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Daily Current Affairs for IAS & UPSC Preparation

All current affairs available date-wise and month-wise. Watchout for Back2basics and Notes4students.


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Cabinet approval for panel to study quotas within OBC quota

Note4students

Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

From UPSC perspective, the following things are important:

Prelims level: Mandal Commission

Mains level: Much awaited step. UPSC can ask direct question on this topic.


News

Sub-categorisation of OBC Castes

  1. The Union Cabinet has approved the setting up of a commission to examine the sub-categorisation of almost 5,000 castes in the central list of OBCs
  2. Why: To ensure a “more equitable distribution” of reservations in central government jobs and educational institutions

Implementation of the Decision

  1. Under Article 340 of the Constitution, the President would be recommended to constitute a commission that would examine the central list of OBC and sub-categorise it
  2. Once the chairperson of the new commission is appointed, it will have 12 weeks to submit its report
  3. Its terms of reference include examining “the extent of inequitable distribution of benefits” among OBCs with reference to the Central list
  4. It will also have to evolve a scientific methodology and classify the OBCs into sub-categories
  5. Also, this commission is being appointed according to the same Article 340 under which the Mandal commission was appointed

Intention behind the decision

  1. The Government’s intent is to ensure a “more equitable distribution amongst the OBCs themselves’’

Current Status

  1. At present, AP, Telangana, Puducherry, Karnataka, Haryana, Jharkhand, WB, Bihar, Maharashtra and TN, as well as the Jammu region, have such a sub-categorisation
  2. However, there is no such sub-categorisation in some of the bigger states, such as Uttar Pradesh, Madhya Pradesh and Rajasthan

Back2basics

Mandal Commission

  1. The Mandal Commission was established in India in 1979 by the Janata Party government under Prime Minister Morarji Desai with a mandate to “identify the socially or educationally backward”
  2. It was headed by Indian parliamentarian B.P. Mandal to consider the question of seat reservations and quotas for people to redress caste discrimination, and used eleven social, economic, and educational indicators to determine backwardness
  3. In 1980, the commission’s report affirmed the affirmative action practice under Indian law whereby members of Other Backward Classes (OBC), were given exclusive access to a certain portion of government Jobs and slots in public universities, and recommended changes to these quotas, by 27% Mobilization on caste lines had followed the political empowerment of ordinary citizens by the constitution of free India that allowed common people to politically assert themselves through the right to vote

[op-ed snap] A BIT of critique

Image result for Arbitration

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Note4students

Mains Paper 2: Polity | Separation of powers between various organs dispute redressal mechanisms and institutions.

Once you are done reading this op-ed, you will be able to attempt the below.

N. Srikrishna committee, constituted to prepare a road map to make India a hub of international arbitration.Critically examine its recommendations on bilateral investment treaty ?

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Indian BIT model features, flaws etc.


News

Context

  1. Justice N. Srikrishna committee, constituted to prepare a road map to make India a hub of international arbitration
  2. Its recommendations on bilateral investment treaty (BIT) arbitration assume importance as India is currently battling 20-odd BIT dispute
  3. These recommendations are largely on the issue of managing and resolving BIT disputes.

Dispute management-Recommendations

  1. Creation of an inter-ministerial committee (IMC), with officials from the Ministries of Finance, External Affairs and Law.
  2. Hire external lawyers having expertise in BITs to boost the government’s legal expertise
  3. Creating a designated fund to fight BIT disputes
  4. Appointing counsels qualified in BITs to defend India against BIT claims
  5. Boosting the capacity of Central and State governments to better understand the implications of their policy decisions on India’s BIT obligations.
  6. Creation of the post of an ‘international law adviser’ (ILA) to advise the government on international legal disputes, particularly BIT disputes, and who will be responsible for the day-to-day management of a BIT arbitration.
  7. The intent is augmenting the government’s expertise on BITs and designating a single authority to deal with all BIT arbitrations

Criticism

  1. The Legal and Treaties (L&T) division of the External Affairs Ministry is mandated to offer legal advice to the government on all international law matters including BIT arbitrations.
  2. Instead of creating a new office — which will only intensify the turf wars between ministries, and deepen red tape — the L&T division should be strengthened. 
  3. This division could be made the designated authority to deal with all BIT arbitrations and thus act as the coordinator of the proposed IMC.
  4. Furthermore, the IMC should have a member from the Commerce Ministry as well. 
  5. This ministry, while dealing with India’s trade agreements — that also cover investment protection — works in tandem with the Finance Ministry.

Dispute resolution

Investor-state dispute settlement (ISDS) mechanism, given in Article 15 of the Indian Model BIT, provides an effective mechanism for settling BIT disputes between an investor and state is problematic for the following reasons.

  1. Article 15 requires foreign investors to litigate in domestic courts at least for a period of five years.
  2. The investor can initiate a BIT claim provided it is done within 12 months from conclusion of domestic proceedings.
  3. Such strict limitation periods dilute the effectiveness of the ISDS mechanism.
  4. There are many other jurisdictional limitations given in Article 13 that also limit the usefulness of ISDS.
  5. The ISDS mechanism in the Indian Model BIT extends from Articles 13 to 30 covering issues such as appointment of arbitrators, transparency provisions, enforcement of awards, standard of review, which have a bearing on the efficiency of the ISDS mechanism. The report is silent on all these critical issues.
  6. BIT arbitration has three aspects: jurisdictional (such as definition of investment), substantive (such as provision on expropriation) and procedural (ISDS mechanism).
  7. While the commission’s mandate was to focus on BIT arbitration, i.e. on all the three parts, it narrowed it down to just the procedural aspect

New cadre policy for IAS, IPS officers finalised, says govt

Note4students

Mains Paper 2: Governance | Role of civil services in a democracy.

From UPSC perspective, the following things are important:

Prelims level: Definition of All India Services

Mains level: Any update regarding All India Services is important for UPSC exams.


News

New policy for cadre allocation

  1. Central Government a new policy for cadre allocation of IAS, IPS and other officers
  2. Now, officers of all-India services will have to choose cadres from a set of zones instead of states

Division of existing Cadres

  1. The existing 26 cadres have been divided into five zones in the new policy proposed by the ministry of personnel, public grievances and pensions
  2. Zone I: AGMUT (also known as Arunachal Pradesh-Goa-Mizoram and Union Territories), Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Punjab, Rajasthan and Haryana
  3. Zone II: Uttar Pradesh, Bihar, Jharkhand and Odisha
  4. Zone III: Gujarat, Maharashtra, Madhya Pradesh and Chhattisgarh
  5. Zone IV: West Bengal, Sikkim, Assam-Meghalaya, Manipur, Tripura and Nagaland
  6. Zone V: Telangana, Andhra Pradesh, Karnataka, Tamil Nadu and Kerala

Objective of this Policy

  1. This policy is aimed at ensuring “national integration” in the country’s top bureaucracy
  2. This policy will ensure national integration of the bureaucracy as officers will get a chance to work in a state which is not their place of domicile
  3. The new policy would help in upholding the rationale behind the all-India services
Foreign Policy Watch: India-Afghanistan India & Neighbours

[op-ed snap] The Trump discontinuity

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Note4students

Mains Paper 2: IR | India and its neighborhood- relations.

Once you are done reading this op-ed, you will be able to attempt the below.

“Trump’s new Afghan strategy could be a game-changer for South Asia. There is an opportunity for India.”Critically analyse ?

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: India- Afghanistan relation-opportunities and challenges


News

Context

  1. India has been quick to welcome President Donald Trump’s new assertive policy in Afghanistan
  2. But the question is whether Washington has the political will to carry through the promised pressure on Pakistan to stop hosting terror sanctuaries on its soil.

US policy- Realisations and cautions

  1. It is important for Delhi to note the shift in Washington’s thinking on the Indian role in Afghanistan.
  2. Bush Administration’s strategic warmth towards India was expansive.
  3. It wanted to help accelerate India’s rise and invested enormous political capital in getting the world to lift a four decades-old nuclear blockade against Delhi.
  4. It cautioned Delhi against too large a role in Afghanistan.
  5. According to Obama Administration, answer to Afghanistan might lie in promoting a resolution of Pakistan’s Kashmir dispute with India.
  6. It required intensive diplomacy from India to fend off these initiatives.
  7. Washington believed that India’s rivalry with Pakistan is part of the problem in Afghanistan.
  8. Trump might be betting that by invoking a larger Indian role in Afghanistan, he might add to the pressures on Pakistan to cooperate with the US.

Pakistan’s reaction and future possible actions

  1. Despite all the talk of playing the China card against the US, Pakistan is acutely conscious of the dangers of being treated as a rogue state by the West
  2. Rawalpindi has chosen to avoid, for now, a public argument with Washington.
  3. It will not be easy, however, for Pakistan to abandon its investments in cross-border terror.
  4. It would try and finesse the issue of terror sanctuaries. Rawalpindi will offer some cooperation in countering terror and make new promises to bring the Taliban to the table.
  5. It will urge US pressure on India to start talks on Kashmir.

India’s strategy towards Afghanistan-Way forward

  1. Delhi’s current emphasis must be on taking advantage of the Trump discontinuity in the American policy towards the Subcontinent.
  2. A positive Indian approach would involve three elements — economic, security and diplomatic.
  3. India must ramp up its economic diplomacy in Afghanistan to bring immediate benefits to Kabul amidst the deteriorating conditions in the country.
  4. Delhi must step up security cooperation with Afghanistan, especially in the training of its police and armed forces and intelligence sharing.
  5. On the diplomatic front, India must counter the emerging argument that Trump’s new approach will intensify the “Indo-Pak rivalry” in Afghanistan and the old one that Kashmir holds the key to peace in Afghanistan.
  6. Delhi must remind the world of India’s commitment to regional cooperation with Afghanistan and Pakistan, in an atmosphere free of terrorism

Centre to set up Alternative Mechanism for bank mergers

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Note4students

Mains Paper 3: Economy | Mobilization of resources

 

From UPSC perspective, the following things are important:

Prelims level: Merger of Associate Banks with SBI

Mains level: Various implications of consolidation of banks. Prepare it’s advantages,disadvantages and way forward


News

Context

  • To expedite public sector bank merger, the Union Cabinet on Wednesday approved a framework for consolidation among PSBs, including a proposal to set up an Alternative Mechanism (AM) to create strong banks. 

Alternative Mechanism (AM)

  1. As per the framework, mergers decisions should originate from the banks and these should be based on commercial decisions.
  2. The Alternative Mechanism will comprise of senior ministers of the government.
  3. The proposals received from banks for in-principle approval to formulate schemes of amalgamation shall be placed before the Alternative Mechanism.
  4. After in-principle nod, the banks will take steps in accordance with law and Sebi’s requirements

How consolidation will help?

  1. Consolidation will improve capacity of the banking system to absorb shocks
  2. Mergers are expected to reduce the pressure on the government of providing capital to the banks.
  3. In 2015, Centre launched the Indradhanush programme, to infuse Rs 70,000 crore into public banks.
  4. The decision is expected to facilitate the creation of strong and competitive banks in public sector to meet the credit needs of a growing economy, absorb shocks and have the capacity to raise resources without depending unduly on the state exchequer
  5. Idea of consolidation was first suggested in 1991 but gathered pace in 2016. “In 1991, it was suggested that India should have fewer but stronger public sector banks.

 

A tough balancing act: The new bitter North-South divide in India’s sugar industry

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Note4students

Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Sugar industry


News

Context

  1. India’s sugar industry seems headed for a North-South divide, with drought conditions leading to huge cane shortages in Karnataka and Tamil Nadu, even as Uttar Pradesh (UP) is poised for a second straight year of record production.

The implications

  1. Traditionally only the, eastern and northeastern regions have been deficit in sugar.Their requirement has, in turn, been met by surplus producers like UP, Maharashtra and Karnataka.
  2. But with the South, too, now turning deficit, the usual inter-regional sugar flows are set for disruption.

Duty-free imports of raw sugar

  1. Mills in Karnataka and TN have already sought permission for duty-free imports of raw sugar under the tariff rate quota (TRQ) system, which, they say, will help improve their capacity utilisation and also bridge the hitherto non-existent demand-supply gap in the region.
  2. Imports of both raw and refined or white sugar attract 50 per cent duty in the normal course.
  3. Allowing duty-free imports — even up to a limit of 1.5-2 mt and to be undertaken solely for processing by southern mills through designated ports such as Chennai, Tuticorin, Karaikal, New Mangalore, Goa and Jaigarh — isn’t going to an easy decision.
  4. Sugar processed from imported raws will be about Rs 10/kg cheaper than if produced from domestically sourced cane. It is only the 50 per cent duty that’s preventing imports from taking place.

Government’s policy change

  1. The Centre, increased the import duty on sugar from 40 to 50 per cent.
  2. That move — together with the more recent hike in edible oil tariffs and quantitative restrictions imposed on imports of arhar, moong and urad pulses — is seen to be a shift in government’s policy focus, from being largely ‘pro-consumer’ to ‘pro-farmer’.
  3. In a scenario where the Modi government is under pressure to be seen as pro-farmer — more so in UP, it may not be inclined to allow duty-free imports even under TRQ.

 

Foreign Policy Watch: India-SAARC Nations India & Neighbours

[op-ed snap] Sharing the future

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Note4students

Mains Paper 2: IR | India and its neighborhood- relations.

From UPSC perspective, the following things are important:

Prelims level: What is demographic dividend?

Mains level: It is important to know about the issues related to Nepal, as it is our very important neighbour and partner.


News

Context

  1. The article talks about current situation of Nepal and talks about some regional commons

Achievements of Nepal

  1. Despite modest economic growth, Nepal halved absolute poverty in the past two decades
  2. It dramatically reduced rates of child and maternal mortality
  3. Primary school enrolment, exceeds 97 per cent, and average life expectancy has crossed 70

Future targets of Nepal

  1. Nepal’s target is to get middle-income country tag by 2030, peopled by a vibrant middle-class
  2. To achieve this, Nepal needs to mobilise an unprecedented volume of public revenue and private investment

The Areas where India and Nepal can help each other
(1) Wider Connectivity

  1. Nepal needs to connect with electric railways, expressways and expanded air routes directly connecting more cities in Nepal to more cities in its neighbouring countries

(2) Augmenting Productivity

  1. Nepal’s formidable topography makes material access to world markets costly
  2. However, the availability of clean energy, an affordable workforce make Nepal uniquely tempting to investors

(3) Tapping new economic possibilities

  1. Nepal today faces an enormous trade deficit with India
  2. The share of Nepal’s manufacturing sector has plunged from a peak of 10 per cent of GDP in 1996 to around 5 per cent today

(4) Applying mass social innovation

  1. Nepal must adopt social protection measures to counter the challenges posed by inequality and vulnerability

(5) Protecting the regional commons

  1. South Asia will face a major shortfall in the supply of fresh water over the next decade
  2. Nepal’s big rivers can be a source of fresh water and clean energy that can displace dirty sources of power in the Subcontinent
  3. But Nepal support for this, due to its limited resources

The way forward

  1. Both India and Nepal are dominated by a youthful population with demographic dividends
  2. By 2020, the median age will still just be 29 in India and 25 in Nepal
  3. This young population is yet to be reaped
  4. Cooperation on governing our regional commons is vital for our shared quests of good health and progress
Banking Sector Reforms Industries

New mechanism to spur PSB mergers

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Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: It is a step taken by government to counter rising NPA problems in banks. This step also have some other objectives.


News

Step for quicker consolidation among public sector banks

  1. The Cabinet has approved ‘in-principle’ the constitution of an alternative mechanism that will oversee the proposals for mergers among banks
  2. According to the government, the decision to create strong and competitive banks will be solely based on commercial considerations
  3. And such decisions must start from the boards of the banks

Why this step?

  1. Because most of the banks are facing with huge levels of NPAs, slow credit offtake and resultant pressures on capital adequacy
  2. Stronger public sector banks will help meet the credit needs of a growing economy, absorb shocks and give them the capacity to raise resources 
Low Priority new Items/op-eds

[23 August 2017 | Low Priority News Items of the Day]

Low Priority Items of the Day:

Share price under watch, says SEBI

Markets regulator SEBI said on Tuesday it is keeping a close watch on the share price movement of Infosys, which saw CEO Vishal Sikka quitting last week.

Normally, news related to SEBI is important. But this news is not important because it is a company specific news. If you know the basics of the current issue related to infosys, then this article will not give you any UPSC specific fact.

 

Trump links India’s Afghan role to trade surplus

President Donald Trump, who announced his new Afghan strategy on Monday night, linked a proposal for India playing a bigger role in the war-torn country to its trade surplus with the United States.

The article is full of political(international) statements(of Trump). No need to read such kind of articles, which are full of statements. Just try to know what the other country thinks on the issue(especially related to India).

 

Centre to send advisory to States

The Centre is all set to send an advisory to thr States, asking them to ensure compliance with the Supreme Court order declaring triple talaq void, illegal and unconstitutional.

Important part of the article is given above.

 

Fusion and fission

New fault lines have formed in the All India Anna Dravida Munnetra Kazhagam in Tamil Nadu. When the factions led by Chief Minister Edappadi K. Palaniswami and former Chief Minister O. Panneerselvam agreed on the merger, they must have hoped it would lead to a period of political stability and an unrivalled claim to power.

The Op-Ed talks about Political Scenario of the Tamil Nadu. No need to go through such kind of political articles.

 

India hails US President Donald Trump’s tough line on Pakistan

Image result for Trump angry

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Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

 

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level:  Terrorism, US-Pakistan-India relations


News

  1. US president Donald Trump warned Pakistan on Monday that Washington will no longer tolerate Pakistan offering “safe havens” to terrorists.
  2. Pakistan has much to gain from partnering with our efforts in Afghanistan. It has much to lose by continuing to harbour criminals and terrorists.
  3. Trump suggested that military and other aid to Washington’s nuclear-armed ally is at stake if it does not clamp down on extremism
  4. It is time for Pakistan to dedicate to civilization and order and peace.
  5. The next pillar of our new strategy is a change in our approach to Pakistan

China’s response

  1. Pakistan’s all-weather ally China came to its rescue.
  2. According tpo Chinese foreign ministry spokesperson Pakistanis at the frontline of fighting terrorism, has made sacrifices in fighting terrorism, making an important contribution to upholding peace and stability

India’s response 

  1. Ministry of External Affairs (MEA), in a statement, said, “We welcome President Trump’s determination to enhance efforts to overcome the challenges facing Afghanistan and confronting issues of safe havens and other forms of cross-border support enjoyed by terrorists. India shares these concerns and objectives”.
  2. It will form one of the core areas of bilateral conversation between India and the US in the coming months, especially in the new 2+2 dialogue format between Defence and External Affairs Ministers of both countries.

 

 

 

[op-ed snap] Undoing injustice: On instant triple talaq verdict

Image result for triple talaq unconstitutional

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Note4students

Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.

Once you are done reading this op-ed, you will be able to attempt the below.

Critically examine the recent Supreme Court judgement which declared practice of instant triple talaq as unconstitutional.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Emerging issues over triple talaq


News

Context

  1. Supreme Court has declared discriminatory practice of instant triple talaq as unconstitutional
  2. It has sent out a clear message that personal law can no longer be privileged over fundamental rights. 
  3. The present case was initiated suo motu by the court

What is triple talaq?

  1. Triple talaq is a form of Islamic divorce that was practised by Muslims in India.
  2. It allowed any Muslim man to legally divorce his wife by stating the word talaq (the Arabic word for “divorce”) three times in verbal, written, or more recently electronic form.
  3. It has been a subject of controversy and debates within the country, raising the issues of justice, gender equality, human rights and secularism

Why it is unconstitutional?

  1. Three of the five judges on the Constitution Bench have not accepted the argument that instant talaq, or talaq-e-biddat, is essential to Islam and, therefore, deserves constitutional protection under Article 25
  2. The forbidden nature of triple talaq can be gleaned from the Koran itself
  3. This form of talaq is manifestly arbitrary in the sense that the marital tie can be broken capriciously and whimsically by a Muslim man without any attempt at reconciliation so as to save it.

Opinion of the judges in the minority?

  1. They concede that their reasoning is based mainly on the fact that this form of talaq is a matter of personal law, and therefore entitled to constitutional protection.
  2. It is not open to a court to accept an egalitarian approach over a practice which constitutes an integral part of religion

 

Women Empowerment: Policy Wise Human Resource Development

In 3-2 verdict, SC walks fine line, strikes down instant triple talaq

Note4students

Mains Paper 1: Social issues | Social empowerment

From UPSC perspective, the following things are important:

Prelims level: Talaq-e-biddat

Mains level: Much awaited judgement. Try to go through the issue , as much as possible.


News

SC Judgement on Triple Talaq

  1. The Supreme Court has “set aside”(in a 3-2 verdict) the centuries-old practice of instant triple talaq or talaq-e-biddat
  2. Talaq-e-biddat: In this practice, Muslim men divorce their wives by uttering talaq three times in quick succession

Majority and Minority Judgement

  1. Majority: Three of the five judges on the Constitution Bench called the practice un-Islamic and “arbitrary
  2. And disagreed with the view that triple talaq was an integral part of religious practice
  3. Minority: But the minority ruling underlined the primacy of Muslim personal law
  4. And said the practice enjoyed constitutional protection and was beyond the scope of judicial scrutiny
  5. Minority judges were of the view that Parliament should consider an “appropriatelaw to deal with the issue of talaq-e-biddat

What now?

  1. With triple talaq being set aside, now Sunni Muslims, will not be able to take recourse to this mode as it would be “void ab initio” (illegal at the outset)
  2. They are now left with two other modes of securing divorce: talaq hasan and talaq ahsan after the apex court set aside the talaq-e-biddat
Employment scenario- India & World

[op-ed snap] The republic of statistical scramble

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Note4students

Mains Paper 2: Governance | Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential

From UPSC perspective, the following things are important:

Prelims level: Particulars of the NSSO and Labor Bureau

Mains level: Accurate Data collection is very much needed for better policy prescription


News

Context

  1. The article talks about the employment data in the country and the issues related to its collection

Contradictory Data on Employment

  1. One set of numbers claims the current phase of economic growth as jobless
  2. Other set of data have accompanied vigorous assertions of rising employment

Different Employment surveys

  1. The National Sample Survey Organization (NSSO), under the ministry of statistics and programme implementation (Mospi), conducts a comprehensive household survey once every five years
  2. NSSO also conducts an unorganized units survey
  3. The labour bureau in the ministry of labour and employment also conducts two household surveys—a quarterly quick employment survey and another on an annual basis
  4. Finally, various government administrative bodies, such as the EPFO or ESIC, provide some indication of organized sector employment trends

Issues with employment data collection

  1. All the surveys given above suffer from some infirmity
  2. Why: Because of methodological issues, unviable sample size, inability to distinguish between different types of employment, long gaps or irregular frequencies
  3. But one thing is common: the findings only provide a partial picture and are therefore useless as a tool for policy design

Comments of the Economic Survey on Employment data

  1. Part two of the Economic Survey says: “The lack of reliable estimates on employment in recent years has impeded its measurement and thereby the Government faces challenges in adopting appropriate policy interventions”

Recommendations from the NITI Aayog

  1. NITI Aayog has recommended
    (1) vast improvements to existing surveys
    (2) institutional and legislative changes
    (3) improved physical and digital infrastructure
    (4) more aggressive use of technology to crunch the time-gap(in employment surveys)

The way forward

  1. The infrastructure of employment data collection needs an urgent improvement to maintain credibility, perceive economic trends and deliver appropriate policy prescriptions
Foreign Policy Watch: India-China India & Neighbours

[op-ed snap] Fixing the trade deficit with China won’t be easy

Image result for India china trade skew

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Note4students

Mains Paper 2: IR | India and its neighborhood- relations.

Once you are done reading this op-ed, you will be able to attempt the below.

“The deficit is not a result of exchange rate but of the inability to either boost productivity or to plug into international supply chains” Discuss it in the backdrop of increasing trade deficits with China.

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: India-china relation, Reasons behind increasing trade-deficits with China


News

Context

Article talks about India’s increasing trade deficit with China and the reasons for that.

Trade deficit with china

  1. The ongoing military stand-off with China has once again brought the issue of trade imbalances with that country to the fore.
  2. China’s quest for regional military dominance makes trade imbalances with it a strategic concern for a country such as India.

Why India has a nearly $50 billion trade deficit with China.

  1. Indian imports from China are nearly five times the exports to it.
  2. China has used a weak currency to push its products into India.
  3. The Chinese currency has actually appreciated against the Indian currency over the past 15 years
  4. A country can continue to maintain its export competitiveness despite a strong currency if its productivity is growing faster than the productivity of its trading partner.
  5. Inability to either boost productivity or to plug into the international supply chains that span the world.
  6. China uses various mercantilist ploys to keep other countries from freely accessing its growing markets.
  7. Obstacles to market access are one reason for the large trade deficit with China.
  8. Composition of trade between the two countries.

How China trades with countries with which it has a deficit ? 

    1. Chinese imports from countries such as Germany, Japan, South Korea and Taiwan are far higher than the exports it ships to them.
    2. These countries make the more valuable parts of various gizmos which are then sent to China for cheap assembly. The iPhone is a classic example.
    3. It is assembled in China but most of the value created lies in parts of the global supply chain that is outside China.
    4. India exports basic material to China and buys more sophisticated products from it.
    5. The main reason is India’s failure to build a globally competitive manufacturing sector
Nuclear Diplomacy and Disarmament India Beyond its Neighbours

‘Uranium sale talks at advanced stage’

Image Source

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Uranium Reserves around the world

Mains level: Uranium export from Australia, is very crucial for India’s rising energy needs


News

Uranium sale to India

  1. According to the Australian government, discussions are at a ‘well-advanced’ stage for Australia’s uranium sale to India, to fuel nuclear power plants
  2. Of the world’s proven estimated uranium reserves (5,404,000 tonnes), 31% are held in Australia (1,673,000 tonnes)

Dismissing the allegations

  1. Australian government has also dismissed the allegations that uranium supply was facing ‘delays’ due to the Australian coal mining sector ‘lobbying’ to protect its interests
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