May 2018
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[op-ed snap] What the future holds for Indian exports

Note4students

Mains Paper 3: Economy | Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: The four important factors discussed in the newscard.


News

Context

  1. The Economic Survey of 2017-18 identified exports as the biggest source of upside potential for growth in FY18
  2. But do the recent macroeconomic developments pose a threat or an opportunity for Indian exports?

Possible negative effect of the US policies on developing countries

  1. The US Federal Reserve has recently hiked the benchmark funds rate from 1.5% to 1.75%
  2. An interesting development is the expectation of a more aggressive monetary tightening in the future, with successive hikes over the next couple of years
  3. Such a hawkish stance has tremendous implications for the rest of the world, especially the emerging market economies

The current situation provides a favourable opportunity for an exports rebound in the coming quarters
There are at least four factors that augur well
FIRST:  Effects from dollar appreciation

  1. A Nomura report forecasts the 10-year US treasury yields to rise to 3.25% in Q3 2018 from 2.95% currently
  2. It identifies Q3 2018 as a quarter holding significant potential for dollar appreciation
  3. This has implications not only for Indo-US trade but also for India’s trade with other countries, as over 88% of Indian exports are invoiced in dollars

SECOND: Trade war between the US and China

  1. The inevitable trade war between the US and China offers another opportunity
  2. US President Donald Trump imposed tariffs on $50 billion worth of imports from China, to which China retaliated immediately and equally
  3. US importers from China cannot just shift this entire demand to US manufacturers as the local economy is already operating at close to full employment
  4. With factory wages in China escalating to the highest in emerging Asia, India can enjoy an export boom in sectors otherwise dominated by China like electronics and apparel

THIRD: Revival of demand from the European Union (EU)

  1. Financial crisis and PIIGS (Poland, Italy, Ireland, Greece, Spain) debt crisis broke the back of EU’s economic growth
  2. This led to a decline in demand from EU for Indian exports
  3. The projections for 2018 remain good, according to a European Commission report
  4. With the EU regaining, the resurgence in demand from the West will act as a boon for Indian exporters

FOURTH: Diversification of China’s manufacturing sector

  1. The growth in the manufacturing sector in February was at its lowest in the past 18 months due to a crackdown over pollution in major industrial provinces
  2. Understanding the long-term limitations, China has started diversifying its trading pattern by focusing more on technology-driven sophisticated goods
  3. It has already become a major exporter of green tech
  4. This is creating a vacuum in the manufactured goods export segment
  5. India should now capitalize on the opportunity

The way forward

  1. India is struggling for comparative advantage against low-end manufacturers, such as Bangladesh and Vietnam
  2. This weakening competitiveness needs to be addressed to sustain employment-generating export growth
  3. Although India may not be able to cater to the world market like China did for two decades, it should not lose out to rivals like Bangladesh and Vietnam
Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

Rajasthan institute comes up with new sheep insemination technique

Note4students

Mains Paper 3: Science & Technology | Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology

From UPSC perspective, the following things are important:

Prelims level: Germplasm

Mains level: Importance of the new technique


News

New insemination technique for sheep

  1. Scientists at the Central Sheep and Wool Research Institute (CSWRI), Avikanagar, have come up with a new laparascope-assisted insemination technique for sheep

Why important?

  1. The new technique has resolved the difficulties involved in freezing of semen and inability to transit the tortuous reproductive tract of the ruminant mammals kept as livestock
  2. The success with frozen semen in the sheep was earlier very low because of its poor freezability

How can the new technique help?

  1. The new technique would help achieve up to 60% survival in the birth of lambs and would have an immense potential for rapid multiplication of elite germplasm
  2. As many as 40 females can be inseminated from a single ejaculate using the technique
  3. The new technique’s invention would be of great help in the breed improvement programmes

Back2basics

Germplasm

  1. Germplasm are living genetic resources such as seeds or tissues that are maintained for the purpose of animal and plant breeding, preservation, and other research uses
  2. These resources may take the form of seed collections stored in seed banks, trees growing in nurseries, animal breeding lines maintained in animal breeding programs or gene banks, etc.
  3. Germplasm collections can range from collections of wild species to elite, domesticated breeding lines that have undergone extensive human selection
  4. Germplasm collection is important for the maintenance of biological diversity and food security
Innovations in Biotechnology and Medical Sciences

[op-ed snap] The problem of lack of rural electricity demand

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: Various electricity schemes mentioned in the newscard

Mains level: The newscard discusses the issue of discoms’ stressed finances and poor reliability of power supply in rural areas.


News

Context

  1. The government has announced the electrification of all inhabited census villages
  2. However, nearly one-fifth of India’s rural households (around 31 million) still remain in acute darkness

Government efforts for the same

  1. The government is committed to reaching these households through the Saubhagya scheme by 31 December 2018—a deadline that has been moved up from 31 March 2019
  2. The project’s ambition is praiseworthy

But is it enough?

  1. Electrification schemes like the previous Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), and the ongoing Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Saubhagya schemes have focused on establishing village electricity infrastructure
  2. There are issues with these schemes
  3. The largest issue is the lack of focus on supply-side barriers

The main issue:-
Power For All: Electricity Access Challenge In India
A World Bank study

  1. According to the study, “even where electricity service has been locally available, many village households choose not to adopt a connection”
  2. For instance, states like Tripura and Sikkim, despite almost universal access, have among the lowest consumption rates
  3. Examining this gap between electricity access and household-level adoption allows for a better understanding of supply-demand problems
  4. Only six states had, on average, 24-hour power supply in rural areas as of December 2017
  5. This lack of reliability often discourages households from adopting electricity, which disincentivises discoms, thus undermining investment in rural electrification

Challenges faced by Discoms

  1. Discoms face multiple challenges, ranging from revenue losses due to high costs of power procurement to power theft
  2. and irregularity and delay in disbursement of state subsidies assured to domestic and agriculture consumers
  3. The lack of political will across governments to rationalize tariffs and slash these subsidies is a long-running problem
    Government efforts
  4. The current government attempt to address discoms’ financial stress via the Ujwal Discom Assurance Yojana (Uday) is the latest in a long line of government bailouts. It hasn’t been any more successful than previous attempts
  5. The scheme was rolled out in 2015

The way forward

  1. While India has made remarkable progress in bringing electricity to every village, the achievement on this front masks continuing challenges
  2. There’s still a long way to go for lowering barriers to adoption, easing discoms’ financial stress and incentivising rural adoption
Rural Infrastructure Schemes

Kailash Mansarovar Yatra resumes via Nathu La pas

Image source

Note4students

Mains Paper 2: IR | India & its neighborhood- relations

From UPSC perspective, the following things are important:

Prelims level: Nathu La pass, Lipulekh Pass route, Kailash Mansarovar Yatra

Mains level: India-China ties and various factors affecting them


News

Bringing ties back on track

  1. Nathu La pass has been reopened for the annual Kailash Mansarovar Yatra
  2. China had shut down the Nathu La pass in Sikkim and denied entry to the Kailash Mansoravar (located in Tibet) pilgrims last year due to the 73-day-long standoff in Doklam between troops of India and China at the border on account of security reasons
  3. The route through the Nathu La Pass (Sikkim) is motorable and suitable for senior citizens unable to undertake arduous trekking

The alternative route also to be used

  1. Pilgrims will also take the Lipulekh Pass route
  2. The route through the Lipulekh Pass (Uttarakhand) involves some trekking and is known to be more arduous
Foreign Policy Watch: India-China

[pib] “Swachh Bharat Summer Internship- 100 Hours of Swachhata”

News: 

Related Ministry/Department: Ministry of Drinking Water and Sanitation

  • The Ministry of Drinking Water and Sanitation, the convening and coordinating Ministry of Swachh Bharat Mission, in association with the Ministry of Human Resource Development, has come up with the innovative ‘Swachh Bharat Summer Internship (SBSI) 2018’aimed at engaging the college youth with  Swachhata work in villages in the coming Summer vacation.
  • The SBSI aims to engage lakhs of educated youth across the country, develop their skills and orientation for the sanitation sector, amplify mass awareness and cement the people’s movement (Jan andolan) aspect of Swachh Bharat Mission.
  • Under the terms of the Internship, candidates would be required to undertake 100 hours of activities including shramdaan, creation of sanitation infrastructure, system building, behavior change campaigns and other IEC initiatives in and around nearby villages.
  • The guidelines for the internship are being formulated in consultation with the Department of Higher Education.
  • The best internships will be recognised at college, University, State and National levels. Every intern who completes the SBSI will also be provided a Certificate of Internship by the Swachh Bharat Mission.
  • The University Grants Commission has agreed to provide 2 credit points as an ‘elective’ under the Choice Based Credit System (CBCS) to students in Higher Educational Institutions who would be undertaking and completing the SBSI.

 

5 ways India could be affected by U.S. decision to pull out of Iran nuclear deal

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: Joint Comprehensive Plan of Action (JCPOA), Chabahar, INSTC, Shanghai Cooperation Organisation, “2+2” dialogue

Mains level: Changing dynamics of US international policies and its impact on India


News

The USA pulls out of Iran nuclear deal

  1. U.S. President Donald Trump decided to pull out of the Joint Comprehensive Plan of Action (JCPOA)
  2. The deal itself won’t be scrapped as long as Iran and the other signatories: U.K., France, Russia, China, Germany and the European Union remain committed to it

Impact on India

India could face the impact of the U.S. decision on the deal as well as instituting the “highest level of economic sanctions” in several ways:

  1. Oil prices
  • Iran is presently India’s third biggest supplier (after Iraq and Saudi Arabia), and any increase in prices will hit both inflation levels as well as the Indian Rupee
  • Non-oil trade with Iran may not be impacted as much

2. Chabahar

  • India’s moves over the last few years to develop berths at the Shahid Beheshti port in Chabahar was a key part of its plans to circumvent Pakistan’s blocks on trade with Afghanistan
  • The new U.S. sanctions could slow or even bring those plans to a halt depending on how strictly they are implemented

3. INSTC

  • India has been a founder of the International North South Transport Corridor (INSTC) since it was ratified in 2002
  • It starts from Iran and aims to cut right across Central Asia to Russia over a 7,200-km multi-mode network
  • Plans for INSTC sped up after the JCPOA was signed in 2015 and sanctions on Iran were lifted
  • New U.S. sanctions will affect these plans immediately

4. Shanghai Cooperation Organisation

  • India joined the SCO along with Pakistan last year, and both will be formally admitted in June 201
  • This year, Chinese officials say they will consider inducting Iran into the 8-member Eurasian security organization
  • If the proposal is accepted by the SCO which is led by China and Russia, India will become a member of a bloc that will be seen as anti-American
  • It will also run counter to some of the government’s other initiatives, for eg. the Indo-Pacific quadrilateral with the U.S., Australia, and Japan
  • The move may also rile other adversaries of Iran, like Saudi Arabia, UAE, and Israel

5. Rules-based order

  • India has long been a proponent of a “rules-based order” that depends on multilateral consensus and an adherence to commitments made by countries on the international stage
  • By walking out of the JCPOA that was signed by the Obama administration, the U.S. government has overturned the precept that such international agreements are made by “States” not just with prevailing governments or regimes
  • This could also impact all agreements India is negotiating both bilaterally and multilaterally with the U.S., and the government will have to choose its future course factoring in the new U.S. behavior
  • New Delhi will have to consider a new understanding of its ties with Washington in this context, and some of this understanding may be built during the first “2+2” dialogue between Foreign and Defence Ministers of both countries to be scheduled in the next few weeks in Washington
Foreign Policy Watch: India-Iran

Commission approves modern animal-free testing for drugs

Image source

Note4Students

Mains Paper 3: Science and Technology- developments and their applications and effects in everyday life

Prelims Level: Indian Pharmacopoeia CommissionPyrogen Test and various drug tests, People for the Ethical Treatment of Animals (PETA)

Mains Level: Rising concerns for animals rights and various initiatives for their protection


News

Animal-free tests

  1. In a step that would spare animals from suffering due to drug experiments, the Indian Pharmacopoeia Commission has approved modern, animal-free tests for drug manufacturers
  2. In the 2018 edition of Indian Pharmacopoeia, that provides guidelines on tests for drugs manufactured and marketed in India, the IPC has replaced the pyrogen test carried out on rabbits and the abnormal toxicity test carried out on guinea pigs and mice with tests that can be done in test tubes
  3. The guidelines in the edition will come into effect from July 1

New mandate

  1. With the Indian Pharmacopoeia Commission’s new mandate, the pyrogen test will be replaced by a bacterial endotoxin test or a monocyte activation test which can be carried out in test tubes
  2. Vaccine manufacturers can apply for a waiver for the abnormal toxicity test by getting a compliance certificate from the National Control Laboratory instead
  3. People for the Ethical Treatment of Animals (PETA) India has been pushing for doing away with the cruel methods of testing on animals for the past several years

Back2Basics

Pyrogen Test

  1. The pyrogen test is carried out to check impurity or substance that can cause adverse side-effects
  2. For the test, the drug is injected into a rabbit and the animal is closely observed for feverish symptoms
  3. The abnormal toxicity test is carried out to check potential hazardous biological contamination in vaccine formulations
  4. This batch test is done before the product is approved for marketing. In this, mice or guinea pigs are injected with the vaccine. The scientists observe if there is the death of any animal.
Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

UN report for social inclusion

Image source

Note4students

Mains Paper 3: Economy | Inclusive growth & issues arising from it

From UPSC perspective, the following things are important:

Prelims level: UN Economic and Social Commission (ECOSOC),

Mains level: Establishing a link between economic growth and social inclusion


News

UN Economic and Social Survey of Asia and the Pacific (ESCAP) Report, 2018

  1. A UN report on the Asia-Pacific region has urged the regional powers to invest in inclusive and sustainable growth
  2. The UN Economic and Social Survey of Asia and the Pacific (ESCAP) 2018, the annual report from the UN Economic and Social Commission (ECOSOC) for Asia and the Pacific have urged countries to take advantage of high growth rate and share the benefits with the national society
  3. Governments of countries in the Asia-Pacific region are advised to take advantage of the currently favourable economic conditions in order to address vulnerabilities and enhance the resilience, inclusiveness, and sustainability of their economies stated the report highlighting the urgency facing the economies of the region
  4. The report was launched at the Indian Council for Research in International Economic Relations (ICRIER)
  5. The report described South and Southwest Asia as the fastest growing sub-region of the Asia-Pacific region and urged the countries to increase social spending

Back2Basics

ESCAP

  1. The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is the regional development arm of the United Nations for the Asia-Pacific region.
  2. It is established in 1947 with its headquarters in Bangkok, Thailand.
  3. Parent Organisation: UN ECOSOC
  4. ESCAP works to overcome some of the region’s greatest challenges by providing results-oriented projects, technical assistance, and capacity building to member States in the following areas:
  • Macroeconomic Policy and Development including the publishing of Asia-Pacific Development Journal (APDJ) twice a year
  • Trade and Investment
  • Transport
  • Social Development
  • Environment and Sustainable Development
  • Information and Communications Technology and Disaster Risk Reduction
  • Statistics
  • Sub-regional activities for development
Financial Inclusion in India and Its Challenges

3rd edition of UNPCAP underway in Delhi

Note4students

Mains Paper 2: IR | Important International institutions, agencies and fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: Particulars of the UNPCAP

Mains level: Aim of the UNPCAP. (The Chinese influence in the African continent is a cause of concern for not only India but also for the US. These efforts will help us in countering the Chinese influence)


News

The third edition of the United Nations Peacekeeping Course for African Partners (UNPCAP)

  1. It was recently inaugurated in New Delhi
  2. The UNPCAP sessions will be held from May 7-25

Aim of the UNPCAP

  1. The course is aimed to build and enhance the capacity of the African Troop Contributing Countries to the UN and to further train the trainers from these countries
  2. The training incorporates topics on operational and logistical matters, humanitarian issues, thematic topics and table top exercises, and mission briefs

India’s contribution

  1. The course revolves around the concept of training the trainers(as stated by the UN) is one of the many steps that India has initiated towards active contribution to peace support activities

Background

  1. The course is conducted by the Centre for United Nations Peacekeeping in India (CUNPK) in partnership with the US, the Indian Army
  2. The first and second editions of the course were held in New Delhi in 2016 and 2017, respectively
Foreign Policy Watch: India-Africa