on record, while 2011-2015 is the hottest-ever five-year period. This is due to a combination of a strong El Nio and human-
induced global warming.
Business
[1]. Centre defends labour reforms drive

What has happened?
In the wake of centres drive to reform labour laws by amalgamating 44 labour laws into 4 codes, opposition has criticised government of trying to dilute the labour laws while government has defended its
decision by saying that these reforms are necessary for creation of employment opportunities in the country so that almost 10 million people who are joining the workforce every year can be given an opportunity
to live a dignified and self-respecting life.
The 4 codes
The four codes will pertain to
1. Labour
2. Industrial relations,
3. Social security and welfare
4. Safety and working conditions
Fact: Labour laws are on the concurrent list
Shram Suvidha Portal
It was launched in April 2015. Under this portal, companies now have to file only a single return instead of the earlier practice of filing separate returns under eight different Acts.
This portal was developed as a unified web platform for ensuring transparency and accountability in enforcement of labour laws while easing complexity of compliance.
[2]. Public sector banks impaired assets stymieing overall economic growth
Context: In the wake of increasing Non-Performing Assets (NPAs), author points our attention to Agricultural debt waiver scheme, which as per him, is the main reason for mounting bad loans and NPAs of the
PSU banks.
Conventional reasons given for such a state of affairs
1. Decline in the countrys growth rate in the aftermath of the Global Financial Crisis (2008-10)
2. The policy paralysis during the second UPA regime, causing significant damage to new projects in infrastructure, power generation and civil aviation sectors.
Author says, above reasons are true but they do not present the whole picture as private sector banks have not been impacted that much.
Main reason as per author is the,

The agricultural debt waiver scheme was announced in budget 2008-09. The inspiration for debt restructuring programs were likely derived from the loan waiver scheme.
Suggestions to deal with the problem
1. The government and RBI must recognize the scale of the problem.
2. Following the lead provided by SBI in this regard in 2014-15, PSU banks should be ready to sell their NPAs to asset reconstruction companies for cash at deep discount, if necessary.
3. Disclosure of full and comprehensive information on the financial health of banks does not happen in India. It will be a good idea for RBI to conduct annual stress testing of banks, following the
methodology in the EU and US, and share the conclusions publicly.
4. Government must be prepared to lower its stake in PSU banks. The Indradhanush reforms are just a good beginning. For achieving something real and durable, the government, the political
class and the opinion-makers will have to jettison the long-held ideological belief that reduction of governments equity stake below 50 per cent will be an act of sedition and sacrilege.
5. All stakeholders must realize that commercial banking is undergoing a major transformation right now, driven largely by technology.
What are Indradhanush reforms?
It is seven pronged plan to improve the functioning of the public sector banks. The seven elements include
1. Appointments,
2. Board of bureau,
3. Capitalisation,
4. De-stressing,
5. Empowerment,
6. Framework of accountability
7. Governance reforms.
Must Read:
1. http://www.business-standard.com/article/finance/govt-launches-mission-indradhanush-to-revamp-psu-banks-115081401145_1.html
2. http://www.sakshieducation.com/GK/Story.aspx?cid=20&sid=122&chid=1054&nid=107387
[3]. Startup policy in New year

Context: The government is gearing up to unveil a new policy for promoting startups in January 2016 with an eye on boosting innovation, entrepreneurship and creating new jobs.
This policy comes under the wake of Start-up India initiative announced by PM on Aug 15 th 2015.
Start-up India policy
1. Encourage entrepreneurship: It would be a set of significant measures to encourage entrepreneurship in the economy and we hope it would become a game-changer in making the ecosystem
conducive for new ventures
2. Compliment schemes The policy would bolster and complement the other initiatives already launched to promote new enterprises such as the Mudra scheme, short for Micro Units
Development and Refinance Agency.
MUDRA bank
Micro Units Development and Refinance Agency Bank (or MUDRA Bank) is a public sector financial institution in India. It provides loans at low rates to micro finance institutions and non-banking financial
institutions which then provide credit to MSMEs. It was launched by PM on 8 April 2015.
The MUDRA banks will be set up under the Pradhan Mantri MUDRA Yojana scheme
India aspiration fund
It is a fund of funds under the Small Industries Development Bank of India (SIDBI) in order to boost the start-up ecosystem in the country. An initial corpus of Rs 400 crore has been already allocated to various
venture funds under it.
[4]. NITI Aayog Draws Road Map for Make in India Plan
What has happened?
NITI Aayog is preparing a road map to implement the Make in India programme in a manner that will give India an edge over its competing neighbours and prove sustainable over the long term.
The focus of the blueprint will be on a shift towards green manufacturing, digital manufacturing and additive manufacturing.
Green manufacturing
It involves
1. Manufacturing of green products, particularly those used in renewable energy systems and clean technology equipment of all kinds,
2. Greeningof manufacturing, thereby reducing pollution and waste by minimising use of natural resources and recycling of waste. It holds potential economic benefits including long-term cost
savings, waste reduction and process efficiency improvements
Additive manufacturing
It is often referred to as beginning of a third industrial revolution, refers to various processes used to synthesise a three-dimensional object while in digital manufacturing or computer-integrated manufacturing
functional areas such as design, analysis, planning, purchasing, cost accounting.
Conclusion
Moving on to higher technologies is a key to success of Make-in India programme.
Opinion & Editorial

[1]. Secularism in spirit and in letter
Context: On the constitution day on November 26, Union Home minister Rajnath singh said that The framers of the Constitution did not include the words secular and socialist because these values were
(already) part of Indian civilisation. Voicing his opinion that secularism was alien to the constitution and only became a part of it due to emergency. Author argues against it.
Backdrop against which the framers of constitution worked
The framers of the Constitution worked against the backdrop of two great instances of human carnage
1. World War II
2. The Partition of India
Both events were based on distinctive identities and there specific territorial demarcations. Makers of the constitution made sure that the document they produced had adequate safeguards and words of comfort for
every religion.
What does secularism in the Indian Constitution mean?
The constitutional vision of secularism is one of principled equidistance from all religious matters, while at the same time regulating its practice in a manner consistent with the demands of a modern society.
It is fallacious to argue that the original Constitution as adopted, enacted and given to ourselves on November 26, 1949, was not a secular document. The inclusion in the Preamble of the words socialist and
secular by the 42nd Amendment on January 3, 1977, only headlined what was already present in the original text of the Constitution. We must also remember that the Preamble itself was drafted only after the
Constitution was approved by the Constituent Assembly. The Preamble thus became a one-page mission statement of the republics intent.
Constitutional provisions devoid of any religious preference
1. Article 14: The guarantee of equality
2. Article 15 and 16: the promise of non-discrimination
3. Article 27 and 28: protection from religious taxes and religious instruction in state-funded institutions
4. Article 29 and 30: The permission of educational institutions of choice to linguistic and religious minorities
5. Article 325: The promise of equal ballots devoid of sectional preferences
Basic structure of constitution
On April 24, 1973, the Supreme Court, with its then full strength of 13 judges, ruled in the Kesavananda Bharati case that secularism was part of the basic structure of the Constitution. It also held that elements
constituting the basic structure were beyond Parliaments power to amend the Constitution. The court reiterated this principle in 1994 in the S.R. Bommai case when dealing with the challenge to the dismissal of
four Bharatiya Janata Party-ruled State governments after the demolition of the Babri Masjid.
42nd Amendment Insertion of word secular During the Emergency came the 42nd Amendment on January 3, 1977. Apart from many significant changes otherwise, it inserted the word secular in the
Preamble.
44th Amendment After the Emergency, the 44th Amendment by the Janata government undid most of the substantial damage achieved by the 42nd Amendment. But it, too, chose to preserve the addition of the
words socialist and secular to the Preamble.
[2]. A leaf from MP book
What has happened?
The agri-GDP of MP grew at 9.7 per cent per annum during 2005-06 to 2014-15, surpassing even record-holder Gujarats 7.7 per cent. The last five years have been even more spectacular: The agri-GDP grew at
14.2 per cent per annum. No wonder MP has got the Krishi Karman Award from the president three times in the last five years.
What has led to such high Agri-GDP growth rate?
1. Strong procurement system put in place for wheat. This incentivised farmers to increase production of wheat while improving the irrigation ratio.
2. The leadership and its focus on agriculture. MP CM has sworn to make agriculture in the state a profitable business. His first mission was to fix roads, power and irrigation. Now, he is focusing
on agri-markets and crop insurance. In perishables, he wants to have milk and horticulture corridors, and is trying to plug the gaps in value chains. He is reportedly ready to open up the land lease markets
and rationalise mandi taxes and commissions steps in the right direction
Conclusion
Would the prime minister take a leaf from Chouhans book and implement some of these lessons at an all-India level? Farmers are looking towards the national leadership with hope but, in the last 18 months,
nothing tangible has resulted. Rural distress is deepening every day. This is a wake-up call.

Written by F O R U M I A S | December 28, 2015 Leave a Comment | B R I E F

National
[1]. Piscine diversity under threat in Krishna river
What has happened?

Research undertaken by Fisheries Development Officer, Gadwal, research scholars and a faculty member of Osmania University, Hyderabad, has revealed that feral fish are causing the decline of presence of other
species of Major Indian Carps, Minor Indian Carps and Catfish in river Krishna damaging the piscine diversity of the second largest river in South India.
Piscine: means pertaining to fish
Observation
The team observed that the presence of Indian Major Carps has been declining year by year, while the population of Feral Fish Nile Tilapia ( Oreochromis niloticus ), which was introduced for aquaculture
purposes in India in 1987, has been going up
Where Tilapia is normally found?
This fish has around 70 species and it is primarily found in the rivers of western Africa and the Middle East.
It is the most traded food fish internationally.
How did they reach river Krishna?
These fishes reached river Krishna from the aquaculture farm, during recurring floods.
What researchers have to say?
The researchers said unless the government initiates a conservation plan, the Nile Tilapia will repopulate the indigenous species in the Krishna very soon.
[2]. Vacate carbon Space: India to West

Context: In the wake of COP21 being held at Le Bourget in Paris, India has reasserted that West should vacate the carbon space and should not force any agreement on the developing nations
What are the issues being forced upon India and the developing nations?
Two main matters on which developing countries are being forced to are,
1. To provide a specific peaking date for coal use i.e. a date on which coal use would be maximum and would not go up after that.
2. Fiver yearly periodic assessment of their emission reduction pledges
Indias stance
India says instead of forcing any agreement developed nations should vacate the carbon space which they have already utilised un-equitably.
1. On coal usage: Criticism of India ignored the fact that the country proposed a seven-fold rise in renewable power capacity, after which coal consumption will definitely come down. Moreover,
India uses around 7th of the coal of top two coal users in the world.
2. On periodic review: Union environment minister Prakash Javdekar said that voluntary pledges submitted are for a 10-year cycle from 2020. After that period, it could give more progressive
INDCs.
BASIC group
On Tuesday, the countries belonging to the BASIC group India, China, Brazil and South Africa will have a meeting, apparently to forge a consensus and resist some of the pressures from the developed
world.
What is BASIC?
The BASIC countries (also Basic countries or BASIC) are a bloc of four large newly industrialized countries Brazil, South Africa, India and China formed by an agreement on 28 November 2009. The four
committed to act jointly at the Copenhagen climate summit, including a possible united walk-out if their common minimum position was not met by the developed nations
BASIC nations came together during COP15 i.e the Copenhagen climate change conference.
Business & Economy
[1]. As GST debate rages, E-commerce seeks leeway
What has happened?
GST is going to be rolled out on April 1st 2016. E-commerce companies have given a representation to the government to keep them out of the GST purview.
What the e-commerce companies want?
1. They say that as they are only providing the customers with a platform wherein they can buy from the sellers, so they should not be subjected to GST.
2. Companies like Flipkart, Snapdeal etc should be seen as service providers to the vendors and vendors would be liable to pay GST on goods sold through their portals.
A Compelling Case to Tax e-Commerce
There is no case to keep e-commerce deals out of GST. It will do no harm but only help retailers. A tax on online sales is the only way e-retailers can get credit for the taxes they pay on inputs, making it
worthwhile for them to do business in India.
It makes no sense to break the input tax credit chain, which is the whole purpose of GST. However, procedures for tax compliance must be hassle-free, even as tax is imposed on all value additions in the chain.
This will also prevent tax base erosion and profit-shifting by companies.
[2]. Panagariya urges corporate to stop seeking tax sops from the Centre
Context: In this article the Vice chairman of Niti Aayog criticises the corporate and industry
Why has he criticised industry?
He says that everytime he meets with the industry captains, they have demands like reduce this tax by 2%, or increase the import duty or tariffs on this product by 4% so that I can have a profit of 5%. This is not
the way to go. Instead the industries needs a different mindset for the country to undergo transformational change.
[3]. Cant Direct Govt to Enact Uniform Civil Code: CJI
What has happened?
CJI Tirath Singh Thakur has said that it cant force the government to enact a uniform civil code. It can only hope that one day we shall have such a law.
What is uniform civil code?
Uniform civil code in India is the proposal to replace the personal laws based on the scriptures and customs of each major religious community in the country with a common set governing every citizen.
Currently, there are personal laws based on the scriptures and customs of each major religious community. They are separate from the public law and are applied on issues like-
marriage, divorce, inheritance, adoption and maintenance
Uniform civil code and Directive principles of state policy
Article 44 of the Directive Principles in India implements the Uniform Civil Code. According to this article, The State shall endeavour to secure for the citizens a uniform civil code throughout the territory of
India.
But, Directive Principles are only guidelines and it is not mandatory to use them
Why this issue is being debated?
India being a secular country guarantees its minorities the right to follow their own religion, culture and customs under Article 29 and 30. But implementing a Uniform Code will hamper Indias secularism.
It is not only a Hindu-Muslim debate but involves other religious minorities as well.
The SC had earlier pointed out that discrimination in issues like marriage, divorce and inheritance may not be a good practice. It also said that there is a total confusion when comes to personal laws governing
religious practices.
[4]. India Wants WTO Meet to Take up Bali Agenda
What has happened?
In the run-up to the World Trade Organisations ministerial conference in Nairobi from December 15-18, India has said it wants the agenda finalised at Bali in 2013 to be implemented before it makes any fresh
commitments
Issues in Bali package
Agriculture issues including public stockholding for food security purposes and export competition,
What India wants from Nairobi ministerial?
Permanent solution for stock piling for food security
Safeguard mechanism in case of sudden rise in imports or fall in prices,
No differential treatment because India is a high growth emerging economy, and the inclusion of peace clause in the draft ministerial declaration.
What is peace clause?
The term peace clause has been a cause of disquiet ever since India dug in its heels on the issue of domestic food security in the recent World Trade Organisation (WTO) negotiations, leading to a deadlock.
Issue: Should the WTO have a say in Indias policy of buying foodgrain at a fixed price from farmers and supplying it below cost to the poor? India thinks not, but developed nations disagree.
Peace clause was created at Bali ministerial in 2013. The peace clause said that no country would be legally barred from food security programmes even if the subsidy breached the limits specified in the WTO
agreement on agriculture. This peace clause was expected to be in force for four years until 2017, by which time the protagonists hoped to find a permanent solution to the problem.
The clause also requires full disclosure of MSPs and annual procurement for food security programmes, which the Government fears would leave India open to questioning by other countries on domestic matters.
Why developed countries are against subsidy programmes of countries like India?
The developed nations see India as a huge market for food-grains and other products, but their produce is rendered uncompetitive when the government is willing to subsidise farmers, purchase their produce for a
minimum support price and then sell it at a loss through the public distribution system and other channels.
Indias worry
Indias worry is that if the clause expires before a permanent solution is in place, food security programmes and policies to protect farmers, such as Minimum Support Prices, would come under siege
What if India accepts the peace clause?
Accepting a temporary peace clause would be tantamount to admitting that the subsidy programmes in India and other developing nations violate global trade norms, leaving the nation a sitting duck if a complaint
was to be raised in the WTO or other international forums later. This would also result in India losing its biggest bargaining chip in future WTO meetings
[5]. Wide open spaces of Indian White Space spectrum
Context: Proposals are being mooted about the exploitation of White space spectrum to provide affordable telephony to the rural unconnected.
What is White-space spectrum?
It refers to the small gaps or empty spaces unused in an otherwise heavily-occupied broadcasting spectrum band. In the current context, the reference is to the so-called Band IV in lower UHFcovering
frequencies from 470 MHz to 590 MHz.
Author says that this situation is applicable to West wherein terrestrial mode of broadcast has been used. In this broadcast, gaps are to be left between the adjacent channels to avoid interference. This unused space
came to known as White space spectrum in the West.
What has happened?
Microsoft has said that it would connect 5 lakh villages through White spectrum technologies
What do experts have to say?
Experts point out that the proposal of White Space spectrum is not only completely inappropriate for India, but is also harmful to the interests of consumers and the nation for several cogent reasons.
Reasons
1. No white space: Hardly any White Space spectrum in the concerned UHF band in India.
2. Cost effectiveness: Based on field trial reports, it has been established that TV White Space provides 1 MBPS for every 1 MHz spectrum consumed. If the objective is to provide 100 MBPS at
the gram panchayat levelwhich is the national mandate of the NOFN or the Bharat Net Projectthen TV White Space would need at least 100 MHz of unlicensed spectrum, which effectively means the
entire UHF Band IV itself! Surely, this cannot be a spectrum efficient backhaul technology for providing rural broadband when there are other cost-effective millimetre wave technologies that provide higher
capacities which require far less spectrum and that too in dedicated licensed bands
Non-white spectrum
There is a vast expanse of non-white spectrumone could even call it regular black spectrum space. This is because, unlike the developed economies, India has only a lone and solitary public terrestrial
broadcaster, Doordarshan, in this band. About 88 MHz of regular non-white spectrum is available for deployment
Benefits of non-white spectrum
This UHF spectrum is comparatively far more superior/powerful in its propagation characteristics. These radio waves can easily travel 20 km or more in rural areas and can also penetrate buildings to provide
excellent in-building coverage in urban areas.
Thus, this spectrum would be tremendously beneficial for use in advanced mobile services and mobile broadband, which are near-necessities for Digital India and for uplifting the economy.
What is Bharat Net project?
The BharatNet project proposes broadband connectivity to households under village Panchayats and even to government institutions at district level. Creation of 100 users at each panchayat level, will enhance
GDP by about Rs. 66,500 crore
What is NOFN?
National Optical Fibre Network project The National Optical Fibre Network (NOFN) is a projectinitiated in 2011 and funded by Universal Service Obligation Fund to provide broadband connectivity to over
two lakh (200,000) Gram Panchayats of India at a cost of Rs.20,000 crore ($3 billion).Government of India has given approval of the project on 25-10-2011.
Opinion & Editorial
[1]. For a morally conscious government

Context: Author in this article has stated that the destructive floods that have ravaged Chennai, though unfortunate are a man-made calamity.
CMs response to the rains in November that preceded this event Losses are unavoidable when theres very heavy rain. Swift rescue and relief alone are indicators of a good government
What has resulted in such large scale destruction?
1. An act of God: To view this tragedy as merely an act of god would be doing injustice to those who have lost their lives and families to it. Rapid urbanization flouting every environmental rule in the
book is the main cause of these massive floods.
2. Failure of successive governments: Author says that successive governments in Tamilnadu have failed in providing a welfare state. Instead, each successive governments focus remained on
shelling benefits to garner votes.
3. Over-cautious courts: Author then blames courts which now have come to see any protest for the environment as anti-development and against the development roadmap of the state. As a
result, flagrant violations of development rules and regulations, both by the government and by private entities, are routinely overlooked.
Conclusion
We must strive not only towards restoring an element of normalcy to the places affected, but we must also actively work towards ensuring that any supposed development activity undertaken in the city is
environmentally sustainable.
[2]. Chennai and its urban nightmares

Context: In the wake of recent Chennai floods, author states in this article that instead of blaming god or urbanization, we should isolate real culprits behind such large scale destruction. Corrupt public institutions
and the corrupt political elite is responsible for it.
Author says,
1. Multiple migrations: India is witnessing multiple migrations that are unprecedented in its history. Millions are moving into literacy, similarly staggering numbers are migrating out of poverty and
malnourishment, thousands are migrating to the IT world, and several millions are moving to urban centres
2. Poor infrastructure: The robust and efficient infrastructure needed to facilitate such large scale migrations is absent in India
3. Failure of the state: The recent Chennai floods show the abject failure of the state in managing rapid urbanisation of the city
4. Aping the West: Author points out that government is forcing migrations from rural to urban areas due to its failure to boost the agricultural sector and improve economic opportunities in rural
areas.
5. Corrupt system: Rapid urbanisation means an incredible pressure on city resources as every new person that moves to the city needs space to live and work. Hence, unbridled construction
takes place, to which the officers, engineers, contractors and politicians turn a blind eye in lieu of benefits they receive.
6. Lowly rankings: The Safe Cities Index 2015 by the Economist Intelligence Unit based on more than 40 indices assessed 50 cities, including two from India. Delhi was at 42nd position and
Mumbai at 44th. It is a reflection of how well our urbanisation is progressing.
Authors view
If the very fundamental duty of a modern nation-state is to provide security to its people and secure its borders, then India is beginning to fail because of staggering corruption and amoral public administration.
Conclusion
So any discussion on Chennai disaster must begin with some fundamental questions. Are the missing drainages and shrinking water-bodies of Chennai a creation of our corrupt masters? Has Chennais misery
been accentuated by the failure of the state to manage its urbanization? Is the Chennai disaster a peek into what is in store repeatedly for the rest of India in the coming days?
[3]. Betting on odds and evens

What has happened?
Delhi governments proposed odd even car formula to reduce pollution in the capital has been met with mixed reviews. Author in this article states that though the step might be lacking in structure, it is the need
of the time considering the fact that Delhi HC had termed Delhi as a gas chamber
Author says,
1. BRT In 2008, the then Congress government introduced a Bus Rapid Transit (BRT) system with a short dedicated high-speed corridor at a tenth of the cost of the metro. Author testifies to the
improvements in the users experience himself.
2. Measures taken internationally: Cities across the world have experimented with variations of restriction on car usage there is odd and even day rationing during peak hours in Bogota
(Colombia), similar restrictions during peak pollution days in Beijing, restrictions on single-occupancy vehicular passage in some North American cities, congestion charges on driving in the city centre in
London, and high car taxes in Singapore.
3. Problems for the differently-abled: People with special abilities would face difficulties with this new formula as our public transport has not been designed keeping their needs in mind.
4. Enough public transport: Where the AAP government will stumble is on improving public transport fast enough to accommodate the 45 lakh new commuters who will need to use the metro,
buses, autorickshaws and taxis from January 1. The world-class metro is currently used by about 20 lakh people every day, while the Delhi Transport Corporations overstretched bus service serves 45 lakh
passengers. Neither is equipped to take on several lakh new passengers within 15 days
5. Other measures: Government is planning to introduce other measures too like it will also begin vacuum cleaning of the dust from the roads in Delhi from April 1, 2016, close down the Badarpur
and Raj Ghat thermal power plants, push the entry of trucks into the city to later in the night, and bring forward the cut-off date for Euro-VI emission norms
[4]. Kathmandu nights

Context: In the wake of Nepal constitutional crisis author tries to ascertain the reason behind the deadlock and suggests the way forward.
Why this deadlock happened or Why Madhesi agitation occurred?
Mainly due to three promises on which the constitution appears to have reneged (backtracked),
1. Proportional representation,
2. Allocation of seats on the basis of population,
3. Identity-based federalism
There is agreement on the first two points. On the third, the Madhesis are insisting on a demarcation of state boundaries. The denial of federalism was seen by marginalised groups as a ruse to deny them a
legitimate share in power. The fact that something already promised was taken away led to a sense of betrayal. This sense of betrayal was compounded into polarisation
Nepal governments role
1. Denying legitimacy: Nepal government denied the Madhesi agitation and rubbished it as Indian conspiracy. The main focus of politics in Kathmandu became standing up to India, rather than
resolving a home-grown constitutional crisis.
What Madhesis are demanding now?
The Madhesis are adamant that there be some credible commitment to federalism, along with at least a sketch of a demarcation.
The way forward
Concessions to Madhesis: Government can concede to a just settlement with Madhesis but Nepal governments ultra-nationalist card (they blamed India for this agitation) can backfire here if they
are not able to project that, any concession given, is in the wake of Madhesi agitation and not due to appease India. It would require a political finesse and craftsmanship to achieve that.
If the crisis continues
Radicalisation of the movement: The Madhesi movement will get radicalised if their demands are not met and a sense of betrayal lingers on within them. Underestimating the power of their
agitation will only plunge Nepal into chaos and instability.
Conclusion
Indias interest lies in a prosperous, united, inclusive Nepal. It is Kathmandu that seems to want the conflict to simmer: It is using the India card as a fig leaf to avoid confronting a structural problem of its own
making. In the process, Nepals people, of all communities, continue to suffer.
[5]. Raising her voice

Context: The article stresses on the widening internet gender gap which is widening the global development gap. It needs to be bridged
The internet opens up a world of knowledge, from digital books and Wikipedia to online courses. Research shows that when women have access to reading apps, they use them significantly
more than men.
Economic opportunities: In a survey of large developing countries, nearly half of the women who were connected had applied for a job on the internet, and nearly a third had earned extra income
online
Lower child mortality and faster economic growth: Improving womens access to income and technology improves child welfare and nutrition. Research shows that countries with more
equality in employment and education have lower child mortality and faster economic growth.
Lending a voice to women: The internet also gives women voice and allows their voices to be heard. In the Democratic Republic of the Congo, the Hero Women set up their own internet caf
to tell their stories, and they successfully petitioned for the appointment of a US special envoy to the war-torn region. In Kenya, women set up Her Voice to fight gender-based violence by advocating for
legal reform and working with victim support groups. In Brazil, women created I Will Not Shut Up, an app that maps assaults on women so that community leaders can be held accountable
Internet gender gap: Globally, four billion people lack internet access, most of them women. In the developing world, nearly 25 per cent fewer women than men are connected; in sub-Saharan Africa, its 45 per
cent.
Universal internet access: Companies engaged in making the dream of universal internet access true, include tech firms like Google, whose Loon and Titan Aerospace projects aim to reach remote
communities; SpaceX, which is planning a network of satellites to provide access; and Facebook, whoseInternet.org initiative uses the Free Basics app and website to connect people in 30 countries. Free Basics
makes basic internet services including news, search and health information available for free
Encouraging stats regarding Free Basics app
More than a billion people can access Free Basics people who otherwise wouldnt be online. Free Basics isnt the full internet theres no sustainable economic model that can deliver that to everyone for free
but it is a bridge to the full internet. More than 50 per cent of people who start with Free Basics pay for the full internet after 30 days and in countries where Free Basics has been launched, the rate of new-
user internet adoption is twice as fast.
Conclusion
By connecting women we can ensure that we are racing together towards a better and bright future.
[6]. Right step forward
What has happened?
On 6th Dec 2015, the talks between the national security advisors and foreign secretaries of India and Pakistan were held in Bangkok.
What has India agreed to?
India has agreed to talk on Kashmir reversing its earlier stand that any talk on Kashmir must be preceded by talk on terrorism
India agreed, moreover, to hold talks in a third country a possibility it had shot down earlier in order to help Pakistan avoid a meeting with Kashmiri secessionists
Author cites examples of other countries who have maintained dialogue despite continuing tensions, like
US & Soviet Union: The United States and the Soviet Union pursued nuclear dtente (is the name given to a period of improved relations between the United States and the Soviet Union that
began tentatively in 1971 and took decisive form when President Richard M. Nixon visited the secretary-general of the Soviet Communist party, Leonid I. Brezhnev) even as they were locked in a murderous
war-by-proxy in Afghanistan.
Turkey & Russia: Turkey and Russia have continued to talk as tensions between the two have spiralled upwards in the light of recent incident wherein a Russian jet was shot down by Turkey.
Author believes that any peace talk initiative does not mean that disputes would be resolved immediately but it gives a promise of change, however small it might be.
[7]. Gods, Gold and state

Context: In this article author states that it would be wise on the part of temples to join gold monetization scheme of the government and deposit their gold.
Two schemes launched by the government are,
Sovereign Gold Bond Scheme

The bond scheme tries to discourage fresh gold purchase. Thus, it indirectly discourages gold imports. That helps to keep the trade and current account deficit down. Under the bond scheme, the government will
pay 2.75% interest rate per annum on the bond. The face value of the bond is denominated in terms of units of gold. Hence, the lender gets the gold back.
Therefore, the risk of the gold price appreciation is borne by the government of India, the borrower.
The government saves on the interest cost under this scheme. It sets aside reserves for handling the gold price risk out of the interest amount it saves
Who can benefit from this scheme?
Those who buy gold for investment can benefit greatly. The bond carries interest and the investor is fully exposed to the gold price in either direction, as he would be if he bought the metal. In addition, as
everyone has observed, this bond can be held in dematerialized form and is not subject to theft and loss through natural disasters.
Gold Monetization Scheme
It requires holders to part with their gold, see it assessed, melted and converted into bars. They deposit the bars. The deposit is repayable in gold or cash. Again, there is no real loss of ownership. That particular
piece of gold that the owner held may be melted away. But, the title to the intrinsic gold content of what they gave away is still theirs.
Aim of this scheme: Indias official gross domestic savings rate is only 30%. It has dropped from around 37%. Much of it is locked up in gold and cannot be intermediated to help in capital formation and
employment creation. That is what this scheme aims to do.
Interest rates under this scheme: The interest rates under this gold monetization scheme too are attractive. It is 2.25% and 2.5% for medium-term and long-term deposits.
Should temples deposit their gold under Gold monetization schemes?
Yes. Except for those items that are earmarked for adorning the deities, the rest can and should be monetized. Besides interest earnings, there are other benefits such as savings in storage and safety costs.
Conclusion
In an environment of slow and uncertain global growth, diminished export prospects and a stagnant savings rate, extracting more out of accumulated savings is a national imperative. Without that, Indias growth
aspirations will likely remain unfulfilled. Hence, it is essential that temples try harder to make the gold monetization scheme a success.
[8]. Time to rethink role of Rajya Sabha

Context: In the light of recent comments by FM that RS is blocking the legislative agenda of the government, it is imperative that we look into the issue of importance of RS and whether it needs to be reformed.
Origins of RS
The origins of the Rajya Sabha can be traced back to the constitutional reforms brought in by the colonial government after the Montagu-Chelmsford recommendations in 1919. It created a
council of states to act as a second house.
The Government of India Act of 1935 strengthened this institution. It was made into a permanent body, where a third of the members retired by rotation, as a way to ensure that there is
continuity in policy.
The Constituent Assembly eventually voted for a Rajya Sabha as a necessity for a complex federation such as ours.
India needs a strong RS
India needs a strong council of states, perhaps even more so today when there is so much attention being paid to the principle of cooperative federalism. The Rajya Sabha is part of the institutional architecture of
Indian federalism.
Two important questions
Should the Rajya Sabha have a veto over subjects that are almost completely the business of the Union government?
There is a need to carefully ascertain Rajya Sabhas jurisdiction vis-a-vis approval of policies.
Should the Rajya Sabha be a permanent body whose composition is often at odds with that of the Lok Sabha?
Its structure was meant to give some stability to policy, but the experience of recent years shows that the lack of alignment between the two houses of Parliament is merely an opportunity for the opposition parties
of the day to block the government.
Conclusion
Author states that RS definitely needs to stay there so as to prevent the government from passing agendas based on the passions of the moment but it doesnt mean that it need not be reformed.
An extract of the speech by Constituent Assembly member Gopalaswami Ayyangar, when he summed up the debate, on utility of RS,
The most that we expect the second chamber to do is perhaps to hold dignified debates on important issues and delay legislation which may be the outcome of passions of the moment until the passions have
subsided and we shall take care to provide in the Constitution that whenever on any important matter, especially matters related to finance, there is a conflict between the house of people and the council of
states, it is the view of the house of people that shall prevail.



National
[1]. India to sign deal with Japan to get first bullet train
What has happened?
India is set to sign a deal with Japan this week on the countrys first bullet train, with Tokyo financing the bulk of the high-speed rail project between Mumbai and Ahmedabad through a $8 billion loan.
Total cost of the project: $14.6 billion (approx)
Distance: 505Km
Between: Ahmedabad & Mumbai
Current time taken: 8hours
Time via bullet train: 2 hours
Facts:
1. A deal with India would be the second successful case of Japan exporting its bullet train technology to a foreign market, following a deal with Taiwan in 2007.
2. India ranked as the second-biggest recipient of Japanese government-backed yen loans as of fiscal 2013, with a running total of 4.45 trillion yen
3. The Japan International Cooperation Agency and Indias rail ministry began a joint feasibility study on high-speed rail two years ago.
4. With trains zipping along at up to 320 kph, the Mumbai-Ahmedabad railway is expected to shorten travel time between the two western Indian cities from around eight hours to roughly two.
5. Construction is supposed to begin in 2017, with completion slated for 2023. India has plans for seven high-speed rail corridors, starting with this one.
[2]. Parliament must ratify WTO deals, say NGOs

What has happened?
Civil society groups have urged the Union government not to undertake new binding commitments at the upcoming Nairobi ministerial from Dec 15 18, without public consultation as well as before debate and
ratification by Parliament.
What civil society groups are saying?
1. Involving stakeholders: Take inputs from all stakeholders and carry out a thorough assessment of the employment, social and environmental impacts arising out of the commitments India makes
at the WTO-level talks as well as due to the various free trade agreements (FTA) between India and other countries.
2. Concerned over Indias engagement on non-binding issue: Concern has been expressed over India engaging in non-binding discussions on new issues such as environment and labour that
the developed world is keen on introducing during the December 15-18 meetings in the Kenyan capital.
3. Corporate agenda: The civil society groups alleged that the new issues which the rich world terms as the latest challenges facing world trade represent the corporate agenda of the
advanced countries to further pry open developing country markets.
Continuance of S&DT (Special & Differential Treatment)
India should also ensure that the WTO mandate of Special and Differential Treatment (S&DT) for developing countries is not abandoned by agreeing to aggressive tariff cuts in farm products as demanded by
the developed world.
What are S&DT provisions?
The WTO Agreements contain special provisions which give developing countries special rights and which give developed countries the possibility to treat developing countries more favourably than other WTO
Members. These special provisions include, for example, longer time periods for implementing Agreements and commitments or measures to increase trading opportunities for developing countries.
These provisions are referred to as special and differential treatment (S&D) provisions.
The special provisions include:
longer time periods for implementing Agreements and commitments,
measures to increase trading opportunities for developing countries,
provisions requiring all WTO members to safeguard the trade interests of developing countries,
support to help developing countries build the capacity to carry out WTO work, handle disputes, and implement technical standards, and
provisions related to least-developed country (LDC) Members
[3]. Indias fight against TB lacks punch

What has happened?
A report titled Out of step 2015 prepared jointly by Stop TB Partnership and MSF Access Campaign, was presented at 6th Union World Conference on Lung Health in Cape Town, South Africa
What do the results of the report signify?
The results of the survey show that many countries need to take bold steps to bring their policies up to date with the latest international standards
Indias TB policies have been found wanting on several counts,
1. Initial diagnostic test: Unlike South Africa, Brazil and the Russian Federation which have recommended rapid molecular testing (Gene Xpert) instead of sputum smear microscopy as the initial
diagnostic test for all presumptive TB cases, India has recommended its use only for people at risk of multidrug-resistant TB (MDR-TB) or HIV-associated TB, paediatric TB and extra-pulmonary TB cases.
Even after limiting its usage, the roll-out has been progressing slowly, despite having in place ambitious scale-up plans.
2. Use of streptomycin: Despite recording 71,000 MDR-TB cases (both new and retreatment) in 2014, the Indian TB policy continues to recommend the use of Category II treatment regimens
containing streptomycin. It uses the drug despite recommendations for drug susceptibility test for those at risk of MDR-TB
3. Use of FDC: though the use of fixed-dose combination (FDC) drugs for treating drug-sensitive TB cases improves drug adherence and make the administration easy, RNTCP does not
recommend FDC formulation
Revised National TB Control Programme (RNTCP)
In spite of evidence showing that there is a higher rate of people lost to follow up from treatment and associated risk of drug resistance generation, India continues to recommend intermittent drug regimen.
However, the Revised National Tuberculosis Control Programme (RNTCP) intends to switch over todaily regimen in March-April 2016. Procurement of drugs is at an advanced stage, he said. Daily regimen
will be introduced in a phased manner. The switch will happen in 104 districts in five States Kerala, Himachal Pradesh, Bihar, Sikkim and Maharashtra.
What is MDR-TB?
Multi-drug-resistant tuberculosis (MDRTB) is defined as a form of TB infection caused by bacteria that are resistant to treatment with at least two of the most powerful first-line anti-TB drugs, isoniazid (INH)
and rifampicin (RMP).
The reasons why multidrug resistance continues to emerge and spread are mismanagement of TB treatment and person-to-person transmission. Most people with TB are cured by a strictly followed, six-month
drug regimen that is provided to patients with support and supervision. Inappropriate or incorrect use of antimicrobial drugs, or use of ineffective formulations of drugs (e.g. use of single drugs, poor quality
medicines or bad storage conditions), and premature treatment interruption can cause drug resistance, which can then be transmitted, especially in crowded settings such as prisons and hospitals.
Must read: http://www.ncbi.nlm.nih.gov/books/NBK100386/
Business & Economy
[1]. Floods, price gouging & free market
What is Price gouging?
Price gouging is, when a seller spikes the prices of goods, services or commodities to a level much higher than is considered reasonable or fair, and is considered exploitative, potentially to an unethical extent.
What is a free market system?
A free market is a market economy system in which the prices for goods and services are set freely by consent between vendors and consumers, free from any intervention by a government, price-setting
monopoly, or other authority.
Author in this article deliberates on the ethical perspective of price gouging. The author couldnt get flight ticket from Bengaluru to New Delhi during recent Chennai floods. She noticed that airlines had raised the
prices of tickets to around 10 times of their normal price.
Author contends that,
1. Market rules work when there is a level playing fieldif sellers have the pricing power, buyers have the power to switch brands but during a catastrophe it is not a normal situation and such
situations need new rules of the game
2. Who should make these rules? The government? But we are against government interference in the free market. So, should government intervene only in times of distress?
3. What we need is a regulator and not increased interference from the government
4. In times of a natural disaster, presence of a regulator would ensure that such blatant price gouging cant happen. Like, Disaster price of an airline ticket can be fixed beforehand so that airlines do
not extort money from needy customers.
Some ethical questions to ponder upon,
1. Is it wrong for sellers of goods and services to take advantage of a natural disaster by charging whatever the market will bear?
2. If so, what, if anything, should the law do about it?
3. Should the state prohibit price gouging, even if doing so interferes with the freedom of buyers and sellers to make whatever deals they choose?
[2]. The GDP growth signals

What has happened?
2nd quarter (July-Aug-Sept) GDP numbers have been positive with a GDP growth rate of 7.4% indicating that economy is on an upward path.
Nominal GDP is not adjusted for inflation while Real GDP is adjusted fro inflation and hence is lower than Nominal GDP but in the present scenario on the account of a negative GDP deflator we have a situation
where Nominal GDP is less than Real GDP
Takeaways from the data,
1. Positive signals for 3rd Quarter: Growth rate of 7.4% in 2nd quarter bodes well for the growth in 3 rd
2. Nominal GDP: The growth in nominal GDP at current prices comes in lower at 6%, with a cumulative growth of 7.4% against 13.5% last year.
3. Impact of lower Kharif crop: the first two quarters are free from the influence of the monsoon and its impact on farm output. As the kharif season starts from October onwards, the impact of lower
output will come in Q3. Also, Q4 is critical as most of the rabi crop is harvested. Therefore, the negative impact of lower kharif agricultural output is to be felt in the second half of the year.
4. Slow construction sector: the construction sector has grown by just 2.6%, which comes as a disappointment as there were expectations that there were big bang investments coming from the
government in roads and railways. This means the movement in previously stalled projects in the construction space has not been significant as issues beyond permissions have come in the way.
5. Growth in trade sector: the segment trade, transport and communications has shown a healthy growth rate of 10.6%, which has been attributed more to the trade sector where high growth in
sales tax collections has contributed to the same
6. Financial sector growth: the financial sector including real estate and professional services has been buoyant with 9.7% growth being witnessed. With professional services growing by 15.6%, it
is tempting to conclude that self-employed income generation has been vibrant, probably reflecting growth in entrepreneurial spirit.
7. Lower consumption: The share of consumption in GDP has come down from 56.2% to 55.9%, which, though not really significant. is still indicative that consumption has not picked up.
[3]. GST Must Apply to Ecommerce, In Full

What has happened?
E-retailers have said that they should not be included in the GST purview as they only provide a portal through which buyers and sellers interact. They do not sell anything. Author in this article states that online
retailers should be taxed under GST
Author says,
1. There is no reason to exempt ecommerce companies from the Goods and Services Tax (GST). Online retailers should be taxed on par with brick and mortar retailers. Amazon and Flipkart, those
who organise the online marketplace, where sellers meet buyers, should pay service tax on the fee they charge for providing this service, labelled fulfilment.
2. The seller so facilitated by Amazon, etc, should collect the tax on their sales from buyers and pass on the tax to the government.
3. The government should not ask aggregators that run marketplaces to pay value-added tax (VAT) on products that they neither own nor sell.
4. Online retail is growing at a fast clip in India, and the government must not lose out on revenues. The share of service tax revenues is just 2% of the GDP despite services contributing to over 60%
of the economy. To raise the share, there is a compelling case to bring ecommerce under GST. It will also prevent Base Erosion and profit Shifting (BEPS).
[4]. Norms soon for crowdfunding, MF sale through ecommerce: Sinha

What has happened?
Capital markets regulator SEBI will soon put in place norms to help entrepreneurs raise funds through crowdfunding, while discussions are also underway to allow sale of mutual funds through e-commerce
platform.
Committee to submit report
1. A SEBI-constituted committee, headed by Infosys co-founder N R Narayana Murthy, to suggest ways for raising funds through crowdfunding is likely to submit its report in a month
2. SEBI has set up a committee under another Infosys co-founder Nandan Nilekani to suggest ways for boosting Mutual Funds industry. Regulator is actively working towards making it possible for
mutual funds (MF) to sell their schemes on e-commerce platforms.
What is crowdfunding?
Crowdfunding typically involves young entrepreneurs and small groups of people raising funds for their ventures through various online platforms involving individuals and organisations
What is a Mutual Fund (MF)?
MF is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money
managers, who invest the funds capital and attempt to produce capital gains and income for the funds investors.
SEBI
The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 12 April 1992 through the SEBI Act,
1992
The SEBI is managed by its members, which consists of following:
1. The chairman who is nominated by Union Government of India.
2. Two members, i.e., Officers from Union Finance Ministry.
3. One member from the Reserve Bank of India.
4. The remaining five members are nominated by Union Government of India, out of them at least three shall be whole-time members
Powers vested with SEBI
For the discharge of its functions efficiently, SEBI has been vested with the following powers:
1. To approve bylaws of stock exchanges
2. To require the stock exchange to amend their bylaws
3. Inspect the books of accounts and call for periodical returns from recognized stock exchanges
4. Inspect the books of accounts of financial intermediaries
5. Compel certain companies to list their shares in one or more stock exchanges
6. Registration brokers
SEBI has three functions rolled into one body: quasi-legislative, quasi-judicial and quasi-executive. It drafts regulations in its legislative capacity, it conducts investigation and enforcement action in its executive
function and it passes rulings and orders in its judicial capacity.
[5]. Opecs divisions keep oil prices low
What has happened?
OPEC (Organization of Petroleum Exporting Countries) met on 4th Dec 2015 at Vienna
OPEC
The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 1014, 1960, by Iran, Iraq, Kuwait, Saudi
Arabia and Venezuela.
OPECs objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of
petroleum to consuming nations; and a fair return on capital to those investing in the industry
What is a swing producer?
A company or country that changes its crude oil output to meet fluctuations in market demand. Saudi Arabia is seen as the worlds major swing producer, as it deliberately limits its crude oil production in an
attempt to keep supply and demand roughly in balance. This role has been taken over by the U.S now.
Issues battering the oil market,
1. Supply: Supply side has been destabilised by rapid encroachment of shale energy technology
2. Demand: Demand side has been marred by an economic slowdown in the economy of emerging countries
3. Swing Producer: The role of swing producer on the downside once played by Saudi Arabia and some of its OPEC partnersby reducing output when prices are lowhas de facto been taken
over by the US. This has given rise to the increased role of market fluctuations in the oil market price balance.
Due to lowering of oil prices earning of the producers reduce considerably but the ability to deal with these fluctuations differ from nation to nation. Like Saudi Arabia which has large accumulated wealth can
easily transition from this phase while countries like Venezuela would have to face a period of increased social and political turmoil.
Conclusion
Meeting at Vienna was convened to discuss various issues regarding current oil market conditions. Meeting resulted in no concrete agreement. So, author contends that conditions in the international oil market
would continue to remain volatile for a while.
[6]. Its Vehicles for Some, Dust & Factory for Others
Context: Conflicting studies point out the cause of pollution in capital to be different sources. Study by National Environmental Engineering Research Institute (NEERI) says road dust and industries are big
contributors, not vehicles.
Report by NEERI
1. The high PM 10 levels in Delhi were caused more by dust and industries rather than vehicles. The report said while road dust contributed up to 52% of Delhis PM 10 levels, vehicles contributed
6.6% and industry share was 22%. Open burning and other area sources contributed 18%.
2. The study showed road dust was the biggest contributor to Delhis high PM levels. Vehicles are also very visible sources of pollution and hence also a perception about how much they contribute.
Assessments have shown it is mostly heavy duty vehicles like trucks and LCVs that cause more pollution
NEERIs report is flawed
Centre for science and environment (CSE) has trashed the report of NEERI deeming it as flawed, based upon flawed methodology.
[7]. Indias Solar Goals a Global Priority, Says Stanford Report
What has happened?
On the sidelines of the climate talks in Paris, a group of solar experts from Stanford University released a report on 8 th dec 2015 calling Indias solar goals a global priority. The report calls for the international
community banks, financial institutions, governments to support Prime Minister Narendra Modis audacious solar ambitions, which present opportunities for India and the world.
Indias plans for solar energy

To balance Indias pressures for economic growth and vulnerability to climate change, Modis big ticket offering has been to increase Indias share of energy from renewable sources to 40% by 2030. In October,
his government also pledged to produce 175GW of energy from non-fossil sources by 2022, of which 100GW would be solar. This is the largest renewable energy target in the world.
Diverse deployment: Report says that diverse mix of solar deployment is the key. India should concentrate on,
1. Distributed Distributed generation (DG) refers to electricity that is produced at or near the point where it is used. Distributed solar energy can be located on rooftops or ground-mounted, and is
typically connected to the local utility distribution grid
2. Off-grid solar
3. Utility-scale Solar projects A utility-scale solar power plant can be one of several solar technologies concentrating solar power (CSP), photovoltaics (PV), or concentrating photovoltaics
(CPV). What distinguishes utility-scale solar from distributed generation is project size and the fact that the electricity is sold to wholesale utility buyers, not end-use consumers. Utility-scale solar plants
provide the benefit of fixed-priced electricity during peak demand periods when electricity from fossil fuels is the most expensive.
Of the 100GW, India has targeted creating 60GW through solar farms (greater than 1MW) and 40GW through distributed solar like roof-top (less than 1MW). Of Indias current deployment of 4.5GW, 85% is
utility-scale. Rooftop solar is 350MW, and off-grid is 200MW.
Lastly, report says that Development banks, agencies like USAID, World Bank, ADB, must support a diverse mix, and governments and bilateral agreements must offer India technical and policy support.
[8]. Dangers of getting sunburnt

Context: Author has stated that despite a fall in the cost of solar panels, aggressive bidding for Indias solar power projects and despite the fact that under our new PM the focus is high on solar power, there is
uncertainty as to whether companies will be able to deliver.
Solar producers are worried
They fear that cut-throat competition is leading to what economists call the `winners curse. In any auction, the most aggressive bid is made by the most optimistic bidder, who banks on everything coming right
with no glitches and no unexpected political or economic shocks. In practice, alas, many things can -and do -go wrong. When this happens, an aggressive winner of contracts can end up with huge losses. This is
the winners curse.
Current condition of solar sector companies
SunEdison, the biggest US solar company , has sold solar assets globally even as it has made the lowest bid ever in India. Welspun, a prominent Indian operator in the solar space, has just sold its 40% stake in a
joint venture with the Leighton Group, saying it needs to reduce its high debt.
Depreciation of rupee: Depreciation of rupee means the fall in solar panel costs would be neutralised by increased import costs.
Authors solution
1. Given the risks, its necessary to reduce the consequences of a possible winners curse. First, bidders should be asked to post big bank guarantees in future auctions. This will discourage really
aggressive bids, and help offset losses if a project is abandoned halfway.
2. The Reserve Bank should alert banks and ensure that leverage is not high for solar projects. Given the risks, they should be financed substantially by equity, maybe 50%. Many road and power
projects went bust because high leverage meant they had no cushion to survive bad breaks and delays.
[9]. Bond yields not reflecting repo cuts

Context: There has been a major reduction in Repo rate by over 125 bps which has lowered the lending rate in market but same change is not seen in bond yields which are source of borrowing of Union and State
Governments making a huge part of planned expenditure foregone as interest payments annually.
What is Repo rate?
The rate at which scheduled commercial banks borrows from RBI in case of any shortfall in fund is known as Repo rate. Repo rate is used by monetary authorities to formulate monetary policies in the country.
What is Bond Yields?
In a very simple term Yield is a figure that shows the return you get on a bond. It can be said that yield is equal to the interest rate.
Why has banks not transmitted the cut in repo rate to their lending interest rates?
1. Resources of banks are mainly derived from Term Deposits and CASA (current and savings bank accounts) and not from borrowing from RBI.
2. A reduction in term deposit rates, when the repo rate is reduced, takes time to translate into the cost of funds this is because the change in value of existing deposits can only take place when
they mature and not before that.
What is the Debate?
The change in yield on government bond G-sec has reduced by 12 basis points only from January 2015 to till date. The cut in repo rate has not been at all transmitted to bond yields.
How does that affect the economy?
G- Sec is the instruments through which government raises loans from different sources. Interest payments on borrowings are large component of government expenditure. The current year budget estimates an
outgo of Rs 4,56,145 crore on account of interest payments by the Union government, mostly on market borrowings, which is a very big part of the planned expenditure and 70% of total gross borrowing.
How will lowering rate of yield help economy?
Government is looking to provide a fillip by increasing its investments. Thus, the need for lower rates for the government is obvious.
How do high bond yields affect Indian banks?
1. Deposit Side Higher Yield for banks gives them incentive to reduce deposit rate hence provide room for reducing lending rates, In an increasing interest rate scenario, banks earn higher
profits in the banking book with higher net interest margins (NIMs),
HOW: Increase in the cost of deposits is felt with a lag, but book losses in the treasury where the mark-to-market value of securities comes down.
2. With attractive zero-risk yields in government securities, there will be no incentive for banks to finance risky loans at fine prices.
2. With yields remaining stubborn as at present, the room for treasury gains is limited.
How does it affect the Corporate?
Corporate bond prices depend heavily on G-Secs yields. Hence a hign yield regime discourages corporates seeking to borrow from corporate bond market.
Why repo rate cut is not being transmitted to bond yields?
1. Reduction in Statutory Liquidity Ratio (SLR) and Held-To-Maturity (HTM) cap for commercial banks over a period of time, the demand from banks for G-Secs has reduced.
HOW: SLR mandates bank to invest in liquid assets while HTM mandates bank to invest in debt instrument for a fixed amount of time.
Liquid assets are defined as easily cashable and with minimum change in value. Based on this definition gold and G-Secs are considered liquid assets. Also G-Secs are debt instrument through which
government borrows. With the cap being lowered down the demand from bank of these products will automatically go down.
2. Provident funds (PFs) have diversified their investments to corporate bonds and equity ETFs, thus further reducing demand from G-Secs.
WHY: Option mentioned above give PFs a better return on their investment with a slight risk factor than G-Secs.
3. On the other hand, the supply has been very high in comparison to the liquidity available in the system. In October alone, the issuances amounted to more than Rs 75,000 crore.
HOW: Any increase in lending has a direct effect on interest rate. Hence, if more is being borrowed the market tends to increase the interest rate.
4. The possibility of Special State Development Loan issuances beyond their planned borrowing under the Project UDAYto restructure the discomswill further increase supply.
5. The last straw is the tightness in liquidity (Liquidity Tightening = when central banks try to reduce the growth in the money supply).
[10] Economy: right direction, slow pace

Context: Indian Economic Outlook 2016
The article assesses the macroeconomic conditions in the country and lists down challenges and issues for the economy in coming years.
Macroeconomic Condition has been stabilized and is well grounded but there are issues that needs to be addressed.
Issue 1: Assessment of Growth Inflation mix

Before: GDP methodology used to give reliable real GDP growth but the parameter (WPI) used by RBI for inflation targeting was faulty.
After: With new methodology of GDP calculation and RBI adopting CPI as headline inflation the situation has exactly reversed. Real GDP growth calculation doesnt seem consistent.
This has created a confusion and problem in assessing Growth Inflation mix.
Issue 2: Investment recovery
Phase 1:
1. Delayed investment projects being revived.
This is seen as there is increase in gross fixed capital formation for three straight quarters.
The improvement of capital goods production and the largely ignored recovery in real credit growth also suggest that activity is gaining traction.
Phase 2:
1. Will need new investments. Key input Turnaround in the corporate profitability cycle. This will take time
2. A recovery in investment and fixing banking sector asset quality woes will be gradual at best
Issue 3: Fiscal Consolidation
The current financial year target for fiscal deficit will be met due to increase in fuel excise. But recent recommendations of seventh pay commission and its implementation may make the fiscal deficit target for
next financial year miss the target.
The slippage will probably be complemented by a pro-growth public capital expenditure push and some reform measures embedded in the budget so as to avoid downgrading of the ratings.
[11]. Balancing currency and interest rates

Context: Conflict between monetary and exchange rate management.
Current Scenario:
India have scored well above all emerging markets in terms of securing Foreign Portfolio Investments (FPI) but with current scenario and further speculation of rate increase by Fed has made a solid ground for
capital outflow from the country.
Issue:
Central bank was compelled to announce open market operations, or sovereign bond purchases, to decrease yields.
Rupee fell to 67 a dollar Intervention support shored up the currency.
Depreciation pressures and intervention support led to squeezed domestic rupee liquidity which was already in deficit for last two months
Other reasons for squeezed domestic rupee liquidity Slower government spending and higher festival demand for funds.
Outcome: Interest rates have inched higher across the spectrum
Conclusion: More accommodative monetary policy by RBI stance thus stands invalidated by these developments.
[12]. December 7 Monetary Policy Review

RBI went for open market purchases (monetary policy tool) are aimed at curbing short-term rates and keeping these consistent with the monetary policy stance.
The shrinkage in net foreign currency assets is expected to persist as more capital outflow is likely ahead of the US Federal Reserves mid-December review, while temporary demand for funds is higher from tax
payment outflows and consumer spending
Conclusion:
The conflicts arise just when the RBI guided at its 1 December monetary review that the central bank would use the space for further accommodation, when available, indicating more future easing
But the confluence of external and domestic factors is sharpening the delicate balance between need to avert currency depreciation and keep funding costs low as well.
Opinion & Editorial
[1]. Cynical in Fighting terror

Context: In the light of recent San Bernardino killings where a U.S couple of Pakistani origin shot and killed people, author says that governments and administrative officials have been outclassed by terrorists of
the IS
Author states that,
1. San Bernardino attack has been perpetrated by a couple, a normal husband and wife who decided to shoot and kill people as they got radicalised. How can one control such acts, if done at an
individual level without any hint whatsoever?
2. It is easy to fault the FBI, which covers domestic intelligence in the U.S., for having failed to identify the couple before the incident. When there is no information that the two had received any
external directions to act the way they did, surveillance physical or electronic may not have helped. This is the complexity of the task that daunts intelligence agencies the world over.
3. One cannot brand intelligence and police agencies as total failures. Do we know how many terrorist attempts have been foiled? We dont
4. If the IS continues to strike terror in all of us, it is not because governments the world over have not tried every means to outwit what has proved to be an outfit deadlier than al-Qaeda. Those in
the administration in many countries have simply been outclassed and outmanoeuvred. Here, we need to recall the classic statement of the Irish Republican Army (IRA), which was out to get British Prime
Minister Margaret Thatcher: Weve to be lucky just once. Youve to be lucky all the time! This is the harsh truth of a problem that is getting increasingly out of hand due to radicalisation of young minds.
[2]. Doing its bit in Paris and then some
Context: In the wake of ongoing Paris COP21 talks, author outlines the approach India ought to take, if it wants to develop sustainably while reducing its carbon emissions
Author says,
1. Carbon common: There is universally available, set quantity of carbon dioxide that can be emitted without increasing the global temperature by 2deg C. Three fourth of this carbon budget has
already been used up. Most of it was used up by countries other than India, which isnt even using its per capita share
Three scenarios,
India wants to emit as others have done. The world turns super-hot.
India says we will stay within our budgets fair share, but the world still turns hot, mainly because many others over-emitted.
India consumes less than its fair share, to try to avoid or at least minimise global warming. That seems to be the frame with which people are looking towards India, and then saying not enough.
Why reduction targets should not be forced upon India?
Development: China already has provided almost all its citizens modern energy. India still has hundreds of millions of people lacking electricity, and those that have a wire face supply shortfalls (load-shedding),
sometimes on a daily basis. India needs to develop.
Thinking beyond treaties
Treaties are a step forward, but how does India exceed its commitments or targets?
Innovate: This isnt just technology such as batteries or solar energy, but also business models, regulation, etc. Global help is valuable, but this would necessarily involve the private sector, and not
just governments or those signing treaties.
Focus on the longer-term and on efficiency: Lots of houses (and even cities) are yet to be built. We should not rely on clean energy to absolve us of over-consumption or inefficiencies. Fixing
this will take a systems approach that spans jurisdictions or even politics, with much of the effort required at a state or local level.
Population growth: Recognise that population growth is an issue. Make it easier for people to want fewer children (through social security schemes, non-agricultural jobs, etc.). No one says use
coercion or be as strict as China, but imagine where the world would be if Chinas population growth rate was like Indias?
Develop: If you believe the environmental Kuznets curve (where you first develop by being dirty and then clean up when you can afford it), India should develop quickly. If a nation consumes
energy but is coasting along (not developing enough), it has squandered energy and carbon resources. There is no inherent cap on consuming more energy if it gives disproportional and ultimately
sustainable development.
[3]. What the citizen must do

Context: Author, a deputy chairperson of the Rajya Sabha maintains that fundamental duties should be taught more aggressively at the school level and their importance should not be forgotten lest we be on
course towards chaos and anarchy.
Why fundamental duties were not included in the constitution?
The makers of constitution could not envision a society which forgets its duties while asserting its rights.
42nd Amendment 1973: It was through this amendment that fundamental duties were included in the constitution
Author says,
Lack of citizen awareness: Even three decades after the fundamental duties were incorporated, theres no adequate awareness among citizens. In 1998, Atal Bihari Vajpayees government had
appointed the Justice J.S. Verma Committee to operationalise the suggestions to teach fundamental duties to the citizens of the country. This committee submitted its report containing a number of
recommendations for the government to act on. There are schemes being implemented by the ministry of home affairs, HRD ministry, the environment ministry, etc, to promote the teaching of fundamental
duties. Theres also a big involvement of voluntary agencies. But the impact of governmental as well as non-governmental involvement in this process is not being felt much.
Teaching children: Children, if from the start are taught the significance of the fundamental duties, a lot of todays problems like intolerance, sectarian violence etc would not be there. Religious
and social prejudices would have no place if children developed a spirit of inquiry and began to understand the world with the help of science.
Conclusion
We should consider incorporating the essential aspects of citizens duties in all oaths and pledges. The Supreme Court, too, has said that since duties are obligatory for citizens, the state should strive to achieve the
same goal. Rights and duties have to exist together. Rights without duties will lead to anarchy.
[4]. A line in water

What has happened?
An inter-ministerial group, including Water Resources Minister Uma Bharti, Environment Minister Prakash Javadekar and Power Minister Piyush Goyal, has decided, in principle that no new construction would
be allowed on the River Ganga or any of its tributaries.
Why this decision has been taken?
To ensure the rivers minimum environmental flow and protect the ecosystem that depends on it
A welcome step due to following reasons,
One, it shows the acknowledgement, among policymakers, of the intricate set of factors that must be taken into account to keep alive and rejuvenate a river system like the Ganga.
Two, in the past, policymakers have shied away from calling a halt to power projects that clearly threatened delicately balanced and even critically endangered river ecosystems. On this occasion, it has been
offered to compensate the six hydroelectric power projects (HEPs) to be built on the Alaknanda and Bhagirathi river basins in Uttarakhand, out of the Rs 20,000 crore approved for Namami Gange. The decision
revives hope of not only rejuvenating the Ganga, but also of averting tragedies like the Uttarakhand floods in 2013.
Road to this decision
1. In the aftermath of the floods, the Supreme Court had prohibited the setting up of any new HEPs in Uttarakhand.
2. In February this year, a four-member committee of the environment ministry evaluating the cluster of six HEPs argued against them.
3. In October, another expert body set up by the environment ministry, which included the Central Water Commission (which comes under the water resources ministry), overturned the first
committees recommendation.
4. And now, yet another five-member committee this time led by the secretary of the water resources ministry has reverted to the earlier decision against setting up the HEPs
Namami Gange
An Integrated Ganga Conservation Mission called Namami Gange has been proposed to be set up and a sum of Rs. 2,037 crores has been set aside for this purpose.
Aim: This project aims at Ganga Rejuvenation by combining the existing ongoing efforts and planning under it to create a concrete action plan for future.
Conclusion
The Centre might also want to relook at other schemes that show more ambition than ecological sense like the proposed linking of 101 rivers across the country


National
[1]. Paris climate draft goes into final round / Climate negotiators release shorter draft
Context: Ongoing summit of COP 21 UNFCCC (United Nations Framework Convention on Climate Change)
What is COP21?
COP stands for conference of parties, an annual meeting of the 195 countries that make up the United Nations Framework Convention on Climate Change. As this is the 21st meeting, its COP21.
What are the aims of COP21?
There is one serious goal, as mentioned above: to create a legally binding agreement between all the worlds countries to lower emissions sufficiently to keep global warming below the 2C threshold that
scientists say is necessary for the health of the planet.
What has happened?
Paris Outcome Draft has been prepared documenting progress and differences on Lima Draft after high level ministerial meeting for two days in Paris. It is a shorter version with an aim to to enable nations to
have an overall view of the progress that has been made so far. Many a points in earlier draft has been strike out.
Chair of the current round of climate negotiations: French Foreign Minister Laurent Fabius
Draft Details:
The issue of differentiation under the Article on Purpose remains within brackets, indicating that it awaits discussion and finalisation. This Agreement will be implemented on the basis of equity and in accordance
with the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances and on the basis of respect for human rights
What is issue of differentiation?
Climate talks are often described as a binary negotiation between developed and developing countries. Earlier the picture was very simple with two group G77+China ( Developing Countries) and Umbrella
Group of developed nations spearheaded by European Union (EU).
But, today the emergence of many other groupings which have made negotiations complex. Some of these groups are:
1. AOSIS (the Association of Small Island States)
2. LDCs (Least Developed Countries)
3. Africa Group
4. ALBA and AILAC (representing the socialist and market-orientated governments of South America)
5. BASICs (Brazil, South Africa, India and China)
6. LMDC Group (Like-Minded Developing Countries)
What these groups signify: The creation of these groups reflect the fact that the national interests of the developing countries have become more diverse and divided over the last twenty years and G 77 is no
more a viable umbrella group.
An Analysis: Paris outcome draft
1. The draft fails to acknowledge even in form of token the limit that need to be placed on global emissions.
2. The draft outcome has removed the main reference to a global carbon budget in Article 3 on mitigation and not a single reference to the one of the most policy-significant scientific results of the
IPCCs Fifth Assessment Report from its Working Group I now remains in the draft text.
3. To make matters worse, the draft outcome effectively declare holy the INDCs of the developed countries without any forecasted assessment.
4. Business globally and domestically in many countries has been asking for a clear signal on carbon prices. But in the absence of any ex-ante assignment of carbon rights, it is unclear how a carbon
market may be expected to develop. Without a clear signal on carbon prices, technology and innovation through the private sector for advanced levels of mitigation becomes even more uncertain.
5. The possibility of the functioning of domestic carbon markets in developed countries does not take away from this global picture. The removal of fossil fuel subsidies or the imposition, implicitly or
explicitly, of carbon taxes will not materially alter the situation.
6. Without the presence of a global constraint, and a clear ex-ante assignment of carbon rights, there is no means to leverage any review process to ratchet up ambition.
7. The INDCs of the developed countries will in fact constitute globally an outright carbon grab, since there is no clear assignment of carbon rights to developing countries. By the time the majority of
them are in a position to use it, it will not be available.
8. The current text essentially promotes a bottom up regime characterized by the voluntary country driven climate actions, further weakening the historical responsibilities of the developed countries
[2]. US wants periodic climate review
US Message:
Countries cannot get away with doing nothing or next to nothing after making pledges, though the Paris Agreement did not propose penalties.
The Paris Agreement held great promise since it relied on verifiable voluntary steps, rather than a fixed percentage of cuts which the Kyoto Protocol contained.
U.S. recognised the differentiated responsibilities of countries and was willing to provide:
1. More in financing, including its own funds,
2. Work with the World Bank and other institutions, though the real driver would be private capital in a clean economy;
What is needed to be done?
1. National pledges made in Paris should be reviewed in five years because progress would change national circumstances;
2. Investments in clean energy were actually cheaper because of avoided costs on environmental degradation and public health.
Indias Stand:
India says it is ready to adopt 1.5C as its ambition for future temperature rise but stresses that the change needs to be initiated in developed countries owing to historical responsibility of climate degradation.
[3]. Real Estate Regulatory Authority on anvil / Cab OKs 20 Changes to Realty Bill
Real Estate (Regulation and Development) Bill has been approved by the Union Cabinet with 20 amendments. It needs now to be passed by the parliament.
Objective of the bill:
1. Protect the interest of consumers
2. Promote fair play in real estate transactions
3. Ensure timely execution of projects
Bill proposes uniform regulatory mechanism to ensure speedy resolution of disputes.
This need to be done for orderly growth of the sector and rise up as a beneficial and transparent sector to attract more investment both domestic and foreign.
Aim: This is a major reform which will enable government to fulfil its promise of Housing for all by 2022.
Applicable: To both residential and commercial real estate projects alike.
Real Estate Regulatory Authority proposed to regulate real estate transactions.
[4]. New dam the only solution
The Issue: Mullaperiyar Dam
Understanding the Issue:
1. Tamil Nadu operates the dam in Kerala. wants to increase water level in it.
2. The Kerala governments contention is that in case the dam breaks, the three dams downstream Idukki, Cheruthoni and Kolamavu will not be able to withhold the pressure, which will put
the lives of 3.5 million people in the state.
3. TN government maintains that if the Mullaperiyar is demolished, it will create water scarcity in five districts of the state, leading to a draught in the region.
SOURCE: MRUNAL
The Mullaperiyar Dam:
1. Type: a masonry gravity dam.
2. River: confluence of Periyar river and Mullayar river
3. Place: Idduki, Kerala. The dam site is in Kerala but is leased to TN
Resolution Till Date: Following up on SC verdict TN government brought the water level down from 152ft to 132ft to allay the fears. In 2006, the water levels were restored. Kerala passed a law the Kerala
Irrigation and Water Conservation (Amendment) Act, 2006, to prevent the neighbouring State (TN) from raising the water level beyond 136 feet.
May 2014: Supreme Court order
1. Kerala dam Law of 2006 is unconstitutional and void.
2. Because, Mullaperiyar is a dispute between two states. In such disputes, one state legislature cannot unilaterally enact law in its own favour.
3. Besides, in 2006 we had allowed Tamil Nadu to raise water height. By enacting g this law, Kerala is interfering with our judicial function.
4. Permitted Tamil Nadu to increase water level up to 142 feet.
In News: Kerala wants a new dam in place of Mullaperiyar dam to allay it fears.
Why TN doesnt agree to this? Because it would mean it that the 999-year lease would be void, and it would have to surrender the 8,000 acres of land under its control to Kerala
[5]. Back to basics for Airtel Zero & Internet.org
Issue: Diffrential tarrifs being provided to consumer to view websites which have tied up with the telecom operator.
SOURCE: ECONOMIC TIMES
What has happened?
Telecom Regulatory Authority of India (TRAI) invited suggestion from citizens. Citizens saw this against net neutrality and hence dispproved of such move.
TRAI has now issued consultation paper which has reported Facebooks Internet.org (now Free Basics) and Airtel Zero as discriminatory, non-competitive and thwarting innovation and disapproved of existing
package if any sold.
TRAI has suggested two models:
1. Operators can provide initial data consumption for free, without limiting it to any particular content
2. Content providers reimburse customers directly the cost of browsing or download irrespective of which mobile operator they have used to visit the website.
What is net neutrality?
The principle that Internet service providers should enable access to all content and applications regardless of the source, and without favouring or blocking particular products or websites.
International
[1]. Strengthening a foolproof relationship
Context: India Japan Relationship
Importance of India Japan Relationship:

For Japan: Growing tensions in the South China Sea and unshakeable anxiety about Beijings military stance. Japan is wary of Chinas geopolitical aspirations, and continues to rally support from potential
regional allies. India is by far Japans biggest potential partner on the security, economic, and political front.
For India: Japan plays a central role in Indias current Act East policy, which calls for intensified relations with East Asia. Another chief motivation for Indias Asia policy is to respond to Beijings activities in
the region. There are few better partners to enlist in Indias Act East enterprise than Japan, a regional economic power with a growing security profile.
The thorn in the ties: India Japan Nuclear Deal
Nuclear accord would aid energy-starved India while helping Japan recover nuclear confidence shattered after the Fukushima disaster. It would also enable Japanese companies such as Hitachi and Mitsubishi to
diversify their industrial portfolios
Tokyo remains uneasy about New Delhis continued refusal to sign the nuclear non-proliferation treaty. Cooperation with India on technological transfers could present major political difficulties for Japan.
Probable Deals and Their advantages
1. Agreement to jointly produce amphibious military aircraft, which would boost Indias counterterrorism and counter-piracy capacities. For Japan, such a deal would bolster its military relations with a
key partner amid concerns about Chinas military ambitions and North Koreas nuclear capabilities.
2. While India-Japan security cooperation, driven by shared concern about China, may get the most attention, bilateral economic relations are equally important in that they also amplify the
relationships symbiotic nature.
The Silent Spectator: United States
There is great enthusiasm for the India-Japan relationship, which serves U.S. interests in multiple ways. It brings two key U.S. partners closer together. It enables India and Japan to assist each other in ways that
the U.S. cannot or does not.
The US though should not look to proxy its pivot to South Asia through India Japan relations as India and US dont tend to get out of the most of their geopolitical situation. Current regime in India wants friendly
ties with China where as it also has fear that US drawing out from Afghanistan may bring taliban to the borders of India.
[2]. The same old script of India Pakistan ties
Context: The confused Indian regime in tackling the Pakistan. The recent meeting of NSA level talk after being cancelled in August, 2015.
What has happened?
August 2015, NSA level talks has been called off due to
1. No meddling by the Hurriyat, a Kashmir-based organization with a separatist agenda
2. Restriction of the NSA-level talks to terrorism alone (leaving out Kashmir)
Bangkok process The venue of Bangkok helped Pakistan avoid the political compulsions of meeting the Hurriyat leaders.
With the initial hurdles now overcome, it will not be surprising to see the resumption of the composite dialogue processthe template for full-fledged bilateral talks
Sushma Swaraj, the minister of external affairs, is on a trip to Islamabad to attend the Heart of Asia conference, which focuses on regional cooperation with a strong emphasis on stability in Afghanistan.
he Bangkok talks were intended to resume the bilateral engagement in order to pave the way for Modis participation in the 19th SAARC (South Asian Association for Regional Cooperation) summit scheduled to
be held in Islamabad in 2016.
Economic Digest
[1]. Government will protect the farmers interest in WTO talks
Context: WTO meeting of ministers 15 18 December, 2015 at Nairobi, Kenya

The Fear:
The WTO Agreement on Agriculture (AOA) has limitation on subsidy for farm products which might impact India food security programme. Under the relevant rules of WTO, if procurement for public stock-
holding programmes for food security purposes is done at administered prices, rather than at market prices, then the subsidy element, if any, has to be kept within certain prescribed limits. At present a stop gap
arrangement is there under WTO.
Secondly, is the issue of import surge leading to price drop of farm commodities which might heavily affecting the earning of poor domestic farmers.
Indias Stand:
India wants the Nairobi meet to take up on a priority basis issues including an effective Special Safeguard Mechanism and and a permanent solution to the issue of public food stockholding in developing
countries for the purpose of food security.
Special Safeguard Mechanism: a trade remedy allowing developing countries to temporarily hike duties on farm products to counter sudden import surges and price falls, thereby protecting the interests of poor
farmers
Current Scenario:
On SSM : consultations have continued to show entrenched and widely divergent positions, he said, adding that, therefore, the negotiations on this issue have reached an impasse
On Stockholding: consultations, based on the proposed texts, have not so far taken much closer to a consensus.
FACT:
WTO Director-General: Roberto Azevedo
[2]. Rare admission by RBI as it gears up for U.S. Fed rate hike
Context: US Fed upcoming meet might see a rise in interest rate in almost a decade which could lead to volatility in the market.
What is RBI planning to do?
RBI has planned to intervene in the Exchange Traded Currency Derivatives (ETCD) segment
The central bank generally intervenes in the spot currency market, and manages the rupee flows resulting from that intervention through the forwards market.
RBI intervenes in the domestic foreign exchange market as and when required in order to manage excessive volatility and to maintain orderly conditions in the market
Three exchanges National Stock Exchange, BSE and Metropolitan Stock Exchange of India offer paired derivative contracts of rupee-dollar, rupee-yen, rupee-pound and rupee-euro.
Why is it needed?
The Indian currency has been under pressure amid foreign fund outflows and has depreciated almost 7 per cent against the dollar in the current financial year. In November, the rupee almost touched a two-year
low, and weakened 2.1 per cent, making it the worst performing currency in Asia.
Facts:
What is Currency trading? Trade is an international business and for any trade payments are settled in Currencies, which are specific to the countries/regions involved. Whenever any Currency is bought or
sold for another, the transaction is known as Currency trading. Currency trading is the largest financial market globally.
Why do we have Exchange Traded Currency Derivatives? Exchange Traded Currency Derivatives provide greater access for market participants, be it investors, speculators or corporate who may want to
trade Currencies to hedge their Currency risk. Exchange Traded Currency Derivatives offer efficient risk management mechanisms and provide a transparent trading platform, with no chance of anybody dealing
with insider information.
Spot Currency Trade: A foreign exchange spot transaction, also known as FX spot, is an agreement between two parties to buy one currency against selling another currency at an agreed price for settlement
on the spot date. The exchange rate at which the transaction is done is called thespotexchange rate.
[3]. CEA-led panel proposes concessions for smaller traders
Context: Arvind Subramanian (Chief Economic Adviser) panel on revenue-neutral rate (RNR) recommendations.
What has been recommended?
1. Traders below Rs 25-lakh turnover should not be covered by the new indirect tax regime and that there could be a concessional rate for those with Rs 25 lakh to Rs 1 crore turnover.
2. Recommended a standard GST rate of 17-18% for all services and for most of the goods (with an RNR of 15%)
3. The report favoured the centres idea of having a Rs 25 lakh threshold for GST in contrast to the Rs 10 lakh bar that states want, but added that the threshold could go up to Rs 40 lakh.
4. The panel has made a strong case for removing all countervailing duty and special additional customs duty exemptions currently given to imports as these amount to negative protection for
domestic producers.
What is revenue neutral rate?
It is the tax rate that allows the government to receive the same amount of money despite of changes in tax laws. In the GST regime the revenue of the government would not be same in comparison with the
present tax structure due to tax credit mechanism, removal of cascading effect , or otherwise. Therefore an adjustment in tax rate is required to avoid reduction in revenue of the government. This adjusted Rate is
termed as Revenue Neutral Rate (RNR). It is the rate at which tax revenue will remain same, despite allowing input tax credit and other factor.
[4]. Illicit outflows from India third highest, says report
Context: The GFI report on cross-border money transfers for 10 years

Illicit Financial Outflows from India 2013 : $83 billion which is third only to China and Russia
Cross-border money transfers for 10 years through 2013 pegged illicit financial outflows from India at $510 billion, double than the foreign direct investment inflows of $258 billion to the country during the
period.
How is it done?
1. Export under invoicing Undervalues export
2. Import Over invoicing Raises the cost of import.
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In both the above cases the profit of the domestic corporate seems to be lowered but in actual huge portion has been moved out of the country.
Added incentive to over-invoice imports as import taxes have declined due to trade-based globalisation.
GFI analysis shows that, of the $1 trillion in illicit flows leaving poor nations annually, over 83% was due to trade mis-invoicing, resulting in massive tax evasion.
Editorials & Opinions
[1]. The crisis enveloping Europe

Context: The article looks into presence of an invisible guest at COP 21 summit where dignitaries from all over the globe has assembled to find answer to climate change. The invisible ghost is terrorism which
has been etched in mind of France and also Europeans after the deadly attack by IS operatives on 13th November in Paris.
It looks into coming change character of Europeans due to fear of terrorist attacks .
An entire continent has developed a siege mentality.
Outraged by the barbaric acts of premeditated violence, indignation over the terrorist attacks, together with the uncontrolled flow of migrants/refugees into the continent from West Asia and other regions, is
beginning to cast a shadow over the character of Europe, especially its approach to humanitarian and other causes.
EU which was already reeling under economic problems since 2008 has now new set of threats to look after.
The terrorist attack along with refugee inflow has one immediate result is that it has led to a divided European Union. It has also given an impetus to right-wing nationalist forces in many countries. The Schengen
concept is under grave threat.
Living with terror
Europe tends to be divided between those who want the state to be armed with greater powers and those who fear that indiscriminate war talk may lead to a crackdown domestically on any contrarian voices.
The employment and the use of extraordinary powers under the plea that the nation and its institutions are under grave and immediate threat have serious connotations for Europes future according to the
champions of civil liberty and keepers of the European way of life.
Emergency measures vs civil freedoms
What is considered certain by most is that European intelligence agencies will be invested with greater powers for surveillance and to carry out more intrusive attacks. At present, those who insist on the
importance of safeguarding civil freedoms are clearly in the minority.
Conclusion:
As Europe flounders on how to deal with a slew of new problems, it is worth considering whether the developments in Europe will have an impact on global governance. Coexistence among people of different
regions and the compact among those belonging to different religions across the planet something that Europeans, in particular, are said to greatly treasure is coming under threat.
[2]. Big emission lessons from a small country
Context: The best practises in Bhutan regarding maintaining climate and environment has a potential to teach everyone in the world.
These lessons are especially relevant as the world negotiates in Paris a new pact on climate change at the International Climate Change Summit, known as COP21.
South Asia is the region which is at the most risk of climate change.
Three lessons:
Firstly, a commitment to ambitious goals will be critical to save the world from climate disaster.Bhutan declared in 2009 that it would remain carbon-neutral and has made the most ambitious pledges on cutting
emissions at COP21. It is carbon-neutral already because of its vast forests absorbing carbon emissions
Secondly, mainstreaming comprehensive climate change measures across the economy is the way to go.
Bhutan has taken the approach of mainstreaming climate change and resilience in policies on disaster risk management and weather monitoring, water-related services, agriculture, urban transport, information and
communications technology (ICT), hydropower, and forest management.
Thirdly, there are big potential wins in the fight against climate change from cooperating with neighbours.
[3]. Too Close to the Sun?
Context: India launched global solar alliance with 121 countries and created what is being called the billionaires fund, with corporate heads like Jack Ma, Mukesh Ambani, Bill Gates, Mark Zuckerberg and
Ratan Tata pledging to finance green technology innovations.
Issue: The big targets and political backing for solar have created euphoria in the market, but there is scepticism about Indias approach of focussing largely on utility scale solar parks and aggressive pricing.
Fact:
Indias First Solar Park: Charanka, Gujarat
National Solar Mission: Installed capacity increased from 20 GW to 100 GW
2022 175 GW of installed capacity of solar power
2030 40% of energy requirement from non fossil resources
Policy Scenario :
Policies and infrastructure to transmit and distribute solar energy are still weak, and 21 of the 29 state power distribution companies (discoms) are abysmally debt-ridden, unable to purchase any power generated
in their state. These are not only inefficiencies but also risks for developers.
Benefit of Solar Power:
1. The two biggest challenges for solar the world over are need for land to mount solar panels, and building the expensive, time-consuming infrastructure to connect to the grid. Solar parks are a
great solution, because the government does both, and then invites private developers who just come install their panels.
2. By pitching for solar, the Modi government is no only offsetting emissions from coal energy, but also addressing energy insecurity. Indias energy bill is high, dependent as it is on imported coal, oil
and gas Over 300 million people still have no access to electricity and sustainable economic growth will need alternative sources of clean energy.
Cost factor:
Bulk transmission of an unstable power like solar needs a strong grid and high-voltage substations, which are expensive. Their transmission lines are time-consuming to build.
Many developers believe technological change should be the real driver for a fall in solar tariffs. Even in a household, people who bought poor-quality solar panels were turned off it for life. If we dont invest in
technology, and rush to slash prices, it will help neither energy security nor climate action,
[4]. The Invisible People
What has happened?
The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, (PWDA) completed two decades of existence this month. And still there are a lot of disabled people who
are yet to receive the benefits of this law.
What are the problems Disabled people faces?
1. Inaccessible public places
2. Non-accommodative educational institutions
3. Social stigma
4. Lack of proper care and nurturing
5. Lack of employment opportunities
What are provisions of the 1995 act?
1. Mandatory 3% reservation in public employment
2. Employment exchanges at state and central level to provide hassle free services
Some obstacles :
1. Some states which account for the largest proportion of the disabled are biased against employing educated disabled candidates
2. The required 3 per cent reservation is still far from being implemented in many departments in-spite of conducting recruitment drives.
3. Absence of any penal provision for those who violate the PWDA is a serious lacuna.
4. According to Census 2011, more than 60 per cent of disabled people live in the countryside but mostly urban people benefit from reservation.
5. Disabled women, SCs and STs in rural India are among those who need attention.
6. Government services and information related to welfare schemes and educational and employment opportunities hardly reach the marginalised.
7. Insufficient financial allocation is also an obstacle.
What you need to know?
The Right of Persons with Disabilities Bill, 2014:-
This bill is still pending in the parliament and needs to be implemented asap.
It aims to establish a disabled friendly environment and also imposes financial penalty on violators.
Visit the below link for more info about the article.
[5]. Not just GST
Context:-
Real estate bill 2015 was given nod by the cabinet. This is also an important legislation like GST that is crucial for reforms in the real estate sector which might be stalled by the opposition.
The new real estate bill incorporates recommendations of the opposition unlike the GST where considerable difference of opinion is still lingering.
What the real estate bill says?
It emphasises on consumer protection in the real estate sector which always had a lopsided buyer seller equation.
It aims at establishing a Real Estate Regulatory Authority in states and Union territories to monitor real estate transactions.
The objective is to:
1. Institutionalise transparency and accountability
2. Boost consumer confidence
3. Promote timely execution and professionalism in the sector
4. Provide easier to access capital and financial markets.
It will cover both residential and commercial projects and includes real estate agents in the ambit of the bill.
The bill stipulates mandatory disclosure of all registered projects, including details of the promoter, layout plan and the statuses of approvals.
Whats the issue now?
In 2014 congress led government in Maharashtra enacted a similar bill in the state , contradictorily its stalling the enactment of the bill at national level
Political parties stalling the functioning of parliament should introspect about their behaviour when it comes to such crucial legislations.
[6]. Centre State Mindset
Context:-
The article laments about the insufficient media coverage state governments receive in the national media when compared to the central government.
The media is less concerned about the usage of 42% untied funds given to the states based on the 14 thfinance commission.
The author feels the term centre state is more centrifugal and the term Union state is the right expression.
Indian polity is a union of states and it needs recognition.
National media Some interesting observations :-
Tripura has surpassed Kerala and Mizoram in literacy rate yet many are unaware of it.
In Indian railways performance 95% of its income comes from states.
After 1991 liberalisation , most reforms still pending are concerned with the factor markets which are mostly subjects of state or concurrent list.
What is factor market?
Goods market is concerned with finished goods and factor market is concerned with the market of factors of production like land, labour and capital. E.g. While Air Conditioner is an example of goods market, an
AC mechanic or plastic manufacturing company will be factor market. Both goods and factor market form a closed loop of money.
Rajasthan has removed 12% of its statutes declaring them as old and dysfunctional.
Jharkhand has rationalised its number of departments by clubbing the relevant ones together.
[7]. A low carbon future is possible
Context:-
The Paris climate talks are expected to adopt a legally binding agreement on green house gasses for the period beyond 2020.
The developing countries should demand a legally binding agreement as with their rising population they will be the worst affected by water and energy crisis and hence their economic growth will be impacted.
If they fail to do so the US will again blame them for a weak agreement.
Fixing a target will put price on carbon and facilitates market mechanisms.
What are the developments till now?
There is an air of optimism and commitment as more than 170 countries have submitted their INDCs (Intended nationally determined contributions) for this period which covers 95% of global emissions.
Initial assessment shows that its consistent with 2.7 to 4 degree rise in temperature (Global target 2 degree, small islands target 1.5 degree).
Though in the last agreement the developed countries agreed to reduce emission and assist developing countries with finance and technology it wasnt legally binding.
The US and Canada did not participate in Kyoto protocol which had country specific targets for 2008 to 2012.
The Doha Amendments have targets for the developed countries for 2012-20 but the US, Canada, Russia, Japan and New Zealand dont participate in this agreement
The demand for fairness:
Though the demand of developed countries to legally bind the developing countries after 2020 is not appropriate but still it will force the developed countries to take some action.
The planet is becoming unstable and poses high risks for developing countries which is forcing the closure of fairness debate.
But still there are alternatives which should be explored and Developing countries should focus more on sustainable development.
As the developed countries are more locked into fossil fuels its easier for the south (developing countries) which are green field to shift to renewable energy.
How is this possible?
Though climate mitigation is all about energy the climate impact is mostly on water which has political, social and economic consequences in the developing nations.
Countries like India should look at structural approaches rather than symptomatic approaches.
It should exploit the intellectual capacity of India to explore green energy technologies.
China is way ahead of India in investments in solar and wind energy and Indian politicians should free themselves from the five year political cycle.
The trade off like rice and potato/ grain production where the former is more water intensive and emits more methane than the latter.
Also stranded resources( coal/ gas and oil resources which are left underground) should be thought about.
Considering the facts that china has bought fossil reserves in north it implies that developed countries are phasing out fossil fuels before the asset value drops to zero.
Denmark has already announced a phase-out of fossil fuels by 2050; 50 per cent of energy in Germany already comes from renewable sources.


National
[1]. Supreme Court upholds Haryana Panchayat law

What has happened?
In what may be a precedent preventing illiterate persons from participating in grass roots democracy, the Supreme Court on Thursday upheld a Haryana State law mandating that only those having minimum
educational qualifications will be eligible to contest panchayat elections in the State
Minimum educational qualifications necessary under The Haryana Panchayati Raj (Amendment) Act, 2015
1. Completion of matriculation in case of general candidates;
2. Completion of Class 8 for a woman candidate or a candidate belonging to Scheduled Caste;
3. Completion of Class 5 pass for a Scheduled Caste woman candidate contesting for the post of Panch
Ground of disqualification under the act
1. Failure to pay arrears to any primary agriculture co-operative society or agriculture co-operative banks,
2. Failure to pay electricity bill arrears
3. Not having a functional toilet at home
Impact of the judgement
1. The law leaves 68 per cent of the Scheduled Caste women and 41 per cent of the Scheduled Caste men in Haryana ineligible to contest panchayat elections. The judgment may become a rallying
point for other States also to amend their laws in the same fashion.
Reasons given for the verdict
1. There is nothing irrational or illegal or unconnected if the law prescribes minimum educational qualification for candidates. Basic education would enable the candidates to effectively discharge
duties of the panchayat.
2. It is only education which gives a human being the power to discriminate between right and wrong, good and bad. Therefore, prescription of an educational qualification is not irrelevant for better
administration
3. Law was necessary to elect model representatives for local self government for better administrative efficiency
[2]. Kerala is expected to be declared first digital state

What has happened?
Kerala is expected to be declared the first digital State in the country shortly, on the strength of its digital infrastructure and e-governance initiatives. Discussions are on to get Prime Minister Narendra Modi to
make the declaration
High mobile and Internet penetration and the increasing use of smart phones had hastened the evolution of Kerala as a digital society. Various initiatives under the digital Kerala programme have been critical in
bridging the digital divide in the state.
What is digital divide?
Digital divide is a term that refers to the gap between demographics and regions that have access to modern information and communications technology, and those that dont or have restricted access. This
technology can include the telephone, television, personal computers and the Internet
[3]. Anti-Dengue vaccine brings hope
What has happened?
The Mexican government has approved the worlds first anti-dengue vaccine which is designed to protect people in the 9-45 age group from nine to 45 years from all four subtypes of the virus.
Name of the vaccine: Dengvaxia
Developed by the vaccine has been developed by France-based Sanofi Pasteur and is the result of an extensive clinical development programme running for almost two decades
India will be able to benefit because it is seeing rising number of dengue cases year after year.
International
[1]. Global NGOs want road map to 1.5 C, not just a target o
What has happened?
Global NGOs have raised a joint demand that the final pact spell out the road map to achieving the goal of 1.5 degrees Celsius rise in temperature
NGOs stand
1. They deplored US and EU moves to avoid any commitments on compensation for the countries that are experiencing the effects of climate change despite not contributing to the problem
themselves.
2. voluntary pledges made by countries, called INDCs, were totally inadequate for the task of cutting carbon emissions significantly
3. Financial help: The agreement should include provisions for grant of finance to the developing world. Developing countries are not seeking charity, and have a right to financial assistance to
move to clean energy
4. Stop subsidizing fossil fuel companies: The Paris agreement must ensure that international development finance should stop subsidizing fossil fuel companies, and instead flow into renewable
energy
Business & Economy

[1]. India rejects artificial deadlines for WTO deal
What has happened?
India has rejected WTO Director Generals suggestion to treat the time available till Nairobi ministerial as a last opportunity to show political will & flexibility for making Nairobi ministerial a success.
Indias stance
India has categorically rejected the suggestion,
1. Why should this be the last opportunity? We have been negotiating for a long time. All the countries have invested a lot in this Round and you cannot put that away.
2. Indias intention is not to delay the talks, but to ensure that the talks come to a successful, logical and balanced conclusion, and fulfilment of the development dimension in every aspect. At the end
of the Nairobi meet, we should have a work programme to implement the development agenda as well as to meet and continue the talks till it is concluded successfully
3. Instead of inserting new issues and hurrying to conclude the Doha round of talks, developed nations should first address matters relevant to developing and poor countries.
Issues which India wants addressed
1. reduction of huge and trade distorting agribusiness subsidies in developed countries,
2. an effective Special Safeguard Mechanism (a trade remedy allowing developing countries to temporarily hike duties on farm products to counter sudden import surges and price falls, thereby
protecting the interests of poor farmers),
3. a permanent solution to the issue of public food stockholding in developing countries for the purpose of food security
[2]. Facebook says Free Basics initiative non-discriminatory
What has happened?
The Telecom Regulatory Authority of India (TRAI) had on 9th Dec 2015 had issued a consultation paper on differential pricing for data services to telecom operators, who offer free or discounted tariffs for
accessing certain websites. TRAI has asked stakeholders as to what steps should be taken to ensure that principles of non-discrimination, transparency, affordable Internet access, competition, market entry and
innovation are adhered to, in case differential pricing is allowed for data services.
Facebook says,
Free Basics initiative, originally known as Internet.Org, is non- discriminatory.
What is Free Basic?
For Free Basics, Facebook has partnered with Reliance Communications in India to offer access to certain applications and websites to users without any data charges. However, it has been widely criticised
forviolating Net Neutrality principles and favouring Facebooks own services over its rivals.
What is differential pricing?
Differential pricing is the strategy of selling the same product to different customers at differentprices. Consider the pricing behavior at an auction. Everyone has the same information and bids on the same item.
For eg: Last year in 2014 Bharti Airtel had introduced differential pricing and had begun by charging consumers differently for using the Mobile Internet for services such as Skype and Viber, and differently for
other types of Mobile Internet usage.
Differential pricing violates net neutrality but what is net neutrality?
Net neutrality: The principle that Internet service providers should enable access to all content and applications regardless of the source, and without favouring or blocking particular products or websites is
termed as net neutrality
Three core principles of net neutrality
1. All sites must be equally accessible: ISPs and telecom operators shouldnt block certain sites or apps just because they dont pay them.
2. All sites must be accessible at the same speed (at an ISP level): This means no speeding up of certain sites because of business deals. More importantly, it means no slowing down some
sites.
3. The cost of access must be the same for all sites (per Kb/Mb or as per data plan): This means no Zero Rating. In countries like India, Net Neutrality is more about cost of access than speed
of access, because, well, we dont have fast and slow lanes: all lanes are slow.
Must read: http://www.financialexpress.com/article/industry/companies/back-to-basics-for-airtel-zero-internet-org-over-discriminatory-services/176818/
[3]. GEAC must approve GM mustard

Context: Author says that Genetically Modified crops should be allowed in India as there is no scientific evidence that GM crops are unsafe
What has happened?
It is time for Genetic Engineering Appraisal Committee (GEAC) to approve GM mustard. For long, the ministry of environment has buckled under public pressure brought by the anti-GM lobby, and has shown
no courage to take a decision based on scientific data. The anti-GM lobby led by Vandana Shiva has submitted a petition via Change.org signed by thousands people to force GEAC not to approve GM mustard,
ostensibly because of safety reasons and inappropriateness of the technology itself to Indian agriculture. The facts are far from the ground realities.
GM mustard
It has been engineered using a system of genes called Barnase/Barstar to create nuclear male sterile plants needed to create hybrids. Such GM canola, a cousin of canola, has been under cultivation in the US,
Canada and Australia for over a decade without any report of harm to the environment or human health.
Safety of GM mustard: GM mustard has undergone rigorous testing for all bio-safety characters and for environmental impact. The results show that it does not impact the environment any differently than
conventional hybrid counterparts.
Scientists view
The scientists said genetically engineered crops are need of the times, and have no harmful effects on the atmosphere or as human health.
Conclusion
Indian agriculture badly needs new technology infusion to improve its performance. Indian farmers, if they are to become globally competitive, need the benefits of modern science and technology, and it high
time that the ministry of environment approved GM crops without further vacillation
[4]. The economics of GST, hostage to politics
What the article is all about?
In the article author explains the benefits of GST and underlines the fact that despite there being a general consensus the GST bill is being held hostage in the parliament owing to politics of the day
Benefits of GST
1. It will eliminate all taxes on production and distribution.
2. The abolition of taxes on the movement of goods between states will end the unnecessary fragmentation of Indian production.
3. The efficiency of the tax system would be optimized.
4. GST will improve governance by creating incentives for the reduction in corruption. For example, a company will need documentation from a supplier if it is to claim tax credit, and in general, the
new tax will create a proper paper trail of transactions across value chains, reducing the black economy.
5. Would unify India into a common market on account of single tax rate
Conclusion
India wont get a flawless GST but still passing of GST bill would signify a watershed moment in the history of Indian Republic
[5]. How to fast forward backward states

Context: Author states that Bihar, Madhya Pradesh, Rajasthan & Uttar Pradesh account for 45% of Indian population and 35% of total land available in India but they contribute only 28% of national income and
are home to 53% of the people who live below the official poverty line in India. These states need to catch up with other states if India needs to develop fast.
Reason of low income of poor states despite rapid growth
1. Population growth was significantly higher in the poorer states
2. Regions that are better endowed with natural resources, physical infrastructure, skilled labour or educated people, experience rapid growth. Like magnets, they attract resources and people from
elsewhere. In contrast, disadvantaged regions tend to lag behind and become even more disadvantaged.
Author did research on developing countries in world economy.
Authors research common factors underlying the success of latecomers to industrialization and development points out to three facts,
1. Initial conditions Improving initial conditions means creation of proper infrastructure through public investment in power, roads, transport and communications & spread of education in society,
where primary and secondary education
2. Enabling institutions Corruption and rents, patronage and exploitation, or arbitrariness or inefficiency, are deeply embedded flaws. These can be controlled and must be minimized by making
ministers, legislators and administrators responsive and accountable to people, so that performance is rewarded and incompetence is penalized.
3. Supportive governments State governments should concentrate on safe drinking water, sanitation facilities, and public health in rural areas, to support those who cannot meet these basic
human needs through private incomes. Good governance is also critical. The quality of governance is an important determinant of success or failure at development
[6]. Modi Govt Replaces RFD Model to Measure Performance with

eSamiksha and PRAGATI
What has happened?
Government has dropped a major scheme through which performance of ministries was monitored. The government has not pursued the mechanism of Performance Monitoring and Evaluation System (PMES)
for 2014-15 and thereafter. Under PMES, every ministry made a Result Framework Document (RFD) every year against which its performance was measured at the end of the year.
What is PMES and why government scrapped it?
PMES It was brought in 2011 for monitoring performance of government departments. Every ministry made its RFD every year through PMES since 2011 spelling out its key targets. At the end of the year, all
ministries reviewed their performance against the targets and were given marks.
Government saw the RFD concept as a completely unviable concept since it was not possible to quantify performance of any ministry. Most ministries are dependent on execution of schemes by states and are
only monitoring schemes. Also, giving marks to a ministry at the end of the year based on performance which cannot be quantified is useless. Many ministries were setting lower targets to get more marks
How the progress is being monitored now?
PM and Cabinet Secretariat were now directly monitoring projects and schemes of ministries through eSamiksha project launched by PM Modi
What is eSamiksha and PRAGATI?
The eSamiksha is a real time, online system for monitoring of projects by the PM and follow-up action is to be updated by the concerned ministry as and when the status changes or at least every month -PM
monitors this on his iPad. PRAGATI is another platform through which PM once every month monitors and reviews important programmes and projects of Centre and states.
[7]. GST critical for Make-in-India

Context: Author points out that GST is critical for the Make-in-India
Author says,
1. 1% tax is a bad idea: The large exemptions that both the Centre and the states give todaythese add up to around 2.7% of GDPand the impact of the current system of taxation. The 2%
central sales tax levied today, for instance, Subramanian points out, means a good faces an additional tax of 4% if, after an intermediate being produced in Maharashtra, it goes to Andhra Pradesh for
conversion into a final good which, in turn, is sold in Tamil Nadufor goods consumed in Chennai, it will be cheaper to import from South East Asia. This distortion, Subramanian estimates, affects at least
half the trade flows between states
2. Countervailing and Special additional duties (CVD and SAD) affect the domestically produced product negatively.


National
[1]. NASA plans to exit space station
What has happened?
NASA has planned to move in the cislunar space for an active human exploration project. So it will be decommissioning the International Space Station in a decade. It has already completed 15 years in the low
earth orbit.
Cislunar :-
It is the space between the earth and the orbit of the moon.
ISS:-
Its a Microgravity laboratory in the low earth orbit travelling at the speed of 5 miles per second orbiting the earth every 90 minutes. It was commissioned on Nov 2000 and various international crew members
have conducted research since then. It has an acre of solar panels making it the brightest object in the night sky after moon and is visible to the naked eye.
Microgravity:-
Its the region where the gravity is maintained at 1*10^-6 g. Since all the objects in the region are falling at the same rate it looks like as if they are floating.
Low earth orbit:
It the orbit above earth at a distance of 99 miles to 1200 miles. Almost all manned satellites are placed in this orbit. It provides high bandwidth and low communication time lag apart from being simple and cheap.
[2]. Groundbreaking for TAPI project tomorrow
What has happened?
The TAPI Gas Pipeline will be inaugurated on 13th December. It will supply Turkmenistan gas to Afghanistan Pakistan and India. It is an 1800 km pipeline in which India joined in 2008 to fuflil 15-25% of its
natural gas needs .
Obstacles:
The cost of laying infrastructure to protect the pipeline from possible attacks from Afghan Taliban will affect the TAPIs viability. Pakistans insurgency in Baluchistan will further add to final cost.
Bypassing Russia:-
US has been a strong advocate for TAPI pipeline to bypass Russia.
The U.S. has also pushed the TAPI as an alternative to the IPI (Iran-Pakistan-India) project so as to bring pressure on Iran to deliver on nuclear safeguards.
What you need to now?
IPI project:-
Iran Pakistan India is a 2700km pipeline (1000km in Iran, 1100 in Pakistan and 600 in Indian Territory). The pipeline can carry 110 million cubic meters of gas a day. Iran government has urged Bangladesh also
to join the project hence it might be extended.
[3]. Japan keen on making in India
This topic will be undertaken once the pacts have been finalised .
[4]. 8 States Heed PMs Call on Competitive Federalism
Context:-
Taking inspiration based on PMs civil services day speech 8 states have planned to implement successful e governance initiatives from other states.
What the PM said?
To see how the project was conceptualised, what were the resources, how the infrastructure was created, what difficulties were faced and see if it can be replicated or suitably modified to be implemented in
states and districts. This process should be institutionalised. its not enough to just print a booklet on the award-winning initiatives
Best initiatives:-
Karnatakas `Effective Vehicles Database Management System:
It comes handy to trace the owners of unclaimed vehicles lying in police stations.
For more : http://nceg.gov.in/sites/nceg.gov.in/files/nceg2015/case-studies/Case%20Study%20-%20Effective%20Vehicle%20Database%20Management%20v2.0.pdf
Gujarats `Suraksha Setu Project:-
Under the scheme 604 CCTV cameras, connected to a control room through a 200-km long underground optical fibre network, have been installed at 113 strategic locations, leading to a reduction in crime rate by
a third.
It is aimed at taking the role of Police beyond solving crimes by bridging the gap with the society and by creating a feeling of trust among residents with their proactive and prompt actions. The project intends to
give a human face to the police force and minimize incidents of crime in the society.
For more: http://surakshasetu.org/
Gujarats `Barcoded Ration Card project and `Biometric Food Coupon project:-
It won a national award last year for ensuring there is no leakage in public distribution system. Barcoded ration cards are linked with biometric authentication of the beneficiaries and they have to pass through the
process of authorization as well as fingerprint authentication to avail the food coupons. The collected food coupons to get the subsequent months food grains as it is linked with the opening stock minus food
coupons validated thus resulting in the closing stock.
For more:http://darpg.gov.in/darpgwebsite_cms/document/file/Barcoded%20Ration%20Card_Case%20study_v1.0.pdf
Chhattisgarh, on the other hand, is replicating `Gujarats Mineral Administration and Governance through ICT (MAGIC) project:
Its goal is to achieve Zero Visit Office. CGM has implemented many innovative ideas such as mineral exploration through outsourced agencies, identification of mineral blocks and putting the entire
information in the public domain, e-Auction of new leases, integrated Lease Management System (ILMS), including weighbridge automation,
Use of technology to curb illegal mining through establishment of Boundary Poles marking the boundaries of the mines using the latitude-longitude coordinates system Audit by professional CA firms, etc.
For more:- http://indiagovernance.gov.in/bestpractices.php?id=2091
Suggestions:-
For e-governance projects to be successful, and citizens to transact online, the ability of the telecom infrastructure to carry data needs to grow manifold. That, in turn, depends on the availability of spectrum. The
Centre must have policies to ensure that more spectrum is made available cheap. Only then can states replicate e-governance initiatives.
What is co operative federalism?
Cooperative federalism creates a relationship in which the national government strongly influences the policies and behaviours of state governments, often through the use of funding for programs. For example, if
the federal government is interested in ensuring that national highways are well-maintained, they might create grants in aid, a specific kind of grant from the federal government that provides funds for the states to
pursue a policy
Economic Digest
[1]. Chinas MSRI and Indian business

MSRI Maritime Silk Route Initiative proposed by China under One Belt One Road (OBOR) program.
Context: The geopolitical importance of India under MSRI as well the advantages that India can leverage with negative impacts if any.
Continents Under MSRI : Asia, Africa Europe
Proposed Connectivity : Far East to North Europe
Proposed Route: South China Sea, Indian Ocean, Persian Gulf and the Mediterranean to Northern Europe.
Regions Covered: North-East Asia, South-East Asia, South Asia, the Indian Ocean region, North and East Africa and South and North Europe
Indias location is exactly in the middle of the proposed route.
Europe China shipping route busiest and heaviest in the world. A huge cross continental value chain and production networks.
These chains originate from Asia, through raw material and intermediates, are assembled in the region and then eventually exported to Europe as final demand products. On the other hand, there are large
resource and commodity chains connecting Europe and Asia through Africa primarily in energy products.
Advantage India :
1. Make-in-India initiative is being visualised as a programme for encouraging export-oriented production, the MSRI provides a good opportunity to Indian and India-based foreign producers for
plugging into theglobal value-chains
2. The second opportunity for India arises from the possibility of growing into a strategic maritime hub.
o Indias central positioning in the route, can help it in latching on to a large part of this traffic. However, such an eventuality would require India
to build ports that efficient in drawing containers with large cargo. At the same time, it is also important that India develops at least a couple of major trans-
shipment ports that allow quick turnaround of containers with low berthing time. A great example is Colombo Port.
Indias Lack of preparedness to leverage the advantage can be described as follow:
1. Across the MSRI geography, East Asia, Southeast, and Europe are far ahead of India at this point in time in port and logistics efficiencies.
2. The World Banks logistics performance index rankings also place India at much lower levels compared with these countries.
What is India doing?
Indias ambitious plan to develop its ports through the Sagarmala initiative is a welcome step. However, the benefits from Sagarmala will take years to materialise
[2]. RBI to help banks tackle stressed assets
Context:-
The Reserve Bank of India (RBI) on Friday said it is looking at how the banks are using the various new powers given to them in order to accelerate the process of recovery of bad assets. To avoid misuse of
such initiatives a dialogue with the lenders is ongoing.
Allegation on lenders:
Some of the banks are using the new measures like strategic debt restructuring (SDR) to camouflage their stressed loans and delay provisions.
SDRs:-
The concept of Strategic Debt Restructuring (SDR) has been introduced by the Reserve Bank of India (the RBI) in the SDR Scheme (the Scheme) to help banks recover their loans by taking control of the
distressed listed companies.
It will give lenders the right to convert their outstanding loans into a majority equity stake if the borrower fails to meet conditions stipulated under the restructuring package. Allowing loan conversion will now be
a precondition for all debt restructuring deals.
For more:
http://economictimes.indiatimes.com/articleshow/47588542.cms?utm_source=contentofinterest& utm_medium=text&utm_campaign=cppst
Opinion & Editorials
[2]. In Chennai, a disaster foretold
What has happened?
Recent floods in Chennai and the absence of proper planned development has raised concerns.
While many cities around the world that are susceptible to disasters have planned to reduce risk, mitigate damage and increase resilience, Chennai remained under-prepared.
The article discusses the alternatives and the way forward.
Urban floods:-
Unlike rural floods they are difficult to manage because of concentration of large population in a small area, impervious ground and indiscriminate building in low lying areas.
Most often planning is wilfully neglected and required risk mitigation measures are also not undertaken increasing their vulnerability.
Around the world-
Cities prepare for a 100 year flood recurrence period (they are ready for a severe flood situation, even if it has one-in-100 chance of). So, Chennais argument of unexpected recurrence of flood after 100 years is
unacceptable.
Way forward:-
Enhance preventive measures:-
Well-prepared cities have mapped flood zones. Which will help citizens understand the status of their neighbourhoods and decide where to move or buy new homes. Based on risk zones construction works should
be regulated and restricted.
The intention is to prevent a high concentration of population in flood-prone areas, and make buildings safe. The United Nations Office for Disaster Risk Reduction has collated data spanning three decades,
starting from the 1980s, for various places in Tamil Nadu including Chennai which can be used to prepare hazard maps.
Most important part is ensuring compliance which should be done by the government.
Enhance Mitigation:-
Kuala Lumpur and Tokyo have built extensive water discharge tunnels to divert and store flood water. This system is efficient but expensive. Before attempting any of them, it would be wise to take care of natural
water bodies.
Chennai is a flat area and depends on canals and water bodies for draining rain waters.
Reclaiming these water bodies is critical. The city should also explore the possibility of designing highways to conduct runoff water. All this would warrant a thorough review of its urban engineering
Enhance response measures:-
The recent experience clearly shows the need for early warning and dissemination of reliable information about floods and rescue.
It also exposed the impediments multiple authorities and the lack of coordination among them can cause. Improved governance and non-interference of political parties in relief measures are critical
The way Chennai citizens admirably coordinated relief measures using communication technology has to be integrated into any plan
[3]. Delhi should wield a carrot
What has happened?
Indias unofficial blockade along nepals border has reached 11th week. It has stressed the level of fuel stock and other essential supplies hampering the normalcy of life in our neighbouring country. The author
discusses the environmental impact of the issue.
Environmental not just economical
Due to shortage of fuel people have been cutting down trees for their fuel needs. As forests act as carbon sink, the alarming rate of deforestation can affect the carbon sequestration capacities.
The burning of firewood has increased the concentration of particulate matter affecting the air quality of the cities which were pleasant tourist attractions.
Way forward:
Arm twisting is not the solution rather Madhesis should try attaining consensus through Nepals democratic process.
India may benefit from following that golden rule and treating others as it would like to be treated when it comes to border issues.
[4]. A body blow to justice
What has happened?
The Supreme court upheld the validity of the disqualifications in Section 175 of the Haryana Panchayati Raj (Amendment) Act 2015, including the lack of minimum educational qualification, electricity bill
arrears, agricultural loan arrears and absence of a functional toilet at home.
The law debars from contesting men who have not completed matriculation, women who have not cleared class 8 (with the corresponding qualifications for SC men being class 8 and for SC women class 5),
Controversies:-
Haryanas statistics on key social indicators is poor and in the light of the new law it might be discriminatory.
The states failure to provide basic services cannot be used as an excuse to debar candidates and this goes against the tenets of participatory democracy our constitution makers envisioned.
The qualification is not in conformance with the criteria for MLAs and MPs which makes it more controversial and contradictory.
For more:- http://www.thehindu.com/news/national/other-states/questions-on-haryana-panchayat-law/article7983643.ece
Way forward:-
Parliament intervention is required in the issue.
[5]. Reasons to invest in health: an OECD perspective
Context:-
India spends very little on health: $215 in terms of purchasing power parity per person, which is lower than comparable middle-income countries such as China, Brazil and South Africa. And majority of this
spending is made directly by Indian households.
The author discusses examples from OECD countries and how to imbibe them in our health policies for increasing effectiveness and efficiency.
Importance of health policies:-
Investment in health sector should be encouraged as it is crucial for increasing productivity which in turn enriches the human capital development.
Shortcomings of our health policy-
The push by the Indian government for universal health coverage in recent years is commendable. But while spending more on health is essential in India, value for money also needs to be demonstrated.
This problem has been addressed by defining a limited set of essential, cost-effective services.
For example, Mexicos Seguro Popular programme provided an explicit package of cost-effective interventions, including pharmaceuticals.
Allocating financial resources:-
Special attention needs to be given to ensure that health remains a priority for states and Union territories
State governments should be incentivized to expand health coverage to the poor, focusing on cost-effective interventions.
For example, financing to states in Mexico was linked to the number of additional persons that signed up to the Seguro Popular programme, with states providing a contribution.
Reducing health inequalities:-
In the UK, a weighted capitation formula is carried out.
It uses a localitys socio-economic characteristics to equitably allocate funds to clinical commissioning groups (the units responsible for health services in specific localities).
This is to enable similar levels of healthcare for populations with similar needs, with the further objective of helping to reduce avoidable health inequalities.
Accountability matters more than decentralization:-
The central government defining the minimum standards of care is an important first step.
It requires coordinated political will at both the central and state levels.
Lessons from OECD countries suggest accountability mechanisms for healthcare outcomes matter more than the degree of decentralization or type of provision.
The central government plays a stewardship role, and has a key planning and oversight role, with a consolidated national information infrastructure necessary to adequately monitor health outcomes, while the
states are responsible for the implementation of programmes.
Conclusion:-
Effective policies can ensure that states and Union territories incremental spending goes to health, but also enhances value for money.
This is because funding can be linked to cost-effective interventions, such as preventive and primary care activities, rather than less cost-effective (but more visible, and therefore more politically attractive)
interventions, such as construction of new hospitals.
International Relations
[1]. India, Japan in Hectic Talks to Seal N-Deal
This topic will be undertaken once the talks have been finalised.

National
[1]. Historic Paris climate pact puts world on green path
The Paris Agreement on Climate Change is the system of voluntary pledges, or nationally determined contributions made by individual countries to peak their greenhouse gas emissions that are warming the
atmosphere and changing the climate.
Paris Agreement on climate change:
1. Goal of well below 2 degrees C (1.5 C) for temperature rise
2. Instituting a regime of financing of developing economies to help make the transition
The agreement will come into effect in 2020 at the expiration of Kyoto Protocol.
Principle: need to achieve an equalisation between emission of Green House Gases (GHGs) and their removal by sinks by the second half of the present century has been welcomed widely since it turns
attention to renewable energy, and away from fossil fuels.
Some Facts:
1. Common But Differentiated Responsibilities ensuring equity is incorporated
2. The first global evaluation of the implementation of the Paris Agreement is to take place in 2023 and thereafter every five years
3. A facilitative dialogue of countries is to be held in 2018 to review the collective efforts, and the Intergovernmental Panel on Climate Change is to be asked for a special report in the same year, on
the impacts of global warming of 1.5 degrees C above pre-industrial levels
[2]. Mullaperiyar: Kerala invokes precautionary principle
The basics of the Mullaperiyar dam has already been dealt with in previous articles.
Current Status:
Citing extreme rainfall in arid region like Chennai, Kerala has invoked the precautionary principle.
This has been done to present Keralas case for the construction of a new dam in place of the centuries-old Mullaperiyar dam.
Kerala has also seek review of hydrological safety by panel of experts.
Kerala citing precautionary principle said that principle warrants risk prevention through proactive measures against specific environment or safety risk.
The memorandum has quoted 1984 Bermen Ministerial Declaration.
Bermen Ministerial Declaration of the International Conference on the protection of the North Sea (1984) had declared that states must not wait for proof of harmful effects before taking action.
Economic Digest
[1]. Latest FDI reforms could hit Make in India/ Defining Make in India
FDI policy tweaks on November 24 define Manufacturing for the first time, in line with income tax law.
The Different Definitions:
1. Income Tax Act, 1961 defines it as a change in a non-living physical object, resulting in transformation of the object into a new and distinct article having a different name, character
and use, or bringing into existence of a new and distinct thing with a different chemical composition or integral structure
2. But Central Excise Act, 1944, defines it as any process, incidental and ancillary to the completion of a manufactured product. Separately lists goods, whose packing, labelling or
alterations also constitute manufacture
3. Proposed Amendments to the 1948 Factories Act define Manufacturing as any process or activity resulting in any alteration of original character, such as nature, state, shape, size,
usefulness and/ or making value addition to the original material. Excludes all packaging processes
The Aftermath:
1. Defining manufacturing in the FDI policy could end up restricting foreign investments in some sectors, including the likes of electronics and hardware manufacturing.
2. At the same time, Indian firms are worried that this could open the door for competitors to make minor changes to imported goods and still call it manufacture.
3. Foreign companies will effect minor modifications to goods and re-label them as Made in India, which will make similar Indian goods less competitive
New conditions:
Indian manufacturers can now sell their own branded products in any manner, including online, but the FDI policy places onerous conditions on them.
1. They must own the Indian brand and manufacture at least 70 per cent in value terms of its products in-house within India, and source a maximum of 30 per cent from other Indian manufacturers.
2. Further, the Indian brand must be owned and controlled by resident Indian citizens and/or companies that are owned and controlled by resident Indian citizens.
Conclusion:
These additions are confusing and it is unclear whether it will apply only to Indian manufacturing companies or to foreign companies who also have established Indian manufacturing subsidiary or joint venture
companies. These can lead to increased number of litigations and disputes in the sector.

[1]. Gene editing on a roll, but safe to clear the way?
Context: Germline Editing
What is Germline Editing?
Deliberately changing the genes passed on to children and future generations in other words, creating genetically modified people
The Problem:
It is unethical, also the problem is that the current state of technology is imprecise, and there will be unintended consequences.
The Reason for Debate:
Powerful gene-editing technology, CRISPR-Cas9, which is relatively inexpensive, accessible and effective. Above all, it is easy to use if you have the right training. It brings the idea of designing a perfect human
who is healthy and intelligent many steps closer to becoming a reality.
India Scenario:
There is no law stopping research laboratories and private companies from using the technology to experiment on embryos.
International Summit on Human Gene Editing at Washington D.C to discuss scientific, medical, ethical, and governance issues associated with recent advances in human gene-editing research and also the
the implications of this technology.
The Verdict:
The summit announced that it would be irresponsible to proceed with any clinical use of germline editing until the relevant safety and efficiency issues were resolved.
[2]. Invest in our girls
Context: The Glo
bal Nutrition Report (GNR) and India Health Report on Nutrition (IHR), 2015
IHR provides easy-to-understand, State-wise data dashboards that give a comprehensive view of nutrition and its determinants
GNR assesses progress in reducing malnutrition for all 193 countries. It concludes that while India is on track to meeting only two of the eight global targets on nutrition, it has significantly improved its
nutrition performance in the past 10 years
The Current Scenario:

They portray one of great progress in improving nutrition across India; stunting among children, a marker of the most persistent types of malnutrition, has declined rapidly in the last ten years.
The Reality (Devil is always in the detail):
1. Conditions of all children gender irrespective:
1. There are diverse pictures about the life conditions of Indian children positive stories about childrens lives and futures in Goa, Kerala, Manipur and Tamil Nadu, but dismal ones
in Bihar, Jharkhand and Uttar Pradesh.
2. The data point to tremendous variability across States in delivering what should be universal, rights-based and already mandated health and nutrition services.
3. Examples: For example, sample this for intra-State disparity. Food provided by the Integrated Child Development Services (ICDS) reaches barely 1 in 5 children in Uttar
Pradesh but over 90 per cent in Odisha. Less than 33 per cent of children in Nagaland are fully immunised; in Goa, it is more than 90 per cent. Close to 80 per cent defecate in the open in Odisha;
barely 2 per cent do so in Kerala.
4. There is a reality of deep, systemic inequality; of inequality in the circumstances that children are born into, that they live and grow in. Their poor nutrition stunts more than their
bodies. It stunts their well-being, and, consequentially, that of their home States and their nation.
2. Condition of Women and girls: there is no intra state variability in the data showing the negligence over women issues in all the states.
1. More than half of women are anaemic.
2. Levels of attained education are low for most Indian women, with only a few States doing well enough to have more than 50 per cent of their women with 10 years of schooling.
This is barely the level of education that would enable them to participate in meaningful employment and be a part of Indias growth story.
3. In 2014, the proportion of young women (20-24 years) married before they were 18, is as high as 1 in 2 in some States and 1 in 3 in many other States, including parts of the
South.



National
[1]. Paris pact will secure earth for future, says Obama as world leaders hail
deal
What has happened?
Speaking of the recently concluded Paris agreement, US President Barack Obama called it a big step forward in securing the planet for future generations and said the agreement showed what was possible when
nations stood together.
Reaction of the French President
In Paris, there have been many revolutions over the centuries. Today, it is the most beautiful and the most peaceful revolution that has just been accomplished.
Reaction of British PM
The agreement represents a huge step forward in securing the future of the planet.
Reaction of the German Chancellor
The deal would oblige the entire global community to act against climate change.
Reaction of Centre for Science and Environment
The agreement is unambitious and has discharged the developed nations of their responsibility
Reaction of China
The Paris agreement may not be perfect and some areas needed improvement the agreement is fair, just and comprehensive and balanced with legally binding force.
Reaction of India
Outcome of Paris agreement has no winners or losers, Climate justice has won.
Reaction of Tata Institute of Social Sciences
The Paris agreement falls well short of what the world needs to halt the progression of climate change.
[2]. Paris deal may bind India on emissions data
What has been agreed to at Paris?
The countries that met at Paris agreed to hold the increase in the global average temperature to well below 2C above pre-industrial levels and also make efforts to limit the temperature increase to
1.5C.
Temperatures have already increased by about 1Celsius (1.8 degrees Fahrenheit) since pre-industrial times. In order to achieve the long-term temperature goal, the countries aim to reach global
peaking of greenhouse gas emissions as soon as possible. It, however, recognises that peaking of greenhouse gases emission will take longer for developing countries.
Mitigation for developing countries and economy-wide emission reduction
Emission reduction targets: Countries will set national targets for reducing greenhouse gas emissions every five years. More than 180 countries have already submitted targets for the first cycle
beginning in 2020.
What about those countries which have set targets with a time-frame of 2030?
Well, such countries would have to communicate or update by 2020 these contributions and to do so every five years thereafter.
Compliance: No penalty has been levied in case of non-compliance but the agreement has transparency rules to help encourage countries to actually do what they say they will do. The agreement
says all countries must report on their emissions and their efforts the reduce them. The transparency framework under Article 13 of the Paris Agreement does provide built-in flexibility, which takes into
account the different capacities of countries.
Finance: The agreement says wealthy countries should continue to offer financial support to help poor countries reduce their emissions and adapt to climate change. It also encourages other
countries to pitch in on a voluntary basis. Like, China can help if it wants to but it is not compulsory
1. Specific amount in dollars has not been set. Developed countries had pledged $100Billion last year but as per Oxfam developing countries would need $800 Billion a year by 2050
2. Loss and damage: For small island nations threatened by rising seas, the agreement includes a section recognising loss and damage associated with climate-related disasters. The US long
objected to addressing the issue in the agreement, worried that it would lead to claims of compensation for damage caused by extreme weather events. In the end, the issue was included, but a footnote
specifically stated that loss and damage does not involve liability or compensation.
So, is the Paris deal sufficient?
It may not be the panacea to the problem of reducing use of fossil fuels but is a starting point for the race towards a low-carbon future.
Not sufficient: Centre for Science and Environment (CSE) has clearly stated that the deal is weak and unambitious and discharges developed nations of their responsibility. Developing countries have got only
words and promises while developed countries have got no legally binding targets on finance and emission cuts.
A start: Greenpeace international termed the deal as a step forward. It is not a momentous deal but still it is one step forward
Hows the deal for India?
The big win for the country is the inclusion of the phrase common but differentiated responsibilities (CBDR) , recognising the different national circumstances of developed and developing countries.
What has happened?
In the recently concluded Paris agreement at COP 21, India would have to submit NDC every 5 years, a clause to which India is not comfortable with.
Target Monitoring
External monitoring of the national pledge on climate action to track progress made in implementing and achieving the Nationally Determined Contributions (NDCs),
A technical review of the emissions data submitted
Participation in a facilitative, multilateral consideration of progress are among the provisions in the Agreement
A caveat
Although Indias INDC includes a caveat that the country will not be bound by any sector-specific mitigation, and only aims at achieving better overall energy efficiency reflected in lower intensity, the
measurements prescribed under the transparency framework clearly stipulate that the national inventory should be by source.
Submitting NDC (Nationally determined Contributions) every 5 years
One of the provisions in the Paris Agreement that India was not comfortable with during the negotiations pertains to submission of an NDC every five years. The public Indian position throughout the talks was
that it had submitted its INDC for the period between 2021 and 2030.
Article 4, however, mandates that each country should, in five-year cycles, prepare, communicate and maintain an NDC.
Conclusion
India has won in one respect as it has been successful. The inclusion of CBDR in the agreement but it has not got what it wanted regarding the submission of NDCs.
[3]. Panchayats and Gender imbalance

What has happened?
Haryana government has issued a law, upheld by SC, which mandates that only those having minimum educational qualifications will be eligible to contest panchayat elections in the State.
Impact of the Haryana law
The new qualifications have disenfranchised 68% of Dalit women and over 50% of all women from contesting panchayat elections.
Has such measure been implemented elsewhere in the country?
Yes. Rajasthan government in Mar 2015 passed a law and became the first state to insist that candidates for the panchayat polls meet minimum educational qualificationsClass VIII for sarpanches, Class X for
the zila parishad and panchayati samiti elections and Class V in tribal reserved areas and an added condition of a functional toilet at home.
Impact of the law passed by Rajasthan
When the elections to the Panchayats were held later in the year 2015, two hundred and sixty Sarpanches were elected unopposed, compared to 35 in 2010. Among regular panchayat members, 46% were elected
unopposed.
The unopposed election at the grassroots level should be a cause of worry for any democratic society. More so, if it is a male dominated one. The 73 rd Amendment Act mandated 1/3rd reservation for women in the
Panchayat councils, to correct this imbalance.
Authors argument against this law
Top-down approach: A minimum education qualification criteria if implemented should be done following a top-down approach. A 9 th class passed son of Lalu Prasad Yadav can become the
minister in Bihar then why discriminate against women and the marginalized in villages in Haryana and Rajasthan?
Penalizing older generation: To penalize older generation of women prevent them from seeking a measure of empowerment and change through elections, goes against the grain of natural
justice. Women Sarpanches have earned their ranks through hardships and sacrifice. It is time we should honour their gumption instead of disqualifying them on false grounds.
Conclusion
Any attempt to curtail the participation of women in public life must be repelled, and the Supreme Court judgment is a step backward in the struggle for womens right to be heard and seen in public life
[4]. Modi cultivates the past

What has happened?
The central government has brought genetically-modified Bt cottonseed under price control by exercising its powers under the Essential Commodities Act, conceding a demand of the National Seed Association of
India (NSAI)
What the notification says?
The notification issued by the agriculture ministry notes that Bt cottonseed is highly priced and needs to be made available at fair, reasonable and affordable prices
Does Price Control exist in other states?
Currently, four states have price controls on Bt cottonseed
How will government decide the price?

The central government intends to bring uniformity in pricing across the country. It will fix the maximum retail price through a committee chaired by the joint secretary (seeds) with seven members, including one
each representing farmers and the seed industry. The rest are government nominees. There is no representation in the committee of technology providers. The rate will be fixed by the end of the financial year
Conclusion
Giving in to price control is a regressive step as per author. Companies invest highly on R&D and their establishments and without any surety of a worthwhile return, might have a chilling effect on the R&D in
agricultural sector which is crying for more of it.
Must Read: http://www.financialexpress.com/article/fe-columnist/column-bt-cotton-price-control-against-rd/177690/
International
[1]. Surveillance, an anti-pollution weapon
What has happened?
Ina bid to reduce and fight severe air pollution, Beijing is utilising Big data. The computer program, developed by IBM, is one of several high-tech measures, ranging from drones and satellites to remote sensors
that China is deploying to deal with its chronic pollution.
What is Big Data?
It is used to describe a massive volume of both structured and unstructured data that is so large it is difficult to process using traditional database and software techniques. In most enterprise scenarios the volume
of data is too big or it moves too fast or it exceeds current processing capacity.
Example of Big Data: An example of big data might be petabytes (1,024 terabytes) or exabytes (1,024 petabytes) of data consisting of billions to trillions of records of millions of peopleall from different
sources (e.g. Web, sales, customer contact center, social media, mobile data and so on). The data is typically loosely structured data that is often incomplete and inaccessible.
Why is this being done?
Despite a vast public surveillance system, accurate information about pollution remains scarce. As a result, Beijing and its neighbouring provinces cant coordinate joint defence and joint control of their anti-
smog efforts, leaving rogue companies to secretly discharge and secretly dump.
So, the company is trying to achieve total pollution awareness: the ability to know, with perfect accuracy, where haze comes from and use that information to predict and pre-empt its future sources.
Severity of pollution is Beijing: Beijing was on its first ever air quality red alert in December.
In July, leadership in Beijing vowed to establish a national network for detecting pollution that will incorporate multiple technologies on land, in the air and space.
Must read: http://www.pollutionsolutions-online.com/news/air-clean-up/16/breaking_news/beijing_issues_first_ever_red_alert_for_air_quality/37171/
Business & Economy
[1]. Cash gets stuck in that last mile

Context: In this article author talks about the Business Correspondent model launched by RBI in 2006. Author says that inspite of schemes like Jan Dhan Yojana, it is difficult for illiterate or diseased to approach
a bank as branches are located far away or they are simply intimidated.
What is BC model?
The BC model, formulated by RBI in 2006, is designed to bring the bank to the door step of the customer.
BCs are the organisations or individuals who travel to individuals, equipped with mobile technology linking them to banking operations
They open accounts, collect savings, make withdrawals and educate the customer about the benefits of banking.
How many BCs are there?
According to RBI, there are over 2.5 lakh business correspondents with the number going up every year
Gender imbalance in the BC model
Only 9% of BCs or CSPs in India being women
How the BC model has turned out?
In Madhya Pradesh
In a study of 22 villages in 2012, although banks had appointed business correspondents, they covered less than 2% of the population. Most of them were young men with motorcycles, and all of them said that
they were spending more in travel than they earned, being a BC was not viable for them, although it was a good learning experience, and they made good contacts. They did not plan to stay in this work for more
than a couple of years.
In Bihar
In Bihar in 2013, BCs were interviewed in five districts. The median customer outreach of a BC was 600, with the coverage of female customers being nearly half. About 60% of the accounts opened by women
were non-operational.
The common reasons were that the accounts were not activated by banks, faulty cards had been issued by banks to the customer and the customers did not want to use the bank for savings.
Problems faced by BCs
Lack of functional knowledge
Disruption in hand-held devices or related technical support
Bank Support: 46% of the agents faced a problem in receiving monthly payments from the bank, resulting in disillusionment amongst them to take it up as a long-term career option. The attrition
rate due to neglect from banking system is around 25% to 34% annually.
Benefits of BC system
Employment: It is an avenue of employment for young educated men and women, and with some effort upto 10 lakh such rural youth would easily be earning a decent income.
Financial inclusion: It is a way in which crores of the excluded can be integrated into financial systems, increasing their savings, their access to insurance and investment in financial markets

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National
[1]. India wants WTO to discuss farm subsidies of the rich

What has happened?
WTOs Nairobi ministerial is going to be held from December 15th 18th. India has stressed that the meeting should take up discussion on the trade distorting farm subsidies of the rich countries & its impact on
millions of resource poor and subsistence farmers around the world, on a priority basis.
What is subsistence farming?
Subsistence agriculture is self-sufficiency farming in which the farmers focus on growing enough food to feed themselves and their families.
Categorization of subsidies as per WTO,
In WTO terminology, subsidies in general are identified by boxes which are given the colours of traffic lights: green (permitted), amber (slow down i.e. be reduced), red (forbidden).
There is no red box in case of agriculture.
Amber Box: All domestic support measures considered to distort production and trade (with some exceptions) fall into the amber box, which is defined in Article 6 of the Agriculture Agreement as all domestic
supports except those in the blue and green boxes. These include measures to support prices, or subsidies directly related to production quantities.
Limits on Amber box: The subsidies are limited to de-minimus level which is,
5% of agricultural production for (1986-88) for developed countries, 10% for developing countries
Blue Box: This is the amber box with conditions conditions designed to reduce distortion. Any support that would normally be in the amber box, is placed in the blue box if the support also requires farmers
to limit production
Limits: At present there are no limits
Green Box: In order to qualify, green box subsidies must not distort trade, or at most cause minimal distortion. They have to be government-funded (not by charging consumers higher prices) and must not involve
price support.
Limits: No limits
Examples: environmental and conservation programs, research funding, inspection programs, domestic food aid including food stamps, and disaster relief
Indias stand is that the developed countries like USA should bring down its Amber box subsidies which distort trade internationally.
Moreover, the de-minimus level which is calculated by the agricultural level of 1986-88 is not ridiculous as the productions have shot up and so have the prices.
[2]. Inequality pulls back India

What has happened?
UNDP has released its Human Development Report 2015. Article offers key insights into what the report has to say about India
The report says,

1. For just four per cent of its GDP, India could provide a basic and modest set of social security guarantees for all citizens with universal pension, basic health care, child benefits and employment
schemes
2. Co-operation: The report mentions that governments, society and private sector should come together and play its role in ensuring that during policy formulation needs of every single person is
taken care of.
3. Global collaboration: Governments should work on a global scale to guarantee workers rights, equality, security and to ensure human dignity.
4. Decline women work-force: Workforce participation rates of women have dropped globally due to fall in these rates in India and China. Women are also less likely to in a leadership position and
are likely to earn less than men
Indias rank on HDI
In 2013: 135 out of 188 countries
In 2014: 130 out of 188 countries
Gender differences
If Women & Men in India had their own country then their rank on HDI would be,
Women: 151 out of 188
Men: 120 out of 188 The average adult Indian male gets twice as many years of schooling as average adult woman.
What is Multidimensional Poverty Index?
MPI measures poverty on 6 deprivation indicators. It considers various criteria for measuring poverty including parameters like, lack of education, access to health etc and supplements the traditional income based
indicators.
What is HDI?
The HDI is a composite index meant to compare the well-being of people across countries and was first introduced by the UNDP in 1990. It is calculated as the geometric mean of three indicators: life expectancy,
education and national income.
What is UNDP?
The United Nations Development Programme (UNDP) is the United Nations global development network.
Headquartered in New York City, UNDP advocates for change and connects countries to knowledge, experience and resources to help people build a better life. It provides expert advice, training, and grant
support to developing countries, with increasing emphasis on assistance to the least developed countries.
[3]. Seven charts that show why Indias healthcare system needs an overhaul
What has happened?
In a paper released in Lancet, a team of researchers identified seven structural problems in Indias healthcare system
Seven structural problems in Indias healthcare system,
1. A weak Primary healthcare sector: The health services sector has improved but the development is uneven.
For example: 1 bed for 1833 people in government hospitals in 2015, In 2005 it was for 2336 people. Situation has improved but the improvement is not evenly distributed meaning there is one government
hospital bed for every 614 people in Goa compared with one every 8,789 people in Bihar.
2. Unequally distributed skilled human resources: There arent enough skilled healthcare professionals in India despite recent increases in MBBS programmes and nursing courses. The survey
by Lancet says this shortage is compounded by inequitable distribution of these resources. In community health centres in rural areas of many states, ranging from Gujarat to West Bengal, the shortfall of
specialists exceeds 80%
3. Large unregulated private sector: The declining quality of healthcare in government hospitals has resulted in decrease in usage of these hospitals. For example: A survey of NSSO shows a
decrease in the use of public hospitals over the past two decadesonly 32% of urban Indians use them now, compared with 43% in 1995-96. Moreover, the private practitioners are seldom fully qualified
and in most cases they are under-qualified.
4. Low public spending on Health: Public health expenditure remains very low in India. Even though real state expenditure on health has increased by 7% annually in recent years, central
government expenditure has plateaued. Economically weaker states are particularly susceptible to low public health investments. Many state governments also fail to use allocated funds. The 14th finance
commission recommendations, which will transfer a greater share of central taxes to states, offers an opportunity for the latter to increase investments in health.
5. Fragmented Health Information systems: Like in most facets of life in modern India, getting quality, clean, up-to-date data is difficult in the health sector as well. This is despite the presence of
many agencies ranging from NSSO to the Registrar General of India Data is incomplete (in many cases it excludes the private sector) and many a time, its duplicated.
6. Irrational use and spiralling cost of drugs: Costs of medical treatment have increased so much that they are one of the primary reasons driving people into poverty. Corruption also increases
irrational use of drugs and technology. For instance, kickbacks from referrals to other doctors or from pharmaceutical and device companies lead to unnecessary procedures such as CT scans, stent
insertions and caesarean sections, the study said. Several schemes like Jan Aushadhi and Drug price regulatory policies have not been implemented correctly.
7. Weak governance and accountability: In the past 5 years, the govern ment has introduced
several new laws to strengthen governance of the health system, but many of these laws have not been widely implemented. The study mentioned inadequate public investment in health, the missing trust
and enga
gement between various healthcare sectors and poor coordination between state and central governments as the main constraints why universal healthcare is not assured in India.
International
[1]. Beijing-Moscow bonhomie the focus of SCO meet

What has happened?
A day-long session of the Shanghai Co-operation Organisation (SCO) is going to be held on 16 th Dec 2015.
What is Shanghai Co-operation Organisation?
SCO is a Eurasian political, economic and military organisation which was founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. These countries,
except for Uzbekistan had been members of the Shanghai Five, founded in 1996; after the inclusion of Uzbekistan in 2001, the members renamed the organisation.
India and Pakistan have been accepted as full time members of the SCO on July 10, 2015.
India, which has had an observer status for the past 10 years, will technically become a member by next year after completion of certain procedures
Major talking points of the meeting,
o Joining together of the Silk-Road Economic Belt (SREB) and the Eurasian Economic Union
o member countries development issues and their economic collaboration
What is EEU?
An economic union created in 2014 by a treaty signed by Russia, Kazakhstan and Belarus. The Eurasian Economic Union treaty allows citizens of EEU member countries the right to work in any other member
country without having to obtain special work permits and is expected to reduce trade barriers among members.
What is SREB?
The Silk Road Economic Belt is the land-based component that together with the oceanic Maritime Silk Road forms One Belt, One Road (OBOR), a Chinese government economic development framework for
primarily integrating trade and investment in Eurasia
Business & Economy
[1]. Markets Make Our Mandis

Context:- Research has found that food riots are most likely to occur when the Food Price Index, compiled by the United Nations Food and Agriculture Organization, rises above 210. Its currently 216.
Spikes in grain prices are regularly blamed on oil shocks, droughts and emerging markets hunger for meat.
But the real culprit behind this is Financial Speculation.
Role of financial speculation:-
Financial speculation is also responsible for the price fluctuations in grains.
Researchers while trying to build a model to understand price rises were unable to explain the reasons until they added financial speculation as one of the causes of price spikes.
Ideally markets should have the ability to match supply and demand at prices that benefit farmers, while ensuring the greatest number of people can afford to eat. Speculation in grain futures knocks these prices
out of equilibrium.
Hunger and revolutions have always gone hand-in-hand, and price spikes are the reasons for the recent food riots around the world.
Recognizing the dangers of food speculation, six European banks including Commerzbank, Germanys second largest removed agricultural products from their commodity funds altogether.
Conclusion:- At a time when the grain harvest is expected to be less than consumption, we cant afford to gamble with food.
Counter view:- We all need a low-cost supply chain that makes basic foods affordable while benefiting farmers.
And the challenge in the food supply chain is financing current operations and future investment in the cheapest way.
But the stakeholders like traders and farmers cannot support commodity price risks or audacious expansion plans.
How futures market can tackle the issue?
It helps consolidate the supply of capital because the bigger liquidity providers become willing to enter and the market player receives a flow of resources to enhance productivity and scale.
Since a well-hedged business is more confident of income and offers farmers better prices, it directly stimulates farm production.
It has the potential for increasing and stabilising agri-business income and, through this, enabling more rapid growth of an efficient food value chain.
Sticking point:-
The real test of an efficient food supply chain is the ease and availability of people willing to accept its risks.
The larger, older markets in New York and Chicago do this well because they have large numbers of liquidity providers always ready to buy or sell any quantity.
How the liquidity providers benefit?
They profit if they correctly anticipate the direction and timing of price changes.
Arbitrage: Buying and selling of same or similar stock simultaneously to achieve profit. When the price of one commodity rises and other falls then they sell the costlier good and buy the cheaper one, the
difference between the two is their profit.
For more: http://www.investopedia.com/terms/a/arbitrage.asp
Since some are willing to buy sell on the smallest price change, the agribusiness player can enter and exit a market position at an efficient price.
Conclusion:-
If they forecast correctly, prices are stable, and if they dont, prices are volatile. So, for better price discovery, we need better-informed liquidity providers.
In short, speculators -or, more accurately, liquidity providers -voluntarily absorb market and credit risks for the mere chance (not an assurance) of a profit.
These risks would otherwise fall on producers, merchants, manufacturers and farmers, thereby increasing cost to consumers and lowering returns to farmers.
The presence of speculators in regulated markets reduces the ultimate cost of food production and distribution and, thereby, raises the standard of living in our country.
Futures trading: http://www.investopedia.com/university/futures/
[2]. Trading black money

Context:- The government got a mere Rs 3,770 crore worth of declarations for black money held overseas when it opened a one-time compliance window in October.
The illegal forex outflows for 2013 stood at $83 billionmostly through under-invoicing exports and over-invoicing import.
It amounts for 4.4% of Indias GDP.
It is also noted that money siphoned out has increased 4.3 times between 2004 and 2013.
So instead of worrying about the past we need to focus on the present and future given that GDP and trade are set to rise dramatically.
Mitigation measures:-
It is important that customs officials have a robust database to compare the value of both exports and imports on a 247 basis.
The Indian Customs Valuation Database Project was initiated to develop a real-time, electronic database in respect of goods imported at all customs stations in India.
It provides instant access to the combined data, duly analysed and flagged by the Directorate of Valuation (DoV), to all assessing officers for their use as an effective tool to check under-valuation and valuation
fraud so as to safeguard customs revenue
Sticking point:-
As pointed out by the Tax Administration Reforms Commission (TARC) in its report, data management and sharing has been a major problem in the revenue department.
Utilisation of various global platforms and organisations providing important trade pricing data through this window is critical for this exercise.
Best practices around the world:-
Trade data exchange windows in the East African Community, European nations and also trade facilitation agreements, have succeeded in curtailing loss of substantial customs revenue on account of trade mis-
invoicing.
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Act)
The Act levies a tax on any undisclosed foreign income assets and held abroad by a person who is ordinarily resident in India.
Undisclosed foreign assets can include but are not limited to bank accounts, immovable property, jewellery, bullion, shares, partnerships, archaeological collections and art work.
The government ran a one-time voluntary compliance program to allow taxpayers with secret off-shore holdings to come clean.
Previously undisclosed foreign income and assets are taxed at a rate of 30 percent of the fair market value of the assets, while a penalty is imposed at the rate of 100 percent of the tax. The total combined tax rate,
including penalties, is 60 percent of the value of the fair market value of the foreign assets
For more: http://www.india-briefing.com/news/indias-black-money-act-liability-compliance-11224.html/
[3]. More of the same

Context:-The report of the sub-group of chief ministers to rationalise the centrally-sponsored schemes was submitted and it has neither received the attention nor has been subjected to critical analysis.
The committee was appointed in March in the aftermath of increase in tax devolution by the 14th Finance Commission (FFC) which reduced fiscal space for the Union government.
The increase in states share in the divisible pool of taxes from 32% to 42% so that the states are enabled better to provide public services in their domain in a more satisfactory manner rather than depending on
the transfers tied narrowly to specific schemes.
Ideal transfer systems:-
An ideal transfer system should possess the below
General-purpose transfers: It should be designed to enable the states to provide comparable levels of services at comparable tax rates on the functions assigned to them.
Specific-purpose: These transfers are required to ensure minimum standards in respect of highly meritorious services with very high degree of externalities.
This implies that the number of schemes for assistance should be very few, the service level in respect of those should be benchmarked, the cost of providing them should be estimated, and the shares of the Union
and different states should be worked out such that the prescribed minimum is ensured throughout the country.
Critical analysis of the recommendations:-
The so-called core sector includes education, health, nutrition, women and children, Swachh Bharat, rural connectivity, agriculture, access roads and communication, fisheries, housing, urban transformation, law
and order and justice delivery system.
Apart from these core sectors, the committee also recommends that the remaining schemes should be pooled into optional schemes.
By coming up with an expanded list of core sectors and stipulating that the existing schemes in these sectors should continue, the committee has missed an opportunity to rationalise the schemes to ensure
prescribed minimum standards of public services across the country.
[4]. Fiscaldevolution
and health care: lessons from the Philippines
Context The article discusses how decentralization and devolution has benefitted the health sector in Philippines
Lessons to be learned
1. First priority should be responding to the inequity in health
2. We should re-think the department of health budget; poor provinces should get more while rich provinces should give more.
3. The technical capacities of the Centres for Health Development should be strengthened in the following areas: public health care services, planning, information system, human resource
development, health financing, hospital operations and management, community and NGOs, inter-sectoral synergy and inter-local government unit (LGU) collaboration and quality assurance.
4. Local government units should be seen as co-equals.
5. It should be recognized that LGUs are heterogeneous in terms of economic, political, historical, cultural, and geo-ecological situations.
6. National and regional budgets should further be decentralized to LGUs with equity as a major factor.
[5]. As economy slows, China urges G20 to focus on domestic reforms

Context China is hosting the G20 summit in 2016 and is also the holder of rotating presidency.
It has set the agenda for the meet by urging countries to spur global economic growth through structural reforms.
G20 leaders had met at Antalya last month and resolved to persist with collective action to lift actual and potential growth of their economies and boost job creation.
The G20 summit mechanism for economic co-operation had evolved in the aftermath of the 2008 financial crisis.
Many countries are suffering from a series of unfavourable factors, including
1. Anaemic global growth
2. Decline in potential output
3. Increasing volatility in financial markets
4. Weakening global trade and investment
5. High levels of unemployment and inequalities
Factors affecting global economy
Protectionist measures:-
China has questioned the significant rise in protectionist measures adopted by countries in trade and investment and the lack of movement on the World Trade Organisations (WTO) Doha Development round of
talks. G20 nations account for 80 per cent of global trade volumes.
Fragmentation of trade:-
The increase in number of bilateral treaties has resulted in fragmentation in global trade and investment governance regimes, to which G20 needs to respond
Sustainability of growth:-
The expansionary macroeconomic policies mainly focus on managing aggregate demand as the temporary response to the financial crisis.
Without solving the deep structural problems, these policies could not reverse the prevailing trends of slow growth in potential output and productivity, and therefore could barely deliver sustainable economic
growth
Delay in reforms:-
China has also said that the prolonged delay in the implementation of reforms in the quota and governance structure at the International Monetary Fund and review of World Bank voting shares jeopardises the
credibility of the G20
G 20:-
The G-20 was founded in 1999 with the aim of studying, reviewing, and promoting high-level discussion of policy issues pertaining to the promotion of international financial stability.
Doha talks:-
The Doha Round is the latest round of trade negotiations among the WTO membership.
Its the ninth round since the Second World War and the first since the WTO inherited the multilateral trading system in 1995.
It aims to produce the first major overhaul of the system in the 21st Century. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade
rules. The work programme covers about 20 areas of trade.
For more:- https://www.wto.org/english/tratop_e/dda_e/dda_e.htm
[6]. How deep is Indias poverty?

Context: World Bank (WB) report brought out poverty ratios across countries
Findings: poverty in India in 2011-12 could be as low as 12.4 per cent if we use modified mixed reference period (MMRP).
Rangarajan Committee on Poverty Estimates: 29.5%
Why this difference?
The poverty line (PL) used by the Rangarajan committee for India was around Rs 1,105 per capita per month. That translates to $2.44 per capita per day, in terms of purchasing power parity. As such, the WBs PL
of $1.90 per capita per day is only about 78 per cent of the PL used by the Rangarajan committee. The lower PL is the reason for the lower poverty ratio estimated by the WB.
There are three conclusions from the all-India and state-wise analysis,
First, the rate of decline in poverty ratios for the lowered cut-off( 50 % of Poverty Line to 85% of poverty line) is similar or more than those for the PL or the raised PL (PL < Raised Pl < 125% of PL) .
Second, poverty is concentrated around the PL.
Third, the percentage of population below 50 per cent of the PL is negligible at both all-India and state levels
Opinion & Editorial
[1]. India-Japan charts Asias peaceful rise

What has happened?
Article is about the resurgence of the Indo-Japan partnership vis-a-vis Japanese PM Shinzo Abes 3 day visit to India.
Author says,
o After the Pokhran test, Japan imposed sanctions on India and throughout 90s the Japanese thought of India as an inhospitable territory for doing business.
So, what has brought about a change in Japanese outlook?
Two things made Japan wake up to the India opportunity,
1. First, the fact that countries like South Korea began to overtake Japan in the Indian market.
2. Second, the emergence of China as the worlds second-biggest economy, overtaking Japan.
The increasing partnership

o The India-Japan Vision 2025 statement jointly issued by both leaders in New Delhi last week is the most comprehensive statement of long-term bilateral
engagement defined by shared interests and values.
Issues resolved during Japanese PMs visit
1. the agreement on peaceful uses of nuclear energy ends years of painstaking negotiations, delayed both by the Fukushima nuclear tragedy in Japan and Indias own confused legislation of a
nuclear liability law
2. Indias decision to agree to tied aid, enabling Japanese funds to finance Japanese investment, especially in infrastructure and high-speed railway projects.
3. Indias willingness to promote Japanese industrial townships aimed at making India a more hospitable destination for Japanese business.
What is tied aid?
Tied aid is foreign aid that must be spent in the country providing the aid (the donor country) or in a group of selected countries. A developed country will provide a bilateral loan or grant to a developing country,
but mandate that the money be spent on goods or services produced in the selected country.
Economic co-operation
1. While Japan is a member of the U.S.-led Trans-Pacific Partnership (TPP) and India is not, both countries are engaged in creating a Regional Comprehensive Economic Partnership (RCEP) and
Japan has agreed to support Indias case for membership of Asia-Pacific Economic Cooperation (APEC), even as the U.S. continues to drag its feet over this.
2. Running parallel to Chinas One Belt One Road (OBOR) initiative Japan and India can build road and rail connectivity across the Eurasian landmass. In the joint agreement Japan has assured of
Japanese funding of Indias own belt-and-road connectivity projects across Asia.
3. Promoting Act East policy: Japan has also agreed to promote Indias Act East policy by developing and strengthening infrastructure that aids in connectivity within India and also of India with
other countries in the region
What is One Road One Belt initiative?
It is a development strategy and framework, proposed by Peoples Republic of China that focuses on connectivity and cooperation among countries primarily in Eurasia, which consists of two main components,
the land-based Silk Road Economic Belt (SREB) and oceangoing Maritime Silk Road (MSR). The strategy underlines Chinas push to take a bigger role in global affairs, and its need to export Chinas
production capacity in areas of overproduction such as steel manufacturing
What is Trans-Pacific Partnership?
The Trans-Pacific Partnership (TPP) is a trade agreement among twelve Pacific Rim countries concerning a variety of matters of economic policy, which was reached on 5 October 2015 after 7 years of
negotiations. The agreements stated goal had been to promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce
poverty in our countries; and promote transparency, good governance, and enhanced labour and environmental protections.
[2]. A shift from style to substance

Context: In this article, author takes a look at the focus areas of the foreign policy under PM Modi during the first half of 2015.
Author says,
1. Asian solidarity: The foreign policy interventions of PM Modi during this time indicate an attempt to establish Asian solidarity as a key theme of his agenda.
2. Key areas: The interventions of PM Modi indicate key areas where PMO is likely going to invest its interest in. Cyber-policy is one such theme, reflected in nearly a third of all of his speeches. At
intergovernmental venues like ASEAN, BRICS or the G20, Mr. Modi has highlighted the importance of securing cyber networks from state and non-state actors. Raised issues of data privacy and security
during his visit to Silicon Valley
3. Themes of trade and energy: Trade partnerships are a major theme in Mr. Modis interventions. He has repeatedly called for an early conclusion of RCEP, while acknowledging the existence of
the Trans-Pacific Partnership (TPP) agreement. At the G20 summit in Antalya, he asserted this clearly, warning that regional agreements should not lead to a fragmentation of the global trading system
4. Renewable energy: Renewable energy is another area of priority as PM constantly talked about the 175GW solar energy target that India has set for itself.
Author says that these foreign policy themes are closely connected to three initiatives of the Indian government:
1. The Technology Facilitation Mechanism,
2. A Comprehensive Convention on International Terrorism,
3. The International Solar Alliance
[3]. Cautious co-operation with Japan

Context: Author in this article states the mutual benefits India and Japans partnership will bring to both the nations but at the same time has cautioned that India should be wary of aligning itself to a specific bloc
Author says,
o Indo-Japans resurgent partnership is going to benefit both India and Japan. How?
For India:
(a). Despite India being one the worlds largest economies, it accounts for only about 1 per cent of Japans imports, exports and direct investments abroad. The proposed bullet train link between Mumbai and
Ahmedabad, which will have access to a soft Japanese loan of $12-15 billion at a concessional interest rate of 0.1 per cent, will cement economic cooperation further
(b). The civil nuclear cooperation deal, after five years of talks, marks a complete reversal of the policy Japan adopted towards India after the Pokhran nuclear tests in May 1998. Tokyo, which considers itself a
champion of non-proliferation, had suspended much of its aid after Indias nuclear test. The deal, however, can be seen as a Japanese seal of approval to Indias status as a nuclear-armed state.
o Enhanced economic and energy cooperation will benefit both countries. Japan has capital and skill whereas India has huge untapped potential. What they
need is a clear road map, which, as the recent official exchanges show, is in the works.
A cautious approach
Author cautions India that in the present circumstances where USA and Japan are looking to contain Chinas progress by trying to swing India towards them, a cautious approach is needed. Mr. Abe had earlier
written about the strategic need to forge a democratic security diamond with the U.S., Australia and India
Conclusion
India should build strong ties with each power, instead of aligning with any particular bloc. The country will gain more from everybodys rise rather than joining some geopolitical alliance that is not in its primary
interest.
[4]. A postscript on NJAC

Context: Author throws light on the burning issue of NJAC, the appointment of judges.
What is collegium system?
Under this system, a body of senior apex court judges headed by the Chief Justice of India selects persons and recommends their names for appointment as judges.
The Supreme Court of Indias collegium system, which appoints judges to the nations constitutional courts, owes its origin to, three of its own judgments which are collectively known as the Three Judges Cases
Criticism of Collegium system,
o Lack of transparency: No information is given as to how judges are appointed and there is no accountability either. To remedy this, the Court will have to
open out information on the procedure and criteria for appointment. There should be no secrecy about the names under consideration
Suggestions for improvement
1. a method should be devised to show that information in support of candidature is false or flawed, or that disqualifications exist, and these objections should be duly considered
2. A high-level Screening Committee can go into the recommendations and objections
3. Suggestions for appointment need not come from senior judges only; other judges, the Bar, and the legal academic community, as well as retired judges should also be able to come up with
names for consideration.
4. Presence of civil society in the screening and recommendatory body
5. The involvement of the Law Minister should not be ruled out either; placing him as a permanent ex-officio invitee to the collegium will enable his views to be made known
6. Under the current Memorandum of Procedure, the government can reject a name sent by the collegium, but if the latter reiterates it the appointment must go through. If this is to be retained, it
ought to be accompanied by the requirement that both rejection and reiteration should be accompanied by reasons to be made public
Author expresses concerns that ending collegium might open doors of political influence over judiciary.
Conclusion
Author concludes by asking judiciary to do not wait longer and restore confidence as in-efficacy of internal methods like collegium might lead to external ones like NJAC
[5]. A long way from Rio

Context: Author explains the Paris Agreement that was signed recently at COP21.
Paris agreement consists of two parts
1. Decision: A decision of the Conference of Parties (CoP) to the UN Framework Convention on Climate Change (UNFCCC), which is non-binding
2. Agreement: A Paris Agreement, which when signed and ratified will constitute a legally binding agreement.
What is legally binding in the agreement?
It establishes a pledge and review system, whereby countries are committed to offering voluntary climate change actions that would then be subject to periodic (in this case, five yearly) reviews, but with no
penalties for not achieving these voluntary targets
Author says, that the idea of historical responsibility of developed nations to do more to mitigate the climate change is absent in the Paris agreement.
CBDR, enough?
Despite India being successful in including CBDR to the Paris agreement, but there is no legal distinction between developed and developing countries as per Annex I and non-Annex I countries, respectively, as
under the convention.
Differentiation principle diluted
1. The principle of Differentiation is also time bound wherein all the countries under Paris agreement are expected to peak their emissions as soon as possible
2. Provision for a common measuring benchmark: There is also a provision for creating a common benchmark tool to measure progress of developing and developed countries. This also dilutes
the differentiation principle.
Paris agreement: Outcome better than anticipated
1. The fact that the agreement was approved by all the 190 countries lends to it a legitimate character which is necessary for fighting climate change
2. Progression: The principle of progression is embedded in the agreement. It means that there cannot be any backsliding from targets already submitted. Targets after the review would be higher
than the current NDCs
Author says that as far as India is concerned, it achieved victory in ensuring that the principle of CBDR is not diluted and that the concept of equity is not eliminated like historical responsibility.
Now, India should shift its focus on creating systems, mechanism and procedures for implementing the Paris agreement. This will include the methodology for measuring net emissions during the five-year review
and the nature of the flexibility that is available to developing countries in this regard.
[6]. A new way to Act east
Context: Author asserts the growing Indo-Japan partnership while stressing on the Partnership for Quality Infrastructure (PQI) initiative of Japan
What is PQI?
Prime Minister Abe announced the Partnership for Quality Infrastructure at the 21st International Conference on The Future of Asia, on May 21, 2015.
In order to meet the massive infrastructure demand in Asia, Japan, in collaboration with the strengthened Asian Development Bank (ADB), will provide approximately USD 110 billion for quality infrastructure
investment in Asia over the next five years.
Four pillars of PQI
1. Expansion and Acceleration of Assistance through the Full Mobilization of Japans Economic Cooperation Tools
2. Collaboration between Japan and the Asian Development Bank (ADB)
3. Measures to double the supply of funding for projects with relatively high risk profiles by such means as the enhancement of the function of the Japan Bank for International Cooperation (JBIC)
4. Promoting Quality Infrastructure Investment as an international standard
In the joint statement issued at the end of 3 day visit of Japanese PM Shinzo Abe, he pointed towards the synergy between Indias Act East Policy and Japans PQI initiative.
Author says,
1. PM Shinzo Abe is trying to pitch PQI as an alternative to the Chinas ambitious OBOR initiative.
2. The vastness of Chinas OBOR initiative can be equalled by Japans longer experience in supporting infrastructural development in other countries
3. India has watched warily as Xi laid out bold plans to develop the $46 billion China-Pakistan economic corridor running across the Karakoram Mountains to the Arabian Sea. India has prepared a
proposal to build the so-called K2K corridor that connects Kolkata in the eastern subcontinent with Kunming in Chinas south-western province of Yunnan through Bangladesh and Myanmar. New Delhi has
also been nervous about Beijings rapid modernisation of transport infrastructure in Tibet and its plans to extend road and rail networks into Nepal and Bhutan
4. Abes agreement with Modi on building a high-speed railway system between Ahmedabad and Mumbai is a big boost to the Japanese strategy to promote infrastructure exports
5. Big difference between Chinas and Japans plans is that through OBOR and other initiatives China wants to connect its economy to Indias neighbours while Japan on the other hand side wants
to connect India to its neighbours and beyond thereby promoting integration
Conclusion
Author concludes by pointing out that if India is serious for a joint strategic co-operation with Japan then why it is putting taxpayers money in the Beijing-led financial institutions like BRICS-bank and Asian
Infrastructure Development Bank (AIIB). It would be better to pool its limited resources in the Japanese PQI.
[7]. Stronger together

Context: In the light of recent visit of Japanese PM to India, author reiterates the resurgence of the strong bilateral co-operation between the two countries.
The landmark breakthrough in the bilateral negotiations is,
1. Civil nuclear cooperation agreement that India and Japan have signed after a half-decade of negotiations. The nuclear deal will facilitate building of nuclear power plants with Japanese reactors
and also ease nuclear co-operation with the West considering Japans stakes in US firms GE and French firm Areva. This agreement has been signed despite Japans resolve of not engaging in nuclear
trade with non-NPT nations. The resolution of this issue indicates the rise of new level of partnership and co-operation
2. New Delhi and Tokyo have signed a deal on defence equipment transfer and technological cooperation, as well as a pact on security measures to protect military information. Japan will also,
henceforth, regularly participate in the India-US Malabar exercises.
3. In the joint statement both the nations mentioned South China Sea and called upon all the nations to avoid unilateral action
Conclusion
Japan and India are both readying themselves to counter the growing Chinese influence in Asia through increased strategic collabo

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National
[1]. WTO chief calls for a Paris-style deal

What has happened?
In the light of recent Paris deal, the director of WTO Robert Azevedo has said that nations meeting at the Nairobi ministerial should try and reach a similar kind of agreement to liberalise world trade to lift
millions out of poverty.
1st ministerial meeting of WTO in Africa
The Nairobi ministerial is the 1st meeting of the World Trade Organisation on the African soil. The global trade body is celebrating its 20 th anniversary in the backdrop of an economic slowdown being witnessed
throughout the world.
Can an agreement like Paris happen at Nairobi?
Well, at the outset it seems difficult that a Paris style deal would be possible simply because, the necessity and the will to reach at an agreement is not at the same level as in the case of Paris summit. Climate
change has made the world aware of its complacent behaviour and its imminent effects if it doesnt rectify its ways. This alarming realization led to an ambitious, though some would differ, deal.
In case of WTO, developed and developing nations are clearly on the opposite sides of the fence.
India, leading the developing countries bloc want developed countries to reduce its trade distorting subsidies while on the other hand side, developed world want the Doha round of talks to be concluded and on the
top of that introduce a host of new issues to the agenda.
Both sides, if dig in their heels, unlike Paris we may not see an agreement at all, let alone an ambitious one.
[2]. Finance panel: No negative impact on the social sector expenditure

What is Finance commission?
The Finance Commission of India came into existence in 1951. It was established under Article 280 of the Indian Constitution by the President of India. It was formed to define the financial relations between the
centre and the state. The Finance Commission Act of 1951 states the terms of qualification, appointment and disqualification, the term, eligibility and powers of the Finance Commission. As per the Constitution,
the commission is appointed every five years and consists of a chairman and four other members.
What has happened?
Chairperson of the 14th Finance commission Y.V Reddy while delivering a talk on the 14th Finance Commission and its implications for the State finances with special focus on social sector expenditure, hosted by
Centre for Economic and Social Studies, on 15th Dec 15 said despite the recent phenomenon of spending through the Centrally-sponsored schemes in social sector, the States share has remained significantly high.
Why he said so?
Apprehensions are being expressed wrt the recent recommendations of the 14 th Finance commission wherein devolution of more tax revenue to states (from 32% to 42%) has been talked about thereby fearing a
reduced expenditure on social sector schemes. So, the chairperson was allaying these fears.
Recommendations of 14th Finance commission
1). The 14th Finance Commission is of the view that tax devolution should be the primary route for transfer of resources to the States.
2). In understanding the States needs, it has ignored the Plan and non-Plan distinctions
3) According to the Commission, the increased devolution of the divisible pool of taxes is a compositional shift in transfers from grants to tax devolution
4). In recommending an horizontal distribution, it has used broad parameters population (1971), changes in population since then, income distance, forest cover and area, among others.
5). It has recommended distribution of grants to States for local bodies using 2011 population data with weight of 90 per cent and area with weight of 10 per cent
6). Grants to States are divided into two
7). One, grant to duly constituted gram panchayats
Two, grant to duly constituted municipal bodies

8). And, it has divided grants into two parts
9). A basic grant, and a performance one for gram panchayats and municipal bodies
10). The ration of basic to performance grant is 90:10 for panchayats; and 80:20 for municipalities
11). The total grant recommended is Rs. 2,87,436 crore for a five-year period. Out of which, the grant to panchayats is Rs.2,00,292 crore. And, the reminder goes to municipalities
12). The Commission has significantly departed from previous commission vis--vis recommendation of the principles governing grants-in-aid to the States by the Centre
13). It has chosen to take the entire revenue expenditure for this purpose. Hence, it has decided to take into account a states entire revenue expenditure needs without making a distinction between plan and non-
plan expenditure
14). The Commission is of the view that sharing pattern in respect to various Centrally-sponsored schemes need to change. It wants the States to share a greater fiscal responsibility for the implementation of such
schemes.
Conclusion
The proposed effort to restructure CSS (Centrally sponsored schemes) in line with the 14th Finance Commissions recommendations is a unique opportunity to address some of the imbalances that exist in the
system. With States bearing a larger share of these schemes, the Union will need to be more flexible and allow States to design and implement schemes according to their needs and priorities
[3]. India business card for SAARC trade

What is SAARC?
The South Asian Association for Regional Cooperation (SAARC) is an economic and geopolitical organisation of eight countries that are primarily located in South Asia or the Indian subcontinent. The SAARC
Secretariat is based in Kathmandu, Nepal. The combined economy of SAARC is the 3rd largest in the world in the terms of GDP (PPP) after the United States and China and 5th largest in the terms of nominal
GDP. SAARC nations comprise 3% of the worlds area and contain 21% (around 1.7 billion) of the worlds total population and around 9.12% of Global economy as of 2015.
What has happened?
India is all set to launch India Business Card for the business community in SAARC countries. In the light of renewed ties wrt Pakistan, the final hurdle has been cleared. The next SAARC summit is in Pakistan
in 2016 and PM wants to fulfil the announcements that he made during SAARCs Nepal summit. The India Business Card will have a special logo and will be only given to businessmen of high repute. It is being
done with an aim of ease of business and gels with the Make in India policy of the government
Renewal of ties b/w India & Pakistan
In the past two weeks, India and Pakistan have had two meetings at the level of National Security Adviser (NSA) and foreign ministers.
6th Dec 2015: NSA level talks were held in Bangkok where host of issues including peace and security, terrorism and Jammu and Kashmir. NSA-level talks were scheduled earlier in 2015 when the two Prime
Ministers had met for a bilateral summit in Russias Ufa on the sidelines of a convention but the meeting fell through at the last minute over a proposed meeting between Pakistans then Security Advisor Sartaj
Aziz and the Kashmiri separatists.
Eased restrictions on businessmen
Earlier in July, India relaxed business visa norms for Pakistan, which is valid for three years now, up from one year earlier, and businessmen would be able to visit up to 15 places. Intelligence agencies had
expressed apprehension over easing visa restrictions on businessmen from Pakistan, but the government prevailed over their concerns saying it was required to bring in normality in the region.
[4]. Farmers urge centre to implement Forest rights act (FRA)
What has happened?
Hundreds of landless farmers, agricultural workers and labourers from across 20 States assembled at Jantar Mantar on 15 th Dec 15 under a joint platform Bhumi Adhikar Andolan (Land Rights Movement) and
observed December 15 (Forest Rights Day) as Chetavni Divas day of challenge and warning. They were demanding the implementation of Forest Rights Act
Protesting against,
1. FRA has not been implemented in its true spirit
2. The NDA government has introduced two dangerous moves by declaring a cut-off date for claiming of rights and also to involve corporate in plantation activities in degraded forest area. Both these
steps were against the rules and provisions of the FRA and would endanger the rights of communities.
3. Attempts being made to dilute the Environment Law (Amendment) Bill, 2015. Social activists allege that, Environment impact assessment and public hearing form the only basis for communities to
participate in the development process and now this very right is being taken away from them
4. The comprehensive report of high level committee (HLC) on the status of Adivasis submitted in 2014 says that the implementation of these Acts have been weak despite the promising
provisions
What is FRA?
The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 is a result of the protracted struggle by the marginal and tribal communities of our country to assert their
rights over the forestland over which they were traditionally dependent. This Act is crucial to the rights of millions of tribals and other forest dwellers in different parts of our country as it provides for the
restitution of deprived forest rights across India, including both individual rights to cultivated land in forestland and community rights over common property resources. The notification of Rules for the
implementation of the Forest Rights Act, 2006 on 1st Jan 2008, has finally paved the way to undo the historic injustice done to the tribals and other forest dwellers.
The livelihood of perhaps 100 million poorest of the poor (The Indian Forest Rights Act 2006: Commoning Enclosures) stands to improve if implementation can succeed. The Act is significant as it provides scope
and historic opportunity of integrating conservation and livelihood rights of the people.
Significance of the act
The Act recognises and secures the,
1. Community rights or rights over common property resources of the communities in addition to their individual rights,
2. Rights in and over disputed land
3. Rights of settlement and conversion of all forest villages, old habituation, unsurveyed villages, and other villages in the forest range to revenue villages.
4. Right to protect, regenerate or conserve or manage any community forest resource which communities have been traditionally protecting and conserving for traditional use
5. Right to intellectual property and traditional knowledge related to biodiversity and cultural diversity
6. Rights to displaced communities
7. Rights over developmental activities
Why are these rights necessary?
What are called forests in Indian law often have nothing to do with actual forests. Under the Indian Forest Act, areas were often declared to be government forests without recording who lived in these areas,
what land they were using, what uses they made of the forest and so on.82% of Madhya forest blocks and 40% of Orissas reserved forests were never surveyed; similarly 60% of Indias national parks have till
today (sometimes after 25 years, as in Sariska) not completed their process of enquiry and settlement of rights. As the Tiger Task Force of the Government of India put it, in the name of conservation, what has
been carried out is a completely illegal and an unconstitutional land acquisition programme
Because of this situation, millions of people are subject to harassment, evictions, etc, on the pretext of being encroachers in their own homes. Torture, bonded labour, extortion of money and sexual assault are all
extremely common. In the latest national eviction drive from 2002 onwards, more than 3, 00, 000 families were driven into destitution and starvation. In Madhya Pradesh alone, more than 125 villages have been
burned to the ground.
The situation is so bad that the then Commissioner for Scheduled Castes and Scheduled Tribes, in his 29th Report, said that The criminalisation of the entire communities in the tribal areas is the darkest blot on
the liberal tradition of our country.
Must read: http://articles.economictimes.indiatimes.com/2014-08-13/news/52768180_1_forest-rights-act-other-traditional-forest-dwellers-the-fra
A counterview to FRA: http://www.counterview.net/2015/02/forest-rights-act-threatens-forests.html
[5]. Human development: A work in progress

Context: Author states, in the light of recently released Human development Report by UNDP, about the rising inequality in India and how it is hampering development.
What HDI involves?
HDI, as it is defined today, involves three parameters that directly increase human capabilities,
1. A long and healthy life
2. Knowledge
3. A decent standard of living
The new Human Development Report (HDR) explores in detail one fundamental factor which increases or decreases human capabilitywork.
The report differentiates between productive useful work like house-care or sending remittances, to work like bonded labour which has negative repercussions.
Difference between a work and job
The report takes special care to differentiate work from jobs. While work is not necessarily always rewarded, a job is work done for a predetermined payment. The report points out that it is this monetary
distinction between work and job that has led to growing inequality in the sphere of income.
Two groups whose potential is not fully utilized
1. Women: HDI is lower for women than men in all regions
2. Youth
India needs to address the three parameters of human development separatelyand simultaneously,
1. Malnutrition: India needs to address this problem as a long and healthy life is not possible without proper nutrition
2. Knowledge: in terms of knowledge, India needs to ensure access and quality through effective implementation of schemes such as Digital India and Skill India.
3. Improving wage equality: India has been lauded for its work guarantee schemes but they are in no way sufficient. India must reform its rigid labour laws, address problem of child labour and
forced labour and bring about wage equality
[6]. India must protect its Agricultural support
What has happened?
WTOs 10th ministerial is ongoing at Nairobi from Dec 15-18. Author says that the draft text released proposes no solution to Indias concerns regarding food security
Author says that it is no surprise that daft offers to no solution to Indias problems as developed countries were never serious in finding any permanent solution and nor did developing countries have pressed
enough for a solution
Author says,
1. Bali ministerial: At Bali ministerial a peace clause was agreed upon by the developed nations under which exemption from penal action for violation of WTO commitments was given. If a
developing country gives agricultural subsidies in excess of 10% of its agri-GDP, no member will challenge this until 2017, when WTO would look for a permanent solution to address their food security
concerns.
The peace clause means that until 2017 there would not be a permanent solution to the problems of developing countries including India. Moreover, Peace clause came with variety of conditions like,
(a). Submission of data on food procurement, stock-holding, distribution and subsidies (including their computation), etc.
(b). It also needed establishing that subsidies are not trade distorting
This means that even before 2017 a member can challenge developing country like India for not following the conditions associated with the clause
So, India from the start has insisted on finding a permanent solution before 2017 after which penal actions would be present.
2. At 2014 December WTO General Council meeting India secure the permanent extension of peace clause until a solution is found but even then the associated conditions were not dropped. Developed
countries do not want a permanent solution and want the continuation of the peace clause with conditions.
So, what strategy India should follow?
1. We need to engage with the US and the EU on rules of the game and a good solution will emerge from only there.
Under the Agreement on Agriculture (AoA), developing countries can give agricultural subsidies or aggregate measurement support (AMS) up to 10% of the value of agricultural production. AMS has two
components viz.,
1. product-specific, or the excess of price paid to farmers over international price, or ERP (external reference price) multiplied by quantum of produce
2. non-product specific, i.e., money spent on schemes to supply inputs viz., fertilizers, seed, irrigation, electricity at subsidized rates.
Mistake Indian analysts did,
1. Calculation of ERP as per 1986-88: For computing product-specific support, they allowed ERP to be frozen at the level of 1986-88. With this, comparing current MSP with ERP of 3 decades
before inevitably results in artificially-inflated subsidy. For instance, at present, wheat MSP, at $226 per tonne (Rs1,450/quintal), is $96 higher than the ERP (1986-88), $130 per tonne.
2. Inclusion of purchases from resource poor farmers under productspecific subsidy category: MSP paid to farmers is substantially above the ERP and if a permanent solution is not found
then India would be penalised for giving MSP in excess of ERP as according to WTO it distorts trade balance by encouraging farmers to produce more.
What should India do at Nairobi ministerial?
Scenario 1
India should confront developed countries with both anomalies and get AoA amended to
1. update ERP to current level
2. Exclude purchases from resource-poor farmers for computing product-specific subsidies
Scenario 2
1. If developed countries do not agree to these conditions then India should try and get the conditions associated with the peace clause removed until a permanent solution is found.
2. India should not allow developed countries to include the new issues like government procurement, competition policy, link between trade and climate, currency and global value chain, TRIPs, etc
to be included in the Doha Development Agenda (DDA) as these were never a part of it to start with.
[7].Universal health coverage: Hurdles and solutions

What is it about?
With reference to the SDG goal of providing Universal health care the article discusses the achievements of Thailand in the health sector.
What has happened?
SDG has set much higher and more ambitious health-related goals.
The main challenge amongst MDG off-track countries is the failure to provide and sustain financial access to quality services by communities, especially the poor.
Especially the poor are not able to access them due to price barriers even in the government health services.
Universal Health Coverage:-
Universal health coverage (UHC) requires a significant increase in government investment in strengthening primary healthcarethe close-to-client service which can result in equitable access.
It also needs political commitment and effective implementations.
Lessons from Thailand:-
It has achieved UHC by 2002.
Firstly the government invested heavily in health delivery systems.
Extensive geographical coverage of health services resulted in universal access to maternal and child health services, disease control and treatment of chronic non-communicable diseases.
Further people were covered by three health insurance schemes, ensuring them access to a comprehensive package of health services. The Universal Coverage Scheme (UCS)
Three design elements essential areextension of access to services, cost containment and strategic purchasing.
Financing reform also must go hand in hand with ensuring physical access to services
International
[1]. In China, India and Pak differ on terror
What has happened?
At the ongoing Shanghai Co-operation Organisation (SCO)heads of government meeting at Zhenghzhou, differences on the fundamentals of countering international terrorism and Chinas Belt and Road
connectivity initiative, came into the open between India & Pak.
India
Representing India, Gen VK singh, Indias External Affairs minister said that Indian policy of non-engagement with the radical groups is now being acknowledged even in China. He was talking amidst the
backdrop of supposed dialogue between a faction of supposedly de-radicalised Taliban and the Afghan government, within a framework of talks that includes China, Pakistan and the U.S. Diplomatic sources.
1. INSTC: He stressed on establishing new networks of physical and digital connectivity that extends from Russias northern regions to the shores of Indian Ocean adding that International North
South Transportation Corridor was an important step in that direction
2. India is not against OBOR. However, India is against what is also called the Gwadar to Kashgar economic corridor because it passes through the Pakistan-occupied Kashmir
3. SCO countries can take advantage of Indias growing economy while India can benefit in the realm of energy security from SCO.
Pakistan
Pakistani PM Nawaz Sharif supported the Chinese OBOR (One Belt One Road) initiative. He said that Pakistan is determined to make the China-Pakistan Economic Corridor Project- joint venture between Pak
and China under the OBOR- a resounding success.
Opinion & Editorial
[1]. A climate more congenial to India

Context: Author in this article debates the question as to whether Paris deal was good or bad for India
What did India give and what it gained from the Paris deal?
Securing our energy future
The major point for India in the climate negotiations has been the constant stress on the principle of Common but Differentiated Responsibilities. India has always maintained that developing countries should not
be placed on the same footing as the developed world in terms of emission reductions and the need to address them.
India has, millions of people still reeling under poverty and to take them out of this state would requires energy expenditure and any excess limits on it would only a significant pressure on the Indian economy to
transform without the raw material so readily available at home like coal.
Developed and developing countries distinction
Developed countries wanted the list of developing countries under the CBDR to be diluted or to be fluid meaning the CBDR should be applied to key selective areas. India agreed to this.
For example, in the core mitigation area, the Agreement states that developed countries should take the lead with economy-wide emission reduction targets, while developing countries should aspire to do so over
time, recognising that they will need to grow their emissions.
This means that the expectations from developing countries wrt emission reduction and mitigation are to be seen vis-s-vis the financial support they get from the developed countries.
The temperature rise is now to be limited to 1.5oC instead of 2oC. Well this might seem good in principle but for India this might mean that the periodic review can force it to revise its pledges to more ambitious
levels.
National Pledges
Paris pact is toothless as it does not bind countries to reduce emission limits, has no mechanisms to enforce actions and therefore will have little impact, in which case India has little to gain.
Author says, that international agreements only amplify the domestic political discourse which motivates the governments to take action regarding such issues. In this respect, the key element of the Paris
agreement is the national pledges and the periodic review which would encourage increasing the pledges over time. This mechanism will lead to more ambitious pledges and stimulate an environment wherein
governments shift to low-emission options.
So, is this going to work?
As per author the answer lies in the national policy and the political process in each individual country
What India needs to do?
1. We need to develop our ability to analyse other countries contributions so that the pressure on the developed nations can be sustained wrt pledges and its implementation.
2. We need to shape our national process to examine our energy and climate future. Synergy needs to be developed between developmental processes and climate. Questions like how much coal
we can use while limiting carbon emission as per national pledges also needs an answering
Conclusion
Author concludes by saying that India has much to gain considering the pact is not binding and gives the space for emissions to developing countries but he adds that India should also keep an eye on the
developed nations and their follow up on the Paris pact
[2]. Panchayats should not be elitist

What has happened?
In the light of recent SC judgement upholding the Haryana law wherein candidates have been mandated to have essential educational qualifications in order to fight the panchayat election, author criticises the law
and presents arguments as to why this should not have been done.
Rajbala vs State of Haryana (Dec 2015)
SC upheld the validity of the Haryana Panchayati Raj (Amendment) Act requiring that a matriculate alone can hold the post of Panchayat president or ward member.
Sec 175 of the Act provides for a number of disqualifications from contesting a Panchayat election,
1. A person will be disentitled to contest the election if he faces a criminal case for which 10-year imprisonment is prescribed and a charge has been framed.
2. If he has to pay arrears to a co-operative society or has not cleared electricity bills, then also he will be disqualified.
3. If a person does not have a functional toilet, he will be barred from contesting the election.
Strange logic of exclusion
Reasoning of the SC: It said that if those seeking election to Panchayats have some basic education then they would be able to discharge their duties in a better way. It added that the objective of the law is
connected to the Part IX of the constitution.
Part IX of the constitution is related to Panchayats. It was added to the Constitution by the 73rd Amendment, which came into force on 24 April 1993. Part IX contains article 243 and articles 243A to 243-O.
Arguments against the judgement
1. Court should have looked into the fact that out of 96 lakh voters, 42 lakhs would be disqualified from contesting. In case of Scheduled Castes, 68 per cent women and 41 per cent men will be
disqualified from contesting
2. Educational qualifications not mentioned in the constitution itself: Author points to Article 171 wherein it is obligatory to be a graduate to select a proportion of members of the Legislative Council,
but it is immaterial if the person elected is a graduate.
1. Narayanaswami vs. G. Panneerselvam case (1972)
The Supreme Court ruled in the S. Narayanaswami vs. G. Panneerselvam case in 1972: The concept of such representation does not carry with it, as a necessary consequence, the further notion that the
representative must also possess the very qualifications of those he represents it would be for the members of such a constituency themselves to decide whether a person who stands for election from their
constituency possesses the right type of knowledge, experience, and wisdom which satisfy certain standards. It may well be that the Constitution makers, acting upon such a presumption, had intentionally left the
educational qualifications of a candidate for election from the graduates constituency unspecified.
3. Tamilnadu has been ruled 8 CMs who were not matriculates. Many functionaries, both at the Centre and in States, have not completed school.
3. Logic of disqualification on the basis of non-payment of electricity bill arrears is also strange as per author. It should result in disconnection of power supply and not disqualification from contesting elections
3. Lack of toilet: Author ridicules the logic of having a toilet as a mandatory condition for contesting elections when poor people do not have their own shelter. This is a clear case fo excluding poor from the electoral
process. Moreover, It is a duty of the Municipalities under Article 243W to provide for public conveniences. In the case of Panchayats, no reference is made to public conveniences and Article 243G only
provides for panchayats to take care of health and sanitation.
Conclusion
The law made by Haryana is really anti-poor, anti-Dalit and pro-rich and if enforced will create oligarchies. It is unfortunate that the Supreme Court should uphold these provisions and make Panchayats non-
representative bodies.
[3]. Splendid decade, but miles to go

Context: Author congratulates India on its achievements as per HDI report released by UNDP and urges to build upon its current achievements to achieve even higher goals.
Author says, the last 10 years were a time of extraordinary human development in India.
How?
1. Fastest-ever decrease in the percentage of its population below the poverty line between 2009 and 2011. Indias Gross National Income more than doubled over the last 15 years, from $2,522
(PPP) to $5,497 between 2000 and 2014, putting it into middle income status
2. This economic growth translated into better Human development outcomes as well. Indias Human Development Index value went from 0.462 to 0.609 between 2000 and 2014, a far higher
increase than in the previous 15-year period. This was due to
(a). Improved economic growth
(b). Increase in life expectancy as a result of improved health care
3. Author cites the India Health Report: Nutrition 2015 released by the Public Health Foundation of India as per which, Child under-nutrition has fallen rapidly between 2006 and 2014, as stunting rates for children
under five declined from 48 per cent to 39 per cent, translating into 14 million fewer stunted children, and declines in wasting translated into seven million fewer wasted children
Negatives as per UNDP report
1. When inequality is factored in, India loses nearly 30 per cent of its HDI values. If Indias women were their own country, they would be 30 ranks lower on the HDI than the country as a whole is
now
2. Women workforce participation rates are low in India. The report blames it on the high proportion (up to 39 per cent of GDP by one estimate) of unpaid care work that falls on women alone pushes
them
What is wasting?
In medicine, wasting, also known as wasting syndrome, refers to the process by which a debilitating disease causes muscle and fat tissue to waste away. Wasting is sometimes referred to as acute
malnutrition because it is believed that episodes of wasting have a short duration, in contrast to stunting, which is regarded as chronic malnutrition. According to the latest UN estimates, an estimated 52 million
children under 5 years of age, or 8%, were wasted in 2011. The vast majority, about 70%, of the worlds wasted children live in Asia, most in South-Central Asia
Economic Digest
[1]. Stress tests for Indian banks

What is it about?
Uncertain about the NPAs of public sector banks and the losing investors confidence the article discusses the need for conducting stress test by RBI.
What has happened?
Lack of concrete information about the banks NPAs investors are worried and our banks have underperformed in the broader market.
Concerns:-
Global factors are stressing the sectors such as iron and steel and infrastructure
Slower-than anticipated macro recovery of the global economy.
Other new regulatory forbearance such as 5/25 refinancing and strategic debt restructuring (SDR)hasnt helped either
Lack of information has further sown seeds of doubt and uncertainty within the investor community.
Banks will need to raise capital to be compliant with Basel III requirements for which investors will need a realistic picture.
What should be done?
RBI can bring some certainty and rationality to the estimates.
One idea could be for the Reserve Bank of India (RBI) to conduct stress tests that are used by banking regulators around the world.
What is a stress test?
It is a systematic and public way to guide banks into shape and can be helpful in bringing stability to lending.
An analysis conducted under unfavorable economic scenarios which are designed to determine whether a bank has enough capital to withstand the impact of adverse developments.
These tests are meant to detect weak spots in the banking system at an early stage, so that preventive action can be taken by the banks and regulators.
It was done in US in the aftermath of 2009 crisis which in turn strengthened investor confidence.
European Central Bank also conducted capital assessments wherein each bank was analyzed across parameters. These parameters included its loans and securities portfolios, as well as any other off-balance sheet
commitments and contingent liabilities/exposures.
Why stress test?
These tests help ascertain potential losses and the capacity of each bank to absorb it along with the additional capital required, which is the capital adequacy ratio (CAR).
It gives a complete picture of financial health to the investors.
In India:-
RBI does a fair bit of stress testing across various categories (such as private, public and foreign banks) and potentially stressed segments (such as iron and steel and infrastructure) in its financial stability
report which is published biannually
But specific data pertaining to individual banks is not mentioned in the report.
This lack of stress test numbers at the individual bank level is creating needless speculation and uncertainty.
One may argue that the results may cause concern as some banks may get exposed and eventually have to be capitalized.
But having one number per bank will give a realistic, complete and transparent picture and will augur well for the system on the whole.
When seen in conjunction with other prominent steps being undertaken by the government likeIndradhanush (aiming to bring more accountability and efficiency), among others, will provide the much-needed
boost for the revival of banks
You need to know!
5/25 refinancing:-
Officially called the Flexible Structuring of Long Term Project Loans to Infrastructure and Core Sector Industries
It refers to the feature that the loan will be repaid over a maximum period of 25 years. However, the banks will have to refinance the loan every 5 year.
Refinance: When a business or person revises a payment schedule for repaying debt. Replacing an older loan with a new loan offering better terms.
The extended debt repayment period under 5/25 scheme will allow the borrowers in long-gestation projects to better manage their cashflows, which are usually slim and uncertain in the first few years of most
projects.
For more: http://www.firstpost.com/business/infrastructure-funding-here-are-a-few-likely-pitfalls-in-rbis-525-scheme-2352086.html
http://www.careratings.com/upload/NewsFiles/SplAnalysis/13%205by25%20Flexible%20Structuring%20Scheme%20-%20Website.pdf
Indradhanush:- It is a comprehensive framework for improving PSBs. This seven-step initiative which include appointments, board of bureau, capitalisation, de-stressing, empowerment, framework of
accountability and governance reforms,
For more: http://financialservices.gov.in/PressnoteIndardhanush.pdf
SDRs:-
The concept of Strategic Debt Restructuring (SDR) has been introduced by the Reserve Bank of India (the RBI) in the SDR Scheme (the Scheme) to help banks recover their loans by taking control of the
distressed listed companies.
It will give lenders the right to convert their outstanding loans into a majority equity stake if the borrower fails to meet conditions stipulated under the restructuring package. Allowing loan conversion will now be
a precondition for all debt restructuring deals.
For more:
http://economictimes.indiatimes.com/articleshow/47588542.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
[2]. Microfinance How to Exclude Less

What is it about?
The article discusses how micro financing evolved and the way forward.
Lending to groups and not individuals:-
Initially it was thought that loans can transform dormant labour into entrepreneurs.
The Malegam Committee study by the RBI showed that 75% of the loans were spent for consumption by poor.
When microfinance first began, it was catering to people who had no identity which resulted in defaults of 40% and higher.
The innovation was the idea of group lending. Where identity was not verifiable, local peer pressure kicked in to ensure repayment and to mitigate risk.
It was the first step in inclusion.
Cost cutting in micro finance:-
Microfinance interest rates are much higher than the rates large corporations pay. Thats because the cost of delivery is much higher in this high-touch.
It has led to a scramble for process efficiencies that control costs: ways for loan officers to be faster and more effective at capturing information about the borrower, and back-end processes to turn around loan
decisions more efficiently.
With costs of smart phones and tablets costs of delivery have fallen steadily, as have interest rates.
Challenges ahead:-
Theres the challenge of value of how to direct capital more productively.
This requires a due diligence into the occupations and business activities of potential borrowers, none of which is recorded in any official way.
The industry must find more clever ways to take on this `dark data.
Microfinance, it is not the end of the road but only the beginning.
[3]. There Is a Need to Tone Down Priority Sector Lending

Context:
The article analyses why NPAs are more in public sector banks than in private sector.
Analysis:-
Private Banks have played smarter by diversifying into services and personal segments, where NPA propensity is lower.
Priority sector lending is not the ideal avenue for banks as it pops up higher NPAs given the vulnerability of the segments mainly was due to their vulnerability to adversities.
The small and new private banks, have to examine and explore the issues relating to priority sector lending with dexterity to ensure that their books remain clean from the start.
Within the non-priority sector, the NPAs in industry reflect to a large extent the risks involved in lending to the infra sector where the private banks have limited their exposures
How to tackle the issue?
A large part of this funding requirement has to shift to the corporate debt market
The PSBs would also need to probably pursue the strategies of the private banks in keeping NPAs lower and focus on services and personal loans segment.
The government on its part would also have to review the sanctity of the 40% level. While the weaker sections have to be supported, banks may not be the ideal medium as it weakens the genetic design of the
system
[4]. Checks & Balances Insolvency Made Easy

Context:-
The article analyses the proposed bankruptcy law and how it empower the government to tackle the rising NPAs.
Bankruptcy law:-
This law is proposed on the basis of TK Vishwanathan committee recommendations.
It will end decades of gaming in the banking system by unscrupulous promoters and the endless obstacles imposed by the courts in the name of providing discretionary relief. Also, banks will have answer if they
dont go after defaulters.
This (bankruptcy) law will provide certainty to investors and lenders
It provides a timeline of 180 days -extendable by 90 days -to deal with applications for resolving cases of insolvency.
During this period, the management of the distressed firm or debtor could be placed in the hands of a resolution professional equipped to deal with such cases, who would be supervised by a proposed new
regulator.
It also segregates the corporate and individual as well as partnership bankruptcies.
It has also proposed a debt recovery tribunal for the individuals and the National Company Law Tribunal to deal with the corporate
What we need?
We need a system that could ensure that every case is dealt the way Satyam Computer Systems was treated: a sale of viable business to Mahindra even after a financial fraud.
Other issues:-
The World Banks Doing Businessranking, which uses insolvency resolution as a key parameter, has placed India at 137 out of 189 countries.
The political impasse in our legislature might delay the enactment of the act.
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Newspaper Must Read Articles of the Day 16 February 2016
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National
[1]. Money lending bill to be tabled in the parliament

What has happened?
AP government will table a money lending bill in the assembly. AP government also decided to issue a judicial probe into the call money racket
What is call money racket?
Call money is an instant loan available over a call through flexible process where the lender comes home with money, promissory note (a signed document containing a written promise to pay a stated sum to a
specified person or the bearer at a specified date or on demand) and other documents which can fix borrowers.
Interest rate: The interest rate usually ranges from 120 per cent to 200 per cent.
Asked to pay back anytime Another key ingredient in the process is that the lender can demand return of the money over a call anytime and anywhere.
In case of non-repayment: In case the borrower is unable to repay, vehicles, houses and other movable and immovable properties are demanded as a guarantee.
Racket prevalent in Vijayawada: Sources say the business of high interest rate is close to over Rs. 600 crore in Vijayawada . Hundreds of women were threatened, coerced and dragged into flesh trade if they
were unable to repay on time.
The police busted the racket when a Vijayawada-based family lodged a complaint last week. In one of the cases, the victim paid about Rs. 6 lakh for Rs. 1.5 lakh loan she took. Police sources reveal these lending
gangs have close links with political leaders and have a network spread across A.P. and Telangana
[2]. Maneka renews plea to amend Juvenile Justice Act

What has happened?
In the light of the intelligence reports of a Kashmiri militant radicalising the juvenile accused in the Delhi rape case, Union minister for Women and Child Development Maneka Gandhi said that law should treat
as adults those aged 16-18 accused of heinous crimes.
Juvenile Justice Act

The Juvenile Justice (Care and Protection of Children) Act, 2000 is the primary legal framework for juvenile justice in India. The act provides for a special approach towards the prevention and treatment of
juvenile delinquency and provides a framework for the protection, treatment and rehabilitation of children in the purview of the juvenile justice system. The act has been amended in 2006 and 2010.
In order to upgrade the Juvenile Justice Administration System, the Government of India launched theIntegrated Child Protection Scheme (ICPS) in 2009-10 whereby financial allocations have been increased
and various existing schemes have been merged under one scheme.
Why, was this law brought about?
This law, brought in compliance of the 1989 UN Convention on the Rights of the Child (UNCRC), repealed the earlier Juvenile Justice Act of 1986 after India signed and ratified the UNCRC in 1992.
What is UN convention on child rights?
The United Nations Convention on the Rights of the Child (commonly abbreviated as the CRC, CROC, or UNCRC) is a human rights treaty which sets out the civil, political, economic, social, health and cultural
rights of children. The Convention defines a child as any human being under the age of eighteen, unless the age of majority is attained earlier under a states own domestic legislation
Why, a demand for review of the age of juvenile?
In the light of the Delhi Gang rape case of 2011, where one of the culprits was a juvenile, public perception changed dramatically. Seeing the brutality perpetrated by the juvenile in this case, there have been calls
since then to reduce the age of juvenile from 18 to 16 years so that if a juvenile commits such a heinous crime he can be tried in a normal court and punished accordingly instead of a 3 year period correctional
home stay.
Must read: http://www.dailypioneer.com/state-editions/bhubaneswar/debate-over-reducing-age-of-juvenile-criminality.html
[3]. Pichai pitches project loon for connectivity

What has happened?
In the wake of network problems faced by Chennai during floods, Google CEO Sundar Pichai has asserted that Project Loon can help in such scenarios.
What is project loon and how can it help?
Under Project loon, uses helium-filled balloons to provide data connectivity in remote areas. When a natural disaster hits, people often get no network coverage, as it happened in Chennai as well. Project Loon is
focussed on providing connectivity in rural areas, and we can use software to position these balloons to areas where theres no coverage or network capacity is less.
Connectivity range: Each balloon can provide connectivity to a ground area of about 40 km
[4]. ISRO launches 6 Singapore satellites

What has happened?
ISRO has launched 6 Singapore satellites and it also tested 4th stage of its PSLV C-29 rocket
The benefit of 4th stage restart
ISRO says that restarting the 4th stage will help them place multiple satellites in different orbits through a single rocket
50 years of Singapores Independence
The launch of 6 Singaporean satellites coincides with the 50 years of Singapores independence and 50 years of Indo-Singapore diplomatic ties
What has the launch earned India?
India has earned 26 Million Euros from the successful launch.
Satellites launched by ISRO
ISRO has launched 17 foreign and four Indian satellites this year
What are miniaturized satellites?
A miniaturized satellite is an earth-orbiting device having lower mass and smaller physical dimensions than a conventional satellite. Miniaturized satellites have become increasingly common in recent years.
Miniaturized satellites can be classified according to mass in kilograms (kg) or weight in pounds (lb).
Miniaturized satellites have several advantages over conventional satellites, such as:
1. Lower cost of manufacture
2. Ease of mass production
3. Lower cost of launch
4. Ability to be launched in groups or piggyback along with larger satellites
5. Minimal financial loss in case of failure
Limitations
1. Generally shorter working life
2. Reduced hardware-carrying capacity
3. Lower transmitter output power capability
4. More rapid orbital decay
Microsatellite: A microsatellite (or microsat) weighs between 10 kg and 500 kg, a weight range of 22 pounds (lb) to 1100 lb.
Nano-satellite: A nano-satellite (or nanosat) masses between 1 kg and 10 kg (2.2 lb and 22 lb).
Pico-satellite: A pico-satellite (or picosat) masses less than 1 kg (2.2 lb).
[5]. $1.5Bn WB loan for Swachh Bharat

What has happened?
World Bank has approved a $1.5-billion loan for a support operation project of Swachh Bharat.
Why is WB doing so?
To help India ensure that all its citizens in rural areas have access to improved sanitation to end open defecation by 2019. This will support the Swachh Bharat- Gramin, the rural component of Swachh Bharat over
5 years.
Sanitation Stats
Total people worldwide who lack access to proper sanitation: 2.4 Billion
People in India who do not have access to proper sanitation: 750 Million
Out of those 750 million: 80% are in rural areas
1. One in every 10 deaths in India is linked to poor sanitation
2. This WB assistance project, aimed at strengthening the implementation of Swachh Bharat, will result in significant health benefits for the poor and vulnerable, especially those in rural areas
3. The States and their implementing agencies will be given incentives for meeting performance standards: reducing open defecation, sustaining their open defecation-free status and improving solid
and liquid waste management in rural areas.
4. The World Bank will also provide a $25-million technical assistance for building the capacity of select State governments.
What is SBM?
To accelerate the efforts to achieve universal sanitation coverage and to put focus on sanitation, the Prime Minister of India launched the Swachh Bharat Mission on 2nd October, 2014.
The Mission Coordinator is the Secretary, Ministry of Drinking Water and Sanitation (MDWS) with two Sub-Missions, the Swachh Bharat Mission (Gramin) and the Swachh Bharat Mission (Urban),which
aims to achieve Swachh Bharat by 2019, as a fitting tribute to the 150th Birth Anniversary of Mahatma Gandhi.
Rural Areas: In rural areas it shall mean improving the levels of cleanliness through Solid and Liquid Waste Management activities and making Gram Panchayats Open Defecation Free (ODF), clean and
sanitised.
Objectives of SBM-Gramin
1. Bring about an improvement in the general quality of life in the rural areas, by promoting cleanliness, hygiene and eliminating open defecation.
2. Accelerate sanitation coverage in rural areas to achieve the vision of Swachh Bharat by 2nd October 2019.
3. Motivate Communities and Panchayati Raj Institutions to adopt sustainable sanitation practices and facilities through awareness creation and health education.
4. Encourage cost effective and appropriate technologies for ecologically safe and sustainable sanitation.
5. Develop wherever required, Community managed sanitation systems focusing on scientific Solid & Liquid Waste Management systems for overall cleanliness in the rural areas
Business & Economy
[1]. Indias investment climate better: Cisco

What has happened?
The investment environment in the country has improved significantly in the past 18 months, enabling businesses to focus more on performance rather than worrying about factors such as an unpredictable tax
regime and interest rates.
Businesses are now focused more on customer outcomes, partnerships and expanding operations.
The government is very focussed on making sure that over time, the right reforms are in place.
It is about tech and getting the process faster and efficient.
You need to know!
Co-innovation:-
Co-Innovation in government is about the public and private sector joining hands to create innovations that can help the government do its job better.
In software industries it is an enhanced partner and customer ecosystem through an integrated network of world-wide expertise, and best-in-class technologies and platforms.
[2]. History will judge WTO poorly if inequities persist

Context:-
The tenth WTO ministerial conference is being conducted in Nairobi, Kenya.
It was expected that some substantial consensus about the Doha development agenda will be arrived at.
Doha development agenda, negotiated from 2001, strived to provide a level playing field for both developed and developing countries in world trade.
Citing the slow progress of the ongoing Doha Round negotiations, developed countries want the Round to be either brought to an end during this ministerial conference, or to include new issues of their interest.
Concerns for India:-
History will judge ministers from the World Trade Organization poorly if the ongoing Doha Round talks perpetuate inequities Commerce Minister, Nirmala Sitharaman, has said.
Hastiness:-
The manner and haste with which important negotiating meetings are being convened does not inspire confidence among the developing countries.
Agenda Overload:-
Nations must not overload the current agenda with new issues as there are still many outstanding matters such as protection of poor farmers interests and food security rights.
The new issues recommended by first world includes global value chains, e-commerce, labour, environment, competition policies, investment pacts and state-owned enterprises, on all of which the rich nations
have much superior standards / rules than the developing and poor countries.
Developing and poor countries feel these standards rules might become non-tariff barriers, hurting their exports.
Ignoring crucial issues:-
India was concerned over the fact that the reduction in the massive subsidization of the farm sector in developed countries which was the clear cut mandate of the Doha Round talks is now not even a subject
matter of discussion.
India seeks SSM:-
G-33 has strongly argued the case for an effective Special Safeguard Mechanism (SSM) for developing countries and for changing the rules relating to public stockholding for food security purposes
India wants rich countries to first drastically reduce their trade distorting farm subsidies and the developing countries are given an SSM, before the developing countries can be asked to make progress on their
farm export subsidies.
What is G-33?
It is a coalition of 48 nations including India and China, which has been taking up the issue of developing countries getting considerable flexibility in limiting market opening of agriculture sector.
What is SSM?
It is a trade remedy mechanism that will allow developing countries to hike duties temporarily to counter the import surge and price falls in farm products.
Services sector:-
India is pressing for a special initiative on services sector .To achieve this, it is imperative to put in place a simple and transparent regulatory framework that encourages growth in the Services sectors.
[3]. Digital India pays off for PDS

Context:-
The article discusses how the difference between the allocation of food grains to states by FCI and the lifting of the same by states has reduced.
It is due to the end to end digitization in the Pubic delivery system that has helped in the above achievement.
How digitization has helped?
All states except Himachal Pradesh and West Bengal have put the beneficiaries list online to ensure transparency and eliminate duplicate cards.
The end-to-end computerization of TPDS operations was a prerequisite for rolling out the National Food Security Act (NFSA).
The states are now able to anticipate grains requirements for each month based on online data.
For more: Pg 13 http://dfpd.nic.in/writereaddata/images/e-book.pdf:/
[4]. Costly Ignorance

Context:-
The article highlights financial illiteracy in the country which is a cause for concern in Indias endeavour towards financial inclusion.
What does the study say?
A study by S&P Ratings Services found 76% of Indian adults dont understand concepts like compounding of interest, inflation and risk diversification.
Indias financial literacy is lower than the global average, and lower than many sub-Saharan nations.
It also shows that poor financial skills in the country is quite acute across the income spectrum (both rich and poor)
Concern:-
If financial literacy remains poor it will be difficult to penetrate deeper in Financial inclusion, than just account opening.
Initiatives:-
1. Reserve Bank of India is spearheading a financial literacy drivepart of this involves funding and setting up Financial Inclusion and Literacy Centres across the country
2. Using mobile telephony in the country to make financial literacy more commonplace, through easy-to-understand mobile learning.
You need to know!
Risk Diversification:-
It is the manner in which an investor invests in a variety of financial instruments like stocks, bonds etc and also in different sectors.
For example, an investor would not want to combine large investment positions in airlines,
trucking, and automobile manufacturing as each industry is significantly affected by oil prices.
It is based on the fact that not all asset classes or industries or individual companies move up and down in value at the same time or at the same rate thus mitigating risks.
Financial literacy centres:-
Guidelines on the Financial Literacy Centres (FLC), advises that FLCs and all the rural branches of scheduled commercial banks should scale up financial literacy efforts through conduct of outdoor Financial
Literacy Camps at least once a month, to facilitate financial inclusion through provision of two essentials i.e. Financial Literacy and easy Financial Access.
For more:-
https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=7844&Mode=0
https://rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=10074
[5]. Making municipal bonds work

Context:-
The municipal bonds market in India has not performed well since their introduction in 1997.
Given the widening gap between huge capital requirement by cities and their annual revenue revival of the municipal bonds can be a game changer.
Such bonds have been widely used in South Africa and Vietnam and have provided successful results.
What are Municipal bonds?
Say your city corporation wants to set up a new Metro rail network. It can issue municipal bonds to fund the project. Institutional investors as well as the public can buy these bonds. Revenues from the Metro will
then be used to repay the interest and principal on these bonds.
For more:-
http://www.thehindubusinessline.com/opinion/all-you-wanted-to-know-about-municipal-bonds/article7049743.ece
http://www.careratings.com/upload/NewsFiles/Studies/Municipal%20Bond%20Market%20in%20India-%20The%20Way%20Ahead.pdf
Why we need municipal bonds?
It will deepen the long-term infrastructure financing market in India as well as redirect retail investments (by city residents) away from real estate and gold.
By creating opportunities for citizens (as retail investors) to invest in tangible public causes in their cities, it can build strong bonds of trust between municipalities and citizens.
Right start
Smart Cities Mission envisages creation of special purpose vehicles in cities that would raise monies from the capital markets. SEBI has issued guidelines earlier this year for issuance of municipal bonds.
Need for policy reforms
1. Financial Self sufficiency: A long-term roadmap to financial self-sufficiency of municipalities needs to be drawn up covering powers over revenues and borrowings, efficiency of revenue
administration (both assessments and collections) and systematic measurement, reporting and review of revenue performance.
Though local self-government is a state subject, the Centre has a crucial role to play in addressing the infrastructure deficit in our cities
2. Professional expertise: The revenue and finance departments of municipalities need to be urgently professional and made market-oriented.
2. Making It attractive: Deliberately creating and positioning of the municipal bond brand to make it popular among citizens, and a slew of enabling measures to make them attractive.
2. The missing links: The public good that municipal bonds can accomplish, and the personal connect that city residents have with individual projects they should be highlighted.
2. Making all municipal bond issuances tax-free,
2. Making investments in municipal bonds by banks part of their priority sector lending
2. Actively encouraging pension funds and insurance companies to participate in municipal bond issuances need to be put into place by respective regulators.
Need of the hour
In the public policy discourse in India, how will it get done (implementation) and who will do it (ownership) are often more important than what needs to be done.
Who?
The Union finance ministry alone is capable of making municipal bonds work, because this requires serious domain expertise and leverage with states and regulatory institutions.
How?
Municipalities need to produce audited balance sheets each financial year and get themselves credit-rated so that they are able to access the municipal bond market in a credible and sustained manner.
Opinion & Editorial
[1]. The strange love for Nuclear energy

Context: In the light of recent joint statement of Japanese PM Shinzo Abe and PM Modi wherein both the sides welcomed the agreement for Cooperation in the Peaceful Uses of Nuclear Energy and expressed
the hope that this Agreement will be signed after the technical details are finalised.
Author says that India is venturing into an uncharted territory with the construction of untested and expensive reactors which will only benefit MNCs, adversely affecting Make in India.
Commercial interests of Japanese companies
As per author, the leading companies whose reactors government is planning to import are,
1. GE Economic Simplified Boiling Water Reactor (ESBWR) for Kovvada, AP. The ESBWR was developed by GE in collaboration with Japans Hitachi
2. Arevas European Pressurised Reactors (EPRs) for Jaitapur (Maharashtra). Japan Steel Works supplies critical components to EPR.
3. Westinghouse AP1000 reactors for Mithi Virdi (Gujarat). Japanese company Toshiba holds a controlling stake in Westinghouse
A global downturn in the nuclear industry after the Fukushima disaster (GE ESBWR was involved) in 2011 has left these companies with serious commercial difficulties. Nuclear deal is meant to clear the way for
the Japanese companies to sell their wares in India.
No buyers inside Japan for Nuclear power
The Fukushima disaster of 2011 reminds Japanese of the dangers of the Nuclear power so there is no scope of sales of nuclear reactors in Japan. A commission established by the Japanese Parliament emphasised
the role of poor safety practices in the Japanese nuclear industry and went so far as to state that this was a disaster Made in Japan. Despite a strong push by the Abe government, nuclear power finds little
support in the country. So, the corporations have turned their interest towards India.
Why India should resist the offer?
1. Prohibitive costs: The cost of electricity generated by domestic Nuclear reactors is already high and to implement designs such as ESBWR, AP100 and EPR which are not operational anywhere
in the world the cost figures must rely on projections which only rise as the time passes. The huge cost is in part due to astronomical capital cost of the reactors.
For example: it was reported that the total costs of the two AP1000s being built in the U.S. state of Georgia might rise to $21 billion, significantly more than the initial projection of $14 billion. Likewise, the latest
estimate, from September 2015, of the cost of the EPR being built at Flamanville (France) is 10.5 billion ($11.6 billion), up from 3.2 billion.
2. Tariff: Author calculates that the tariff as per Indian scale for a nuclear reactor that costs $11billion in Europe would result in a cost of Rs.19 per unit for the first year. When we compare it to the recent winning
bids of coal and solar power which have been in the range of 4.50rs to 5.50rs, one can clearly see the huge difference.
Indian govt says,
We will build key components in India thereby promoting Make-in India.

Author says that the in press briefing last year, Joint Secretary (East Asia) explained that Indias motivation in signing a nuclear deal with Japan is the inherent advantage involving Japanese industry wrt large-
scale forgings.
So, author asserts that if key components are being built in Japan they cant be built here in India simultaneously.
3. Safety issues: The reactors under consideration are untested, and provide no empirical track record of safe operation. Although the industry produces some calculations, using a technique called probabilistic
risk assessment to claim that these reactors are safe, these techniques are unreliable both on theoretical and empirical grounds. Companies themselves are aware of the risks associated which can be
gauged from their constant efforts to alet Indias Liability Law.
Lessons from Japan
GEs CEO, Jeffrey Immelt, explicitly stated earlier this year that he would not invest in India without legal indemnity.
Author says that India should not give into such threats and learn lessons from Fukushima accident. More than 50 years ago, Japan succumbed to pressure from nuclear suppliers and instituted a law to indemnify
them. Consequently, when the GE reactors at Fukushima suffered an accident, in part due to a design defect that had been pointed out decades earlier, GE was protected from any claims by victims. The cost of the
clean-up, estimated at about $200 billion, has been borne almost entirely by Japanese taxpayers. Of course, multinational suppliers would like to institute the same outrageous arrangement in India, but there is no
reason that the government should oblige them
Opposition to Nuclear deal in Japan and India
Recently, 13 villages near Jaitapur passed a joint resolution against that nuclear plant. Large protests have also taken place at Kovvada and Mithi Virdi. Before Mr. Abes visit, the mayors of Hiroshima and
Nagasaki took the unusual step of jointly writing to their Prime Minister asking him to reconsider the deal with India. It is revealing that the leaders of Asias largest democracies have entirely ignored these
voices on the ground, and instead moved to bail out the multinational nuclear industry.
[2]. Warning for Beijing

Context: In the wake of recent visit of Japanese PM Shinzo Abe and signing of key pacts, author singles out the agreement on bullet train link between Ahmedabad and Mumbai as the most important one.
Author says,
1. A blow to Chinas high speed rail diplomacy: China and Japan are both engaged in a fierce competition to export its high-speed rail technology. China recently bagged such contract in
Indonesia. Indonesia opted for China as it was offering a high concessional loan with no guarantee from Indonesian government. Japan learned from it and has offered India a $12 Billion loan with 0.1%
interest rate re-payable over 50 years.
2. Delhi-Mumbai: China won the contract for the feasibility study of high-speed train link between Delhi-Mumbai. So, China can still get to export its high-speed rail system to India
3. Maritime Silk Road: China has eagerly promoted its Maritime Silk road initiative and has invited India to join it. India has still not cleared its stand. Although a map released by China shows
Kolkata as a part of the Maritime Silk Road. If India refuses, the routes would have to be redrawn bypassing Indian ports.
4. Indo-Japan co-operation: Together with finance and technology from Japan, India can challenge the growing challenge of China in South Asia and the Indian Ocean
5. Building up the presence: The mentioning of South China Sea dispute in the joint statement with Japan and with US earlier this year states the fact that India is again trying to build up its
presence in the South Asian region.
Conclusion
Author concludes by saying that India can twist the insecurity of China over the increasing co-operation between India and Japan to make it shell out some attractive packages like the one Tokyo did.


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National
[1]. Nairobi deadlocked over draft deal on agriculture
What has happened?
With just one day left for the end of Nairobi WTO meet, there is still no deal in sight to liberalise global trade.
The developed nations propose a Declaration on agriculture which had ignored the demands of the developing countries.
In addition it mentioned a short deadline for arriving at a permanent solution for the issue of public stockholding for food security purposes.
This is against the demand of Special safeguard mechanisms by developing nations to protect the interests of farmers.
[2]. Centre contemplating launch of insurance scheme for farmers
What has happened?
Centre is planning to launch a new insurance scheme for farmers as the agri sector is facing a lot of uncertainties.
Agriculture extension system:-
India is having a pluralistic extension system which is dominated by the public extension system which has two approaches: field extension pursued by the development departments and frontline extension
pursued by the ICAR and agricultural universities through Krishi Vigyan Kendras.
What is Agricultural extension?
It (also known as agricultural advisory services) plays a crucial role in promoting agricultural productivity, increasing food security, improving rural livelihoods, and promoting agriculture as an engine of pro-poor
economic growth. Extension as a rural support service is needed to meet the new challenges agriculture is confronted with.
What is field extension?
Field demonstration is a long term educational activity conducted in a systematic manner in farmers fields to show worth of a new practice/ technology.
Seeing is believing is the basic philosophy of field demonstrations. Only proven technologies are therefore selected for field demonstrations.
What is Front line extension?
The field demonstrations conducted under the close supervision of scientists of the National Agriculture Research System are called front-line demonstrations because the technologies are demonstrated for the
first time by the scientists themselves before being fed into the main extension system of the State Department of Agriculture.
For more: http://www.icarzcu3.gov.in/kvk/technical/9.pdf
Other schemes:-
Pradhan Mantri Krishi SinchaiYojana, the Soil Health Card Scheme, the Paramparagat Krishi VikasYojana and the proposed National Agricultural Market Scheme will revolutionise agriculture in the years to
come.
Wastage of food:-
At present, one third of global production is lost or wasted annually which is enough to feed two billion people for a year.
Most of which takes place in post-production, harvesting, transportation and storage. This is a huge loss on account of economy, environmental and societal significance.
Around 800 million people in the world suffer from hunger and under-nutrition remains widespread with some two billion people lacking essential nutrients like iron, zinc and vitamin A,
Climate impact:-
U.N.s Food and Agriculture Organisation estimate, world food production must rise 60 per cent to keep pace with the demographic change. Whereas the International Panel on Climate Change predicts that crop
yields may decline by 10-20 per cent by 2050.
Land fragmentation:-
As the holdings are getting smaller, the farmers need models which could ensure food security as well as regular flow of income from their land.
[3]. Three charts that show why reservations are desirable
Context:-
Debate on need for reservation was kick started by a two-judge Supreme Court bench comment that national interest requires doing away with all forms of reservations in higher education.
The judges also expressed regret that some privileges remained unchanged even after 68 years of independence.
It is felt that social inequities have been abridged but data shows otherwise.
Study 1:- It shows that inequalities still exist in higher education of which scheduled caste are the most deprived followed by scheduled tribes.
Study 2:- It has shown that in Allahabad most of the top government posts are occupied by upper castes who also maintain dominance in civil society
Study 3:- It shows that in spite of reservation which is said to compromise on merit, in Indian railways this has not led to a decrease in productivity. On the contrary labour diversification is said to increase
efficiency.
Conclusion:-
Finally, while the data and studies here show the time may not have come yet to do away with reservations, even its supporters have emphasized that it cannot be the sole means of dealing with existing
inequalities, even in the field of education.
It is noteworthy that economic and social entitlements crucially determine the access to primary education, the state of which is far from satisfactory in India.
[4]. Tackling the demographic challenge
Context:-
Initially huge population was considered as a negative aspect, later after seeing the example of china which transformed its population into a huge work force the notion changed.
Now demographic dividend is the key word which is seen a huge opportunity.
But the real question is whether the work force is equipped to face the scramble for jobs in the era of globalisation.
Problems faced by India:-
a) Lack of Infrastructure:-
The paucity of good quality schools, proper infrastructure and facilities, and well-trained teachers poses enormous challenges in primary and secondary level education.
b) Drop outs:-
The huge dropout ratemore than half of Indias literate youth drop out of the education system by the age of 15is a cause for concern.
c) Lack of Merit based system:-
Caste-based reservations is damaging both for the nation and for the morale of the youth.
d) Regionalism:-
The debate over the preference for Englishwhich is the global language of businessversus regional languages continues endlessly.
e) Lack of suitable job profile
Our analysis reveals that nearly 40% of employed people are not satisfied with their job profiles. The major reasons for dissatisfaction cited are unsecure jobs, low salaries, stressful environment, and mismatch
between job and qualification.
f) Lack of proper measures to harness women workforce:-
Another appalling concern is that a significant proportion of qualified women (for example, having earned PhDs but sitting idle at homeabout 30%) drop out of the workforce for reasons ranging from no
suitable jobs in the locality.
g) Threat:-
The gap between the haves and have-nots is increasing.
Unemployment, injustice and corruption only add to the feeling of victimhood, destroy the confidence of citizens, and leads to strife and violence at a societal level.
h) What needs to be done?
Engage with the youth and create an enabling environment for entrepreneurship.
Improved infrastructure, skill development, access to easy finance, reducing barriers to entrepreneurship and forums for mentorship of emerging entrepreneurs in partnership with corporate are some of the
measures.
The approach has to be two-foldcreating more jobs, and ensuring better quality of jobs with a focus on matching skill-sets and job opportunities
There is a need to look into these qualitative issues of job satisfaction, job profile and skill matching, and the creation of opportunities for entrepreneurship in order to be able to harness the vast potential of human
resources.
Science & Technology
[1]. Hubble spots first ever supernova explosion
The Hubble Space Telescope has captured the image of the first-ever predicted supernova explosion offering a unique opportunity for astronomers to test how mass is distributed within a galaxy cluster.
Hubble telescope:-
It was launched in 1990.

Hubble is a telescope that orbits Earth.
Its position above the atmosphere, which distorts and blocks the light that reaches our planet, gives it a view of the universe that typically far surpasses that of ground-based telescopes.
Hubble has shown scientists galaxies in all stages of evolution, including toddler galaxies that were around when the universe was still young, helping them understand how galaxies form.
It found protoplanetary disks, clumps of gas and dust around young stars that likely function as birthing grounds for new planets. It discovered that gamma-ray bursts strange, incredibly powerful explosions of
energy occur in far-distant galaxies when massive stars collapse.
For more: http://hubblesite.org/the_telescope/hubble_essentials/
Supernova:-
A supernova is the explosion of a star. It is the largest explosion that takes place in space.
Supernovas are often seen in other galaxies. But supernovas are difficult to see in our own Milky Way galaxy because dust blocks our view.
A supernova happens where there is a change in the core, or center, of a star.
Scientists also have determined that supernovas play a key role in distributing elements throughout the universe.
When the star explodes, it shoots elements and debris into space.
Many of the elements we find here on Earth are made in the core of stars. These elements travel on to form new stars, planets and everything else in the universe.
For More:- http://www.nasa.gov/audience/forstudents/5-8/features/nasa-knows/what-is-a-supernova.html
Opinion & Editorial
[1]. Still in the pipeline
Context: Launch of TAPI gas pipeline, at Mary, Turkmenistan on 14th Dec, 2015. Representing India was Mr. Hamid Ansari Vice President of India.
TAPI Gas Pipeline Project:
a) Source: Galkynysh, Turkmenistan second largest reservoir of natural gas.
b) Countries Involved: India, Afghanistan, Pakistan and Turkmenistan
c) Benefit: Will increase economic co-operation in above mentioned countries
d) Benefit to India: Seen as a counter to China one belt one road (OBOR) policy.
e) Benefit for Turkmenistan: Russia withdrawal as major importer of Gas from Turkmenistan made it look for other avenues for economic benefits which can be realised through TAPI gas pipeline.
Issues Around the Pipeline
Most of the issues surrounding the pipeline is more strategic and political. It is because of difference between below mentioned countries on issue of border, security and terrorism.
a) India Pakistan
b) Pakistan Afghanistan
[2]. Indias climate leadership at Paris
Context:-
The article discusses how India has performed in the Paris climate change and how well it has been able to achieve its demands.
Bonn Context:-
Despite the pressure, CBDR, a tenet central to the UNFCCC charter, was defended valiantly by India with support from other like-minded developing countries.
While the agreement has responsibilities for all nations, India was able to get the agreement to retain the principle of CBDR (Common but Differentiated Responsibility) in the key elements of technology transfer,
finance, adaptation and capacity building.
Kyoto context
The Paris agreement, if viewed from this perspective, is a loss for India.
In all probability, given past failures of developed countries to meet their obligations in finance and technology, they will not be forthcoming for all domestic mitigation actions.
India played a constructive role in arguing for ambitious commitments on finance (a floor under of $100 billion), capacity building (including for monitoring and reporting) and technology support (including
partnerships) from developed to developing countries, without being obstructionist as it was often wrongly accused of being.
International Solar Alliance (ISA)
ISA spearheaded by India, through the principle of demand aggregation, could potentially lead to significant further decline in solar technology costs, as multiple countries come together for scaling global solar
power production.
This is what India did domestically with the hugely successful LED procurement and distribution programme.
The progressive monitoring of actions by the developed world as well as the scaling up of commitments (which are optional for developing countries) provide a lever for India and other developing countries to
hold the developed world accountable, compelling them to do more than they have done so far.
From challenges to opportunities:-
India could do well to grab the opportunities for developing
a) Domestic solar panel manufacturing industries,
b) Energy storage solutions,
c) Grid integration solutions,
d) Electric vehicles,
e) Battery manufacturing facilities
f) Building a skilled renewable energy workforce.
[3]. The Force Reawakens / Liftoff / At any Rate / Fed lifts up rates
Context: The rise in interest rate by US Federal Reserve board
Effect: Most of the economies have shown a positive reaction with their market indices rallying ahead. But there is an underlying fear that capital will move out from the countries and invested in US due to better
returns.
India: Rupee gained against dollar as well stock market gained 1.21%.
More rate hikes by US fed is predicted. What can be consequence on India?
According to author, Indian economy is not integrated with global economy which has affected the desired growth as well as insulation from global economic shocks.
In near future the rate increase is going to pull capital out of India and skew dollar rupee equation.
India has enough foreign exchange to weather this issue but there is a need for policy actions like GST to be implemented as well as to address domestic supply constraints.
Another Reason why India should be cautious?
Exports have fallen 18.5% in dollar terms between April and November
Saving Grace:
Indias $65-70 billion of annual remittances, largely from the Gulf, will remain same.
Indias forex reserves are now up to around 11 months of imports also gives the central bank more room to defend the rupee if need be.
Indias FDI$16.6 billion during April-September this yearwould also be higher than the projected current account deficit, thereby lowering the vulnerability to volatile FII flows
[4]. No Proof Required: Jaago, aur jaagte raho
Current Scenario:
1. GDP Deflator is negative
2. Nominal GDP growth is lower than Real GDP
The Question
Why are policy rates not being cut down even when GDP Deflator is negative
The answer
Argument Wholesale prices are contaminating consumer prices and making the deflator artificially negative. So in conclusion, consumer inflation is quite high and likely to go up, and the RBI has no room to
cut policy rates further.
Argument against Policy Rates Cut:
Corporations are not investing because capacity utilisation is too low, and because they have too many bad loans, stressed assets.
What is?
1. Nominal GDP: GDP calculated at the market price is known as Nominal GDP
2. Real GDP: GDP calculated at base price (a fixed year price) is known as Real GDP.
3. GDP Deflator: It is the ratio of nominal gdp to real gdp. The deflator is the measure of inflation of domestically produced goods & services. It does not have the component of imported inflation.
4. Policy Rates: The interest rates used by the Central bank of a country to regulate liquidity in the country (regulate monetary policy) is known as policy rates. In India, repo rate is the policy rate.
Economic Digest
[1]. Fed raises interest rates, citing ongoing U.S. recovery
What has happened?
The US Federal Reserve has raised the interest rates by one quarter percentage, the first in seven years when America tumbled into a deep financial crisis with the collapse of the Wall Street.
Federal Reserve funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the Great Depression.
It is also hinted that the rate hike in future might be a gradual one.
Impact on India:-
The rate hike by the US Federal Reserve is in line with global expectations and its impact on India will be very minimal due to our strong macroeconomic conditions.
Impact on Emerging Markets:-
As many emerging markets have amassed greater debts while interest rates have been at historic lows. Now with rate hike, payments on those loans could become unmanageable.
Brazil, Chile and South Africa are among the most exposed, with their currencies likely to slump if the Fed tightens more rapidly than anticipated
Asian stock markets jumped on Thursday as investors chose to take an historic rise in US interest rates as a mark of confidence in the worlds largest economy
[2]. RBI links lending rates to loan tenor
What has happened?
The Reserve Bank of India (RBI) on Thursday issued fresh norms on how banks ought to calculate their lending rates a move which is aimed at lowering borrowing costs.
Marginal Cost of funds based Lending Rate (MCLR) will replace the present base rate system.
RBI said the guidelines were also expected to ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks.
MCLR:-
It mandates banks to calculate the lending rate taking into account the marginal cost of funds.
MCLR will be a tenor-linked benchmark, and banks should arrive at the MCLR of a particular maturity by adding the corresponding tenor premium to the sum of marginal cost of funds, cost of maintaining cash
reserve ratio and operating costs.
Base rate system:-
In this it was left to the individual banks as to what cost it used, which typically was the average cost of funds.
Benefits:-
Transmitting RBI rate cuts to customers:-
Banks have been slow in cutting their base rate as they have only reduced it by about 70 bps despite RBI reducing the policy rate (repo rate) by 125 bps since January 2015.
This move will improve the transmission of policy rates into the lending rates of banks.
Transparency:-
It improves transparency in the methodology followed by banks for determining interest rates on advances.
International standards:-
With marginal cost of funds including tenor premium we have moved closer to international manner of benchmark rates.
[3]. FATCA Prompting US NRIs to Sell Property in India
US Foreign Account Tax Compliance Act (FATCA): a law aimed at ensuring that tax is paid on income generated from wealth parked overseas. Under the agreement, they would share information about
citizens with assets in each others countries.
The Fear: The fear of consequences of being caught by US tax authorities for tax evasion through the route of FATCA is making US based non resident Indians sell off their properties in India. Apart from fear the
confusion in provision of FACTA is also partly responsible for this distress sale of properties by US based NRIs.
Schemes under FATCA:
Under the first scheme, there is no penalty for those who declare they were unaware of the liability, although tax for income generated over the past three years has to be paid.
In the other scheme, back taxes for eight years can be paid along with interest as well as a 27.5% penalty to compensate for non-compliance.
Indian Banks Fear: In addition, Indian banks are reluctant to open accounts that will help US-based NRIs to invest in India because it will increase their reporting obligations.
[4]. MNEs must start test runs fast
What you need to know in the article
OECD
Transfer Pricing : Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a
parent company, the cost of those goods paid by the parent to the subsidiary is the transfer price.
Base Erosion & Profit Shifting:
MNCs have HQ in first world and subsidiaries in third world.
Subsidiaries (third world) send profit$ to parent company (first world) in form of dividend, royalty and loan-interest payments.
Over the years, MNCs came up with 3 methods to shift these profits in such way, theyve to pay minimum taxes
1. In third world (usually the source of profit) AND
2. In first world (usually the destination of profit).
Three methods for profit shifting:
1. Transfer pricing
2. Special purpose entity.
3. Hybrid mismatch.
Why the news
New transfer pricing documentation by OECD known as Action plan 13.
New requirements, multinational enterprises (MNEs) will need to maintain three-layered transfer-pricing documentationa master file, a local file, and a country by country reporting (CbCR) template.
The CbCR template will contain key financial information about each group entity, including its revenues, profits, taxes paid, information on capital and assets, etc. Importantly, it will also provide crucial non-
financial information such as nature of activity performed by each group entity, number of employees, country of tax residence, etc.
Mandatory for firms having turnover more than 750 million euros.
Effect on India
a) India-based MNEs that have made outbound investments will need to file information about all subsidiaries across the world with the Indian tax authorities, as a part of the return of income or through separate
transfer-pricing filings
b) Subsidiaries of foreign MNEs will need to provide the requisite information to their global headquarters in a prompt manner, consistent with their group reporting systems

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9 PM Daily Brief - 14 January 2016January 14, 2016In "Brief"
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[1]. Genome of the Asian elephant sequenced for the first time in India
What has happened?
The genome of the Asian elephant has been sequenced perhaps for the first time in India.
They have also for the first time mapped the transcriptome that is, a section of genes active in a particular cell for the blood cells of the species.
Who has done?
A team of scientists from the city-based Centre for Ecological Science at the Indian Institute of Science (IISc) and the Indian Institute of Science Education and Research (IISER), Pune.
Outcome of the research:-
There are over 4,000 olfactory receptors in the Asian elephant, double that of a dog which is considered to have the sharpest sense of smell.
Over 95 per cent of the genes were found to be similar to the African elephant; but there are 1,500 bases that are unique to the Asian elephant including those responsible for the heightened sense of smell.
Like the African elephant, the Asian elephant, too, has a particular gene known to inhibit cancer
The genome sequence eventually builds a foundation (or, as the researchers say, guidebook) for further investigation into the genetic make-up of an elephant, its evolutionary path, as well as the possible
conservation measures.
What is a transcriptome?
The human genome is made up of DNA (deoxyribonucleic acid), a long, winding molecule that contains the instructions needed to build and maintain cells.
These instructions are spelled out in the form of base pairs of four different chemicals, organized into 20,000 to 25,000 genes.
For the instructions to be carried out, DNA must be read and transcribed in other words, copied into RNA (ribonucleic acid).
These gene readouts are called transcripts, and a transcriptome is a collection of all the gene readouts present in a cell.
What is a Genome?
A genome is an organisms complete set of genetic instructions. Each genome contains all of the information needed to build that organism and allow it to grow and develop.
In humans, a copy of the entire genomemore than 3 billion DNA base pairsis contained in all cells that have a nucleus.
[1]. Neighbourhood first on track: Sushma
Context:-
External affairs minister Sushma Swaraj has said that the governements Neighbourhood policy is on track.
She also added that Foreign policy begins on our borders.
Ties with Pakistan have predictably been the most challenging to take forward. However, the recent NSA-level dialogue on security and terrorism and the establishment of a Comprehensive Bilateral Dialogue
following my visit to Islamabad now offers a pathway.
Counter views:-
The below reasons are being mentioned by critics to counter the ministers statement.
Nepal is yet to emerge out of the setback of a blockade and bitterness persists in bilateral ties
Prime Minister Narendra Modi had to drop the Maldives from a planned Indian Ocean trip
Dialogue with Pakistan is yet to begin formally.
While Indias voice was often heard on international platforms, its focus should primarily be in the South Asian region due to its importance to Indias domestic affairs.
What is Neighbourhood First?
Indian government foreign policy will actively focus on improving ties with Indias immediate neighbours, a policy that has since been termed the neighbourhood first policy by the media. The policy emphasises
on importance of SAARC and was initiated with invitation to all SAARC nation heads for swearing in ceremony of NDA government in May 2014.
Economic Digest
[1]. Govt. lowers growth outlook, stresses supply-side reforms/Cut Loose on Fiscal Goals, But First Grow
What has happened?
India lowered its GDP growth projection for the current year to between 7-7.5 per cent against the earlier forecast of 8.1-8.5 per cent.
Nominal GDP growth is also slowing down
Unless supply side reforms provide an impetus to growth, real GDP growth next year is not likely to be significantly greater than this year.
Reasons:-
Sharp decline in exports due to weak global demand
Deficient monsoons affecting farm output
Challenges:-
Fiscal deficit:-
Meeting the fiscal deficit target of 3.9% of GDP will be difficult as low growth will itself raise the deficit target by 0.2 per cent of GDP.
Also high outgo because of Seventh pay and OROP it will be difficult to contain the fiscal deficit.
Tax revenue collection:-

Low growth will also stress tax revenue collection.
Debt to GDP ratio:-
The ratio had been declining over the past 10-12 years, benefiting from the nominal GDP growth exceeding the governments cost of borrowing.
Indias debt-to-GDP ratio too will cease to decline which in turn will affect Indias macroeconomic stability and vulnerability to external risks.
Measures:-
a) Enhancing public investment
b) Kick-starting stalled projects
c) Revival of investment and growth depends on policy action to ease infrastructure companies of their debt burden and creditors of their bad loans.
d) Creating a favourable tax environment through the implementation of the goods and services tax (GST) and enactment of the bankruptcy code
e) The government needs to worry about the fiscal deficit, but after growth revives. For the real economy to grow, reforms are a must.
What is Debt to GDP ratio?
By comparing what a country owes to what it produces, the debt-to-GDP ratio indicates the countrys ability to pay back its debt.
Often expressed as a percentage, the ratio can be interpreted as the number of years needed to pay back debt if GDP is dedicated entirely to debt repayment.
The higher the debt-to-GDP ratio, the less likely the country will pay its debt back, and the higher its risk of default.
What is Nominal GDP?
A gross domestic product (GDP) figure that has not been adjusted for inflation.
It can be misleading when inflation is not accounted for in the GDP figure because the GDP will appear higher than it actually is.
If the nominal GDP figure has shot up 8% but inflation has been 4%, the real GDP has only increased 4%.
[2]. Sahara, ShardaPearl
Context:-
Citing the examples of various scams of residuary non-banking finance companies (RNBFCs) ,the author points out the loopholes in the regulatory model of the government.
Reasons for such scams:-
a) Investor ignorance and greed and more greed are behind all such schemes.
b) Regulatory powers in India are still fluid and too fragmented
c) High Level Coordination Committee on Financial Markets which was to ensure nothing slipped between the cracks has simply not worked
d) The court process has led to decades of delay during which valuable time has been lost and firms have been allowed to carry on raising money
e) SEBI has just 600 employees, no powers to tap phones and a fraction of the surveillance capacity.
[3]. Indias quest for oil and gas: More questions than answers
What has happened?

Petroleum ministry has decided to offer 69 small oilfields for development through an international bidding process and has floated a consultation paper on the future contours of oil and gas exploration policy.
Consultation paper highlights:-
Uniform licensing policy:-
It proposes common policy for all forms of hydrocarbon resources, ranging from conventional oil and natural gas to unconventional sources like shale oil/gas, coal bed methane, gas hydrates, etc.
Open Acreage Licensing Policy (OALP)
a) It was one of the recommendations of the Kelkar Committee.
b) It will enable upstream companies to bid for any oil and gas block throughout the year without government having to hold an auction.
Sticking points:-
OALP:-
It requires a much firmer stand of the petroleum ministry and the Directorate General of Hydrocarbons (DGH) vis-a-vis the national oil companies (NOCs) ONGC and OIL, in matters relating to acreage on offer
and availability of data.
Private companies feel that NOCs are not willing to give up the acreage allotted to them earlier.
It is felt that those fields allotted under New Exploration Licensing Policy (NELP) which have not seen any activity should be offered under OALP.
This removes discriminatory treatment favouring NOCs.
The DGH should also develop a strong data repository (another recommendation of the Kelkar Committee) and ensure that all geological data, including from those areas currently or formerly held by the NOCs
and other companies, is freely available for inspection and analysis.
Revenue sharing system:-
Despite the Kelkar Committee for continuing with a petroleum profit-sharing arrangement, the petroleum ministry has stuck to revenue-sharing system.
a) It transfers the entire risk burden to the investor.
b) With royalty and a share of gross revenue (net of royalty) having to be paid upfront to the government, private companies will find the risk-weighted returns skewed against them, especially in an era of low oil
prices.
c) This could also go against revenue interests of government as windfall gains can be reaped by private company if they find huge resources in an area which is not geographically prospective in the first
place.eg:- hydrocarbon discoveries in Bombay High and Rajasthan
Pricing control:-
There will need to be clear policy moves, on the lines suggested by the Kelkar Committee, removing government control over pricing and marketing decisions on gas, so that private producers face no unpleasant
surprises from subsequent governments.
Penalty:-
Penalising companies for failure to reach committed production levels goes against the very grain of best petroleum industry practice, given the uncertain behaviour of petroleum reservoirs.
Against International standards:-
Treating revenues earned from assignment of participating interest as liable for sharing with the government is against the international oil industry principles.
It will inhibit participation of small companies which hope to develop the reservoir and then sell their participating interest to larger companies which are better placed to exploit the reserves.
Conclusion:-
When oil prices are on a downward path, marginal discoveries are unlikely to attract any significant private investment, if the contractual terms offered are less than appetising.
Viewing company motives with suspicion is not the best advertisement for encouraging private investment in a high-risk sector.
Global examples:-
Mexicos recent experience in failing to enthuse private investors to bid for its shallow-water exploration blocks is a timely reminder of the consequences of low government credibility in the eyes of investors.
Venezuela and Brazil are also paying the price for their past reluctance to engage with private oil companies.
Way forward:-
Petrodollars will not pour into India unless
a) Geologically attractive areas are offered
b) Contractual terms meet investor expectations
c) The operating environment is efficient and hassle-free
National
[1]. No legal provision to detain juvenile further
What happened: centre sought a stay on the release of the juvenile perpetrator in Nirbhaya case stating that the boy had been radicalised by another youth (accused in Delhi HC blast) during his stay at the
observation home.
Reply by Supreme Court: SC sought an IB report about youths radicalisation. Also asked centres response on the issue of reformation of juveniles. Pointing to JJ Rules, court refused to detain juvenile further
while seeking individual care plan for restoration of juvenile into family and quarterly follow up report which is to be submitted to JJ Board for two years.
[2]. Opposition agrees to clear 6 bills as GST is out of the way
What has happened: Instead of wasting any more time trying to pass the GST Bill, the govt has decided to pass the following bills which have consensus in both the houses by Dec 23.
1. SC/ST Amendment bill
2. Appropriation bill
3. Anti-hijacking bill
4. Atomic energy amendment bill
5. Commercial courts ordinances bill
6. Arbitration and Conciliation Amendment Bill
The govt also conceded a substantive motion to be heard against the role of Governors.
[3]. It was framework pact with NSCN(IM)
Context: Framework Peace accord between Government of India (GoI) and NSCN (IM).
Current Update:
Deal between GoI and NSCN(IM) the Naga insurgents was termed as peace accord by our PM in August. But now the Home minister is terming it as Framework Agreement.
The main interlocutor between GoI and NSCN (IM) and who signed the pact on behalf of the govt, Joint Intelligence Officer Chief R.N.Ravi reiterated that it was not a peace accord but a framework agreement
that is still being worked out.
[1]. After Paris, the Balancing
Context: In the light of the Paris pact, author states the direction in which the policy of Indian government should move in order to implement the key elements of the agreement.
Author states that,
1. India will be a guiding light to many developing countries and its policy manoeuvres will lead the way for other countries to shape their efforts in balancing economic growth vis-a-vis environmental
impact
Author states that India is home to two different realities,
1. Reality of Aspiration There is a rising middle class in India that aspires to be rich and believes that being rich will help them mitigate the harmful impacts of environmental change.
2. Reality of need On the other hand, India is home to millions of poor people. Poverty is prevalent in large sections of society. The reality of such poverty ridden section is that of need.
The difference here is of need and want. An aspiring middle class wants the luxuries of modern life while poverty affected class needs the basic amenities to make their life work on a daily basis. Their reality
originates from need.
Author gives example of government policy wherein,
Reality of Aspiration is dealt with
Recent order of Delhi government mentioning the odd-even number rule is an example of a policy which only takes care of reality of aspiration and ignores the reality of need. Government sees upper middle class
aspires to have vehicles but the reality of need has not been ascertained. They have vehicles because public transportation lacks end to end connectivity and the safety issues plaguing women in Delhi.
Reality of need and Aspiration both dealt with
The LED lighting programme is an example wherein both the realities have been dealt with. LED has been branded as an elite product so that an aspiring middle class feels no shame in using it while a modern
lighting source is provided to under this programme to address the reality of need. Such efficient lighting sources deal with the reality of need in an effective way. We need such sources to reduce the
environmental impact by saving energy.
Conclusion
In the same vein, author concludes that government will have to take decisions that incorporate both the realities. It might mean taking tough decisions but to ensure a sustainable future this needs to be done.
Environment
[1]. Averting Catastrophic Climate Change
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National
[1]. Gadgil takes green crusade to Wikipedia
What has happened?
Successive state and central governments have dumped Gadgils report on Western Ghats called the Western Ghats Ecology Expert Panel (WGEEP) report.
Now he is taking his green campaign to Wikipedia.
Prof Gadgil was honoured with the prestigious 2015 Tyler Prize for Environmental Achievement in March for authoring the landmark report on the preservation of the unique ecosystem of the Western Ghats and
the inclusion of local committees.
His Wikipedia articles will be crowd sourced and people contributing to it freely.
Why Wikipedia?
Lack of advertisements on the site and most importantly, out of government control.
What will be covered?
a) Issues like illegal sand and stone mining, deforestation
b) Uploading extensive information about several villages, their social parameters, and the problems the villagers face.
c) Credible references from a variety of sources, including newspapers and research articles, would constitute the base article to which citizens could contribute their own observations
Inspired from:-
In western countries promises made by political candidates have been juxtaposed with the actuals delivered in the public domain.
What has been done till now?
Information on villages affected by the pollution of the Panchaganga and its tributaries hae been uploaded.
About two other villages: Parite and Haldi. The base article on Haldi has information about its sewage being flown into the river, which leads to gastric diseases.
Tyler prize:-
Awarded to recognize those individuals who have contributed in an outstanding manner to the scientific knowledge and public leadership to preserve and enhance the environment of the world.
Recommendations of Gadgil report:-
The entire Western Ghats is considered an Ecologically Sensitive Area (ESA) and, assigned three levels of Ecological Sensitivity to different regions of it. These are termed as Ecologically Sensitive Zone 1
(ESZ1), Ecologically Sensitive Zone 2 (ESZ2) and Ecologically Sensitive Zone 3 (ESZ3).
It advocates a graded or layered approach, with regulatory as well as promotional measures appropriately fine-tuned to local ecological and social contexts
No new dams based on large scale storage will be permitted in Ecologically Sensitive Zone 1
Phasing out of mining in Ecologically Sensitive Zone 1 by 2016 and continuation of existing mining in Ecologically Sensitive Zone 2 under strict regulation with an effective system of social audit.
The fundamental error of the Gadgil report emanates from the very trend of environmentalism negating human livelihood to conserve environment.
International
[2]. Sri Lanka eager to share Make in India avenues
What has happened?
Sri Lanka is eager to share the opportunities created by major government plans such as Make in India and Digital India.
Make in India will create a chain of production and major research and development opportunities, some of which can be shared by Sri Lanka as we have the required manpower and infrastructure in place
Push for conclusion of ETCA:-
Economic and Technological Cooperation Agreement, which is more focused on increasing the Sri Lankan share in Indian opportunities.
Negotiation for CEPA:-
Comprehensive Economic Partnership Agreement
CEPA is being criticised as an Indian attempt to flood Sri Lankan markets with Indian products. But a middle way in this negotiation to be found without compromising on Sri Lankan economic strengths
Bridge over the Palk Strait:-
Campaign for the bridge connecting Thalaimannar in Sri Lanka and Rameswaram in India is perceived as another attempt to open up Sri Lankan market to India and has drawn criticism.
Economic Digest
[1]. Government to respond to WTOs Nairobi package in Parliament/India eclipsed at WTO ministerial/Nairobi setback
What has happened?
Trade experts and NGOs have also said the Nairobi package has effectively killed the fundamental objective of the WTOs Doha Round negotiations, which was to improve the trading prospects of the
developing and the poor world, or in other words a development agenda.
Disappointments:-
a) The Nairobi Ministerial Declaration reflects the surrender to insistent US proposals to set aside key Doha issue and to open the door to issues that favour its own commercial interests.
b) The developing and the poor world wanted the Doha Round to continue till all outstanding issues, including on protection of poor farmers and food sovereignty, are resolved.
c) But the rich countries wanted the Round to end and had sought the introduction of new issues that are of their interests, including e-commerce, global value chains, competition laws, labour, environment and
investments.
Achievements:-
Six ministerial-level decisions on agriculture, cotton and other issues, including

a) A commitment to abolish export subsidies for farm exports
b) Public stockholding for food security purposes
c) A special safeguard mechanism for developing countries
d) Measures related to cotton and preferential treatment for least developed countries in the area of services.
Indias Issues:-
India demanded for SSM, permanent solution for public stockholding programmes for food security and the reaffirmation to continue the DDA negotiations.
The ministerial decision on SSM for developing countries recognises that they will have the right to temporarily increase tariffs in the face of import surges while committing members to engage constructively in
finding a permanent solution on public stockholding for food security
[2]. Will Fed lift off lead to emerging markets crash?
What has happened?
Fed has increased its interest rate by 25 basis points. Three more rate increases of 25 basis points each are expected during 2016.
It can be called as normalisation rather than tightening.
Apart from US and Bank of England all other major economies of the world are either reducing their interest rates or remaining neutral.
Similar situation in 1995:-
Debt securities prices fell significantly
Under intense pressure and the ensuing volatility continued into the early months of 1996.
The decline of the rupee also engendered substitution of foreign credit by domestic credit, which put pressure on domestic liquidity and interest rate.
Impact now:-
Vulnerability of the rupee will increase.
Unlike in 1994, when the real exchange rate appreciation of the rupee was under check because of the U.S. dollars relative stability against other major currencies, the situation now entails a real appreciation of
the rupee.
Emerging market corporate debt has doubled since 2008 and it is close to 105 per cent of aggregate GDP.
The debts in foreign currencies, especially those denominated in U.S. dollar will now become more expensive to service as also to refinance.
With interest rate rising in U.S. and dollar appreciating, the decrease of risk appetite will mean lower prices of stocks and bonds in emerging market economies, including India.
Apart from causing vulnerability to balance of payments, higher cost of servicing external borrowing will lead to still higher NPA of banks.
The end of a prolonged era of easy money in the U.S. will likely bring to the fore pre-existing vulnerabilities.
[3]. Crop insurance or deficiency payments?
Context:-
In the light of the proposed agriculture insurance schemes, the article discusses the Demerits of deficiency payment system which can be seen as an alternative to crop insurance.
States like Punjab and Maharashtra are already attempting deficiency payments in some crops that have a minimum support price (MSP) provision.
Issues associated with Deficiency payment system:-
Landlessness:-
In some states landlessness is as high as 70%. This shows that farmers are not the major population in rural areas anymore.
A lot of them are dependent upon casual labour to earn a livelihood.
In this case asking for minimum income insurance for only farmers is just lobbying for a dominant rural group.
Increased public spending-
If landless labours are also included under such schemes it is debatable whether the country can afford such income insurance when even MGNREGA was being targeted for wastage of money.
Skewed agriculture productivity:-
Once a farmer is assured of a minimum income, he need not work hard.
As any deficiency in income arising out of below average yields and below average or minimum prices will be met by the state.
International pressures:-
When India has been opposing the domestic support subsidies in developed countries and is herself under constant attack for crossing the mandated Aggregate Measure of Support (AMS) levels, how can it go for
deficiency payments?
Sharecroppers will be left out:-
These real farmers (sharecroppers or leasees) will not get the income insurance.
This will lead to further raising income inequalities.
Use of APMC for deficiency payments:-
After amended APMC act farmers in India are undertaking contract farming or selling to food supermarkets and other buyers directly without contract.
So its a complete lie that a farmer cannot sell outside APMC markets.
To avail of the benefit under the deficiency direct payment system a farmer will have to submit a copy of the APMC receipt as proof of selling below MSP, his land records, and estimated yield of his farm as a
record.
In this case where will the farmer register his produce for minimum income support when some states have shut APMC markets?
Allied activities are excluded:-
The scheme does not seem to include allied occupations like dairying, fisheries, non-timber forest produce or poultry as that produce does not come to the APMC market.
But they face price and market risk like any other crop farmer .
Less state intervention:-
It makes the state give up its responsibility of intervening in markets by undertaking procurement at MSP
By doing so it sends signals to other buyers and creates competitive conditions for farmer benefit.
Once the MSP is not backed by procurement, it would leave the market to the private players who may not even buy at MSP.
Way forward:-
1. It is better to have multiple mechanisms of agricultural risk management, some of which are already available like
2. MSP (backed by more effective procurement across most MSP crops),
3. Market Intervention Scheme (MIS) in states like Karnataka and Himachal Pradesh, for crops that have no MSP
4. Contract farming
5. Warehouse receipts system
6. Better implemented crop insurance with some state subsidy for commercial crops that matter for farmer livelihood
7. Help achieve desired diversification in cropping pattern.
[4]. Dont give up on fiscal consolidation/ Re-look deficit-CPI target
The first article argues for fiscal consolidation and the latter argues for relaxation in Fiscal deficit targets
Context:-
The mid-year economic review, released by the finance ministry last week, argued in favour of relaxing the fiscal deficit target in order to address demand issues in the economy.
The review suggested that
Medium-term fiscal framework should be reconsidered.
And the need to redefine monetary policy objectives, to meet inflation objectives.
Why Fiscal consolidation is need of the hour?
Any deviation from the fiscal consolidation path will affect the credibility of the government and will raise questions about its ability to reach the desired goal of consolidation.
This government has already pushed the target for bringing down the fiscal deficit to 3% of the GDP by a year. Further delay can dent financial market confidence in a significant way.
If monetary policy is it will only induce uncertainty and complicate matters both for the financial markets and the real economy.
Way forward:-
Nurture the economic recovery through structural reforms,
Remove supply side barriers as it will help economic activity and boost revenues.
Reviving the disinvestment programme can provide a steady inflow for capital expenditure.
Article 1 Conclusion:-
The very idea of reconsidering the fiscal consolidation roadmap should immediately be taken off the table as it could potentially backfire by hurting market confidence.
It is important for policymakers to not shift focus from long-term objectives for short-term gains.
Article 2:-
Increase public investment:-
It is said that two of the engines fueling the economy in the pastexports and private investmentare not available in the short run.
And the onus has to fall on private consumption and public investment which is vulnerable to some serious downsizing if commitments to fiscal discipline are to be kept.
Since there is little capital expenditure likely from the private sector for at least another year or two, it is important the government keep up the pace of investments
Fresh public investment would create jobs and put more money in peoples pockets, required to keep private consumption levels up.
Rethinking monetary policy:-
The government and the private sector are in danger of getting caught in a debt trap as long as interest rates are higher than nominal growth rates.
Asking RBI to relax its CPI targets is one option, but what is more important is cutting interest rates on small-savings schemes so that banks can lower interest rates on deposits and transmission will be faster.
[5]. Banks to Raise Provisioning for Another Banks NPAs
What has happened?
The below idea has been proposed to curtail NPA menace in banks.
If a companys account in one bank is classified as NPA then his account in other banks will be treated as NPA even if he is not defaulting his payments in other banks.
It is based on the fact that the borrower is either facing problems or promoters have misused the money because of which he is defaulting payments in one bank.
Now, if the cash flow problem persists, its a matter of time it would default to other banks as well.
How does it affect banks?
For every NPA the banks have to set aside a percentage of the loan from their profits this is called Loan provisioning. This will hurt banks earnings as now they have to provision for NPAs of other banks too.
But such a mechanism can provide cushioning against future defaults.
[1]. Big Question for our generation
1st question: in order to promote education and sanitation, Haryana panchayati raj amendment act 2015 has made it mandatory for candidates who want to stand for election to be both literate (class 10 for general,
class 8 for dalit and class 5 for women) and have toilet in their homes. This was upheld by supreme court.
Is this amendment justified as the constituent assembly after extensive debate finally decided to give Indians the right to vote and stand for election without any restriction.
2nd question: is the removal no detention policy being contemplated and implemented in some states justified? This policy has improved GER (gross enrollment ratio) tremendously and is a great remedy to the
problem of dropouts. But many feel that this policy has prompted poor learning outcomes and low standards. This is because CCE i.e. continuous and comprehensive evaluation which is a part of no detention
policy has not be carried out sincerely.
3rd question: is lowering of juvenile age from 18 to 16 years under juvenile justice(care and protection of children)bill,2015 justified? This will hit the marginalized section the hardest while also putting young
boys in consensual relationships at risk. Besides, rehabilitative juvenile justice have been found to lower re-arrest than adult justice system.
4th question: children under the age of 14 are currently banned from working in hazardous industries. is it justified to reduce the number of industries considered hazardous from 83 to 3 and to allow children to
work in their own family businesses of zari, bangle n carpet making, etc.? The govt argues such amendments are being made to allow children to learn traditional crafts after school hours. This might lead to
children dropping out of schools to work full time for enterprises under the garb of family business. Instead of eliminating child labour this will provide perfect condition for child labour as well as juvenile
crimes.
[2]. Cure the doctor
What has happened: the Lancet published a paper this month with the objective of transforming Indias healthcare system to achieve the govts vision of health for all. It found that Indias healthcare delivery
system is so expensive that it is driving millions of Indians into poverty.
Causes:
1. Corruption in admission to both pvt n public medical colleges
2. Nexus of doctors and pharmaceutical companies
3. Lack of regulation of Medical Council of India
4. Over commercialisation of healthcare
5. Kickbacks in cash or kind for prescriptions or referrals
Remedy:
1. Training to medical students to prepare them to work in primary care in villages n towns
2. Rejuvenate and re-engineer Medical council of india
3. Make costs of care transparent in the spirit of RTI
4. Jan Swasthya Abhiyan recommends all kickbacks and commissions be deemed illegal
[3]. Art of a climate deal
What has happened: Paris climate talks produced a deal that 196 member countries agreed on. India was looked upon as critical before the talks as we being the fourth largest emitter of co2 were expected to
reduce our dependence on coal. But we felt that converting to cleaner energy would risk our growth and development. After the talks however we were applauded for our constructive role in the talks. China on the
other hand had arrived with a huge fund and pact to compensate for their rising emissions but after talks they were viewed as obstructionist and unhelpful.
Highlight : Bill Gates along with 30 business leaders including Mukesh Ambani and Ratan Tata formed the Breakthrough Energy Coalition in Paris to provide seed, angel and series A investments to early stage
green technology innovations. The coalition will also coordinate with 20 Govts that focus on state R&D investments on scalable, locally implementable and transformational clean tech innovations. This will
provide necessary commitment from pvt sector to find cheap and powerful alternatives to coal for developing countries.
[4]. Justice that is rehabilitative
What has happened: The juvenile involved in Nirbhaya case has completed his time in special home but the govt has appealed to the SC to stay his release. But the sc has refused to do so.
View of the writer: This decision is applauded as it is a misplaced view to punish juveniles as adults and keep them from reintegrating into society. With a proper post-release individual care plan and quarterly
follow up reports, rehabilitation of the juvenile can be assured thus reducing chances of his misconduct. rehabilitative justice is required for child offenders for transitioning into responsible adults thus ensuring
safety and security of society in the long run.
Environment
[1]. In hot water
What has happened: A new study by Washington State University which studied lake temperatures from 1985 to 2009 shows that worlds lakes are warming rapidly at approx 0.3C every decade. Esp. lakes in
higher altitudes are warming faster. This is the effect of climate change.
Impact: Weak algal bloom which is fodder for fish. hence, thinning fish population. Consequently, impoverished fishing community. For instance, lake Tanganyka in Africa and lake Erie in N.America. Rising
temperature in lake Baikal in Siberia is threatening the Baikal seals. Also fast melting of glaciers has lowered temperatures in some lakes.

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National
[1]. PMO sets ambitious paperless target.
W hat has happened :
As part of the Digital India mission, the Prime Ministers Office (PMO) has set a target of December 2016 to shift 90% of all govt transactions i.e all payments and receipts from citizens and businesses to
electronic mode. For this, all govt departments have been asked to provide electronic options for all payments and receipts by mar31,2016.
I mplementation :
1. DEITY Departmentt of Electronics and Information Technology is in charge of developing an online portal through which payment of all govt services can be done online by all citizens.
2. All govt depts. have been asked to come up with innovative measures to encourage citizens to make payments online. This initiative is headed by cabinet secretary P.K Sinha.
W hy this is needed
The flagship financial program of Government of India JAM (i.e. Jan Dhan Yojana, Aadhar no. and Mobile Payment) trinity scheme aims at financial inclusion. To achieve this, all transactions must be moved
online.
Also, this move will reduce corruption and mis-governance and address the leakages in subsidy system.
W hat is JAM
JAM is a trinity of three scheme of Indian Government i.e.
1. J an Dhan Yojana A flagship financial inclusion program of Government of India aimed to bring people into the banking net and inculcate the habit of saving. What it assures is every citizen
has a bank account where government can directly transfer the money.
2. A adhar Card To provide unique identification to citizens of India. The role it plays in JAM trinity is of better targeting of subsidies with information available from Aadhar database which was
validated at the time of issuance of Aadhar card.
3. M obile Payments A part of payment banking enables easy remittances of money even in remote location. With 869 million subscribers mobile payments becomes an enormous tool for
government to remit money to intended beneficiary, also making easier for beneficiary to receive.
[2]. Rajya Sabha Unanimously Passes SC|ST Bill Without Debate
C ontext:-
The Rajya Sabha on Monday unanimously passed the SCST bill that provides for stringent action against those compelling any member of Dalit or tribal communities to carry human or animal carcasses or do
manual scavenging.
P rovisions of the bill:-
The Bill seeks to amend the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989. The Act prohibits the commission of offences against members of the Scheduled Castes and
Scheduled Tribes (SCs and STs) and establishes special courts for the trial of such offences and the rehabilitation of victims.
N ew offences added under the Bill include:
1. Garlanding with footwear
2. Compelling to dispose or carry human or animal carcasses, or do manual scavenging
3. Abusing SCs or STs by caste name in public
4. Attempting to promote feelings of ill-will against SCs or STs or disrespecting any deceased person held in high esteem
5. Imposing or threatening a social or economic boycott.
P ublic servant:-
The Act specifies that a non SC or ST public servant who neglects his duties relating to SCs or STs shall be punishable with imprisonment for a term of six months to one year.
E xclusive courts:-
It specifies that an Exclusive Special Court must be established at the district level to try offences under the Bill. In districts with fewer cases, a Special Court may be established to try offences.
For more: http://www.prsindia.org/billtrack/the-scheduled-castes-and-the-scheduled-tribes-prevention-of-atrocities-amendment-bill-2014-3327/
[3]. Draft Civil Aviation Policy 2015: Are we making our airports safer?
W hat has happened?
Two matters in the Draft Aviation policy that stand out are the indecision on the 5/20 rule and the proposed new ground handling policy.
W hat is Ground Handling?
Ground handling at an airport involves all aspects of management of an aircraft between the time it arrives and takes offcleaning, passenger and cargo handling, cabin service, catering service, ramp service,
guiding aircraft into parking slots, lavatory cleaning, air conditioning, air start services, baggage handling, etc
G round handling provision in the draft:-
Each airport operator must have at least three GHAs, of which one will be Air India through its subsidiary or its JV but there will be no upper limit of GHAs at an airport.
Further, all domestic airlines and charter operators will be free to carry out self-handling through themselves or their own subsidiaries and are permitted to ground handle another airline.
Also, while ground handling staff will be on the rolls of GHAs, airlines or their subsidiaries are allowed to take contract employees with a contract of at least one year, which is against the labour laws.
C oncerns:-
S ecurity Issues:-
The use labour contractors for ground handling is dangerous because police verification and on-ground vigilance of such a large and changing workforce cannot be done in a short period of time, and will never be
as good as a permanent workforce
P roductivity decreases:-
It has been documented that productivity decreases in proportion to the growing number of ground handlers.
More the GHAs, more space for parking their equipment is needed.
The pooling of equipment has been suggested but it is found impractical due to competition.
M orale of workers:-
Since efficiency and high skills are essential for a good and quick turnaround of aircraft, the labour needs to be highly trained and motivated.
Contract labours for a minimum of one year will not fulfil the above requirements.
W hat is 5/20?
It requires a domestic airline to have a fleet of 20 aircraft and operational experience of five years to start international operations.
[4]. Tread carefully on minimum wage reform
W hat has happened?
The labour ministry has moved a cabinet note seeking to merge four wage-related laws and set a mandatory national minimum wage.
S pecial case in India:-
Researches have shown that modest minimum wage hikes caused no visible change in employment levels.
But in India with the informal economy accounting for 90% of the workforce and 50% of the national product, employers hold disproportionate bargaining power.
N ot just Mere Tokenism:-
Enforcing wage reforms is more challenging.
Government should set an optimal minimum wage rate and a modest hike followed by periodic inflation-linked revisions.
It should also update outdated labour laws to make it easier for employers to adjust their workforce in accordance with market conditions.
C onclusion:-
Minimum wage reform is simply one measure in an interlocking system necessary for poverty alleviation.
When implemented in isolation, or when guided by political considerations instead of economic, it runs the risk of being ineffective at best and counterproductive at worst.
[1]. India welcomes, Madhesis reject Kathmandu Package
W hat has happened :
Nepal decides to amend its new constitution in order to address the following issues which sparked protests from the marginalized Madhesis group.
1. Demarcation of states,
2. Delimitation of constituencies,
3. Proportional representation for Madhesis, and
4. Strict citizenship rules.
I ndias reaction : India has been consulted with and is happy with this announcement.
M adhesi reaction : UMDF (United Madhesis Democratic Front) is not happy with this announcement stating that these amendments leave out their main demands for separate state and identity. They will
continue with their agitation and protests till these demands are met.
B ackground : Madhesis migrated from India to Nepal long back. They have been marginalized and dominated in Nepal. The new constitution of Nepal further marginalizes them and this sparked a huge
protest from the Madhesis which has been going on ever since the constitution came into force. India has been supporting the Madhesi cause which has led to a dip in India-Nepal relations.
Economic Digest
[1]. Centre tables bankruptcy Bill in Lok Sabha/ A law to quickly resolve bankruptcy
[2]. RBI discussion paper on peer-to-peer lending soon/ Reserve Bank of India to prune
NBFCs for effective regulation
W hat has happened?
The central bank was actively studying the peer-to-peer lending arrangements and would soon come out with a discussion paper.
The central bank is also looking at another category of NBFCs NBFC account aggregators.
They are working towards harmonisation of the regulations to reduce the number of NBFC categories since there are several categories of NBFCs and varied regulations across these categories.
W hat is peer to peer lending?
Enables individuals to borrow and lend money without the use of an official financial institution as an intermediary. It is also known as social lending.
The advantage to the lenders is that the loans generate income in the form of interest, which can often exceed the amount interest that can be earned by traditional means
It is because the lender has very little assurance that the borrower, who traditional financial intermediaries may have rejected due to a high likelihood of defaults, will repay their loan.
W hat is NBFC AA?
The NBFC-AA will provide a technology-enabled solution to a person to view at one place the position of his financial assets across institutions under different sectoral regulators.
Guidelines for the same are under preparations
[3]. Servicing the fisc
C ontext:-
The article suggests measures to keep fiscal deficit within limits.
S tress on Fiscal consolidation:-
1. Seventh pay commission
2. One rank one pension
T ax to GDP ratio:-
To meet expenses meet Tax to GDP ratio should be increased.
So government is considering to increase Service tax by 2% to 16%.
But Laffers curve suggests that if the service tax rate is increased too much, the taxable base may not grow by as much as is expected.
Over the years, growth in service taxes has been more a factor of the increased base than it has been the hike in the rate itself.
W ay forward:-
The government must focus on disinvestments and strategic sales.
L affer curve:-
This curve shows the relationship between tax rates and tax revenue collected by governments.
The curve suggests that, as taxes increase from low levels, tax revenue collected by the government also increases.
It also shows that tax rates increasing after a certain point (T*) would cause people not to work as hard or not at all, thereby reducing tax revenue.
For more:- http://www.investopedia.com/terms/l/laffercurve.asp
W hat is tax to GDP ratio?
This ratio is the total government tax collections divided by the countrys GDP.
[1]. Failing the test of gender

C ontext: Supreme Court verdict on policy of DMK regime in Tamil Nadu on the issue of appointment of priests in Hindu temples.
T he Issue:
Agamas are the rules that govern temple construction and worship and dictate the eligibility of those to be appointed to important religious positions in the temple, including the priests.
Discourse: this has been shown as Brahmin v/s Non Brahmin and that everything is being done to bring an end to Brahman dominance.
A rticle Emphasis: In the whole legislative and judicial process there has been a gross neglect of women and their right to different religious post.
Q uestions before Supreme Court:
Two important dimensions to adjudicate on
1. a) Whether DMK legislative order encroached on the freedom of religion
2. b) The prevalent practices violate Right to Equality (Art. 14) and Abolition of Untouchability (Art. 17)
T he Verdict:
The Supreme Court uphold agama rules saying as it doesnt prescribe any caste or society in text it doesnt violate above mentioned fundamental rights. It has instances where sanctum sanctorum is not reachable
for certain Brahmans.
T he Issue of Women:
Women has been kept out pf priesthood on many points, them menstruating being one. In fact, they are not even allowed to enter the temple in that period.
In a non-agama temple by the recent judgment of Madras High Court a woman priest was appointed in one of the temples. The judge in the case noticed that it was possible because temples governance was not in
the shackles of agama rules.
C onclusion:
It is important here to revisit the language of Article 14, 15 and 17. The first two bar discrimination on the basis religion, race, caste, sex or place of birth. The third is also clear in its dictate: Untouchability is
abolished and its practice in any form [emphasis added] is forbidden. Thus, it should be essential for any custom, denomination or usage to pass the test of gender to be declared as being in consonance with the
Constitution.
While the Supreme Court judgment asserts that the exclusion of some and inclusion of a particular segment or denomination for appointment of archakas would not violate Article 14 so long as such
inclusion/exclusion is not based on criteria of caste, birth or any other constitutionally unacceptable parameter, the fact that the judgment, while upholding the Agamas, fails to deal in detail the aspect of gender
leaves a major lacuna.
[2]. Rajya Sabhas winter of disquiet/Dont appease the mob/Juvenile Delinquency and Law
C ontext: After a long period of protesting and withholding work, in the sudden issue of juvenile being released facing a nationwide protest Rajya Sabha has hurriedly agreed to pass Juvenile Justice Bill.
A uthor in the article cautions,
That Rajya Sabha members should not work like a herd mentality and should look into legality as well as rehabilitative and reformation aspect of Juvenile law before taking any actions.
The article looks into the deliberative and questioning spirit of Parliament and how between all chaos the initiatives by Chairman of Rajya Sabha (Vice President of India) for keeping this spirit alive has gone
unnoticed.
The author calls for the cooperative nature in Rajya Sabha where ruling party having less in numbers goes an extra inch to provide answers to stringent questions as well as Opposition should held a bipartisan
views and their views should not be curbed because of anti-defection laws.
C urrent Law:
Children below 18 years of age are subject to criminal action only in a specialised juvenile justice system that is required to reintegrate children, who are in conflict with the law, back into society as productive
citizens
P roposed Law:
Will reverse the existing law if it gets the Rajya Sabhas nod. It would put children aged 16-18 years, who are accused of committing crimes punishable by seven or more years of imprisonment, in the adult
criminal justice system.
A uthor states,
This change will bring no benefit to society. Crime will not be deterred by harsh punishment, as we have seen in the case of the Criminal Law (Amendment) Act, 2013, post the Nirbhaya rape case. More than that
it can lead to dehumanization of the child convicts and turning them in a hardcore criminal.
The current law is a copy paste of United States law, whose own record on Juvenile Justice is shady. It is the only member country of the UN that has not ratified the UN convention on the rights of the child.
That response is to strengthen the juvenile justice system, not to weaken and destroy it. The proposed law violates not only Indian constitutional standards but also our international obligations.
C onclusion:
The author argues that Government and Parliament will do a heinous crime if the Juvenile Justice Bill is passed just to appease to the mobs. As stated above and from experience world wide the idea can ruin life
of many children in the age bracket of 16 18 years. Also, it is against the standard international conventions and practises where mostly the age of juvenile is set to 18 years.
We should not look for an eye for eye, through our legal system. Judicial decision should not be confused with revenge.
[3]. Riddles in the Syria road map
C ontext: United Nations Security Council (UNSC) has finally come to an agreement on an international road map for a peace process in Syria. Resolution 2254, adopted unanimously by the Security Council.
P roposal:
1. a) Ceasefire between the regime of Syrian President Bashar al-Assad and the rebels within a month and the establishment of a credible, inclusive and non-sectarian government in Damascus
within six months.
2. b) Set an 18-month deadline for free and fair elections and a new Constitution that would decide the future of Syria
I mplementation Challenges:
1. The region of Syria affected by IS which has not been acknowledged in the agreement on what will happen to these regions.
2. Implementation will face challenge due to strategic difference and distrust among the involved nations such as Saudi Arabia and Iran, Russia and Turkey.
3. No differentiation between rebels and terrorist makes it even more difficult. Also, many rebel groups have cordial contacts with terrorist groups.
4. Implementation of Sharia law after Assad regime is one of the demand which wont amuse the West.
5. Polarity in nations on the issue of Assad role in future.
H istorical position of US and Russia:
Syria is the first conflict where both the United States and Russia are militarily involved since the end of the Cold War. Syria is the first conflict where both the United States and Russia are militarily involved
since the end of the Cold War.
For Russians, Syria is a strategic asset in West Asia. Russias only naval base outside the former Soviet region is in the Syrian coastal city of Tartus. Russia also sees Syria as an outpost of its power from where it
could influence West Asian politics.
Washingtons Syria policy has evolved from one of idealistic intransigence to that of pragmatic flexibility, narrowing the gap with the Russian position.
[4]. Lies and the Sensex
C ontext:-
The article explains why Stock market performance is not a real indicator of Indian economy and what is causing this divergence.
D ivergence:-
Stock prices usually reflect the future prospects of a company, which in turn are linked to the economy. Therefore stockmarket indices like the Nifty and the Sensex are seen as indicators of the robustness of the
Indian economy.
By this logic, the current weakness in the Nifty, which is down nearly 7 per cent over the past 12 months, has dampened sentiment about the economy.
This comes at a time when several hard broad-based indicators like oil and auto demand are pointing towards an economic recovery.
R easons for this divergence:-
The weakness in stockmarkets, particularly the larger listed stocks, is linked to weakness in the global economy.
This happens in two ways First, through strong business links to global trends among larger companies and second, through fund outflows
L ink between business and global trends:-
More than half of the revenues of the top 100 listed companies (53 per cent to be precise) are fundamentally unrelated to the domestic economy.
Businesses like metals, energy and petrochemical companies, whose prices are driven by global demand and supply are some examples.
F und outflows:-
Net selling by foreign institutional investors (FIIs) in the past nine months is high.
This is driven by fiscal problems in oil-exporting economies caused by the fall in oil prices. When oil prices were high, these economies (particularly those in West Asia and Scandinavia) were generating large
fiscal and current account surpluses, which were deployed into equity and bond markets globally.
EM funds also saw strong inflows, and as these were then deployed into various markets due to the same reason.
Those stocks which are driven by domestic economy performed well during the same time the stock market indices were falling. For example stocks of consumer discretionary and non-banking finance
companies.
Since they are less exposed to global trends, and so they better reflect the improvement in the Indian economy
I s the divergence permanent?
This divergence will likely reduce over time on both fronts as markets keep evolving.
Indices regularly shed weaker companies and add stronger ones: Over the next few years, as the Indian economy continues to outperform global trends, it is likely that they may become more representative of
the economy.
[5]. In The Right Company
C ontext:-
Rising Controversies about Section 25 companies
W hat are section 25 companies?
Section 25 companies are those companies which are formed for the sole purpose of promoting commerce, art, science, religion, charity or any other useful object and have been granted a licence by the central
government recognizing them as such. T
There are three criteria for determining whether a particular company is section 25 company or not:
Its objects should be only to promote commerce, art, science, religion, charity or any other useful object.
It should intend to apply its profits or other incomes only in promoting its objects; and
Central government should have granted a licence to such a company recognizing them as such, these types of companies can be either public company or
private company having a limited liability.
E xample: Sabarmati riverfront project, was planned and implemented by a not-for-profit section 25 company.
W hat are Producer companies?
It is based on the recommendations of an expert committee led by noted economist, Y. K. Alagh.
It is termed as `producer company, to indicate that the members have necessarily to be `primary producers, that is, persons engaged in an activity connected with, or related to, primary produce.
The objects of producer companies shall include one or more
1. Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of members or import of goods or services for their benefit;
2. Processing including preserving, drying, distilling, brewing, venting, canning and packaging of produce of its members; and
3. Manufacture, sale or supply of machinery, equipment or consumables mainly to its members.
For more:- http://www.thehindu.com/biz/2003/06/30/stories/2003063000010300.htm
[6]. Dargah diplomacy
C ontext:-
Government has cleared an invitation to Shahbaz Sharif, chief minister of Pakistani Punjab and younger brother of Premier Nawaz Sharif, to attend the annual Urs celebrations of the 14th-century Sufi saint,
Hazrat Nizamuddin Auliya, next month.
D argah Diplomacy:-
Religious tourism figured explicitly as one of the 12 elements identified in the comprehensive dialogue announced by External Affairs Ministry in its engagement with Pakistan.
It was also part of the joint statement issued after the talks between Prime Ministers Narendra Modi and Nawaz Sharif in Ufa in July.
This shows that the government is sensitive to the diplomatic possibilities that religious tourism offered as it promote people-to-people exchanges.

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9 PM Daily Brief - 4 February 2016February 4, 2016In "Brief"
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National
[1]. Sensing public mood, Rajya Sabha clears Juvenile Justice Bill/Parliament veers away from history/ An arbitrary cutoff
H ighlights of the bill:-
1. It replaces the Juvenile Justice (Care and Protection of Children) Act, 2000.
2. It permits juveniles between the ages of 16-18 years to be tried as adults for heinous offences
3. Any 16-18 year old, who commits a lesser, i.e., serious offence, may be tried as an adult only if he is apprehended after the age of 21 years.
4. Juvenile Justice Boards (JJB) and Child Welfare Committees (CWC) will be constituted in each district.
5. The JJB will conduct a preliminary inquiry to determine whether a juvenile offender is to be sent for rehabilitation or be tried as an adult.
6. The CWC will determine institutional care for children in need of care and protection.
7. Procedure for adoption has been included in the Bill.
8. Penalties for cruelty against a child, offering a narcotic substance to a child, and abduction or selling a child have been prescribed.
A nalysis:-
P unitive approach:-
It is argued that the current law does not act as a deterrent for juveniles committing heinous crimes. And that a reformative approach will reduce likelihood of repeating offences.
A gainst UN Convention:-
The provision of trying a juvenile as an adult contravenes the Convention. The UN Convention on the Rights of the Child requires all signatory countries to treat every child under the age of 18 years as equal.
P enalties are not proportionate to gravity of offence:-
Penalty for selling a child is lower than that for offering intoxicating or psychotropic substances to a child.
M isleading Data:-
The Bill observed that it was based on misleading data regarding juvenile crimes and violated certain provisions of the Constitution.
P revious acts:-
Juvenile justice laws enacted by Parliament in the past 55 years shows that lawmakers have always leaned in favour of reformation and social re-integration of child offenders rather than populating Indian jails
with them.
The current act tries to find a balance between right of victims and right of juveniles.
A uthor Views:
The author expresses his view that rather than considering the age of the convict, his mental maturity should be used as the yardstick. This in turn should be the task of the judicial discretion than a board.
It is said that the amended act again has the same flaw of placing the under 16 convict beyond the reach of criminal law even if his mental maturity is aware of the consequences his crime would produce.
[2]. Finally, Govt may Write a Code for Software Sector
C ontext:-
The government is working on a national policy for software products.
The policy will take a comprehensive view of the sector and try to fix some longstanding issues pertaining to international tariffs, taxation and R&D among others that have been scuttling the industrys growth.
The first draft of policy in the form of a consultation paper is ready and will be circulated soon for industry consultation.
C oncerns:-
The industry has been seeking clarity from the government on whether digital goods will be taxed as a product or a service.Even the proposed goods and services tax (GST) does not have a definition for digital
goods.
The confusion has led to digital product downloads off the internet being treated as both products as well as services, and companies have to pay dual taxes on them.
Software product companies also suffer from over regulation, especially when it comes to recurring payments.
For instance, companies that provide software-as-a-service (SAAS) cant process payments from their Indian clients on a monthly basis without an authentication each time, according to RBI guidelines. Similarly,
they need to set up different accounts for each of these customers in order to process refunds.
In a lot of government projects, departments are mainly procuring MNC products so the Indian software products need to be given a level-playing field.
[3]. What is behind the regional variation in adult mortality in India?
I ndias crude death rate (CDR)the number of deaths per thousand people per yeardeclined from 9 to 7 between 2000 and 2013, as per data from the civil registration system.
A falling death rate is often associated with an overall improvement in heath and sanitation.
But the above inference can be misleading as countries with younger populations will tend to have lower death rates.
For example, Indias CDR (7) is lower than that of Japan (10).
T o overcome this, researchers often use the age-standardized mortality rate (ASMR), which is a weighted average of the age-specific mortality rates, with the weights being the proportions of persons in the
corresponding age groups of the World Health Organization (WHO) standard population.
Indias ASMR declined from 12.6 in 2000 to 10.5 in 2012.
A recent study has found significant divergences in ASMR across states. Chhattisgarh, Uttar Pradesh and Assam have the highest ASMRs.
R easons:-
The main reasons for variation in adult mortality across districts are not clear.
But the authors show that deaths due to tuberculosis, vascular diseases, malaria and other infections, and respiratory diseases together contribute around 60% of the gap between high and low mortality districts.
In addition, around 5% of the excess deaths among women in high-risk districts were attributed to maternity-related causes.
[1]. Modis visit to reassure Moscow

C ontext:
Prime Minister Narendra Modi will leave for Moscow on Wednesday with a slew of defence acquisitions worth an estimated $10 billion and nuclear and space cooperation agreements.
A bout Syria:-
Both Russia and India agree that the solution to the problem in Syria will be achieved by political and diplomatic means and through an intra-Syrian dialogue.
[2]. Zhengzhou emerges a major hub along the New Silk Road
C ontext:-
Zhengzhou is becoming the hub of brisk trans-border trade between China and Europe because of rail connectivity and e commerce.
W hat is SREB?
Zhengzhou and Hamburg are emerging as the major centres of the Silk Road Economic Belt (SREB), a trans-Eurasia connectivity project.
The China-led initiative will connect Asia with Europe along a land corridor interlinked by rail, roads, industrial parks and smart cities.
C hinas Look west policy:-
Zhengzhou Hub Development and Construction Company (ZIH) is the state-owned enterprise that steers transcontinental transportation of goods by rail, road, sea and air.
Temperature controlled wagons are used to transport the cargo even in winter
The location of Zhengzhou in the centre of China has gone a long way in making profitable the multiple railway routes that radiate from the city.
[1]. Misdiagnosis of the Rajya Sabha malfunction
C ontext:-
The article illustrates the need for Rajya Sabha and how to balance legislative productivity and legislative dissent.
W hy do we need an Upper house?
C heck against whims:-
People have argued that the Upper House is a creation of imperialism and independent India did not need it.
To which Gopalaswami Ayyangar, replied that the role of the Upper House is merely to delay legislation which might be the outcome of passions of the moment until the passions have subsided.
It means that Lok Sabha MPs can be vulnerable to passing laws in the spur of the moment and The upper house will serve as an effective tool to curtail such momentary instincts.
I ndirectly elected Vs Directly elected:-

It is also argued that how can the indirectly elected Rajya Sabha members have veto powers over the directly elected Lok Sabha Members.
In India first-past-the-post electoral system is followed,where a political party can form a government without the majority of citizens voting for it.
Which means the percentage of seats won in the Lok Sabha by a political party is not the same as percentage of Indians voting for that party
Thus legislation passed by the Lok Sabha may not necessarily represent the views of the majority.
D oes Anti defection Act aggravate the situation?
Anti Defection law disqualifies any Member of Parliament who either changes political parties mid-way or disobeys the whip of her party
It was enacted to prevent horse-trading on the floor of the House and penalise members who succumb to temptations from opposition parties.
For a large, diverse polity such as ours, with a large number of regional parties this act is relevant.
Also the choice of when to issue a whip rests with the party and in some cases the members have voted as per their choices even against their party.
Hence Anti-Defection Act in itself cannot be made a villain for an internal matter of political parties over degrees of freedom to be given to their members for voting in Parliament.
W ay Forward:-
There has to be an outlet for opposition members to voice their protests without disrupting productivity.
One suggestion is to have designated day(s) in a week on which the opposition can raise, discuss and debate issues rather than the government dictating the order of business every day of the session.
C onclusion:-
To argue that the construct of the Upper House and the Anti-Defection Act need to be amended or done away with might substantiate our founding fathers fears of lawmaking in a fit of frenzy.
[2]. In the spirit of South Asianism/ Make amends
C ontext:-
Nepals government agreed on Monday to amend its new constitution, in the hope of meeting the demands of the madhesis.
I mpact of blockade:-
The tactic of the blockade has helped to construct a dangerous dichotomy Madhesi vs Pahadi while muffling the diversity of dissent as along with Madeshis, Janajatis and Dalits are also not given fair
representation in the constitution.
The blockade has set a dangerous precedent by the polarising politics of the border blockade.
It is a great irony that South Asia allowed its borders to be captured by parochial interests when the world is embracing post-nationalist visions of regionalism and globalism.
D emands of Madhesis:-
Population-based proportional representation in government and changes in constituency delimitation

P roposed amendments:-
While Nepal Government has agreed to amend the constitution to incorporate the demands of protesters, the madhesis are rejecting it claiming that the proposals are vaguely worded.
W ay forward:-
India should take measures to ensure that the backlog on essential supplies of medicines, cooking gas, kerosene and petrol is cleared as soon as possible.
Delhi then needs to rebuild its relations with Kathmandu and ensure that its policies do not favour the political struggle of one agitating Nepali constituency against the others.
Above all, India should withdraw from any imperial designs in the region if it truly believes in South Asianism and the spirit of Panchsheel.
The government to resolve the situation, rather than perpetuating the stand-off as this would provide the Nepal government an incentive to continue with accommodating consensus.
Delhis best interests lie in creative diplomacy that leverages Indias strengths not crude displays of its coercive resources otherwise it will lead Nepal to lean more towards China.
[3]. Nothing historic about Nairobi Ministerial
C ontext:-
The WTO Nairobi meet is a setback because the developmental issue of developing countries was not taken forward.
D istorting Agriculture Trade:-
Agricultural trade is highly discriminatory in nature essentially because of three primary issues that distort the trade even now -Domestic subsidy, market access and export competition.
Export competition has the least intensity among the three and it experienced an overwhelming emphasis in the WTO Meet.
Though export subsidy remains a major irritant to free trade, according to the World Bank its abolition will only yield 2% of theoretical gains to world agriculture.
The entire export subsidy given to the magnitude of $5 billion on farm products is minuscule compared to domestic support that is given to the tune of $1 billion per day
S pecial Safeguard Mechanisms (SSM) :-
It would help developing countries defend their triple concerns of food security, farmers livelihoods and rural development in the event of agricultural trade liberalisation.
SSM enables them to raise their tariffs above the bound rates in the event of a fall in price of the imported product or an increase in volume of the imported product beyond certain levels.
I dentification of Special Products (SPs):-
SPs are a set of products that directly concern their food security and livelihoods, and therefore should be subject to no or low tariff reductions
T rade Facilitation Agreement (TFA):-
Trade facilitation agreement (TFA) is a trade protocol aiming to give a spur and do away with the stumbling blocks in doing international trade between various countries.
The implementation of TFA has the potential to increase global merchandise exports by up to $1 trillion per annum,
The developing country especially India and South Africa wants that before pushing for this TFA WTO has to address their concerns on food subsidy which is a lifeline for lakhs of BPL people in these countries
It is argued that developing countries will benefit significantly from TFA, capturing more than half of the available gains.
For more:- https://www.wto.org/english/thewto_e/20y_e/wto_tradefacilitation_e.pdf
[4]. Defence reforms: time to execute the vision
C ontext:-
Todays Defence challenges in India require a coordinated armed force that can work in tandem in different spheres of planning, training, procurement and operations.
N eed for a Chief Defence Staff:-
Jointness across every level of our armed forces should be promoted.
The CDS will be a four-star general and serve as a single point of contact for the defence minister. He would be accorded a place above the three service chiefs in the pecking order.
But very little progress has been made.
I ncreased Geographic Presence in neighbourhood:-
The neighbourhood continues to remain in top priority.
The focus on Indian Ocean and articulation of a need for a maritime strategy is the need of the hour for the country with a coastline exceeding 7,500km.
India is working to safeguard its interests and relationships in the neighbourhood to counter the increasing Chinese influence.
While Indias capability to counter China in the Indian Ocean is considerable, its capability gap on the continental boundary remains a source of worry.
Cyber and aerospace also needs attention.
D efence Hub:-
Building domestic defence capabilities under the umbrella of Make in India is a welcome move.
While liberalization on FDI is done to some extent, an effective regulatory mechanism is needed.
Creating a level playing field between the state-owned public sector units and the private firms will go a long way in boosting investments and innovation.
A new defence procurement policy is also being worked upon.
E D conomic igest
[1]. Government says it protected Indias interests at WTO talks
C ontext:-
The Nairobi WTO ministerial conference and its outcome for India.
Nairobi Package, for India contains
1. Ministerial Decisions on public stockholding for food security purposes,
2. Special Safeguard Mechanism (SSM) for developing countries- SSM is a tool that will allow developing countries to temporarily hike duties to counter import surges and price falls of farm items.
3. Commitment to abolish export subsidies for farm exports particularly from the developed countries
[2]. Mid-year review: Macroeconomic policy rethink required/Analysing the Analysis
C ontext: Mid-year Macroeconomic performance review of India Economy.
F indings:
1. Macroeconomic conditions are very weak.
2. Exceptional public investment and private consumption.
3. Fiscal policy has been contractionary since 2012.
4. Monetary policy in tight mode since 2010.
5. The GDP deflator has turned negative, so nominal GDP growth is well below real GDP growth
Question Asked:
It asks whether India should depart from its promised path of fiscal consolidation, which calls for the fiscal deficit to fall by another 0.4% of GDP (from 3.9% to 3.5%) in 2016-17
F ocus of the report:
The focus of the review appears to be upon how to break out of the circle of excess capacity, weak demand, falling prices, high levels of debt.
V isible outcomes of tight monetary policy has been stated by Author as,
1. Steady worsening of corporate balance sheets,
2. The continuous increase in interest costs,
3. The relentless souring of bank loans and
4. The structural deterioration of banks balance sheets.
W hat has made recovery cycle difficult?
1. Pre-committed fiscal consolidation path
2. Falling nominal gross domestic product

3. Weak consumer demand
T he Challenge:
1. On the monetary side is the inflation targeting framework
2. Credibility issues on the fiscal side are far more serious in the light of Indias history and the increased dependence upon short-term foreign capital
W hat is needed?
There is a need to increase public investment to crowd in private investment. But the challenge is breach of commitment towards fiscal deficit.
A lternate Ways to Raise Public Investment Without Breaching Fiscal Deficit:
1. Liquidate the government holdings of equities held in Specified Undertaking of the Unit Trust of India (SUUTI)
2. Rationalising of subsidies
3. The big corporation can borrow money to fund programmes rather loading the borrowing on budget.
[3]. The positive side of Fed rate hike
C ontext:-
It is unlikely to hurt stock markets, and based on past evidence, India will do well out of any resultant volatility.
A symmetric monetary policy:-
Divergence in monetary policy among Major economies is now a reality.
Any cry for joint response is a thing of the past as the European Central Bank indicating a new round of QE (Quantitative Easing) as well as Bank of Japan and Bank of England not changing their policy.
I mpact on emerging Economies:-
The rate of growth of MSCI Emerging Markets Index, which captures trends in large and mid-cap companies across 23 emerging markets, has increased over the years, exhibiting better prospects.
But this has been accompanied by increased dispersion in emerging market returns, indicating higher uncertainty in the global financial system.
India with its better macros stands is hoping to gain from positive market volatility in future.
[5]. Indias credit boom, and bust
W hat is needed to be known from this article?
Urgent requirement of Bankruptcy reform in India is a reflection of major debt problems in the countrys corporate sector. This in turn is a reflection of large number of Non Performing Assets.
The analysis of bank borrowing in the credit boom and subsequent firm performance hints at structural problems that may be difficult to resolve. They can be:
1. Problems arose in infrastructure and construction, part of the cause may be political influences on lending decisions
2. Banks did not have the expertise for assessing large, complex infrastructure projects
W hat is to be done meanwhile?
In a new scheme, banks have become de-facto owners of some firms with bad loans, but they need an expedited path to liquidating these positions, since they cannot be expected to start managing these firms
operations. This needs urgent attention and perhaps some ad hoc solutions until a new bankruptcy legal framework is put into place.
India needs more aggressive recapitalization of its banks than has so far been proposed. In such cases, reluctance to acknowledge the problem and move on from it is always more costly than the alternative.
[1]. IISc makes Big Impact on Small World of Chips
S cientists at the Indian Institute of Science (IISc) have devised a method to lay circuits in electronic chips that is both cost-effective and energy-efficient.
They have found a way to etch nano-circuits on silicon chips at room temperature.
N ano-circuits, several thousand times thinner than a strand of hair, are the basic building blocks of any high-end device -be it mo bile phones, television sets or even aircraft.
They could accelerate the growth of connected devices, which are dependent on lower power consumption and faster speeds.
Currently, electric circuits are etched using two methods: Electron-beam lithography and photolithography.
As of now circuits are etched the circuit on polymer the new technique does the same on metal.
It is energy-efficient and reduces the operating cost too.
If this method actually works, it can be a game-changer in the Internet of Things industry due to the industrys need for low power and small form requirements.
[2]. Round 2: Free Basics vs Internet Saviours

N et neutrality , or the notion that internet service providers must treat all traffic as equal, became a topic of heated discussion after Telecom Regulatory Authority of India floated a consultation pa per on per
on Regulatotry Frame work for Over-the Top (OTT) Services
Net neutrality has already been dealt in earlier briefs.
R ecent Happenings:
Facebook launched its Save Free Basics campaign on the social network, in an attempt to promote its Free Basics programme, which the social networking giant says is a part of its internet.org initiative. It is
urging users in India to show support for digital equality in India.

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What is 9 PM brief?
National
[1]. Rs. 1.4 lakh crore cess money lies idle
C ontext:-
More than Rs. 1.4 lakh crore of funds collected by the government under various cesses for purposes as varied as higher education, road development and the welfare of construction workers are lying unutilised.
As a normal process, the cesses are allowed for a specific purpose. For example, the education cess can only be used for education. Using the funds in other areas would amount to misuse.
W hat you need to know?

T ax: Any money the government takes from you (legally) for doing any economic activity is tax. Generally, this is a percentage of the money you receive or give. Taxes are either direct, where the money goes
directly from your pocket to the govts pocket, or indirect, where the money goes from your pocket to someone elses pocket and then to the govts pocket. (Lemme know in comment if you need further
explanation of these terms)
D uty: This is an on-border tax charged on goods (commodities, or things that you can physically touch) either while coming into the country or going out of the country. Generally, a percentage of the value of
the good.
C ess: This is a tax on tax, levied by the govt for a specific purpose. Generally, cess is expected to be levied till the time the govt gets enough money for that purpose. The education cess, that is levied
currently, is meant to finance basic education in the country.
S urcharge: This is an additional burden to the tax being already levied. Generally, surcharge is levied for a certain period time. For instance, the 10% surcharge being levied on super rich in India for one
financial year.
NOTE: Surcharge and Cess may look the same, but the difference is in the way of charging. For instance, say some tax is 30%, so out of Rs 100 earning; Rs 30 is paid as tax. Now if the govt levies a 10% cess,
the total tax will become Rs 33. However, if the govt levies a 10% surcharge, the total tax will become Rs 40.
[2]. Winter session ends in deep frost/Winter chill
C ontext:-
This session has been a victim of a strategy conceived to see that Parliament is paralysed, come what may.
The only time where it looked as though public pressure was exerted on MPs to run the House was during the debate on the Juvenile Justice Bill.
The Juvenile Justice Bill is a classic example where disrupting proceedings of the House will result in a political cost, of falling demonstrably foul of the public mood, hence the reaction.
Otherwise, one can put frequent disruption of the House, of even low levels of scrutiny of the government through question hour [only 13% of the allotted time for it was utilised] to the fact that these have no
effect on electoral prospects.
If these disruptions persist the Indian Republic will be subjected to dangers.
F ailure of Rajya Sabha:-
The Constitutions founding fathers had envisioned that the House of Elders would refuse to fall prey to passionate rhetoric and instil calm to the legislative process.
In the case of a law that called for reasoned and rigorous debate, the Rajya Sabha showed undue urgency and failed its mandate.
[3]. Rural development, farm spending rises by 10%
Official data show a nearly 10 per cent increase in real expenditure on agriculture and rural development.
a) No reduction in spending is visible in the health sector with expenditure rising.
b) The increases are substantial both in absolute terms as well as a percentage of GDP.
c) The quality of spending has improved too with the shift in expenditure away from current to capital investments.
[4]. Min Starts Work on MoP for Judges Appointment
C ontext:-
Supreme Court left the task of bringing in a new Memorandum of Procedure (MoP) for appointments to the higher judiciary to the government and the Centre has initiated a consultation process.
F our key issues:-
The ministry has asked states to give suggestions on four key issues underlined last week by the Supreme Courts constitutional bench.
These four are:
a)eligibility criteria,
b)transparency in the appointment process,
c) a permanent secretariat and
d)a process to evaluate and deal with complaints against candidates.
S ignificant Development:-
Legal experts view the development as significant for two reasons.
Firstly, the government has decided to refrain from entering into any confrontation with the judiciary as it has postponed the issue of immediately coming up with a revised or new National Judicial Appointments
Commission (NJAC) Act, which was struck down by the Supreme Court in October.
The second reason is the intent shown by the government to improveand incorporate transparency into the procedure.
The court also gave the government the liberty to lay down eligibility criteria, like minimum age for the judges of high courts and the Supreme Court.
[1]. Worst humanitarian tragedy of 2015

[2]. Seychelles committed to Indian naval base
W hat has happened?
A plot of land for India to build its first naval base in the Indian Ocean region has been allocated by the Seychelles government in the Assumption Island.
H ighlights:-
J oint Project:-
This is a joint project between India and Seychelles involving the two Defence Forces in enhancing mutual security along the western coast of Indian Ocean.
E xercise greater control:-
It will help India exercise greater control over the Indian Oceans western region all the way to the piracy-prone eastern African coastline.
S taging post:-
It will be one of the major staging posts for a large maritime security network that India is setting up with the help of the various Indian Ocean region partner countries.
P iracy and security issues:-

It will play a key role in eradicating the scourge of Somalia-based piracy as well as other maritime security issues such as arms trafficking and financial fraud in the banks of the Indian Ocean region islands.
A new patrol vessel from India will be handed over to Seychelles in mid-January 2016.
India, with its strong intelligence network, will also be helpful in maritime law enforcement by Seychelles.
I mportance of Small Nations:-
Pointed out that small nations are equally important in the contemporary world order and need to be taken seriously for the sake of preserving the security and order.
T o counter China:-
The project has acquired significance following China acquiring its first African naval base in Djibouti in November.
[3]. India should reclaim its space in Afghanistan
C ontext:-
Prime Minister Narendra Modis visit to Kabul, and will be inaugurating Afghanistans Parliament building, which is a symbolic gift from the worlds largest democracy.
Government has also decided to transfer four Mi-25 attack helicopters to Afghanistan.
I mportance:-
Both India and Russia have a convergence of interest as far as political stability in Afghanistan is concerned.
Apart from Taliban, the increasing presence of Islamic State (IS) in Afghanistan greatly worries both India and Russia.
India was the first country with which Afghanistan signed a strategic partnership agreement in 2011.
It is also the fifth largest bilateral donor and the largest among the non-OECD (Organization for Economic Cooperation and Development) countriesto Afghanistan.
India has a lot at stake in the future of Afghanistan.
India is an inevitable partner for Afghanistan not just for cultural exchanges and building democratic institutions but for defining the contours of security arrangement as well.
[4]. What all is at stake as PM Narendra Modi visits Russia
C ontext: Indian PM Narendra Modi first state visit to Russia.
A Little of History:
Cold War made sure that India Russia inter-dependency grew giving strong foundation to strategic relationship between two.
Aftermath of Cold War, USSR disintegrated, started a phase in Russia which fascinated with west to revive its economy. This was the time when India was taken for granted by increasing prices of arms supplies
and supplying sub standard products.
This made India to look at other countries to diversify her arsenal purchase.
C urrent Scenario:
Once economically wrecked, Russia has started a new phase of economic revival on the back of oil economy as well as consolidated its space in geopolitics with continuous strikes on ISIS leaving no choice for
west but to join Russia in this fight. At the same time Russia has been involved in Crimean Annexation, disturbances in Ukraine and support of Assad regime in Syria.
At the same time India, has started a new projection of itself under new regime which is of selfish of national interest but at the same time accommodating and cooperative. The diplomacy has shown that no past
preconceived standards will be adhered blindly.
A uthor States that,
That India and Russia has share a special bond and have stood behind each other in geopolitical arena. India shares cooperation in many field with Russia nuclear, defence, infrastructure over a long period and
now with Make in India initiative time is ripe to take this strategic cooperation to next level as there are many defence programmes of intense cooperation between two countries.
E xpected Programmes to be Signed:
a) Manufacture of Kamov helicopters, armoured vehicles and naval vessels
b) Outsourcing manufacture of spares and repairs of major components to Indian industries
c) Resolve the impasse afflicting programmes such as FGFA and MTA, and space and nuclear power
C onclusion:
India and Russia are at the crossroads of a major transformationwith Chinas growth slowing, India is going to be the bright spark, and it needs to leverage its position to gain technologically and strategically.
For Russia, it makes sense to strengthen its relations with India more than ever before. The stakes for both are enormous.
[1]. For now, Make in India is a mere slogan
C ontext:-
Defence deals with Russia, US and France in the recent past are only following the legacy import-dependent, risk-averse and corruption-riddled Defence Procurements.
India accounted for 15 per cent of the volume of global arms imports in the previous five years. In terms of financial value India was only second to Saudi Arabia in 2014 on military purchases from the global
bazaar.
T he Chinese story:-
Indias imports are three times that of China, which in the early 1990s took a dramatic turn towards indigenisation after following a pattern very similar to that of India.
Between 2010 and 2014, China also turned into a major exporter of arms, increasing exports by 143 per cent over the period.
China is the worlds third-largest military exporter today; India does not even figure in the top ten.
Even if its stolen from foreign countries and reverse-engineered, China has rapidly built itself a very robust military-industrial complex.
R eforms Needed:-
I nvest in domestic Manufacturing:-
It would be best to deploy money spent in the international bazaar into rapidly building the domestic military manufacturing base.
These big-ticket purchases are taking away a major pie from the capital budget of the Ministry of Defence (MoD).
Already, most of the capital budget is going towards committed liabilities payment for contracts concluded in the past.
The current deals will also ensure that the capital budget will, for years to come, be heavily committed to previous contracts.
L evel playing field for Private sector:-
The major reform needed was to end the stranglehold of government-run public sector units (PSUs) and the Ordnance Factory Board over military supplies, with the Indian private sector allowed entry into
defence contracts.
Over the years, the FDI limit has also been raised to 49 per cent but the response is still lukewarm.
S killed Man power:-
The creation of a robust military-industrial complex would require an overhaul of higher education to create well-trained manpower.
I PR and Design Control:-
One of the most significant recommendations of the MoD Expert Committee is that Make in India should not end up being assemble in India with no IPR (intellectual property rights) and design control.
This is a lesson learnt from the defence sector PSUs, which have largely become local integrators for foreign systems.
I ncrease Domestic acquisition:-
India decided to increase its defence acquisition from within India from 30 per cent to 70 per cent by 2005. However, till today indigenous acquisition is still hovering around 35 per cent.
The MoD expert committee has now suggested that 2027 should be the target year to achieve 70 per cent self-reliance.
D efence Vs Civilian goods Debate:-
The defence budget is 13 per cent of the Central governments total expenditure, and almost 2 per cent of the GDP.
Discussions about guns versus butter (defence versus civilian goods) can be endless, but the merit of an indigenous military-industrial complex is also important.
As its ability to better lives beyond the military realm, its criticality for securing the nation state, and ability to bring down corruption in purchases are proven.
[2]. Rage of the self-righteous Republic

T he Rajya Sabha has just passed the Juvenile Justice (Care and Protection of Children) Amendment Bill, 2015, which allows for children between the ages of 16 and 18 to be tried in adult courts for heinous
crimes.
The article critically analyses the impact of such harsh laws on Indian Youth.
L awmaking in a fit of frenzy:-
Parliament is being criticised in the mistaken belief that a legislative fix could have ensured continued imprisonment of the juvenile.
It is being suggested that legislative inaction in the Rajya Sabha has been responsible for the juvenile walking free.
The amended law is considered an effective deterrent which will protect middle-class India from being attacked by juvenile criminals.
W orse than the crime:-
Has juvenile criminal behaviour reached epidemic proportions requiring legislation is a question to be asked?
It is said that juvenile crime has risen by 47 per cent but its also true that juvenile crime is still less than 2 per cent of reported crime figures.
Also most of it is non-violent crime and often the result of vagrancy.
Most importantly, most children in trouble with the law come from extremely poor backgrounds and are often runaways from hunger and abuse at home.
Does this most vulnerable section of our society require legislation to keep it from being a menace to the rest of us?
H arsh Legislation:- Bad laws are the worst sort of tyranny
It is a cheap fix for politicians to douse public anger at events.But harsh laws do not diminish the problem, nor do they protect future victims.
TADA [Terrorist and Disruptive Activities (Prevention) Act] and POTA [Prevention of Terrorism Act] did not end up reducing terrorism, but they ended up empowering lazy policing.
Criminalising cheque bouncing has resulted in our criminal courts being flooded with cases from financial institutional lenders and magistrates ending up as recovery agents.
We as a society keep clamouring for harsher laws, which politicians enact to escape being targets of outrage
Criminal laws made to benefit a particular section end up being misused against them.
The maximum proportion of female offenders in any Indian jail is women arrested under the dowry laws. Their accusers are women as well but often put up to such accusations by male relatives and lawyers.
H einous crime:-
Heinous crime is defined as crime that carries a sentence of imprisonment for seven years or more under any law.
A variety of acts, including non-violent crimes such as forgery, or even crimes of incitement such as sedition, attract a prison term of seven years or more.
From the policeman who makes the arrest, to the Juvenile Justice Board that takes the call on whether to allow prosecution as an adult, large amounts of discretion will necessarily operate.
Those who can afford it can and will challenge any decision to prosecute in higher courts. The result is more likely to be greater uncertainty, and lesser justice, as criminal trials get stalled by appeals to superior
courts.
C onclusion:-
Extreme justice is often injustice
Whether safety lies in the path of harshness, or in effective implementation of existing laws, is a call for the republic to take.
Has Nirbhayas death necessitated harsh laws to deal with Indias young people or have we elders failed our succeeding generations of youngsters by exposing them to adult penalties
The amended law confirms that we are better off treating our children in conflict with the law as adult offenders to be punished rather than juvenile delinquents to be reformed.
[3]. Supreme error
C ontext:-
Disenfranchising candidates based on the requirements of having a toilet and certain minimum educational qualifications by Haryana government and upholding of the same by the Supreme court
C onstitutional right:-
Contesting and voting in any election (adult suffrage) is a constitutional, and not just a statutory, right
Statutory rights may be limited or extinguished by an amendment or repeal;
Fundamental rights are subject to reasonable restrictions and what is reasonable is for Parliament and the Supreme Court to finally decide;
Constitutional rights are neither fundamental nor statutory, but these can be changed only by a constitutional amendment without abrogating the essential features of the basic structure of the Constitution.
R easonable restriction:-
The right to contest panchayat elections is subject to any law made by the state legislature, and identical provisions (Articles 101 and 191)
It prescribes specific grounds for disqualification for Parliament and state legislatures. But this does not mean that the state may disenfranchise panchayat contestants at will.
Constitutional rights are subject to reasonable restrictions. But the regulation has to be reasonable as not being arbitrary under Article 14 and that the due process of law has to be upheld.
C onclusion:-
The toilet requirement is held to be reasonable because a salutary provision designed as a step for eliminating the unhealthy practice of rural India of defecating in public and those who aspire to get elected to
those civic bodies and administer them must set an example for others.
But the difficulties of the affected people are unclear and needs more insight to know the actual reason.
It is also said that education gives a human being the power to discriminate between right and wrong, good and bad. Though its true to some extent; formal credentials are not the only things that enable us to
distinguish between right and wrong.
[4]. The good news/Decoding social sector innovations
C ontext:-
In collaboration with the UNDP, Niti Aayog brought out a book titled Good Practices Resource Book 2015, focusing on social-sector delivery.
H ighlights:-
A rbitrary choice:-
The choice of those heads can be a trifle subjective and arbitrary.
For instance, is the integrated basin development and livelihood promotion programme in Meghalaya is not about environment management but its more about driving entrepreneurship and synergising existing
public expenditure schemes .
O nly for the current year:-
This is documentation only for 2015, although one cannot necessarily pin down an intervention to a specific year.
Its not an inventory of all good practices in social-sector service delivery.
S tates represent neat administrative boundaries:-
Good practices often originate in districts, sometimes even in blocks and villages but the practices are attributed to states. Consider the rehabilitation of manual scavenging. This is listed against UP, but is really a
Badaun district initiative.
T o replicate elsewhere:-
This initiative is to disseminate and advocate its replication elsewhere.
B enefits:-
This illustrates the success stories of decentralisation, fiscal devolution and community participation, providing the District Magistrate (DM) (or Block Development Officer (BDO)) with flexibility and
independence.
This is an aspect of civil service reform, and not just all-India services alone.
It also imparts an element of optimism to the development and governance discourse.
E D conomic igest
[1].Weak balance sheets, bad loans increase risks for banks: RBI/RBI sees big problem with big borrowers
C ontext:-
A significant increase in the gross non-performing asset ratios of large borrowers among public sector banks, from 6.1 per cent in March 2015 to 8.1 per cent in September 2015, has led to an increase in the GNPA
ratio of the banking system, according to the report
R easons:-
Loans to the industrial sector account for a major share of their overall credit portfolio as well as stressed loans.
The profitability and as a consequence, the debt-servicing capacity of companies, has seen a decline.
This is an indication of halted projects, rising debt levels per unit of capex, overall rise in debt burden with poor recoveries on resources employed.
C onsequences:-
It is inhibiting new investments.
W ay forward:-
Corporate sector vulnerabilities and the impact of their weak balance sheets on the financial system need closer monitoring
[2]. Parliament passes bonus Bill; benefits to accrue from April 2014
Parliament on Wednesday passed the Payment of Bonus (Amendment) Bill.
It showcases the resolve of the government to ensure job security, wage security and social security for the workforce of the country to realize the vision of Make in India, Skill India and Digital India.
B ased on CPI (IW):-
The revision of the bonus eligibility and the amounts are done by factoring in the relevant price increases, the measure used being the consumer price index-industrial workers or CPI(IW).
A pplicability:-
The Payment of Bonus Act, 1965, is also applicable to every factory and other establishments in which 20 or more persons are employed on any day during an accounting year.
[3]. Why no corporate bond market?
C ontext:-
Underdeveloped Corporate Bond Market in India.
W hy there is a need for Corporate Bond Market:
a) Such a venue will provide an important alternative source of funding for corporations, which will enable them to optimize capital structure in an environment of friction.
b) Such a market should enable additional cash to fund operations or long-term expansion plans without diluting corporate control
c) The government should also welcome the development of the corporate bond market because it would spur corporate activity and thus economic growth.
c) Investors such as pension funds and insurance companies will have an additional set of instruments in which to invest, providing, in theory, a better overall risk to reward trade-off since there would be more
opportunities for diversification.
I f such a good thing why is it underdeveloped?
The huge pile of corporate debt that is currently being held in the form of loans, especially by state-owned banks. This massive inventory of loans generates significant incentives for three partiesbanks,
corporations and the governmentto delay or inhibit the development of a significant corporate bond market. (How they benefit is something that we guess is not needed for UPSC)
[1]. Indian American professor wins top honour for research on tumours
C ontext:-
U.S. President Barack Obama will present the National Medal of Science to Rakesh K. Jain, an Indian American professor.
The award is considered as their nations highest honours for achievement and leadership in advancing the fields of science and technology.
Prof. Jain is regarded as a pioneer in the area of tumour micro-environment and widely recognized for his seminal discoveries in tumour biology, drug delivery, in vivo imaging and bioengineering.
His work includes uncovering the barriers to the delivery and efficacy of molecular and nano-medicines in tumours, developing new strategies to overcome these barriers; and then translating these strategies from
bench to bedside.
[2]. Indian startup grows human liver in lab
C ontext:-
Pandorum Technologies, a Bengaluru-based biotech startup, has developed an artificial tissue that performs the functions of the human liver.
U ses:-
D o away with human/animal trials:-
3D-printed living tissues made of human cells would enable affordable medical research with reduced dependence on animal and human trials.
It will serve as test platforms for discovery and development of drugs and vaccines.
O rgan transplant:-
This research will also eventually lead to full scale transplantable organs.
The cell-based miniature organs can be used to develop bio-artificial liver support systems for preserving life in patients who have developed liver failure.
Such bio-printed organs will address the acute shortage of human organs available for surgical transplantation
[3]. Unfree basics
C ontext:-
TRAI has asked telecom operators to put Facebooks Internet.org on hold as it violates net neutrality.
F acebooks argument:-
It wants to save Free Basics arguing that the platform would bring those people online who find the cost of using mobile data prohibitively expensive.
F or Net Neutrality:-
The free in Free Basics, for instance, is subject entirely to Facebooks, and its mobile operator partners, discretion.
C onclusion:-
The spectacular growth of the internet was made possible by its openness and level playing field, which allowed once-upstarts like Google and Facebook to topple giants.
With smartphones and tablets becoming the default gateways to the Web for more and more people, the design of telecom policy is crucial to ensuring India doesnt become home to a stratified, uncompetitive
internet.
(PS: There 9 PM Daily Brief will not be published tomorrow. Tomorrow Brief will come on Saturday. Saturday brief will come on Monday. As per convention there
will be no brief for Sunday.)
Wishing You all A VERY MERRY CHRISTMAS !! : By: ForumIAS Editorial Team
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What is 9 PM brief?
National
[1]. PM goes to Lahore, makes a Christmas date with history/3 minutes that changed India-Pak. ties
W hat has happened?
Modis visit to Pakistan is the first by an Indian Prime Minister in 11 years.
It caught everyone by surprise including senior officials.

They also called for innovative diplomacy of the kind they conducted in Paris, hinting there would be more such meetings in future.
Mr. Modi reportedly spoke of improving ties through economic links, citing progress in Indias bilateral trade with China as an example.
The Prime Ministers then discussed bilateral relations, particularly on how to improve people-to-people ties and also the upcoming talks between the Foreign Secretaries for more than an hour.
Modi reportedly agreed to include all issues, including Jammu and Kashmir in the list, which had been omitted in the Ufa statement.
[2]. To 2016, uncertainly
C ontext:-
The article discusses the economic problems of the current year and the need for taking up reforms seriously to ensure growth development.
P roblems of 2015:-
a) Failed parliamentary session
b) The disinvestment target of roughly $11 billion has been postponed
c) No clear strategy to recruit better managers for PSUs.
d) The bankruptcy bill is yet to be made into law.
e) The problem of non-performing assets in public-sector banks remains unresolved.
f) There has been little progress on energy reforms and there is only a slight improvement in the ease of doing business index.
g) It has shelved those plans and ignored the Shanta Kumar Committee report on reforming the Food Corporation of India.
h) No efforts are underway to set right the distorted fertilizer subsidy.
i) Inflation has come down and is largely due to the decline in global commodity prices
j) The level of investment remains lower than desired and import demand continues to be weak .
k) There are no financial or business indicators that suggest the economy is growing as rapidly as suggested by the new GDP estimates.
l) The recovery has also been slowed down by the RBIs stubborn insistence on keeping interest rates higher than mandated by the underlying inflation.
m) The combined Central and state fiscal deficit has gone up since 2010-11. With the 14th Finance Commission recommending that more funds be devolved to the states, it will be important to start looking at
combined fiscal deficit numbers.
Economic Digest
[1]. Green norms may sound death knell for domestic textile industry
W hat has happened?
The Environment ministry has mandated that textile units having waste water discharge greater than 25 kilo litres a day shall establish Zero Liquid Discharge effluent treatment plant.
No new or existing units will be allowed to operate their factories after that, in the absence of such arrangements.
Textile industry has raised concerns about the rule as it would make Indian firms even more uncompetitive at a time when export orders are shrinking.
W hat is Zero Discharge?
The concept of zero discharge necessarily means the following: 1) recovery of reusable water/other materials from waste water; 2) minimization or, no discharge of polluting substances into the environment away
from the waste water treatment facility.
S ignificance of Textile industry:-
The textile industry is Indias largest employer after agriculture, accounting for 14 per cent of Indias exports.
It has recently lost ground to Bangladesh and Vietnam in the global market as the preferred supplier for ready-made garments.
C oncerns of textile units:-
Smaller textile units wouldnt be able to afford the costly equipment for treating effluents with a zero liquid discharge approach.
Several units after necessary approvals from the environment ministry and state pollution boards have invested in sea-discharge after treating effluents all these investments would stand futile with the
implementation of the proposed policy, thereby increasing the financial stress on these companies .
Technologies for such treatment plants is steam and electricity-intensive, leading to higher green house gas emissions as India largely relies on coal for power.
S uggestions:-
Increase the threshold of 25 kilo litres a day to 100 kilo litres a day.
Redefine zero effluent discharge to include re-use, recycling and alternative deployment of treated effluents
Environment
[1]. The gap in environmental crime statistics
W hat has happened?
From 2014, the National Crime Records Bureau (NCRB) began compiling data on environment-related offences. They show the all-India tally at 5,835.
Rajasthan alone accounts for half of all environmental crimes committed in India in 2014. In six states and four Union territories, no environmental crimes were recorded.
L aws Included:-
The NCRB Data includes violations under only five laws:
1. The Forest Act, 1927;
2. Wildlife Protection Act, 1972;

3. Environment (Protection) Act, 1986;
4. Air (Prevention and Control of Pollution) Act, 1981; and
5. Water (Prevention and Control of Pollution) Act, 1974 (as amended in 1988).
M ost of the offences relate to just two Acts, the Forest Act and the Wildlife Protection Act, with the bulk recorded under the former.
P roblems with the Data:-
Under-reporting and inadequate coverage of laws
E xample:-
Delhi, with such poor air quality and where the Yamuna is choking under the weight of industrial and household waste, records no crimes under Air (Prevention and Control of Pollution) Act, 1981; and Water
(Prevention and Control of Pollution) Act, 1974 (as amended in 1988).
W ildlife crime:-
Wildlife crime broadly falls into five categories:
1. Poaching;
2. Illegal trade in body parts of wildlife;
3. Illegal possession of wildlife goods;
4. Entering a protected wildlife territory to hunt without permission;
5. Taking wildlife goods outside the country without permission.
O f these, illegal trade in body parts was the most common offence.
Earlier, the offences mostly involved animal parts like leopard skins, deer antlers or ivory, nowadays they have expanded to include sea horses, pangolin skins, star tortoises, spotted black terrapins and sea
cucumbers, with much of this new demand coming from China and South-east Asian countries.
W hy are most crimes recorded under the Forest Act of 1927?
This may be because violations under this Act, such as cutting trees, are easier to record.
The well-trained cadre of forest service officers are granted a lot of judicial power, and their promotions and incentives depend on their policing performance.
On the other hand, the pollution control boards (PCBs) which deal with air and water pollution were created only in the 1970s. They do not have enforcement officers, no mechanism to address complaints, no
policing functions and just issue permits
Police authorities are often not aware of the violations under the laws and hence do not record these as crimes under the Act.
In most cases, the PCBs just issue a show-cause notice to the entities concerned, and do not register cases with the magistrate. This is why the data does not represent the real extent of such crimes.
W hy does Rajasthan account for half of the total environmental crimes reported in the country?
Greater vigilance, especially after tigers disappeared completely from Sariska in 2004.
The state has only 9.5% of its area under forest coverage and even that is under immense pressure.
The local populations dependence on forest produces for livelihood.
Rajasthan has a 1:5 human-to-cattle ratio, and overgrazing is rampant
[1]. Continental shifts, fault lines
Whole article should be read. Its ready brief analysis of the problems of West Asia.
http://www.thehindu.com/todays-paper/tp-opinion/continental-shifts-fault-lines/article8030137.ece
[2]. India, US and a year of togetherness
C ontext:-
The article discusses Indo-US relationship in the year 2015.
The year 2015 according to the author yielded extraordinary results in terms of cooperation between the two countries, greater ambitions have been set for 2016.
U S-India-Japan ministerial mechanism:-
The Republic Day visit followed by a common vision for the Indo-Pacific region based on the shared commitment to the rules-based international systems that which has safeguarded peace and prosperity for
seven decades.
Malabar naval exercise in the Indian Ocean in which Japan was welcomed as a regular participant.
The Defence Technology and Trade Initiative under which joint working groups on aircraft carrier and jet engine technology was launched.
The 2016 Red Flag aerial exercise in which India will be joining.
Nepal earthquake demonstrated how Indo-US growing military inter-operability contributed for joint humanitarian and disaster-response missions
P ublic health and development challenges:-
Joint research helped launch the worlds most inexpensive rota-virus vaccine.
The US Centres for Disease Control and Prevention signed 16 new agreements to partner with Indian health institutions to combat infectious disease threats.
Also launched new efforts to fight TB, engaged in joint cancer research, and battled acute encephalitis together.
Working to increase agricultural productivity and reduce malnutrition across Africa.

T rade:-
In 2005, two-way trade was around $30 billion.
Today, it stands at $104bn, and our sights are set on increasing this figure to $500bn.
A $2.6bn agreement for GE to provide Indias railway network with next-generation locomotives, many of which will be made in India.
In 2005, there were approximately 200 US companies operating in India, today there are over 500.
This past year, over 1 million visa applications were processed the highest on record
C limate and environment:-
Fulbright-India climate fellowship, expanded Indo-US Partnership to Advance Clean Energy (PACE) research, and established a new fund to hasten the commercialisation of innovative, off-grid clean-energy
solutions.
Agreed to work to adopt an amendment to the Montreal Protocol in 2016 to phase down the production and consumption of super greenhouse gases known as hydro-fluorocarbons.
These efforts facilitated the conclusion of this months Paris Agreement to combat climate change.
C onclusion:-
The US-India relationship is poised to become a 21st-century alliance for global prosperity.
Indo-US partnership can protect the commons, empower the youth of our countries and the world, help maintain global peace, and further prosperity and development.
While there may be some differences as close partners often do never before in history have two such diverse and culturally distinct powers been united by a shared vision for the global good.
[3]. As We All Get Older
C ontext:-
On account of improvements in education, information, health and subsequent increases brought about in life expectancy, the percentage of Indians in the 60-plus age group has increased from 5.3% to 5.7% and
6.0% to 8.0%,
C ontribution of senior citizens:-
Those who stay at home also assist the household contribute to the economy through their consumption -which has multiplier effects -and savings.
Further, they are engaged in supporting children of the economically active population -usually their grandchildren. But these are typically not quantified in national income accounting.
A round the world:-
New Zealands ministry for social development has an office devoted exclusively for senior citizens.
It has been estimated that senior citizens contribute $64 billion to Australias economy annually.
Some estimates for Britain state that older people work more than 13 million hours a year, which is valued at -an unpaid, of course -$3.1 billion.
I n India:-
There is a ministry of social justice and empowerment, within which there is a social defence division under which senior citizens are covered.
An Integrated Programme for Older Persons, the main objective of which is to improve the quality of life of senior citizens by providing them basic amenities such as housing, food, medical care and
entertainment opportunities, and specifically by encouraging productive and active ageing through support for capacity building of various institutions, local bodies and the community.
There is a national award for senior citizens, which recognises the efforts of individuals and institutions that work toward the cause of the elderly.
M ore attention:-
`State of Indias Elderly: 2014 report points out; India spends a mere 0.032% of its GDP on senior citizens.
An ongoing national programme for healthcare for the elderly is being implemented in only 13 of the nearly 600 districts of the country. And only those who were in government service are eligible for pensions.
While large private sector industries provide substantial retirement benefits, the smaller units, particularly the informal sector, leave their ex-employees to fend for themselves.
W ay forward:-
While fiscal subsidies impose a burden on the countrys finances, the contributions made by senior citizens should be quantified to appreciate their net effects on the economy.
by: ForumIAS Editorial Team


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What is 9 PM brief?
National
[1]. A juvenile act/ A juvenile rush to justice
C ontext:-
Criticising the juvenile justice act (JJA) and its impact on Juveniles.
E ffect of Strict laws on Juveniles:-
Depriving children of their liberty can lead to long-term and costly psychological and physical damage.
Overcrowding and poor detention conditions threaten their development, health and well-being.
The removal of children from networks as well as from educational or vocational opportunities at critical and formative periods in their lives can compound social and economic disadvantage and marginalisation.
Exposure to criminal influences and violent behaviour in detention, and in the worst instances, exposure to adult offenders, is likely to encourage repeat offending.
T he real issue:-
The real issue with juvenile law in India is less about the law and more about its implementation. The JJA will also fail if the boards that it recommends are not created or are staffed without adequate competence.
For instance, juvenile justice boards will decide whether an under-18 accused is to be tried as an adult or a child.
But how will these boards be set up? How will you prevent arbitrary functioning?
C ontradicting laws:-
There is no word also on the contradiction between raising the age of consent while lowering the age of delinquency.
The contradiction is that even though people under 18 are children with no capacity for sexual autonomy, they could be tried as adults for rape should they have consensual sex with under-18 girlfriends.
I nsensitive education:-
Studies show that an overwhelming majority86%of all rapists are men known to survivors, and that they include fathers, brothers, neighbours and teachers.
And it is sad that we dont want to include consent, sexuality and respect in our school and college curriculums.
C onclusion:-
The cornerstone of juvenile justice is reform not retribution. And one of the tests of a civilized society lies in the way we treat the worst amongst us.
The role of Parliament in this context is to be a deliberative body, not an echo chamber.
[2]. Modi Vows to Unveil Startup India Project Details in Jan
Prime Minister has promised to unveil details about the the Startup India, Standup India project in January.
All IIMs (Indian Institutes of Management), IITs (Indian Institutes of Technology), central universities, NITs (National Institutes of Technology) will be joined with this programmes through live connectivity
He also added that a startup is not necessarily associated solely with the digital or IT world.
Start-up India, Stand-up India, should not be limited to certain cities it should spread to all corners of the country
The most important element in the framework is to make it easy for startups to set up their business.
Economic Digest
[1]. States can levy tax on petroleum products
W hat has happened?
The government has proposed a win-win model to address the issue of including petroleum products in the proposed Goods and Services Tax (GST) list.
H ow will it be done?
The states can levy the Value Added tax (VAT) for a certain period.
Constitutionally petroleum products will be part of GST, but for a certain period, the states will have the freedom to determine the tax rate.
[2]. SICASarfaesiNCLT
C ontext:-
The article discusses the need for the proposed Bankruptcy law as studies are indicating more defaults over the year.
P revious laws:-
Various governments have come up with various solutions, from the Sick Industrial Companies Act (SICA) of 1985 to the Recovery of Debt Due to Banks and Financial Institutions Act of 1993, the Sarfaesi Act
of 2002 and a revamped Companies Act of 2013.
It takes BIFR around 5 years to decide on winding up a firm and more than 7 to decide on a rehabilitation scheme; oddly, while BIFR adjudicates on the viability of a firm, the high courts supervise liquidation.
I nsolvency and Bankruptcy Code:-
It seeks to resolve by consolidating all laws and make one bodythe National Company Law Tribunal (NCLT) for firms and Debt Recovery Tribunals for individuals.
It is responsible for resolution of insolvency, liquidation and bankruptcy.
While a time limit of 180 days has been fixed for deciding on cases, the most important change is that no civil courts will have any jurisdiction on the issue and, if there is any appeal against the order of the
National Company Law Appellate TribunalIt will be directly to the Supreme Court, and only on a question of law.
With the Supreme Court upholding the constitutionality of the NCLT, the challenge is to build up the NCLT and its benches across the country.
Editorials & Opinions
[1]. The map of neighbourly outreach
C ontext:-
Prime ministers Pakistan visit has unfolded into of a new era of diplomacy between India and Pakistan.
I nitial Freeze:-
In August 2014, Foreign Secretary-level talks were called off after the Pakistani High Commissioner met Kashmiri separatists; the same excuse was given a year later to call off National Security Adviser (NSA)-
level talks in New Delhi.
Militant infiltration and the occasional provocation from across the border have long been the routine.
T errorism and Pakistan:-
After New Delhi messed up its Kashmir policy Kashmir insurgency of the past three decades acquired sophistication, weapons and manpower from the remnants of the Afghan terrorists.
The world got its new generation of terrorists and their broader ideology. From New York Citys World Trade Center complex to Pariss Bataclan theatre, from Mumbais streets to the many bombed markets
across India, the signatures of violence nurtured by sections of the Pakistani establishment and flourishing under its guidance cannot be ignored.
I ndias strategy:-
The engagement with Pakistan is driven the fact that Indias economic growth, including its ability to keep government expenses under check, enjoy global market trust and attract investment, is all critically
hinged on a peaceful South Asia. No other reason is needed to appreciate why India will have to keep talking to Pakistan.
[2]. Green shoots of a possibility
C ontext:-
The notion that political parties are not sensitive to climate changes and the growing development and environment divide has led to the rise of green parties
W hat are green parties?
A political party with ecological wisdom and participative democracy as its roots.
O ldest green party:-
The German Green Party (now called Alliance 90/The Greens), established in 1980, is one of the oldest and most prominent of these groupings.
N eed for green parties:-
There is a crying need for environmental politics as our flawed economic developmental model has left a trail of shattered homes.
The near-term viability of such parties is still questionable, as many of the current discussions around environmental issues and green politics are restricted to the now and here.
The new-found sensitivity to environmental issues is more of a knee-jerk emotional response and is short lived.
But we have to consider such unique features of our democracy into account while coming up with a political response to new social mores.
Will western model work in India?
These unique challenges, make the strategy of the green parties in the West seems inappropriate in the Indian social milieu.
Hence we should not try to ape the Western model.
There, the environmental concerns are the concerns of the urbane and the educated. In India, the environmental concerns revolve around necessities. They are the concerns of the rural poor, the Adivasis, the
fishermen, the tribals and even the urban castaways.
If green politics does not restrict itself as urban environmental activism but emerges as a binding agent of all these groups and concerns, it definitely has a future in India.
C onclusion:-
We need fresh infusion [of people] and fresh formations which can act as the political and ecological conscience of society.
Conventional mainstream political parties may eventually wake up to the ground realities and may add elements of sustainable development and environmentalism to their agenda.
It is not as if there are no lessons that we can learn from the green parties of the West as the things we fight against are same.
Thus green parties in India are just a seed of an idea, but an idea that holds a lot of promise.
[3]. Engineering regression
C ontext:-
Government is trying to cap the fees in unaided private-sector technical institutes when there are significant gaps in higher education.
The All India Council of Technical Education (AICTE) has accepted the recommendations of a 10-member panel headed by former Supreme Court judge Justice BN Srikrishna on fixing ranges for maximum fees
that can be charged by a private institute for various technical disciplines, including engineering and MBA.
P rivate sector will be hurt:-
This will hurt the private sector which will find it difficult to carry on functioning.
Even though the government has significantly increased public spending on higher education, including technical education, it is nowhere near enough to bridge the supply gapthe private sector accounted for a
whopping 59% of tertiary level enrolments in 2011-12.
Moreover, such a move impairs the chances of foreign universitiesafter the relevant Bill is passedbeing interested in setting up campuses here.
It would be really unfortunate if, just when India needs more quality institutes of learning, populist government policy prevents them from coming upin the long-run, the biggest sufferers will be the very same
students.
[4]. Fudging the debate on net neutrality
C ontext:-
The Telecom Regulatory Authority of India (Trai) issued its Consultative Document on Differential Pricing for Data Services.
The Trai has yet to complete this consultative process and make recommendations to the government on a similar issue which it had raised earlier.
N ew consultation:-
It seeks views on whether telecom operators must be allowed to provide subsidised or free access to some websites or services. a practice called zero-rating in the context of net neutrality regulation.
Trais new document conspicuously avoids familiar terminology including net neutrality, paid prioritisation or zero-rating.
The new document is also largely devoid of any relevant data.
A round the world:-
Few countries see the zero-rating in binary yes/no terms.
Over 90% of countries have no rules in place for zero-rating.
There is significant difference between the dozen-odd countries that do have some rules in place to deal with net neutrality or zero rating.
The US, for example, has a net neutrality law in place, but does not ban zero-rating outright.
It will treat each type of zero-rating on a case by case by basis. In the circumstances, it is odd that India is undertaking a separate consultation, almost entirely focused on zero-rating and yet with virtually no
discussion of its own many facets.
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What is 9 PM brief?
National
[1]. New-look Indira Awaas Yojana to Get New Name
C ontext: Indira Awas Yojana to be renamed as Pradhan Mantri Awas Yojana

I ndira Awas Yojana:
Started in 1985 86
Objective: To provide housing for shelterless below poverty line households in rural areas. Financial assistance is provided for construction of house.
Runs under Ministry of Rural Development
S o is it more than name change?
The proposed upgrade on earlier schemes are:
a) Unit allocation of cost per household has been increased from Rs. 75,000/- to Rs. 1,25,000/-.
b) The size of kitchen will be increasing thereby increasing the total size of unit house by 3 sq. m from 22 sq. m to 25 sq. m.
c) Proposal to converge the scheme under different running government schemes:
i) Already merged with MNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) as construction has been made eligible itme under MNREGS giving the household beneficiaries 90
95 days of unskilled labour job.
ii) States have been asked to ensure that Jan Dhan Yojana, Unnat Chulha Abhiyan andDeendayal Upadhyaya Gram Jyoti Yojana are made available to the beneficiaries.
d) Proposal is there to have quantum of assistance be derived from the grass root problems affecting different geographic regions.
Housing for All is the contemporary scheme being run for urban areas providing assistance of Rs. 1 lakh.
G lossary:
M NREGS The objective of the Act is to enhance livelihood security in rural areas by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult
members volunteer to do unskilled manual work.
J an Dhan Yojana The National Mission of Financial Inclusion named as the Pradhan Mantri Jan Dhan Yojana seeks to integrate the poorest of the poor with bank accounts.
U nnat Chulha Abhiyan (more efficient, less polluting cooking fuel) Unnat Chulah Abhiyan (UCA) is a programme of the Ministry of New and Renewable Energy.
Objectives:
A) To develop and deploy improved biomass cook stoves for providing cleaner cooking energy solutions in rural, semi urban and urban areas using biomass as fuel for cooking.
B) To mitigate drudgery of women and children using traditional chulha for cooking.
C) To mitigate climate change by reducing the black carbon and other emissions resulting from burning biomass for cooking.
D eendayal Upadhyaya Gram Jyoti Yojana (Electrification): Union Government launched Deendayal Upadhyaya Gram Jyoti Yojana (DUGJY) in Patna, Bihar. The flagship scheme was launched with an
aim to provide 247 uninterrupted electricity supply to each rural household across the country by 2022.
[2]. High-Level Panel to Help Jumpstart Innovation

C ontext: Booming Startup Culture in India
P roposal:
India plans to establish a high-level, inter-ministerial panel that will act as the fulcrum of the Modi governments plan to create an ecosystem to nurture innovation.
The panel will evaluate startup proposals to see if they qualify for incentives.
H ow will they be incentivized?
a) Sharp reduction in the plethora of compliances now needed to set up businesses
b) Swifter approvals
c) Easier finance and tax breaks
C ommittee Composition:
Secretaries of departments of information technology, biotechnology and others. The committee will be anchored under the Department of Industrial Policy and Promotion (DIPP)
T he Sticking Issue
There is yet to decide the definition of START- UP.
T he Keyword which will decide who will get incentive: INNOVATION
J anuary 16, 2016 Expected date of unveiling of Start Up India Stand Up India policy full action plan
[3]. Ramakrishna Mission-UNESCO establish official ties
The United Nations Educational Scientific and Cultural Organisation (UNESCO) has established an official relationship with the Ramakrishna Mission in the areas of inter-cultural dialogue, social cohesion and
for promoting peace and non-violence.
In 2012, the UNESCO set up a chair on Inclusive Adapted Physical Education Bnd Yoga at the Coimbatore campus of Vivekananda University.
The organisation found common features with the Ramakrishna Mission in many respects.
[4]. Kant made NITI Aayog CEO
I ndustry Secretary Amitabh Kant had been given the additional responsibility of being Chief Executive Officer of NITI Aayog.
[5]. LPG subsidy linked to income
C ontext:
The government has declared that those who earned over Rs. 10 lakh in the previous financial year will be ineligible for LPG subsidy from January.
C urrent Scenario:
At present, all households are entitled to 12 cylinders of 14.2 kg at the subsidised rate of Rs. 419.26. The market price is Rs. 608 a cylinder.
The government had also launched a scheme for people to give up their subsidies so that the less privileged would benefit. So far, 57.50 lakh LPG consumers have opted
E xpected Benefits:
It would save the government Rs. 113 crore. Such a decision will likely affect at least 60 lakh people, if one were to go only by the number of people who filed their returns in the governments e-filing portal.
Economic Digest
[1]. Panel refuses Swiss Challenge; wants changes in corruption law/Kelkar chalks out rules for PPP revival
C ontext:-
An expert panel led by Vijay Kelkar, has called for swift amendments to the anti-corruption law and an backing from the Parliament for a new policy for public private partnerships or Public Private Partnership
(PPPs) that balances risk-sharing between private and public partners, in order to encourage infrastructure building.
I ssues:-
Infrastructure investments have remained stuck at different stages due to a variety of issues such as land acquisition, lack of clearances, unfavourable market conditions, and costly finances. This puts stress on
banks and the developers balance sheet.
A healthy PPP is required to balance countrys infrastructure needs and the availability of long-term funding.
Also it is critical for India to make the leap from a low-income country to a high-income one in two to three decades, else it risks falling into a middle income trap.
It is observed that risk allocations in Indias PPP projects over the past 15 years are inefficient and inequitable; the panel blamed it on a one-size-fits-all approach to model concession agreements or contracts
signed for such projects.
R ecommendations of Kelkar Panel:-
R emove Swiss challenge:-
The Kelkar panel has asked the government to actively discourage the Swiss Challenge for auctioning infrastructure projects.
In this model any bidder can offer to improve upon a project proposal submitted by another player. It was adopted by the government to redevelop 400 railway stations.
This system brings information asymmetries in the procurement process and results in lack of transparency and in the fair and equal treatment of potential bidders in the procurement process
S wiss Challenge: Swiss challenge method is a new process of giving contractsAny person with credentials can submit a development proposal to the government. That proposal will be made online and a
second person can give suggestions to improve and beat that proposal.
An expert committee will accept the best proposal and the original proposer will get a chance to accept it if it is an improvement on his proposal.
In case the original proposer is not able to match the more attractive and competing counter proposal, the project will be awarded to the counter-proposal.
D istinguish between genuine errors and malafide actions:-
The panel called for urgent changes to the Prevention of Corruption Act of 1988 as well as governments vigilance and conduct rules.
This should be done to distinguish genuine errors in decision-making by public servants from acts of corruption.
It has emphasised the need to guard officers against witch hunt while taking immediate measures to punish malafide actions.
D isallow State owned Entities:-
State-owned entities or public sector units should not be allowed to bid for PPP project .
R ational allocation of risks:-
A rational allocation of risks can only be undertaken in sector and project-specific contexts.
This arrangement has to done in collaboration with all the stakeholders.
R enegotiation:-
The r report has drawn up extensive guidelines regarding the re-negotiation of the terms of concession agreement.
It also has stipulated the reasons that form the basis for re-negotiation and those that should not be entertained as valid reasons.
R e-Bid stalled Projects:-
It has proposed umbrella guidelines for dealing with stalled projects and even suggested cancelling projects dont achieve a prescribed progress threshold on the ground.
Re-bid such projects once issues have been resolved or complete them through public funds and if viable, bid out for Operations and Maintenance.
I nstitutional reforms:-
I PAT: It also recommends the creation of an Infrastructure PPP Adjudication Tribunal (IPAT)which is to be chaired by a former Supreme Court Judge or former High Court Chief Justice, with at least one
technical and financial member.
I PRC: The report says that an Infrastructure PPP Project Review Committee (IPRC) be constituted comprising at least one expert in finance and economics, law, and one or more sectoral experts, preferably
engineers with a minimum of 15 years of experience in the industry in question.
R ight to Information:-
On the issue of PPP developers account books being open to government audit and the Right To Information law, the Kelkar panel has asked for comprehensive guidelines to be framed, adding that the private
sector must be protected against the loss of bargaining power over time.
C onclusion:-
Instead of suggesting an overarching PPP law, the panel has suggested formulating a national PPP policy and seeking Parliaments backing for it to be effective.
[2]. India Post payment bank to be operational by March 2017
H ighlights:-
India Post, which was among the eleven applicants to have received approval from RBI for payment banks in August, will start its service by March 2017.
About 40 international financial conglomerates including World Bank, Barclays and ICICI have shown interest to partner with the Postal Department for the payment bank
The Department has 1,55,015 post offices across the country, of which 1,39,144 are in rural areas.
A dd ons:-
Wi-fi hotspots were launched at Har ki Pauri in Haridwar and Dargah Sharif in Ajmer.
[3]. Interest subvention should be phased out: central bank panel
C ontext:-
The government must do away with the interest subvention scheme and introduce a universal crop insurance scheme for small and marginal farmers according to a recommendation from a panel constituted by the
Reserve Bank of India (RBI)
W hat is interest subvention?
This implies that with the subsidy in hand, the loan borrower has not to pay total interest on loan amount and the balance interest amount is borne by the government.
D rawback:-
There is a specific purpose of subvention where farmers receive loans at a lower cost with the government paying the balance. By changing the same to insurance, the purpose is lost. Besides, insurance works for
the farmer when the crop fails, while subvention helps even under normal circumstance.
O ther recommendations:-
Multiple guarantee agencies, both public and private, that can provide credit guarantees in niche areas need to be encouraged and the role of counter guarantee and re-insurance companies should be explored in
order to deepen the credit guarantee market.
I ssue identified by the panel:-
The committee recognised that substantial progress has been made in terms of access of financial products and services especially after the launch of the Jan Dhan Yojana.
But still there were significant gaps in terms of usage, inadequate last mile service delivery, and exclusion of women as well as small and marginal farmers and very low formal link for micro and small
enterprises.
The Mohanty panel also noted significant financial exclusion continues to persist in the north-eastern, eastern and central states to achieve near-universal access.
[4]. India Trade Gloom
C ontext: Contraction in Indias export fo 12 months in a row and diminishing participation and role of India in global trade.
R eason for insignificance:
India trying to plat leading role in WTO trying to protect interest of developing countries as well as its own stock holding program hence putting itself on defensive ground and not having any forward looking
agenda at WTO ministerial meet at Nairobi.
W TO Relevance:
Most of the developed countries has realised it is very difficult to reach consensus on any forward looking agenda on WTO. They have been looking at the WTO as a forum for preserving their defensive spaces
in global trade.
T he Difference:
One of the main reasons for the attitudinal difference between these countries and India on the WTO is that the former have located alternative forums for articulating forward-looking interests in global trade.
These are the various regional trade agreements (RTAs) being worked out across the world involving developed countries and emerging markets.
I ndia and RTAs:
India suffers from a variety of cross-cutting opinions and interests leading to an odd posturing in RTAs and FTAs. An important element among these is Indias inability to rationalise RTAs exclusive of the WTO.
The leadership role in a multilateral trade forum (WTO) has partly blunted the ability to objectively assess benefits of entering into RTAs, particularly with developed countries
Few segments of Indian industry has also been opposed to RTAs and FTAs and has successfully lobbied with the government on several occasions for preserving defensive interests.
Mega RTA TPP has been discussed in below article in detail
T he Needed Change in India:
a) First, domestic improvements, particularly in doing business conditions remain essential for improving exporter competitiveness. Necessary domestic regulatory reforms can get a leg-up from signing FTAs&
RTAs and can bring about quicker change in this aspect.
b) The second, and specifically important point is engaging in RTAs with a constructive vision. Indias RTAs have not produced the desired results since many of these have been shallow with limited market depth
and have not been taken to domestic industry as meaningfully as they should have been.
C onclusion:
The need of the hour for India is to look into its specific economic interest and be an active participant in RTAs to provide impetus to its trade as well as opportunity to improve domestic business conditions. This
will help India create its own space in global trade governance.
[1]. A Christmas course correction
C ontext:-
Prime Ministers unscheduled visit to Lahore signifies a major course correction in the governments Pakistan policy.
N ew Modus Vivendi:-
The new initiatives indicate a clear preference for summit diplomacy over incrementalism.
India-Pakistan relationship is ripe for summit diplomacy as well as bold initiatives since most of the outstanding issues have already been discussed in great detail over the last many years.
All that is needed now is the political will to implement some of those win-win solutions.
W hat is incrementalism?
It means ensuring progress through small steps rather than drastic initiatives.
K ey issues:-
C ease fire violations:-
Both India and Pakistan need to share the blame for the intermittent ceasefire violations along the Line of Control and the International Border.
C onsulting Separatist leaders:-
Also the way in which New Delhi react to, if Islamabad insists on consulting the Kashmiri dissident leadership needs to be charted out, as the two governments need to find a way to get out of the commitment trap
they jointly created.
R ising radicalisation:-
Pakistans civilian establishment as well as its army have been raising their stakes on the Kashmir front.
Also the situation in Kashmir is going from bad to worse with a number of educated youngsters joining the ranks of militants and radicalisation on the rise among the disenchanted Kashmiris.
In this context, reaching out to Pakistan could potentially alleviate at least some of these worries.
C ontaining Chinese influence:-
Increasing Chinese influence in the region and in Pakistan in particular, this, if unchecked, will be difficult for us to handle in the days ahead.
This is also the reason for Indias new approach to Afghanistan.

R elations with Pakistan army:-
Government should also make a serious attempt at establishing back-channel contact with the powerful Pakistan Army which might be a major hindrance to normalising India-Pakistan relations.
T rade as a tool for Diplomacy:-
Government also believes how business ties can transform strategic relations. They should therefore front load the current engagement process with enhanced commercial and trade relations between the two
counties.
[2]. Free run for the rent-seekers
C ontext:-
With Plurilateral agreements sidelining WTO, the author feels that developing countries like India should initiate measures to protect their domestic interests.
E xistential Threat to WTO:-
The reasons for such a claim are as follows:
a) The post-Nairobi work programme has very few substantive issues that can meaningfully engage its 162 members,
b) The Doha Development Agenda (DDA), that has been the lifeline of the WTO for nearly a decade and a half, now faces the imminent threat of closure.
T he Doha agenda
It was a collective articulation of the developing countries for working towards a just and equitable trading system.
R emove Trade distorting subsidies in agriculture in developed countries:-
It was agreed that agriculture must be stripped of all policy distortions, including the unacceptably high levels of subsidies that provide unfair advantage to the large conglomerates controlling global trade in
commodities
F ood Security issues of developing countries:-
Amending the agreement on Agriculture (AOA)to address smallholder agriculture and give developing countries new instruments to address concerns regarding food security, protection of rural livelihoods and
rural development.
F lexibility with regard to Tariffs:-
Developing countries would be able to enjoy flexibility while reducing tariffs in both agriculture and industry, so as to ensure that these enterprises are prevented from facing competitive pressures before they are
adequately prepared to do so.
O pening up of services:-
In the area of services, most developing countries, including India, have been seeking ways to improve their presence in the global services markets, especially through cross-border trade in services and through
movement of natural persons.
T owards Plurilateral agreements:
Powers like US are showing least interests in DDA thus the Nairobi meet marks that WTO is no longer inclined to discuss the DDA and its covered issues.
Developed countries are more inclined towards the plurilateral formats such as Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership and the Regional Comprehensive Economic
Partnership.
W hat is TPP?
The TPP is a 12-member arrangement, led by the U.Ss quest for markets, without any consideration being given to the ability of smaller countries in the grouping to be able to compete with the larger countries
In this countries of vastly unequal strengths would be treated equally.
Another problem with the TPP is that it ignores the presence of large policy distortions, for instance, the granting of high levels of farm subsidies by the U.S. while pushing for opening of markets.
T he rising influence of Transnational Corps:-
These transnational corporations earn unacceptably high rents through the exercise of the extraordinary rights they have been promised for their intellectual property and their investments.
They have also successfully brought cases against their host countries before international arbitration panels when the host countries have tried to bring domestic regulations to check blatant violation of norms.
C onclusion:-
WTO is facing the imminent danger of being taken over by a grossly unjust and undemocratic governance structure that would be dominated by the powerful interests
In this context India and other developing countries need to seriously consider the contours of their future engagement with this organisation.
Also they should set up stage to discuss the developmental issues which have been sidelined in the current meet.
[3]. Onion lessons
C ontext:-
The author feels that the governments decision to remove minimum export price for onion is a welcome move which should have been done earlier.
K ey issues:-
Though the Centre is always quick in imposing or hiking MEPs when domestic prices firming up, the same is rarely seen when it comes to removal or reduction, which obviously works against growers.
The MEPs according to the author have only caused collateral damage through the loss of valuable export markets.
The time has come to review the utility of not just MEPs, but also other restrictions on movement, storage and marketing of agricultural produce.
Such measures are counterproductive, because they inhibit the supply response from farmers.
W hat is MEP?
Minimum Export Price (MEP) is the price below which an exporter is not allowed to export the commodity from India.
MEP is imposed in view of the rising domestic retail / wholesale price or production disruptions in the country. MEP is a kind of quantitative restriction to trade.
[4]. Ramping up
H ighlights
The prime minister suggested the usage of the word divyang (person with a divine limb) instead of viklang (disabled) to denote that persons with disabilities, in fact, have extra power.
The 100 million-odd disabled persons in India arguably constitute one of the most disadvantaged groups a majority are illiterate and only 25 per cent are employed.
The Rights of Persons with Disabilities Bill was introduced in the Rajya Sabha in 2014.
Its high time to pass the bill, which views disability through the lens of rights and entitlements, not charity and goodwill.

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Budget 2015 Excerpts : - Major New schemesMarch 5, 2015In "Latest Updates"

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[1]. Foreign funds plan share in Indias infrastructure corpus/Modi Sarkars Rs 40kcr Infra Fund Hits Road
The Hindu | The Economic Times
C ontext:-
Sovereign and pension funds from Russia, Singapore, the U.K. and the UAE are among those to express interest in the Rs. 40,000-crore National Investment and Infrastructure Fund.
The NIIF is meant to fund development of infrastructure projects, including reviving stalled ones. The government will invest Rs 20,000 crore into the NIIF from the Budget, with another Rs 20,000 crore
expected to come from private investors.
The governments share in the corpus will not exceed 49 per cent.
The Governing Council of the Fund has decided to complete by January-end the selection process of the Chief Executive of the investment management company responsible for taking investment decisions of its
corpus
W hat is National Investment and Infrastructure Fund?
National Investment and Infrastructure Fund (NIIF) is a fund created by the Government of India for enhancing infrastructure financing in the country.
This is different from the National Investment Fund.
NIIF, proposed to be set up as a Trust, would raise debt to invest in the equity of infrastructure finance companies such as Indian Rail Finance Corporation (IRFC) and National Housing Bank (NHB).
NIIF is a banker of the banker of the banker.

The objective of NIIF would be to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects.
For more: http://www.arthapedia.in/index.php?title=National_Investment_and_Infrastructure_Fund_(NIIF)
[2]. Govt Changes Rules to Protect Civil Servants
The Economic Times
C ontext:-
IAS officers working with the Centre can now be suspended only with the approval of the minister in charge of the Department of Personnel and Training DoPT)
This is aimed at checking any arbitrary suspension at the Centres level as well.
R eason:-
The new rules have kicked in after almost the backdrop of suspensions of IAS officers including Ashok Khemka and Durga Shakti Nagpal.
E arlier:-
Central Review Commitee of bureaucrats would step into the picture only if the suspension was to be continued beyond a year.
N ow:-
IAS officers working with the Centre can now be suspended only on the recommendation of the Central Review Committee and with the approval of the DoPT minister in charge.
States will now have to inform the Centre within 48 hours of suspending any all-India services officer (IAS, PS and IFS) working for them.
Copy of the suspension order and reasons for the suspension have to be communicated.
The state cannot keep an officer suspended beyond 30 days if he Centre does not confirm the suspension or if disciplinary proceedings are not initiated. The earlier period was 45 days
Economic Digest
[1]. 2015: Reforms, a retreat and resurgence for banks
The Hindu
C ontext:-
The article discusses the slew of reforms that were introduced in the banking sector in the year 2015.
G yan sangam:-
The bankers retreat organised in January, where the broad contours of banking sector reforms were chalked out.
I ndradanush:-
It aimed to improve governance in public sector banks by
1. Separating the post of Chairman and Managing Directors,
2. Proposed the formation of Bank Board Bureau for top level appointments
3. Announced Rs.70,000 crore capital infusion in public sector bank over four years.
4. Opened up the position of public sector bank CEOs to private sector candidates a first in the history of Indian banking.
N ew banks, new type of banks:-
Two new full service banks, IDFC Bank and Bandhan Bank started operation during the second half of the year.
21 new niche bank licences were issued in 2015
P ayment Banks:-
Eleven new banks were licensed to start operations as payments banks where the main objective is to provide remittance services, apart from distribution of simple financial products like insurance and mutual
funds.
This was also the first time business houses are allowed in banking although; the scope of activities was restricted.
S mall Banks:-
Ten new small finance bank licences were also granted, of which eight of them are micro-finance institutions.
Small finance banks are mandated to extend small loans mainly to customers who are not covered by formal banking system.
B ad loans:-
News on banking was largely bad debts and institutional reforms to deal with bad debt and wilful defaulters. As new measures to tackle this problem were rolled out in right earnest, success in implementation has
been limited.
S trategic debt restructuring
The banking regulator allowed banks to acquire 51 per cent or more stake in companies defaulting even after restructuring of their loans.
The move is expected to improve repayment culture of the borrowers.
The government is also keen for a bankruptcy code as it could have a positive impact on recoverability from weak assets.
N ew Monetary policy framework
A historical agreement between Central bank and the government to tackle price rise which.
According to the framework, RBI has the explicit mandate to have an inflation target, for which it is accountable.
The central bank will aim to bring retail inflation below 6 percent by January 2016 and to four percent by fiscal 2016-17 and thereafter, with a band of +/- 2 per cent.
S harp interest rate cuts
During the year, repo rate was reduced by 125 bps to 6.75 per cent a four and half year low level.
M CLR:-
The banks were reluctant to cut rates as evident from the fact that base rates were reduced by only about 70 bps during the year.
RBI issued guidelines for the computation of the benchmark lending rate using the marginal cost of funds method.
Banks will now follow the new Marginal Cost of Funds based Lending Rate (MCLR).
This improves the efficiency of monetary policy transmission for new borrowings, and will impact new borrowers immediately.
[2]. Government pitches for global north-south corridor
The Hindu
C ontext:-
The commerce ministry has pitched for popularisation of International North-South Transport Corridor (INSTC) as an alternative route through Tehran that significantly reduces costs and travel time.
This will boost trade with former Soviet Union countries, Iran and Russia.
W hy?
To help Indian exporters reduce their dependence on traditional markets in the West where there is currently not much demand.
To gain more access in growing markets in Asia, Africa and Latin America which are unexplored.
I NSTC:-
The INSTC is a multi-modal route (ship, road and rail) from Mumbai to the Iranian port of Bander Abbas then via Tehran to Baku (Azerbaijan) and further to Astrakhan, Moscow and St Petersburg in Russia.
Alternatively, there is also a road route from Iran to former Soviet Union countries such as Azerbaijan.
This concept was formalised by India, Iran and Russia (in 2000)
R easons for delay:-
Delay is due to outstanding issues concerning logistics, banking connections, insurance cover as well as harmonisation of documentation and procedures for cargo.
Poor rail connectivity and the shortage of wagons in Iran as well as the lack of incentives including discounts for using the INSTC are also some problems.
I nitiatives:-
The ministry also wanted banks (to help in trade finance) and insurance companies (to provide trade credit insurance, cargo insurance and risk management) to play an active role in boosting traffic through
INSTC.
Meanwhile, Export Import Bank of India has expressed interest in financing projects in the infrastructure sector and joint ventures involving Indian companies to better the prospects of INSTC.
[3]. Banks should fund first generation entrepreneurs
The Hindu
C ontext:-
Prime minister has said that banks should finance more greenfield projects by first generation entrepreneurs instead of extending loans for expansion projects of established firms.
P roblems of dalit youth:-
Industrialisation is a tool for uplifting the backward classes from a vicious circle of Poverty and the government is committed to facilitating skills and finance for Dalit youth to become job creators instead of job
seekers.
M UDRA achievements:-
Nearly 80 lakh people have been granted loans worth Rs.50,000 crore without any collateral under the Mudra scheme in its first eight months. Mudra is an acronym for Micro Units Development and Refinance
Agency.
V enture capital funds:-
The government has now set up a venture capital fund for first generation entrepreneurs, which is fundamentally for scheduled castes and scheduled tribes.
C riticism about JDY:-
Some experts feel that maintaining zero balance accounts imposes a cost on the banking system and the economy. But the government feels that those at the bottom of the pyramid should be strengthened so that
the pyramid itself becomes stronger.
[1]. Fear of Facebook colonising digital space looms over IT capital/ Nothing free or basic about it/ Crony connectivity, and Internet for us
The Hindu Business | The Hindu Editorial 1 | The Hindu Editorial 2
W hat is net neutrality?

Tim Wu, the father of net neutrality, has written that keeping the two sides of the Internet free of gatekeepers is what has given a huge incentive for generating innovation and creating content.
This is what has made the Internet so different from other mass communications platforms such as radio and television.
It has unleashed the creativity of the masses; and it is this creativity we see in the hundreds of millions of active websites.
W hat is free basics?
Fecebook wants to provide a subset of the Internet free of charge to consumers, with mobile telecom operators bearing the costs of the traffic.
Free Basics allows customers to access selected social networks, and services like healthcare, education and job listings from their phones without a data plan.
Since Google hasnt signed up as a partner with Facebook, users cannot access it. This also includes any of the billions of websites that havent partnered with Facebook.
This practice of zero rating (toll-free data or sponsored data) is not compatible with net neutrality.
A rguments against Free Basics:-

F acebook is not charity:-
Facebooks central role puts it in a privileged position to monitor its users traffic, and allows it to act as gatekeeper (or, depending on the situation, censor).
There is no technical restriction that prevents the company from monitoring and recording the traffic of Free Basics users.
This means there is no guarantee that the good faith promise Facebook has made today to protect Free Basics users privacy will be permanent.
more Internet users in the world means more users for Facebook, which they monetise in their usual ways.
Being the gatekeeper of Internet content for hundreds of millions of people will give Facebook a lot more market power.
D igital Colonisation:-
Facebooks controversial Internet service is feared as digital colonisation by the West.
The British Empire was based on the control of the seas. Today, whoever controls the data oceans controls the global economy.
In sociology, the locus of decision-making ability is called agency.
Free Basics shifts agency (who has decision making rights) from the end user to Facebook. But Indias constitution guarantees agency to each citizen, which is why they have fundamental rights and universal
franchise. Free Basics wants to take it away
This is Digital Colonialism, the exploitation of resources while denying rights.
It believes that a benevolent dictatorship is better than democracy for progress.
H aves versus have nots lists:-
The scheme risks breaking the network into many smaller ones and skewing the playing field in favour of apps and services that enjoy privileged pricing.
India has just woken up to the advantages of mobile Internet and splitting Internet will create a have versus have nots list in the country
N ear Death Experience for Start ups:-
At the start of startup India revolution, we cannot have some Indian developers and entrepreneurs blocked by large corporates to access consumer
If telecom operators are allowed to split Internet, it will be a near death experience for Indian startup eco system.
B iased Unequal Internet:-
Free Basics developers cant innovate on technology without the permission of Facebook, experts said.
Telecom operators and Facebook also need to approve services.
Entrepreneurs say there is a need for unbiased, equal Internet that treats all developers same.
No developer should need to take a license or apply to someone to bring new idea to Indians or anyone in the world
U ndermines Digital India:-

Any segregation of the Internet into fast and slow, free or paid, app or web will undermine the governments digital India program.
M ass scale privatisation of services:-
The Internet monopolies agenda is hidden and mass-scale privatisation of public services.
People will have Internet connectivity instead of education, and Uber will provide private taxis, instead of public transport.
D ata is Currency:-
Personal data is the currency of the Internet economy. Data as commodity is the oil of the 21st century.
Facebook and Googles revenue model is based on monetising personal data and selling it to advertisers. Facebook generates estimated revenue of nearly $1 billion from its Indian subscribers.
I s free basics the only solution for bridging digital divide?
A llow market to take its course:-
Mobile penetration has not happened due to no-frills services for poor and developing country users but by ensuring that market competition is allowed to take its course.
There is no reason why mobile Internet services will not become as popular as mobile phone services as long as there is adequate competition.
Unless government policies get in the way, the same forces will reduce prices further to make the service affordable to ever more people, with lower disposable incomes.
C reate Level playing field
Government should be answering questions given below.
Should it be licensing more telecom operators? Has the government made enough spectrum available so that mobile operators can lower prices and ensure adequate service quality? Are there bottlenecks in the
hands of monopolists that raise the costs of service?
This calls for the regulator to have a hawkish approach towards anti-competitive behaviour by existing market players.
R egulate tariffs:-
High cost of data services in the country is the main barrier to Internet penetration.
Till now, TRAI has not regulated data tariffs. It is time it addresses the high price of data in the country and not let such prices lead to a completely truncated Internet for the poor.
I mprove economy:-
The best method to achieve this outcome is to raise peoples incomes. If the Indian economy grows at 8 per cent over several years, the income effect will make Internet connections more affordable even if prices
do not fall.
C onclusion:-
The best scheme to bring the Internet to all involves

1. Boosting competition to bring down prices
2. Pursuing economic growth to raise peoples incomes.
T his is the formula that has worked elsewhere in the world and will continue to work in India too. Schemes like Free Basics by Facebook and Airtel Zero are unnecessary from the perspective of connecting the
unconnected.
O ther violations be Face book :-
In its campaign, Facebook is also using the generic phrase free, basic Internet interchangeably with Free Basics. This is in blatant violation of Indian rules on advertising, which forbid generic words being
used for brands and products.
In spite of having 125 million Indian subscribers, It refuses to be sued in India, claiming to be an American company and therefore outside the purview of Indian law. Nor does it pay any tax in India.
A dd-ons:-
People who have signed up to support the online campaign of Free Basics can reverse their decision by visiting their website saynotofreebasics.fsmi.in
[2]. Impersonal government is good
Indian Express
C ontext:-
The article highlights the need for active transparency in public institutions .
P roblems of RTI Activists:-
Indias RTI Act completed its first decade of implementation this year and is arguably one of the worlds most widely used freedom of information acts.
Exposing corruption can make you enemies, and accounts abound of RTI users and activists being threatened, harassed, even assaulted or killed as a result of their requests
A ctive Transparency:-
As the RTI starts its second decade, we need Indias government to ensure that information provision has a more impersonal face.
This requires the government to invest in a data infrastructure that will allow it to go from passive to active transparency.
W hat is active transparency?
Many countries have opened their administrative datasets to the public, with several goals in mind:
To make government more transparent and accountable,
Track progress toward performance targets,
Help policymakers and administrators do their jobs effectively.
Here the citizens can directly access data without filing requests.
R equirements for active transparency:-
1. Invest in technical inputs:-
Technicians should be hired to complement the skills of the government staff
It can also improve its digital services, especially website speed, by increasing the use of open-source technologies, which avoid costly licensing fees that can create procurement bottlenecks, and by taking
advantage of efficient cloud web-hosting services.
1. Encourage collaboration between policymakers, researchers and technicians
2. Employ agile methodologies:-
Agile methodology keeps fast-moving projects from going astray and creating waste
It uses clearly defined set of user needs; the team creates prototypes and proceeds through short rounds of cooperative iteration.
This method can benefit a wide range of government initiatives by keeping all sides informed and involved, and the project on track.
L ong term benefits:-
Investments in data infrastructure are like investments in physical infrastructure such as roads and power lines up-front costs may well be outweighed by long-run benefits.
C onclusion:-
The more real-time data we have, the earlier we can correct ourselves and set a path toward goals that will improve the lives of individuals.
[3]. The LPG Model
Indian Express
The governments decision to bar taxpayers earning more than Rs 10 lakh per annum from availing of subsidy on LPG cylinder sales is welcome for signalling a clear intent of targeting subsidies to the deserving.
The trajectory of LPG subsidy rationalisation sets a template that other sectors can follow.
The move aims to make the subsidy targeted, as opposed to being near-universal.
Already the direct benefit transfer system has reduced the scope for diversion of subsidies.
The true test for the government would be whether it is able to extend the LPG model of targeting and DBTs in other politically sensitive and fiscally significant sectors such as fertiliser and food.

Related
Budget 2015 Excerpts : - Major New schemesMarch 5, 2015In "Latest Updates"
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What is 9 PM brief?
National
[1]. Centre pushing to revive NATGRID, looking for CEO
The Hindu
Highlights:-
The government is set to make an aggressive effort to accomplish one of the most ambitious intelligence projects.
The National Intelligence Grid (NATGRID) is a centralised agency which stores sensitive personal information of
citizens from almost two dozen agencies to be made available for counter-terror investigations.
The grid would have networked 21 sets of data sources to provide quick and secure access of information to about
10 intelligence and law-enforcement agencies including the Intelligence Bureau (IB) and R&AW.
These data sources include records related to immigration entry and exit, banking and financial transactions.
It was conceived in the wake of the 2008 Mumbai attacks.

Raghu Raman was NATGRIDs first and only CEO but his term wasnt renewed. The government will now appoint
a senior serving government official, with an intelligence background, to head NATGRID
[2]. Iranian banks to open in India
The Hindu
Context:-
A lot of commercial measures have been taken by the India-Iran Joint Commission that met for the first time since
Iran and the P-5+1 grouping struck a deal to end sanctions on Iran.
Measures:-
Opening Iranian banks in India:-
Irans leading banks will soon open branches in India to energise commercial ties between both the countries.
India will be the major beneficiary as it has just begun settling more than $6.5 billion energy-related pending
payment, with Iran.
After the U.S. and western powers in 2011 blocked payment channels to increase pressure on Iran, the Reserve Bank
of India created a channel for payment via Turkey.
Freight forwarding measures:-

The two countries also discussed measures to boost logistic services, including allowing freight forwarding
companies to take advantage of the rupee payment mechanism and the insurance cover that are currently available
only to exporters and importers.
Preferential Trade Agreement:-

India and Iran have decided to hold preliminary discussions for a preferential trade agreement (PTA). The PTA is
meant to ensure that both the countries will cut or eliminate duties on certain mutually agreed products to increase
bilateral trade. A Joint Working Group will hold meetings to look at the feasibility of the PTA.
Chabahar port:-
The next big bump to India-Iran trade will come from the signing of the contract to develop the Chabahar port. It is
in the final stage of negotiations.
What is P5+1?
The P5+1 is a group of world powers who have been negotiating with Iran since 2006 with the goal of limiting
Irans capacity to manufacture a nuclear weapon in exchange for relief from certain economic sanctions and the
ability to pursue a civilian nuclear energy program.
Read more: http://www.investopedia.com/terms/p/p51.asp
[3]. Indo Israel anto aircraft missile test fired

The Hindu
Context:-
Barak NG (next generation), a surface-to-air missile system, developed by India in collaboration with Israel,
achieved a significant milestone after its successful firings from an Indian naval warship (INS Kolkata).
Specifics:-
It is a long-range surface-to-air missile (LRSAM) land version is medium-range SAM or MRSAM.
It is a very advanced SAM that can track and shoot down incoming missiles and other flying objects with high-level
accuracy.
It can intercept aerial targets up to a range of 80 km.
It was co-developed by the Defence Research and Development Organisation (DRDO) and the Israel Aerospace
Industries (IAI) of Israel.
It will be manufactured by Bharat Dynamics Ltd. (BDL).s

The system has a multifunctional surveillance and threat alert radar (MF STAR) for detection, tracking and
guidance of the missile.
For the army:-

While the LRSAM is for the Navy, the Air Force has an order for the MRSAM which has been recently approved.
International
[1]. Has the world reached its multilateral moment?
The Hindu
Context:-
The article analyses the trend of global orders in 2015 such as the rise of multilateralism, Retreat of of USs
Unilateralism and the emergence of new antagonistic bipolarities.
Rise of Multilateralism:-
Iran nuclear deal:-
The P5+1-Iran nuclear deal was a remarkable piece of diplomatic initiative and action.
The deal paved the way for removal of economic sanctions against Iran in return for stringent monitoring and
drawdown of its nuclear programme.
It allowed for new outlook in the Wests relations with the West Asian power.
Paris Deal:-
The climate agreement in Paris in did heap in an additional responsibility on the shoulders of the developing world.
It emphasised on a multilateral arrangement in the mitigation of climate change gave it a consensual heft missing in
the earlier summits.
Retreat of USs Unilateralism:-
The year also saw that US administrations gradual retreat from the unilateralism and the military adventurism of the
preceding governments. The focus of the administration has shifted from direct interventions to offshore balancing,
as the conflicts in Syria and Iraq would confirm.
The U.S. in the multilateral agreements is not acting as a singular fulcrum of power, but as one among a set of
actors.
But it doesnt mean that Washington has given up on dominating global politics.
This year showed that other powers in the international arena rose, but not at the expense of the U.S.
Clearly, the outcome of any move to control the conduct of international affairs again by the U.S. would be
disastrous. Also it cannot lead the world through dominance.
Rise of right wing parties in west:-

The global financial crisis challenged the Western dominance in the global order; it also triggered enormous social
and political tensions, especially in the domestic arena of the countries in the developed world.
The rise of the Right in Europe as well as in the U.S. is a clear sign of these tensions.
The economic crises, growing unemployment and the real and perceived threat of Islamist terrorism have
encouraged a far-Right narrative of state and society in a number of Western nations.
Eg Donald trumps (US Presidential candidate) idea of banning immigration to Muslims.
If the New Right captures power in any of the major countries, say France or the U.S., its consequences for the
international system could be monumental.
Antagonistic bipolarity:-
There are plenty of two-tier crises in modern world such as those involving India and Pakistan; China and Japan;
and Russia and Ukraine.
Containing them is vital for the interests of the larger world. But the year 2015 saw a dangerous addition to this list
hostility between Russia and Turkey.
It has the potential to plunge the whole world into a dangerous military conflict. Russia has shown commendable
restraint after its warplane was shot down by Turkey over the Syrian border in November.
Since both Russia and Turkey are deeply involved in the Syrian conflict, tensions between these two countries will
persist unless a sustainable solution is found to the Syrian crisis, which is the challenge of 2016.
Conclusion:-
The year 2015 has underscored the trend of strengthening multipolarity but has also strengthened the forces of
instability. Which of these factors emerge stronger would shape the future global order.
Economic Digest
[1]. Governments clean fuel drive in reverse gear
The Hindu
Context:-
The Union governments crackdown on air pollution, by implementing stricter vehicular emission standards, is
facing a delay due to unavailability of suitable fuel to support its clean technology.
The government is now considering postponing the implementation of Euro-V norms by a year to 2020 and that of
Euro-VI norms to 2022.
Other developments to contain air pollution:-

Supreme Court recently banned the registration of diesel cars and SUVs with 2000 CC engine capacities in the Delhi
and the National Capital Region
The Delhi government also announced its plan to keep a check on the rising air pollution by restricting the number
of vehicles that can ply in the national capital beginning January 1, 2016.
To know about Euro and BS norms:- http://www.siamindia.com/technical-regulation.aspx?

mpgid=31&pgidtrail=33
[2]. Cabinet clears amended textile scheme
The Hindu
Context:-
The Amended Technology Upgradation Fund Scheme, got cleared by cabinet committee on economic affairs.
Scheme Provisions:-
In this scheme apparel, garment and technical textiles will get 15 per cent subsidy on capital investment, subject to a
ceiling of Rs.30 crore over a period of five years.
The remaining sub-sectors will be eligible for 10 per cent subsidy, subject to a ceiling of Rs.20 crore.
The new scheme does not cover the spinning sector as there is excess capacity now.
Old schemes:-
The amended scheme will replace the existing Revised Restructured Technology Upgradation Fund Scheme (RR-
TUFS).
The Technology Upgradation Fund Scheme for the textile industry was introduced in 1999 and Rs.21,347 crore has
been provided as assistance between 1999 and 2015.
Benefits of the scheme:-

The ATUFS would ease the financial position for the industry and encourage investments to the tune of Rs.1 lakh
crore and create over 30 lakh jobs.
As the scheme provides capital subsidy instead of the existing combination of interest subsidy and capital subsidy,
the industry will get the assistance on time.
It will trigger growth and exports for the textile industry and it will aid the Make in India initiative.
And also the industry is confident of moving up the value chain and become globally competitive.
FACTS: TUFS: The Technology Upgradation Fund Scheme (TUFS) was introduced by the Government in
1999 to facilitate new and appropriate technology for making the textile industry globally competitive and to
reduce the capital cost for the textile industry.
[3]. Will India Make it in 2016?
[a]. A weak growth impulse
The Financial Express
Major Positive outcomes in the economy in the year 2015:

a) Exceptional fall in the price of oil
Impact: corrected Indias balance of payment, brought down inflation, improved public finances and increased
consumer spending.
b) Relaxation of monetary policy from start of year gradually by 125 bps.
Impact: Helps in investment reviving and growth recovery
c) Revived expectation of growth and increased GDP growth due to implementation of new methodology.
Impact: Helped pull investment from across the world beating Russia, Brazil and Oil producing countries.
View on fiscal policy:

a) Sticking to a committed consolidation path,
b) Quality improvements and
c) Consumption-enhancing salary revisions are likely a plus for investors, rating agencies and civil servants;
d) Others may grumble about higher taxes and cesses that equally marked the year.
The Challenges for the economy:

a) High levels of corporate debt and unending stream of NPAs weighing down the banks
Impact: They hold back investment
b) Second poor monsoon season, weakened international agriculture prices and minimal increases in farm support
prices
Impact: farmers in distress, sales of agriculture dependent industries hit.

Unpleasing Indicators:
A) Domestic Problems
a) Yearlong contraction in exports
b) Highest level of idle factory capacity in five years
c) Feeblest growth in bank credit in decade
d) Constant decline in corporate earnings and sales throughout the year
e) Failure of private investment to take off
B) Global Problems
a) The downgrading of world growth and trade projections in succession through the year constituted one of the
weakest demand environments since 2008
b) China economic slowdown
c) US monetary tightening and divergent monetary policies of the advanced countries
d) Slowing down of many emerging nations economies
The Question:
With so many favourable turn that economy took as mentioned on top of the article how come the indicators are so
poor?
[b]. Dont go broke for growth
Current Scenario:
A return to macroeconomic orthodoxy via:
a) Continuing fiscal consolidation,

b) A new monetary policy regime,
c) Positive real ratescoupled with expectations of economic reform by the new government.
Impact:
i) India is now seen as the emerging market best prepared to withstand global shocks
ii) Most of the emerging nations are seeing deceleration in growth while India is accelerating
Lets understand the quantum of change:

In 2012-13, Indias current account deficit was at $88 billion for the year. This year, it is on course to less than $20
billion. In other words, the balance of payments is expected to remain in comfortable surplus even if the economy
experiences a large portfolio outflow.
Who deserves the credit for this turnaround?
Government yes due to certain reforms it brought across the sectors. But the biggest driver of the turnaround is
heavily depreciating oil prices. Economy almost received a gain of 2% of GDP due to low oil prices.
What government did with this gain?

1% of GDP was spent on subsidies and higher oil taxes. The spending was needed as the government did not have
inflation tax and there was a need of public investment stimulus.
Impact on Household:
Household gained 0.8% of GDP as extra purchasing power through two mediums:
a) Low oil prices
b) Low prices of goods and services
Fiscal Arithmetic:
A complicated one, we dont know about it from the viewpoint of UPSC only the outcomes of this arithmetic are
important.
a) GDP was increased by 130 bps just because of the low oil prices due to increased purchasing power, which means
when prices rise again the economy will slow down for no concrete reasons like global trade or weak exports. This
will be a trade shock roll down in growth.
What it means for fiscal policy?

On the one hand, having relaxed the fiscal road-map in the last Budget, it is important for credibility to adhere to the
revised road-map.
Furthermore, any unanticipated increase in government borrowing is likely to exacerbate the supply-demand
mismatch in the bond-market, put further upward pressure on G-Secs and corporate bond yields and, thereby, raise
borrowing costs for the private sector, precisely when corporates are moving towards more wholesale funding given
limited transmission in the banking sector. So, the risks of crowding out are real.
On the other hand, sticking to the fiscal road-map would mean a fiscal consolidation of 0.4% of GDP, which would
further impinge on growth
The Solution:
An asset swap: stepping up disinvestment and other asset sales to simultaneously maintain public investment levels
while simultaneously reducing the deficit
[c]. Servicing Indias growth
Context: The process of industrialization and deindustrialization of India and ways we have been behind many
countries in term of technology and infrastructure due to our own restrictions and policy.
What has been the reason for such instance?

First half of 20th century saw many a companies being established. We did industrialise, but with the intent of serving
only the tiny market of a very poor country, our own. Products and processes were anything but world-class.
By 1990, the country was studded with inefficient, sub-scale, technologically-backward factories that employed a
very small portion of our work force. Liberalisation came to India too late.
Our poor infrastructure (e.g. endless electric power cuts) and our self-imposed restrictions on allowing business
flexibility, has meant that instead of industrialising, we have actually de-industrialised quite a bit.
Our insipid industrial growth combined with over-investment in higher technical education, not only led to a transfer
of technical talent to other countries, but to spectacular growth in areas like IT services which meant India moved
directly from primary sector to tertiary sector.
What can be done now?

In order to rejuvenate manufacturing, India need to:
a) Better transportation
b) More reliable and good quality power
c) Fewer taxes/inspections/controls/registrations and other bureaucratic nightmares
d) Faster clearances and turnarounds at ports
A specialized issue with Indian manufacturing:

One more irony, so typical of all Indian tales is that Indias competitive advantage seems to be in high-end, design-
intensive products or in high value niches, not in the areas where millions can get jobs.
[d]. How to revive investment
Context: No signs of a revival in private investment.

What is the reason?
Credit-less recovery. GDP growth has bottomed out, but several big banks are grappling with huge stocks of non-
performing loans (NPLs).
Credit growth, in both real and nominal terms, is well below the long-term average, recovering more slowly than
during previous slowdowns.
Is credit less recovery is a common occurrence?
IMF recent study has shown that one out of five countries has seen credit less recovery.
Characteristic of Credit-less Recovery:

First, output growth is about a third lower than during normal recoveries, and this has been the case for India this
time around.
Second, the financially-dependent investment sector makes a disproportionately lower contribution to growth.
Lower investment has been a stand out characteristic in India, while consumption has fared relatively better.
The Way Out:

Taking a break from the path of fiscal consolidation, the government attempted some counter-cyclical fiscal policy.
a) Savings from the oil subsidy bill were deftly channelled towards investment.
b) Previously stalled investment projects showed signs of life and parts of the transport sector received additional
government funds.
c) A new public private partnership (PPP) model was needed to allay private sector concerns about shouldering
excess risks.
d) Recovering private sector wages and real gains from low inflation are also likely to provide additional support to
government wage hikes
[e]. Leveraging Indias frugality bias
Context: India has all the ingredients to become a global driver of innovation, led by a strong market potential, an
excellent talent pool, and an underlying culture of frugal innovation (low cost innovation).
Frugal: Being economical with money

Examples of cultural leverage:
a) Japan leveraged its cultural emphasis on efficiency and team work to revolutionise the manufacturing and
engineering industries.
b) Korea leveraged its cultural emphasis on speed and built world-class companies such as Samsung and LG.
c) China has capitalised on its action bias to sustain a GDP growth in excess of 10% for more than two decades.
d) The US and Israel have leveraged the diversity of their population to lead aggressively on innovation.
So what is recommended for India?

India can take its frugal approach for innovation to shore up business domestically as well as globally.
What needs to be done?

A) Indian corporations and the government should first focus on innovation for the significant internal market needs
in energy, water, transport, healthcare, and food security to deliver tangible human and environmental benefits.
B) From a technology leadership standpoint, start-ups should accelerate innovating for the digital economy and large
corporations should develop new opportunities at the confluence of emerging scientific knowledge and materials.
One such opportunity is the intersection of biology, computing and materials.
C) In the emerging research areas, industry R&D should double and the government should provide direct R&D
grants to industry.
[f]. Can health techcelerate
Context: New impetus on growth and innovation gives a hope to correct its lagging indicators.
Current Innovations:
The Indian Council of Medical Research and the Innovation Foundation of India organised an exhibition of
innovative health technologies in Rashtrapati Bhavan in March 2015. Few of interesting innovations were:
a) Android tablet for use by frontline health workers,
b) A smart cane whose sensor helps the visually challenged to avoid raised objects,
c) A wheel chair that negotiates stairs,
d) An Indian made vaccine for Japanese Encephalitis and
e) An inexpensive baby warmer.
India Historical Feat in Innovation: Jaipur Foot and Arvind Intra-Ocular Lens.
Have to strengthen the whole value chain from product innovation, evaluation and legal protection to design,
manufacture, marketing and supply chain management to avoid the trap of niche innovations that fail the mass
application test.
This will need a new environment that fosters trans-disciplinary research, supported by cross domain professional
collaborations that thread seamlessly through all stages of product development.
Any innovation developed will flounder if a weak public health system fails to deliver the intended beneficiaries.
Such Technology pile up can be prevented by developing a strong delivery vehicle through a robust public health
system.
[1]. Is the economy sick
The Hindu
Context:-
The article explains the economic scenario of the country and suggests to stop overdoing fiscal consolidation
measures as it will end up choking domestic demand at a time when global demand is also weak. And this isnt a
recipe for double-digit growth.
Current economic scenario:-

Growth rate:-
While growth rate was 7.3 per cent in 2014-15, various official estimates point to a growth rate of 7-8 per cent in
2015-16.
Savings and investment:-

Savings and investment ratios have dropped sharply to around 30 per cent.
Export:-
Export growth has declined sharply. From April to November 2015, exports have dropped by over 18 per cent. If
this trend continues, 2015-16 will see the worst export performance for over 15 years.
Import:-
Import growth has also declined by double digits indicating lack of demand (and also falling prices of crude).
Fiscal deficit current account deficit and inflation:-
The average fiscal deficit for the first two years of the government is likely to be around 4 per cent with the current
account deficit around 1.3 per cent of GDP.
Without lower crude prices, these twin deficits would be higher, as would inflation.
Other Problems:-
There are reports of widespread rural distress, mixed performance of the industrial sector, continued problems in the
banking sector and low private sector investments due to market uncertainty and stressed corporate balance sheets
Is Fiscal consolidation the need of the hour?

Some economists believe that the government must continue on this fiscal consolidation path to give confidence
to investors that macroeconomic stability is of utmost importance.
This would be all very well if private investors were stepping in to invest and create jobs. But thats not happening.
So, the government is trying to increase public investment as a way of boosting the economy.
The problem here is that public investment will be increased by a combination of lowering other expenditures
(NREGA, Subsidies) and higher tax receipts.

India should be aggressively going after a greater share of the global economic pie, and not seeking comfort in fiscal
management.
We should be promoting big investments in our food supply chain.
We should be providing major incentives for our small and medium enterprises to modernise and compete globally
and employ young people
Our major corporations should be encouraged to invest at a time of global weaknesses so that when demand picks
up, they are ready to take a bigger share.
[2]. A welcomes hopeful afterglow
The Hindu
Context:-
The article discusses the recent developments in India Pak relations.
Enough has been discussed in the earlier briefs.
Other outstanding issues:-

Mumbai terror attacks:-
India wants Pakistan to take substantive action against the perpetrators of the Mumbai attacks. Indias position on
Mumbai may be rigid but it is understandable.
Sir creek issue:-

Sir Creek is an area that has not been demarcated between India and Pakistan by a clearly delineated maritime
border on which Pakistan has laid its claims on the entire creek.
http://idsa.in/askanexpert/SirCreekbetweenIndiaandPakistan
[3]. Good sense on LPG subsidy
The Hindu
Context:-
The article discusses the problems of subsidy schemes in India and how the LPG subsidy has successfully tried to
solve them.
The two major problems plaguing most subsidy schemes in India: leakages and mis-targeting.
Leakages:-
It refers to the phenomenon where the subsidy does not reach the intended recipient due to corruption, pilferage or a
variety of other causes.
This has been quite successfully addressed via the governments decision to transfer the subsidy payments directly
to the recipients bank accounts through Direct Benefit Transfer Scheme.
This was also made easier with the Pradhan Mantri Jan-Dhan Yojana.
Mis targeting:-
It means while the most deserving beneficiary is denied the subsidy because some privileged consumer is enjoying
the benefits of the same (subsidy is only going to go to those who need it).
The decision to limit the LPG subsidy by income groups is an attempt to address the mis-targeting problem.
Way forward:-
Rather than using the resultant saving simply to shore up the budget deficit, the Centre should use it to ensure that
LPG connections are provided for those who still depend on firewood and kerosene stoves.
[4]. The double mistake
The Indian Express
Context:-
Supreme Court upheld the Kerala Governments decision to prohibit liquor sales in all hotels except 5 star rated
ones.
Intention of the judgement:-

The Directive Principles in the Constitution necessitates that strict state regulation is vital to discourage regular and
excessive consumption of alcohol.
Will prohibition work?

Historical evidence shows that prohibition does not encourage or enable people to quit drinking.
The experiences of states like Andhra Pradesh and Tamil Nadu, which have tried to implement prohibition in the
past, have remained unsuccessful.
Possible consequences:-
Prohibition tends to drive the trade underground and creates a market for spurious liquor.
Alcoholism does critically impact the household budgets of the poor and may lead to domestic violence.
Since liquor will be traded at state outlets for a few more years, the policy may only help to shift the drinking space
from bar to home or other private spaces
How to control alcoholism?

Instead of the state insisting on prohibition, a more practical and effective strategy might be for non-state actors to
step up the campaign for abstention.
Loss of level playing field:-
The decision to exclude five-star hotels from the ambit of prohibition seems unreasonable and arbitrary.
The government claimed that the exception was necessary to protect the tourism industry.
But the decision discriminates against a large segment of the tourism industry and ignores their right to a level
playing field.
It should be noted that Kerala attracts tourists from different strata of society, including the upper crust.
[5]. What determines the size of Indian state?
Livemint
Context:-
The article discusses the role of government in the modern era.
Here state refers to the government and when the term bigger state is used it implies that government controls most
of the operations leaving little room for private players and citizens.
If its said that the space of the state is shrinking it means that more private and non state actors (Citizens, NGOs)
are actively participating in the government.
Now lets see what according to the author the ideal size of a state is.
What is meant by the size of the state?

It is the assessment of state capacity (or its fitness), in terms of the ability of a government to administer its physical
territory, as well as its ability to maximize welfare for its citizens.
What decides the size of a state?

It is decided by the circumstances the government is facing.
There are circumstances in which the state should expandboth in breadth (scope) and depth (reach).
Equally, there are circumstances where the state should contract, ceding space to private action.
Role of state based on the circumstances:-
Coercive: These comprise areas where the state has the power to mandate and enforce compliance. Security and
law and order taxation and determining food safety standards, would fall under this category. For the state to excel in
this category, it needs effective organizational powers.
Prescriptive: There are areas where the state has the power to prescribe remedies.
It sets standards and is at times able to employ some of its regulatory powers to enforce compliance. Mostly though,
the role of the state here is to encourage the adoption of idealized rules and norms. Managing education, by
prescribing school standards and determining the curriculum, would be a suitable example.
Advisory: In this category are areas where the states power to influence real outcomes is limited and the role of
the state is mostly advisory in nature, with little real power of enforcement.
An easy example would be the efforts to inspire hygiene and cleanliness through a nation-wide mission to achieve
sanitation. Innovation and flexibility are vital for a successful intervention.
Complexity of focusing on all three categories

This may be better explained with an example of elections.
The Indian state is by and large able to enforce that every citizen has the right to cast a single vote; it is less
successful in encouraging more people to vote; and even less so, in making people vote for the right considerations.
The state may well decide that it is fulfilling its duty as long as it ensures that there is no fraudulent voting, thereby
fulfilling its contract with its citizens but at the end its unable to meet the rising expectations of an enlightened
citizenry.
Role of Local Governments:-

Instead of increasing its physical presence and reach through bureaucratic expansion, State could opt for an
enhanced role for citizens in these areas through genuinely participatory mechanisms.
Local governments offer a democratic framework for organizing grassroots citizen action
They represent an expansion of the state, but also a break from its conventional forms.
[6]. How much land is actually cultivated in India

Livemint
Context:-
The latest National Sample Survey Organization (NSSO) report on land and livestock holdings estimates that
around 95 million hectares of land was classified as operational holdings in 2012-13.
The NSSO figure is about 65 million hectares lower than the numbers put out by the ninth agricultural census
conducted in 2010-11 (159.6 million hectares).
What is operational holding?

Operational holdings are land that was used wholly or partly for agricultural production. While this includes land
being used as kitchen garden or livestock growing, it leaves out cooperative farming and institutional/government
ownership.
Difference in surveys:
The agricultural census is primarily based on land records with states, except some including West Bengal, Odisha,
and Kerala where these are not available.
The divergence between the two estimates is not new; it has increased in the last two decades. The increasing gap is
largely on account of a sizeable decline in NSSO estimates.
The agricultural census admits that the situation reflected in land records might be different from the actual situation
on ground.
Why should we bother about this?

The government is planning to roll out direct benefit transfers (DBT) in place of input subsidies for farmers.
Given such large-scale differences in estimates of agricultural land, according to its own data, deciding on the scale
and quantum of DBTs might become a difficult issue in the days to come.
There will be no brief published on 1st of January, 2016 (Friday)
Forum IAS Team wishes all aspirants a VERY HAPPY NEW YEAR and
The
aSUCCESSFUL YEAR AHEAD.

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Written by F O R U M I A S | December 28, 2015 8 Comments | B R I E F

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A brief of newspaper articles for the day bearing

[1]. Call for pact on emission cuts

What has happened?

What did U.S and China say?

2. Cap and Trade schemes

Carbon tax is based on the economic principle of negative externalities.

We will talk only about negative externality here.

What is negative externality?

Benefits of carbon tax

Carbon Tax and India

National Clean Energy Fund (NCEF)

[2]. Modi launches International solar alliance

What is this ISA all about?

The launch resolution of ISA says,

3. co-operation in building institutions

[2]. New militant tactics draw army into long-drawn siege

What has happened?

Source: The Hindu

[1]. IS taxes masses to swell its coffers

What has happened?

IS is exacting money from,

1. Tolls and traffic tickets

2. Rent for government buildings

3. Utility bills for water and electricity

4. Taxes on income, crops and cattle

5. Fines for smoking or wearing the wrong clothes

Money from these collections is approaching around $10Billion a year.

Other sources of finance include,

2. Plundering bank vaults,

4. Ransoming kidnapped foreigners

5. Donations from wealthy supporters in the Persian Gulf

The biggest source of cash for IS appears to be the,

1. people it rules, and

2. the businesses it controls

[2]. China hosts first BRICS media summit

Who is behind this initiative?

Other media organisations that are a part of this initiative,

1. The Hindu group of publications,

2. The Brazil Communication Company,

3. Russia Today International News Agency,

4. South Africas Independent Media

What is being hoped to achieve through this new initiative?

During the 1st media summit following were proposed,

Opinions & Editorials

[1]. Why government must hire more?

What the author is arguing in this article?

What are his reasons?

1. To ensure a better governance, the government servants should be paid well

2. To reduce corruption: Better pay can certainly reduce corruption

What is Administrative Reform Commission?

1. a review of what government employees do

2. What incentives they face

3. What type of people are attracted to the job

[2]. Losing the story in Nepal

Nepal-India crisis: How it started?