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October 2019

Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

India’s industrial production shrinks 1.1% in August


From UPSC perspective, the following things are important :

Prelims level : IIP

Mains level : Economic Slowdown


India’s Index of Industrial Production (IIP) slid 1.1% in August 2019 amid worrying signs of an economy. This pulled down the overall growth of the index to 2.4%.

Signs of a problem

  • Passenger vehicle sales in the country dropped 24% in September — the 11th month of decline in a row. Car sales are taken to be the benchmark for a market economy’s health.
  • The index for electricity production also slipped by 0.9%. Power output is generally tied to its demand, which signifies economic activity. 
  • The mining index grew only 0.1%.

Agriculture worries

  • Agriculture has been lackluster for quite some time exacerbated by a series of droughts. The monsoon this year was delayed and erratic and there are complaints of droughts in many states.

Manufacturing worries

  • 15 out of 23 industries in the manufacturing sector shrank in August.
  • Manufacture of motor vehicles, trailers and semi-trailers tanked the fell the most – 23%. 
  • Machinery and equipment shrank 21.7% while ‘other manufacturing’ slipped 18%. 
  • Growth was seen in mostly less value-adding industries such as basic metal manufacturing. 
  • Capital goods shrank 21% while infrastructure and construction goods fell 4.5%. 

The government tried to solve

  • The government has cut corporate taxes to boost consumer demand and spending.
  • RBI has been reducing lending rates to increase the availability of funds.


In this situation, shrinking manufacturing can increase job losses and signify that consumer demand remains muted.



A measure of manufacturing

Higher Education – RUSA, NIRF, HEFA, etc.

[oped of the day] Let’s use cognitive science insights for better learning


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Teaching and education methods based on neuroscience

Op-ed of the day is the most important editorial of the day. This will cover a key issue that came in the news and for which students must pay attention. This will also take care of certain key issues students have to cover in respective GS papers.


Insights about how the human brain gathers and stores information have been accumulating for over a hundred years. But there’s a gap in mainstream education: good pedagogical practice—applying cognitive science has often taken a back-seat to convenience, scale and tradition. 

Better learning – redesign of existing education systems

    • We learn best in about 10-minute chunks
      • This is related to the way we form short-term memories in the brain. 
      • If learning exceeds that time, the mind begins to wander.
      • Lectures need to be extremely short to be effective. 
      • Recorded lectures, enabling viewers to pause, rewind or speed up a video, offer personalization, where students can learn at their own pace.
      • Learning through regular in-person lectures does not offer this flexibility.
    • Testing effect – When a learner is tested frequently about the material that she has just learnt, learning is better
      • For example, a learner who is given weaker cues for the test, and therefore struggles more to recall material, will learn better.
    • Spaced practice – Testing is best when spaced out over weeks or months.
      • This flies in the face of a prevalent approach of mass practice, in which a student might address a number of problems at the end of a chapter in a short span of time. 
      • This applies not just to academic learning, but also to sports and motor driving.
    • Fourth, content is best absorbed when topics are interspaced with one another.
      • A common practice in education is to take up topics in blocks: multiplication one day, say, followed by division a week later. 
      • Research points to the benefits of interleaving practice. 
    • Fill in the blankNovices have fewer predefined schema to digest new information. They suffer from high cognitive load because the working memory available is limited.
    • Tactile experience – in which a student physically feels angular momentum, or gestures to capture a phenomenon, have been shown to result in better learning than if the learning is purely abstract. 
    • Prototyping technologies such as 3D printing, Lego Mindstorms, the Arduino, the Raspberry Pi, App Inventor, and even the programming language Python, enable hands-on learning. 
    • Project-based learning, problem-based learning, and task-oriented learning are all techniques that give students more agency and purpose. 
    • Techniques such as game-based learning can lead a student through a series of tasks and create an environment where learning occurs naturally. An example is World Without Oil, an alternate reality game that leads players through a post-oil world, forcing them to think about the implications of an oil shock.


We know far more about how we learn today than we did some decades ago. Yet, we are not applying these insights to education. Modern schools and universities must adopt newer pedagogical models and break away from centuries-old norms.

Mother and Child Health – Immunization Program, BPBB, PMJSY, PMMSY, etc.

Government launches SUMAN scheme, assures free medicines for pregnant women


From UPSC perspective, the following things are important :

Prelims level : SUMAN scheme

Mains level : Nothing much


The central government launched the Surakshit Matritva Aashwasan (SUMAN) scheme aiming zero preventable maternal and newborn deaths in India.


    • Under the scheme, pregnant women, mothers up to 6 months after delivery, and all sick newborns will be able to avail of free healthcare benefits.
    • The beneficiaries visiting public health facilities are entitled to several free services. 
    • These include at least four antenatal check-ups that also includes:
      • one checkup during the 1st trimester
      • at least one checkup under Pradhan Mantri Surakshit Matritva Abhiyan
      • Iron Folic Acid supplementation
      • Tetanus Diptheria injection 
      • other components of comprehensive ANC package
      • six home-based newborn care visits
    • There will be zero expense access to the identification and management of complications during and after the pregnancy. 
    • The government will also provide free transport from home to health institutions.
    • There will be assured referral services with the scope of reaching health facility within one hour of any critical case emergency and Drop back from institution to home after due discharge (minimum 48 hrs). 
    • The pregnant women will have a zero expense delivery and C-section facility in case of complications at public health facilities.
    • It will ensure respectful care with privacy and dignity, with early initiation and support for breastfeeding, zero dose vaccination and free and zero expense services for sick newborns and neonates.


    • It will help in bringing down maternal and infant mortality rates in the country. 
    • According to the government, India’s maternal mortality rate has declined from 254 per 1,00,000 live births in 2004-06 to 130 in 2014-16. 
    • Between 2001 and 2016, the infant mortality rate came down from 66 per 1,000 live births to 34.
    • WHO defines the quality of care for mothers and newborns as “the extent to which health care services provided to individuals and patient populations improve desired health outcomes. In order to achieve this, health care must be safe, effective, timely, efficiently integrated, equitable and people-centered.”

Insolvency and Bankruptcy Code

[op-ed snap] The efficiency promise of the bankruptcy code


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : IBC - analysis


It has been 3 years since the Insolvency and Bankruptcy Code (IBC) is passed, and it remains a work in progress. 

Background to IBC

  • It had envisaged a mechanism by which creditors could wholly or partially recover their dues from a company unable to pay back.
  • The insolvent business taken over is to be revived or sold off so that its assets could swiftly get back to generating value under new ownership
  • In theory, it’s about capital moving to the best hands. 

Updates – Online Bidding

  • Recent reports suggest the government may bring in a short, time-bound online bidding process to resolve corporate bankruptcy cases. 
  • This is likely to improve transparency and reduce litigation over business failures.
  • This would be an efficient way to deal, which is crucial for an economy to optimize its allocation of resources


  • Last year, it was amended to protect homebuyers, placing them at par with financial creditors. 
  • 8 changes were made to ease the resolution process, the most important one being an extension of the maximum time that can be taken to a more realistic 330 days.

Outcomes – Drawbacks

  • At the heart of the IBC legislation was its time-bound approach to resolving insolvency cases. But the initial 270-day deadline proved inadequate
  • Several lenders unsure of their stance; some promoters trying every legal device to retain their firms, and the very process frequently getting caught in a judicial quagmire
  • Some high-profile cases have been plodding along for years now.
  • Bankruptcy courts have been stormed with realty cases because even a lone homebuyer can file one.
  • So far, creditors of a company undergoing insolvency proceedings have been at liberty to negotiate with bidders on a case-to-case basis. This leads to a drama of bids and counter-bids and bank officials are chased leading to litigation. 

What lies ahead – with new proposals

  • In case the assets or shares of a bust company are being auctioned, a clear time window would be specified for eligible bidders to place financial bids. 
  • Moving to bid online should speed up resolutions. 

What needs to be done

  • The tribunals that deal with IBC cases could do with stricter guidelines to distinguish between financial and operational creditors
  • Secured lenders need to be marked apart from unsecured lenders with greater clarity. 
  • Resolution orders should not end up casting the basis on which banks lend money in doubt.

Right To Privacy

[op-ed snap] Privacy rights & wrongs


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Right to Privacy vs Technology Surveillance


TRAI had commenced a process of consultations to bring over the top (OTT) services like WhatsApp and Telegram under “lawful interception”. 


  • The objective of the exercise is public security since criminals and terrorists are known to use end-to-end encryption offered by such services to fly under the radar. 
  • Parity has always been an issue since telecom providers complain that they are regulated and must respond to requests for information from governments and agencies. But the OTT sector is untrammeled. 

Is interception technologically feasible, at all?

  • Technology companies have argued that end-to-end encryption is completely private between the correspondents in the conversation.
  • It is encrypted by a pair of security keys which their devices exchange, and which are available to no one else, not even the OTT provider. 
  • Providers are unable to provide governments with any communications content, except metadata like the frequency of contact. 
  • The US Attorney General’s, along with his counterparts in Australia and the UK, has requested Mark Zuckerberg not to deploy systems that preclude any form of access to content, even for preventing or investigating the most serious crimes.

Need for such technologies

  • Concerns about crime, terrorism and lethal mischief-making using encrypted communications are legitimate.
  • Worldwide, the pressure is developing on providers and platforms to make content available for inspection. 

Weighing against privacy 

  • Privacy concerns are equally legitimate because compromising security would degrade privacy across platforms.
  • Blackberry had kept a copy of encrypted communications and provided it to the governments of India, Saudi Arabia, and the United Arab Emirates. Now, it is an inconsequential player. 
  • Privacy is now recognised as a right. It would open the door to situations like the NSA mass surveillance scandal.

Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

Small businesses provide most jobs in underdeveloped, developing nations: ILO


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : MSME & Self Employment - role in Economy


More than two-thirds of total employment in under-developed and developing countries is provided by small economic units as per the latest report – Small Matters.

What the report says

  • Policymakers must treat these units as a central part of economic and social development strategies worldwide.
  • It argued that such an approach is a must for low- and middle-income countries where the majority is employed in small economic units.

Link to SDGs

  • Three of the United Nations’ SDGs depend on employment opportunities — eradicate poverty (SDG 1), full and productive employment and decent work for all (SDG 8) and reduce inequality (SDG 10).

Correlation with the country’s development status

  • The report says that there’s a negative correlation between countries’ level of per capita GDP and employment share of the self-employed and micro and small enterprises.
  • The countries in the lowest income level groups have almost 100% self-employment. In these countries, hardly any employment occurs in firms with 50 or more employees.
  • Self-employment is the highest in South Asia (66%) followed by sub-Saharan Africa (50%) and the Middle East and North Africa (44%), found the report. 
  • Around 85% of workers in India are self-employed or do casual work and 73% of non-agricultural workers in Bangladesh were self-employed.

Other findings of the report

  • Countries that have more people working in the service sector, have lower employment in the agriculture sector. For example, Niger and Madagascar see agriculture provide 75% of employment and services only 15%. 
  • In developed countries like Ireland, Netherlands and Denmark, hardly 5% of total employment is in the agriculture sector, while 80% is provided by services.

Employment in the agriculture

  • Most of the employment opportunities fall into the informal category.
  • Around 95% of agricultural sector employment in South Asia and sub-Saharan Africa is informal.

The contrasting case of developed and developing countries

  • Europe and Central Asia have the largest share of agricultural employment in the formal sector more than 30%. 
  • In East Asia and the Pacific, it is more than 20%.
  • In sub-Saharan Africa and South Asia, self-employment alone accounts for more than half of the total agriculture employment.
  • There is an inversely proportional relationship between countries’ economies and the nature of employment opportunities.
  • The share of the self-employed in low-income countries is almost five times the share in high-income countries,.
  • The employment share of micro-enterprises is much higher in low- and lower-middle-income countries than in upper-middle- and high-income countries.
  • But, the employment in small enterprises (10-49 employees) is more in high-income countries and the employment share of small enterprises is just 3% in low-income countries; but it goes up to 25% in high-income countries. 


The report argued that it is important to understand the nature of employment opportunities available in a country to facilitate and improve the quality.

Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Can the government intercept WhatsApp?


From UPSC perspective, the following things are important :

Prelims level : Over the Top services; End to End encryption

Mains level : State surveillance; Social Media


The TRAI is studying the possibility of bringing platforms such as WhatsApp under the ambit of “lawful interception”.

Lawful Interception

  • Lawful interception of online communications platforms such as WhatsApp, Skype, Signal or Telegram has been a long-running debate.
  • It has ranged governments and regulators across the world against technology companies and privacy activists. 
  • The authorities want such platforms to provide access to messages, calls, and their logs to law-enforcement agencies to aid them with investigations. 
  • India, too, has made demands for traceability of communications from instant messaging platforms.

Why is TRAI looking at the lawful interception of online messaging apps?

  • Issue of OTTs – The telecom sector watchdog has been carrying out consultations to build a regulatory framework for over-the-top service providers (OTTs).
    • OTTs are the platforms that use the infrastructure of traditional telecom companies like the Internet to offer their services. 
    • TRAI has been looking at the regulation of OTTs since 2015 when mobile companies first raised concerns over services such as WhatsApp and Skype causing loss of revenues by offering free messaging and call services.
  • Regulatory regime – The other argument made at the time was that these services do not fall under the licensing regime prescribed by the Indian Telegraph Act, 1885, and operated in a regulatory dark spot.
  • There are concerns about the lack of a level playing field between telecom companies and OTT service providers, including the economic aspect. 
  • With the boom of data consumption in the country over the last two or three years, the regulator began looking at the security facet of the regulatory imbalance between the two kinds of players. 
  • While telecom players are subjected to lawful interception as per the telegraph law, OTT platforms, as they are not licensed, are not subject to interception by law enforcement agencies.

How will the regulator proceed with the proposal now?

  • TRAI will submit its views to the Department of Telecommunications (DoT), which will decide on the next course of action. 
  • Currently, the regulator is studying global practices as far as a lawful interception on online platforms is concerned. 
  • It is also looking into whether other regulators and authorities have been provided any facilities for interception of communications, and could suggest that the platforms should provide the same facilities to the Indian government.

Under which laws are telecom firms currently subject to lawful interception?

  • The Indian Telegraph Act, 1885 states that on the occurrence of any public emergency, or in the interest of public safety, 
    • the central government or a state government can take temporary possession as long as the public emergency exists or the interest of the public safety requires the taking of such action 
    • of any telegraph established, maintained or worked by any person licensed under the Act. 
  • This mandates telecom companies to provide access to messages, calls, and logs of these in case a court order or a warrant is issued. 
  • However, the government is not relying on The Telegraph Act to meet this objective. It wants the platforms to come up with a solution to enable traceability.

So, are messages sent and received on these platforms not traceable?

  • Apps such as WhatsApp, Signal, Telegram, etc. claim to provide end-to-end encryption of their messages. 
  • This has caused some uncertainty among the authorities on how they can seek access to messages.

The case of WhatsApp

On the FAQ page on its website, WhatsApp states: 

  • We will search for and disclose information that is specified with particularity in an appropriate form of the legal process and which we are reasonably able to locate and retrieve. 
  • We do not retain data for law enforcement purposes unless we receive a valid preservation request before a user has deleted that content from our service.
  • It also says that in the ordinary course, WhatsApp does not store messages once they are delivered. 
  • Undelivered messages are deleted from servers after 30 days. 
  • As per the WhatsApp Privacy Policy, they may collect, use, preserve, and share user information if it is reasonably necessary to
    • keep users safe
    • detect, investigate, and prevent illegal activity
    • respond to legal process, or to government requests
  • They also offer end-to-end encryption for the services. End-to-end encryption means that messages are encrypted to protect against WhatsApp and third parties from reading them.

And what is the situation elsewhere?

  • Currently, there is no jurisdiction anywhere in which messaging apps have been known to provide access to their messages. 
  • Pressure on such services to provide access for law-enforcement purposes has been rising everywhere. 
  • The United States Department of Justice has made fresh arguments for access to encrypted communications. The New York Times reported that Attorney General William P Barr has written to Facebook CEO Mark Zuckerberg, pointing out that companies should not “deliberately design their systems to preclude any form of access to content even for preventing or investigating the most serious crimes”.
  • In India, Law and IT has repeatedly stressed the need to be able to trace messages to prevent serious crimes. 
  • The Indian government has conceded that encrypted messages may not be accessible. 
  • It has asked the platforms to provide the origin of messages that could possibly incite violence or other mischievous acts.

Foreign Policy Watch: India-ASEAN

RCEP: Opportunity, fears in regional trade deal


From UPSC perspective, the following things are important :

Prelims level : RCEP; ASEAN

Mains level : ASEAN negotiations


Commerce Minister is in Bangkok for the eighth RCEP ministerial meeting. The meeting is expected to work out the unresolved issues in the negotiations on the mega trade deal.

What is the RCEP?

  • It is a trade deal that is currently under negotiation among 16 countries — the 10 member countries of ASEAN and the six countries with which the ASEAN bloc has FTA.

The deal

  • Negotiations on the details of RCEP have been on since 2013, and all participating countries aim to finalise and sign the deal by November.

What does the RCEP propose?

  • The purpose of RCEP is to create an “integrated market” spanning all 16 countries, making it easier for products and services of each of these countries to be available across this region.
  • ASEAN says the deal will provide “a framework aimed at lowering trade barriers and securing improved market access for goods and services for businesses in the region”.


  • The negotiations are focussed on areas like trade in goods and services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce, and small and medium enterprises.

Why is the RCEP important?

  • It is billed as the “largest” regional trading agreement ever.
  • These countries account for almost half of the world’s population, contribute over a quarter of world exports, and makeup around 30% of global GDP.

How have the talks progressed?

  • Of the 25 chapters in the deal, 21 have been finalised. 
  • Chapters on investment, e-commerce, rules of origin, and trade remedies are yet to be settled.

How does India stand to gain?

  • Sections of the Indian industry feel that being part of RCEP would allow the country to tap into a huge market if the domestic industry becomes competitive. 
  • Pharmaceuticals and cotton yarn are confident of gains, and the services industry too may have new opportunities.

What are the concerns?

  • Several industries feel India needs to be mindful of the amount of access it gives to its market. 
  • There is fear that some domestic sectors may be hit by cheaper alternatives from other RCEP countries. 
  • Apprehensions have been expressed that cheaper Chinese products would “flood” India.
  • Critics are also not confident that India would be able to take advantage of the deal, given its poor track record of extracting benefits from the FTAs with these countries. 
  • India’s trade gap with these countries may widen if it signs the RCEP deal.
  • Industries like dairy and steel have demanded protection. 
  • The textile industry has already raised concerns about growing competition from neighboring countries.
  • The bigger players in steel are apprehensive of the potential impact on their businesses.
  • Makers of finished goods have argued that limiting steel supply to domestic producers through higher import duties will put them at a disadvantage.