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JANUARY ‘8’, 2017 ‘<250 words’ summary of articles of The Hindu & Indian express relevant for UPSC GS:2—IR IndiaMyanmar Source—The Hindu (pg9 India-Myanmar border trade hit) 1. Issue: -Border trade between India and Myanmar, legalised in 1995, has virtually come to a halt. 2. Because of: recurring blockades, recently the ongoing economic blockade imposed by the United Naga Council since November 1 is no different, bringing trade almost to a standstill. 3. Other reason for halt: general strike other forms of disturbances. highway robberies and rampant extortion by militant outfits GS:2—IR IndiaPortugal Source—The Hindu (pg12 India, Portugal sign defence agreement) 1. News: -In a bid to boost joint production and development of niche weapons systems, India and Portugal entered into a defence agreement. 2. Apart from the agreements on defence, visa-free travel for diplomats and marine research, both sides also issued a separate declaration for cooperation in third country. 3. Why India needs Portuguese: Underscoring the substantial opportunities in India’s defence sector and the niche technological competencies of the Portuguese defence industry, India invited Portuguese companies to ‘Make in India’ and set up joint ventures and commercial partnerships based on joint production and technology transfer GS:3—ECONOMY International Business Report (IBR) survey Source—The Hindu (pg16 Indian companies optimistic of economic recovery in 2017) 1. India continues to stand out as the one economy which has huge potential to continue to grow and this is reflected in the survey where Indian businesses are most optimistic and high on expectations of increasing revenue, employment, profitability. 2. Requires that the policy makers to look at (Reform needed in): unleashing the next generation of reforms i.e. GST mostly focussed on ease of doing business minimum government, maximum governance requires a change in mind-set among the policy makers implementing reforms in the legal system and contract enforcement (India’s poorest ranking is in contract enforcement in the doing business ranking). increase in investment in R&D activities. 3. Challenges to Indian Businesses: lack of strong ICT infrastructure shortage of orders unavailability of workforce shortage of finance regulations and red tape as a constraint on growth. GS:2—HEALTH Issue Related to health data Source—The Hindu (pg10 Health-care data is ailing) 1. Data pertaining to health care in India, evidence shows, is significantly compromised in terms of its quality, its periodicity and coverage. 2. For example: -If you want to know the proportion of births that were delivered by caesarian section in a private health facility of Andhra Pradesh, National Family Health Survey (NFHS)-4 will say it is 57 per cent but the Health Information System of the National Rural Health Mission 2015-16 pegs it at around 42 per cent. 3. Reason: there is a lack of data at the sub-State or the district level, making it difficult to plan for targeted interventions. data is collected at irregular intervals, which doesn’t allow for mid-course policy correction. For example, the fourth round of NFHS was conducted after a gap of nine years. data remains incomplete in many surveys and tools, especially in administrative data at hospitals and nursing centres in smaller towns and districts. Lack of health-care data from the private sector is another major caveat. 4. Way forward: the definitions for various indicators need to be standardised across surveys, even if conducted by different organisations. the best way to data is to ensure routine capturing of disaggregated data, without duplication of forms and formats to reduce the efforts of data producers. stakeholders and decision- makers will have to place a positive value on data in order to use it in decision-making. This can be generated by building a positive experience using information to support a decision and through proper training. the capacity building of staff needs to be a focus area, providing them with necessary skills. GS:2—IR Source—The Hindu (pg20 China setting up highest altitude telescopes close to LAC) 1. China is setting up the world’s highest altitude gravitational wave telescopes in a Tibet prefecture close to the Line of Actual Control (LAC) with India. 2. About project: Telescope is code-named as Ngari. The telescope, located 5,250 meters above sea level, will detect and gather precise data on primordial gravitational waves in the Northern Hemisphere. 3. Gravitational waves were first proposed by Albert Einstein’s theory of general relativity 100 years ago, but it wasn’t until 2016 that scientists with the Laser Interferometer Gravitational-Wave Observatory announced proof of the waves’ existence, spurring fresh research interest among the world’s scientists. 4. Other projects: - Last September, China commissioned the world’s largest radio telescope in a mountainous region of southwest China’s Guizhou Province to search for more strange objects space, gain better understand the origin of the universe and to boost the global hunt for extraterrestrial life. GS:3—ECONOMY RBI Source—The Indian Express (pg15 Across the aisle: Whither RBI’s autonomy?) Role 1. Why RBI formed during british regime? analysed A need was felt to ‘regulate the issue of bank notes and the keeping of reserves with a view to securing monetary stability’. However, in 1929, the world had been hit by an unprecedented economic crisis — the Great Depression. The monetary systems of the world were in disarray. No one was sure what kind of monetary system would be suitable for India. Hence, it was decided to make a ‘temporary provision’ and that temporary provision was the Reserve Bank of India Act, 1934! (the ‘Act’). The RBI’s main objectives in 1934 was to issue bank notes and to keep the reserves. 2. Development made so far: Under the Act and through numerous amendments, vast powers were conferred on the RBI. The word ‘autonomous’ does not occur in the Act but, over the years, the principle of Central Bank autonomy has been raised to the level of an immutable law. Under Section 7 of the Act, the Central government may give such directions to the RBI as it may consider necessary in the public interest, but the power has never been exercised in the 83 years of the Act. Overall, however, the RBI and the Central government respected each other’s jurisdiction and learnt to work with each other. 3. Doubt raised over decision of demonetisation: The government has claimed that demonetisation was announced on the recommendation of the RBI. On the contrary, the government’s and the BJP’s spokespersons boasted that it was entirely Mr Narendra Modi’s brainchild. The decision-making process at the RBI was opaque and dubious. The RBI’s Board of Directors should have 10 directors regarded as independent. Seven vacancies in that category have not been filled by the NDA government. Dr Urjit Patel, the Governor, justified demonetisation as a policy action to ‘turn around’ the economy. None of the governors before him since 1978 had advocated demonetisation even when the economy faced grave challenges. Dr Patel embraced the idea, barely 65 days after he took office, when the economy was growing, reportedly, at about 7 per cent! The RBI is believed to have told a parliamentary committee that the Central government had recommended to the RBI (on November 7) that high denomination notes may be demonetised. Acting in haste, the RBI recommended to the government (on November 8) that high denomination notes may be demonetised! It was an unusual role reversal. The RBI has refused to release the agenda note for the meeting or the minutes. The RBI has refused to answer questions if any director had demanded more information or dissented. The RBI has a Monetary Policy Committee (MPC) that was constituted recently after years of deliberation. Money supply is an integral aspect of monetary policy. The MPC was totally excluded from the decision-making process. 4. Analysis: In his speech on December 31, Mr Modi ventured into territory where no prime minister or finance minister before him had gone. He directed banks to increase the credit limit for small industry from 20 per cent to 25 per cent of turnover and the working capital limit from 20 per cent to 30 per cent of turnover. He directed banks to provide 8 per cent interest on 10-year fixed deposits of senior citizens. On Saturday, the Prime Minister nudged the banks to reduce the lending rates and, on Sunday, State Bank of India led the pack and announced a cut in interest rates! Every announcement by the Prime Minister scuttled the independence and credibility of the RBI. The RBI has come under severe criticism both within India and abroad. I would like to believe that the RBI has not fallen victim to ‘institutional capture’ by the current regime. I would like to believe that years of nurturing the autonomy of the RBI have not gone to waste.