Tag Archives: current events 2014

Insights Secure-2014: UPSC Questions On Current Events and General Studies

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12 June 2014

Answer ALL the questions in about 200 words

1.What changes have been proposed to Industrial Disputes Act and Factories Act to bring labour reforms in India? Critically examine.

Business Standard

2.By giving examples from different parts of the world, discuss the benefits of high speed rail to India. Examine the impediments involved in expanding high speed rail network in India.

Business Standard

The Hindu

3.Critically comment on  controversy surrounding General Anti-Avoidance Rules (GAAR) which will come into effect from January 2016.

Business Standard

4.Critically comment on the need for subsidy reforms in India.

Business Standard

5.Critically examine the causes behind pollution of River Ganga. In your opinion, what are the major challenges that can be faced by authorities in cleaning River Ganga? Explain.

The Hindu

6.In the light of India’s ‘soft power’ status, evaluate the principles of ‘Multi Alignment’ and ‘Non Alignment.2.0′ put forward by some intellectual in recent years.

The Hindu

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Insights Secure-2014: Questions On Current Events

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15, March 2014

Answer ALL the following questions in about 200 Words

1. What is dual citizenship? What is the stand of Indian law on this issue? Explain why there is a demand from the Indian diaspora for dual citizenship.

Business Standard

2. What is core-inflation and what causes it? How does it affect economy?

Business Standard

3. What do you understand by currency futures? What is the difference between ‘currency exchange’ and ‘stock exchange’? Explain the controversy surrounding SEBI and MCX-SX.

Business Standard

4. Comment on the major contributions of the American and French revolutions to the birth and maturing of democracies across the world.

Business Standard

5.  Do you think globalization has endangered democracies? Substantiate.

Business Standard

6. Why Micro finance institutions are not regulated by RBI? Presently how are they regulated? Explain

Business Standard

7. Comment on the criticisms against the recently enacted national food security act. Do you think they are justified? Substantiate.

The Hindu

 

132 Comments

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Insights Secure-2014: Questions On Current Events

Hearty congratulations to All the aspirants who got selected for the interview. Around 10 aspirants (might be more) who regularly wrote answers at ‘Daily Answer Writing Challenge- have got selected for the interview. One common thing that I observed in them is that they wrote answers consistently from day one to the last day. It proves that consistent hard work definitely pays. Insights team is proud of you guys. Here in Secure-2014, we can see few guys who are going to make news next year. And of course from our offline classes in Bangalore many more will make us proud (they really write a lot). Just never give up. Thank you.

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12, March 2014

1. To decrease power deficit in India and meet the growing demand for power, it is imperative that power transmission infrastructure and energy efficiency be improved. How this can be done? Explain.

Business Standard

2.  India added as many as 35 million jobs since 2000 in the rural non-farm, non-manufacturing sector which has emerged as the largest job creator. Is it a good trend? Examine the reasons behind this shift in employment.

Business Standard

3. Unless there is early focus on the critical challenges of governance, India’s long-term prospects will remain sub-optimal. In this context, What are the indispensable elements of efficient governance? Critically analyze.

Business Standard

4. Examine the effects of low spending on health sector by Indian government. Why is India not spending enough money on this crucial sector? Examine.

Business Standard

5. Examine the reasons behind stalling of US-India civil nuclear deal which was signed in 2008.

The Hindu

Business Standard

6. “The premise of carving out smaller States in India shifted from the formation of linguistic states to one of, since the 1990s, rearranging them on the basis of backwardness and a lack of development.” Elaborate. Do you think it’s a good shift? Comment.

The Hindu

7. In the light of new guidelines on stem cell research released by  the Indian Council of Medical Research and the Department of Biotechnology, comment on the need for proper regulation of stem cell research in India.

The Hindu

8. What is infrasound? What are its sources? Explain why was it in news recently.

The Hindu

 

226 Comments

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Insights Secure-2014: Questions On Current Events

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20, February 2014

1. For the past five years, the world economy has been heavily influenced by the policy of quantitative easing  that the United States Federal Reserve launched in November 2008.  Explain how? (200 Words)

Business Standard

www.business-standard.com/article/opinion/nitin-desai-the-taper-s-good-for-india-114021901325_1.html

2. “The future for Indian IT is as exciting as it is challenging.” Elaborate. (200 Words)

Business Standard

www.business-standard.com/article/opinion/reinventing-digital-world-114021901319_1.html

3. Why was Armed Forces (Special Powers) Act, 1958 introduced in North East and why is it controversial? Critically examine. (200 Words)

The Hindu

4. Analyze the important provisions of the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2014 . (200 Words)

The Hindu

5. What is Option B Plus under AIDS treatment? Explain its advantages. (200 Words)

The Hindu

6. Write a note on India-Canada trade relations. (200 Words)

The Hindu

7. “Adequate availability of water, food and energy is critical to global security.” Comment (200 Words)

The Hindu

8. “Among the issues that will shape our future world are water and other natural resources, demographics, and sustainable economic growth, as well as an accelerated weaponisation of science and other geopolitical elements. A combination of these factors will create winners and losers in the world.” Do you agree with this assessment? Comment with reference to India. (200 Words)

The Hindu

 

157 Comments

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Insights Secure-2014: Questions n Current Events

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23, January 2014

1. What is black money? Explain the measures taken by the RBI and government to curb it. (200 Words)

The Hindu

2. Analyze the important provisions of the draft  Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011. (200 Words)

The Hindu

3. What are deemed universities and why were they conferred that status? Comment on the state of higher education in India in the light of controversy surrounding these deemed universities. (200 Words)

The Hindu

4. Do you support FDI in farm land? Substantiate. (200 Words)

The Hindu

5. How does the interim nuclear deal agreed between Iran and P5+1 countries affect India? Examine. (200 Words)

The Indian Express

6. “The Naga society is seething with multiple tensions intermittently erupting into morbid fratricidal violence.” Comment. (200 Words)

The Hindu

7. Write a note on the recommendations of Urjit Patel committee that was set up by the RBI to revise and strengthen the monetary policy framework. (200 Words)

The Hindu

8. “Instead of trying to keep out companies from one country or the other, the government would do well to create a reporting and monitoring system that will enable security agencies to keep an eye on the activities of these companies, especially when it comes to blocks located close to defence installations.” Comment in the light of not granting licences to Chinese companies to invest in certain ‘sensitive’ sectors in India. (200 Words)

The Hindu

 

151 Comments

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Insights Secure-2014: Questions On Current Events

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13, January 2014

A9, A10

What is  Index of Industrial Production (IIP)? Explain its significance. (200 Words)

The Hindu

B1,B2

What are the highlights of  the Pre-conception and Pre-natal Diagnostic Techniques (Prohibition of Sex Selection in India) (PNDT), Act 2003? Evaluate its performance. (200 Words)

The Hindu

B3,B4 (LEADERS)

Compare and contrast India’s relationship with South Korea and North Korea. (200 Words)

The Hindu

B5,B6

Comment on the role of health sector in addressing violence, particularly against women and girls. (200 Words)

The Hindu

B7,B8

Write a note on the composition and mandate of CRPF. (200 Words)

The Hindu

B9,B10

What is cross-subsidisation? Do you think it is feasible in India to adopt cross-subsidisation and help the poor? Critically comment. (200 Words)

The Hindu

C1,C2

“It is said that  what is good for the U.S. will be good for other economies as well.” Elaborate. (200 Words)

The Hindu

The Hindu

 

188 Comments

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Insights Secure-2014: Questions On Current Events

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5, December 2013

1. Evaluate the role played by NABARD in rural development in India. (200 Words)

The Hindu

2. Write a note on the economic cooperation between India and Egypt. Do you think political instability in Egypt has affected ties between two countries? Substantiate. (200 Words)

The Hindu

3. Sphere of Influence (SOI) of the Earth (50 Words)

The Hindu

4. Do you agree with the demand that Siachen should be demilitarized and declared as a protected area? Substantiate. (200 Words)

The Hindu

5. What circumstances led to the creation of Article 370? Do you think provisions of this article are still relevant? Critically analyze. (200 Words)

The Hindu

6. Highlight the strategic importance of Inter Continental Ballistic Missile (ICBM) Agni-V to India. (150 Words)

The Hindu

7. Analyze what systemic factors are responsible for the poor quality of higher education in India. (200 Words)

The Hindu

8. Critically discuss why a stable Bangladesh with a strong democratic government and institutions is important for India. (200 Words)

The Hindu

The Hindu 2

9. What are microplastics? Examine how the  affect marine  organisms. (200 Words)

The Hindu

10. Do you think India’s early childhood programs have succeeded in their mission? Critically examine their functioning and need for reforms. If possible cite any example from other countries that can be implemented in India. (250 Words) (Hint: talk about ICDS, anganwadi system, malnutrition, IMR, creche system under NREGA etc)

The Hindu

11. What is ‘Dirty Bomb’? (100 Words)

The Hindu

12. Misuses of Cobalt-60 (100 Words)

The Hindu

13. Are there any productive non-military  use of Drones? Do you think it would be safe to operate them for private uses? Comment. (200 Words)

The Hindu

14. How does the proposed Prevention of Communal Violence (Access to Justice and Reparations) Bill proposes to deal with communal violence in the country? Why is there controversy regarding the bill? Do you think objections raised against the bill are justified? Comment. (200 Words)

The Hindu

15. Bird Flu Strains and their threat (200 Words)

The Hindu

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Insights Secure – 2014: Questions On Current Events

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Questions From The Hindu 29/10/2013

1. Do you think linking of rivers is a feasible solution for bringing water security to the water deficient regions? Suggest alternative methods for water conservation and utilization in dry regions. (250 Words)

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2. What are the socio-economic constraints faced in the preservation of the Sundarbans ecology? Analyze how the  participation of local people is crucial in protection of the Sunderbans ecology. (200 Words)

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Link (reference)

3. What is the relation between Repo rate and inflation? (50 Words)

Link

4. Throw light on the importance of border roads in national security. (150 Words)

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5. Examine how money laundering affects the economic development. (200 Words)

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Link – Reference

6. Mahatma Gandhi Pravasi Suraksha Yojana (100 Words)

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7. If the number of voters opting for NOTA option is more than the number of votes polled by any of the candidates, will  the candidate be disqualified? Explain (50 Words)

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8. ” Social impact analysis and assessment of environmental effects should be included at the very beginning of the total process of development planning,” Comment. (200 Words)

Link

9. Do you think the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 is a step in right direction in ensuring fair acquisition of land? Critically examine the important features of the act. (250 Words)

Link

10. How geothermal energy is produced? How can it be used for power generation? (150 Words)

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11.  Cape Melville (50 Words)

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12. “India’s foreign policy is the prerogative of the Centre, not the State.” Comment. (150 Words)

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16. How independent  is India’s foreign policy when it comes to managing its relations with its neighbors? Critically evaluate. (200 Words)

Link

17. Comment on the impact of new rules under the new Companies Act 2013 on the companies.  Does new rules adequately protect depositors? Examine. (200 Words)

Link

18. “As the country develops economically, its double burden of malnutrition and its health implications will increasingly affect women and those who are socio-economically weak.” Critically analyze in the Indian context. (250 Words)

Link

19. What are the benefits and risks of throwing open the financial sector to foreign banks in India? Explain. (200 Words)

Link

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Insights Daily Current Events, October 28, 2013

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October 28, 2013

NATIONAL

Kashmiris observe Black Day

  • Even as United Nations Secretary-General Ban Ki-moon offered to facilitate a dialogue between India and Pakistan, there were protests all over the city, as people observed Black Day, demanding that Kashmiris be allowed their “right of self-determination.”

  • Kashmiris throughout the world observe October 27 as Black Day to mark the day in 1947 when Indian forces entered the Kashmir Valley.

  • All-Party Hurriyat Conference chairperson Syed Ali Geelani said the United Nations had failed to give the “right of self-determination” to Kashmiris through plebiscite and added that the political front did not accept the ‘Indian occupation.’

Steep cut in funds allocation to Central police forces

  • Ambitious modernization plans of the Central Armed Police Forces (CAPFs) will suffer yet another setback as the Ministry of Home Affairs (MHA) has decided to make a steep cut in allocation of funds for 2013-14, with the Indo-Tibetan Border Police (ITBP) and the Central Industrial Security Force (CISF) not getting even a single penny.

  • The CAPFs had sought Rs. 2,360 crore from the Ministry for 2013-14 to buy latest weaponry, gadgets and surveillance equipment to meet threats and challenges posed by terrorists, Maoists, anti-national elements and foreign forces along the border.

  • But the MHA has agreed to give just Rs. 90 crore to fund modernization plans of five CAPFs. Significantly, in 2012-13, the CAPFs were sanctioned Rs.128 crore for modernization, but the forces could utilize only Rs. 35 crore.

  • Significantly, in May, 2012 the Prime Minister-headed Cabinet Committee on Security (CCS) had approved Rs.11,000 crore for modernization of the CAPFs that is to be sanctioned and utilized in the next five years.

  • Apart from procuring latest machine guns, automatic pistols, guns and rifles, rocket launchers, the shopping list of the CAPFs include night vision devices, patrolling and special vehicles.

Functions of Cabinet Committee on Security (CCS)

  • to deal with all Defence related issues;

  • to deal with issues relating to law and order, and internal security;

  • to deal with policy matters concerning foreign affairs that have internal or external security implications including cases relating to agreements with other countries on security related issues;

  • to deal with economic and political issues impinging on national security;

  • to review the manpower requirements relating to national security including proposals concerning creation of posts carrying the pay scale or pay band plus Grade Pay equivalent to that of a Joint Secretary to the Government of India and higher, and setting up new structures to deal with

  • security related issues;

  • to consider all cases-involving capital expenditure related to defence(Example: the Department of Defence Production; the Department of Defence Research and Development)

  • in respect of the Services Capital Acquisition plans, schemes, projects, procurement of security related equipment, non-scaled and new items in respect of Department of Defence; and

  • all matters relating to atomic energy;

  • CCS is chaired by the Prime Minister of India and comprises the Minister of Defence, the Minister of Finance, the Minister of Home Affairs, and the Minister of External Affairs.

Central Armed Police Forces (CAPFs) constitutes-

  • Central Reserve Police Force (CRPF), the Border Security Force (BSF), the National Security Guard (NSG), Assam Rifles (AR), Sashastra Seema Bal (SSB), the ITBP and the CISF

Courtesy- NIC website

INTERNATIONAL

Developed countries pledge only meager emission cuts till 2020

  • According to the U.N. Framework on Convention on Climate Change (UNFCCC), the developed countries have committed to cut greenhouse gas emissions by a meagre 3% from 2011 to 2020.

  • It is less than one-third of the emission cuts the rich countries have achieved between 1990 and 2011.

  • The UNFCCC analysis shows that, the countries have collectively committed themselves to a reduction of only 13-19 % by the 1990 levels. This falls far short of the 25-40% reduction expected of the developed countries so as to keep temperatures from rising more than two degrees above the pre-industrial era, above which would lead to dangerous climate change consequences.

  • The EU (which has always projected itself as a leader on the issue) has set such a low target for 2020 that it has almost achieved it. By 2011, it had already achieved 18% cut from its promised 20% emission cut below the 1990 levels.

  • The U.S. on the other hand, which has the highest accumulated emissions and the highest per capita emissions in the world, increased emissions by 8% between 1990 and 2011 because it refused to sign the Kyoto Protocol. Now it has committed to cut emissions by 5% from the 1990 levels by 2020.

  • And it is also difficult to ascertain whether the reduction emissions committed by the developed countries would be actually achieved since many of these countries have not explained or clarified their dependence on offsets (i.e., buying credits for work done to cut emissions in the developing world)

The UNFCCC negotiations had two agenda:

  • to persuade the countries to make higher emission cuts between 2013 and 2020 so as to prevent the atmosphere from accumulating higher levels of emissions.

  • to come up with a new deal by 2015, which will put in place a formula for all to cut emissions from 2020.

  • While the U.S. has made it clear that it will not increase its target to cut carbon dioxide emissions in the pre-2020 period, the EU has made it conditional on countries such as China and India to make commitments immediately.

  • With the carbon space being limited and almost two-thirds occupied by the developed countries, the low commitments of these countries would push the developing countries to commit to a higher level of reduction post-2020.

What is Kyoto protocol?

  • The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change, which commits its Parties by setting internationally binding emission reduction targets.

  • Recognizing that developed countries are principally responsible for the current high levels of GHG emissions in the atmosphere as a result of more than 150 years of industrial activity, the Protocol places a heavier burden on developed nations under the principle of “common but differentiated responsibilities.”

  • KP sets binding emission reduction targets for 37 industrialized countries and the European community in its first commitment period. Overall, these targets add up to an average five per cent emissions reduction compared to 1990 levels over the five-year period 2008 to 2012 (the first commitment period).

  • The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005. The detailed rules for the implementation of the Protocol were adopted at COP 7 in Marrakesh, Morocco, in 2001, and are referred to as the “Marrakesh Accords.” Its first commitment period started in 2008 and ended in 2012.

  • In Doha, Qatar, on 8 December 2012, the Doha Amendment to the Kyoto Protocol was adopted. This launched a second commitment period, starting on 1 January 2013 until 2020.

Courtesy- UNFCC website

Georgia Elections and its repercussions on Russia-U.S. relationship

  • The Georgian President Mikheil Saakashvili will end his 10-year rule, as the citizens vote in the presidential election.

  • Georgia elections will be a key to the relationship between US and Russia.

  • As this may see a renewal of rivalry between Russia and US for control of the strategically located post-Soviet state.

  • The departure of the President has bought mixed feelings in Russia.

  • On the one hand, Mr.Saakashvili is the man who triggered a short but fierce war with Russia, when he tried to regain control over the separatist region of South Ossetia in August 2008.

  • On the other hand, Mr.Saakashvili’s adventurism enabled Russia to strengthen its foothold in the Caucasus after routing the U.S.-trained Georgian army.

  • Russia had extended political recognition to Georgia’s breakaway regions and has since set up military bases on their territories. Despite Georgia’s importance to the West as a gateway to Caspian oil and gas, NATO put on hold plans to grant it membership in the alliance, partly because Western leaders feared that the erratic Georgian leader could drag them into a conflict with Russia.

  • Prime Minister Bidzina Ivanishvili, tipped to win presidency, has promised to rebuild ties with Russia, but has also reiterated Georgia’s ambition to join NATO and the European Union (EU). In November, 2013 Georgia, along with Ukraine and Moldova, is expected to sign an association pact with the EU.

Significance of the election to Georgia

  • The election will mark Georgia’s transition from a presidential to a parliamentary republic, with key powers of the President transferred to the Prime Minister. Uncertainty associated with the constitutional reform may be further heightened by the decision of Mr.Ivanishvili to step down as Prime Minister in November, 2013.

More about Georgia

  • Georgia is a sovereign state in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded to the west by the Black Sea, to the north by Russia, to the south by Turkey and Armenia, and to the southeast by Azerbaijan. The capital of Georgia is Tbilisi.

  • At the beginning of the 19th century, Georgia was annexed by the Russian Empire. After a brief period of independence following the Russian Revolution of 1917, Georgia was occupied by Soviet Russia in 1921, becoming the Georgian Soviet Socialist Republic and part of the Soviet Union.

  • After independence in 1991, post-communist Georgia suffered from civil unrest and economic crisis for most of the 1990s.

  • This lasted until the Rose Revolution of 2003, after which the new government introduced democratic and economic reforms.

  • It contains two de facto independent regions, Abkhazia and South Ossetia, which gained limited international recognition after the 2008 Russo-Georgian War. Georgia considers the regions to be part of its sovereign territory under Russian military occupation

Courtesy – Wikipedia

62 more killed in Iraq’s continuing ‘war of genocide’

  • The Iraqi capital Baghdad continues to reel under a fresh wave of car bombing.At least 62 people were killed.

Reason behind the War:

  • The Shias were the main targets. These blasts were meant to further inflame the sectarian strife. In the composite social fabric that Iraq has – Sunnis, Shias, Christians and Kurds have been pitted against each other, in the aftermath of the country’ s invasion by the United States and its allies in 2003.

  • Prime Minister Nouri al-Maliki has described this as “war of genocide”.

  • The statistics regarding the mounting death toll in Iraq in 2013 make a dismal reading.

  • More than 5,250 people have been killed in 2013 so far, with 600 perishing in October alone

  • A study undertaken by academics from the US, Canada and Iraq has revealed that war-related incidents have claimed half-a-million lives since the U.S.-led invasion of the country over a decade ago.

Iran-Pakistan Gas pipeline unviable

  • Pakistan is demanding U.S. to ease sanctions on Iran, so that the two countries can go-ahead with their long pending natural gas pipeline.

  • A recent report by Sustainable Policy Development Institute (SDPI), titled “Rethinking Pakistan’s Energy Equation: Iran-Pakistan Gas Pipeline” claims that the gas purchase agreement and pricing of the Iran-Pakistan Gas Pipeline (IPGP) should be renegotiated or else the project could prove fatal to country’s economy.

  • Pakistan has blatantly ignored the energy dynamics and its pricing while going for this deal. The price of the gas purchased under the IPGP project is linked to crude oil prices and this has not been taken into account.

  • The report also notes that, IPGP project is not the panacea for Pakistan’s energy problem, but more of a bailout plan. Pakistan will have to look out for other options other than the unconventional and alternate energy sources. Nearly 50% of the energy needs are met through natural gas.

  • Pakistan has a combined power generation capacity of 24000 MW which it is unable to meet due to scarcity of natural gas supply.

  • According to the 2013 agreement with Iran, Pakistan will import an amount of one billion cubic feet a day (BCFD). This would last for 20 years with an option to extend it for another five years.

  • Iran has offered $500 million and has already constructed more than 900 km (out of 1100 km) of the pipeline on its territory at a cost of $700 million.

  • But Pakistan needs a total of $2 billion to complete its share. Moreover, Pakistan had not taken any substantial step to initiate the process of tapping the country’s shale gas potential except developing a framework.

  • The agreement with Iran stipulates construction of Pakistan’s side of the pipeline by December 2014. If Pakistan fails to meet this deadline it will be liable to pay heavy daily penalties, which can run into a million dollars per day.

U.S. quietly ramping up military presence in Africa

  • The attack on the Westgate mall in Kenya in September, 2013 by al-Qaeda-affiliated militants has underscored the need for enhancing U.S. engagement with the African continent.

  • Hitherto, the U.S. has focused on providing training, building military capacity of African countries contributing troops to the African-led Mission in Somalia (AMISOM), and providing intelligence to partner nations.

  • With the exception of high profile commando missions, like the simultaneous raids in Somalia and Libya earlier in October, 2013 the U.S. military presence in Africa has attracted relatively little international attention.

  • On the question of Kenya’s participation in the International Criminal Court (ICC), the U.S. has urged Kenya to cooperate with the ICC and in the meantime it would look into AU recommendation to the U.N. Security Council (UNSC) regarding the deferral of the trial of Kenyan President Uhuru Kenyatta.

What is AFRICOM?

  • AFRICOM was set up five years ago and has since provided training, logistics and infrastructure to countries across Africa with the aim of boosting interoperability between American forces and host countries.

ECONOMICS

Weak economy exerts asset quality pressure on banks

  • The profitability of Indian banks is under increasing pressure due to subdued growth in interest income, sharp slowdown in deposit growth, and an increase in credit costs led by a rise in non-performing assets (NPAs).

  • Credit growth has been far ahead of deposit growth over the last three years, and this trend has continued in the first-half of 2013-14 as well. Between 2009-10 and 2012-13, banking credit grew at a compounded annual growth rate (CAGR) of 19 %, with deposit growth lagging behind at 16 %.

  • The slowdown in economic growth and entrenched inflation have adversely impacted savings with household savings rate (as percentage of gross domestic product (GDP)) declining to an estimated 22% in 2012-13 from 25.2 % in 2009-10.

  • More disturbing is the proportion of financial savings (of which bank fixed deposits form 56 per cent) has declined. High inflation has severely impacted inflation-adjusted returns from financial instruments such as deposits, leading retail investors to turn towards physical savings avenues.

  • For banks, this worrisome decline in deposit growth has severely impacted their liquidity, which is reflected in the sharp rise in borrowings from RBI’s liquidity adjustment facility (LAF) window.

  • Average daily borrowings increased to Rs.74,000 crore during 2013-14 (till October 11, 2013), which is more than double the Rs.35,000 crore borrowed in 2010-11. Borrowings have been especially high in recent months, due to the liquidity draining measures announced by the RBI to shore up the rupee. These measures led to a spike in short-term money market rates, pushing corporates to resort to bank borrowings for funding their working capital requirements. Although some of those measures have been gradually withdrawn, the situation still remains strained for many banks, especially as there are no signs of deposit growth picking up ahead of the busy season. The systemic credit-deposit ratio as of September 2013 was at an all-time high of 78.3 per cent, clearly pointing towards the need to attract deposits.

Many banks are responding to the situation by hiking deposit rates, especially on shorter-term deposits, by 50-100 basis points even though credit pricing is also under pressure. The fall in CASA (current account savings account) deposit base — 33 per cent as of June 2013 compared to 34.1 per cent as of March 2013 — is not helping matters.

  • Due to rising cost of funds, it is expected that, net interest margins (NIMs) of banks to decline by 20-25 basis points in 2013-14. The drop in NIMs is expected to be far more sharper in the case of public sector banks (PSBs), given the higher proportion of non-interest earning weak assets and lower increase seen in their lending rates.

  • Due to weak economic conditions, the asset quality of the banking system is expected to deteriorate sharply. The gross NPAs are expected to increase to 4.4 per cent by March 2014, from 3.3 per cent a year ago, propelled by weak demand and liquidity constraints being faced by corporates.

  • Also there would be sharp increase in slippage from restructured assets. Despite restructuring, the inherent weakness in restructured assets will be accentuated by the fragile economic environment. Consequently, this would lead to over 30% of restructured assets (excluding state power utilities, which are likely to receive sovereign support from the Central and State governments) to slip into NPAs in the next two years. (By contrast, during the two-year period, following the global financial crisis of 2008, only 15 per cent of restructured assets turned NPAs.) Therefore, the total weak assets in the banking system (gross NPAs plus likely slippage of restructured assets) will shoot up to 5.7 % by the end of this fiscal (2013-14) from 4.3 % a year ago.

  • Weakening asset quality as well as increased provisioning on restructured assets (announced in May 2013) will significantly increase the credit costs for banks. On account of increased provisioning on restructured assets alone, Crisil Research anticipates that banks will have to make additional provisions to the tune of Rs.13,000 crore between April 2013 and March 2016. Again, PSBs will bear the brunt of the increase in provisioning.

  • In the wake of slow accretion to deposits, rising delinquencies, stricter provisioning norms and implementation of Basel-III norms, Indian banks’, particularly PSBs, will need significant capital infusion over the next five years.

Summary:

The banking sector will face tough times for the next 12 months, with upward pressure on cost of funds and lower profitability. To protect the downside in profitability, banks’ will have to focus on garnering retail deposits and minimising slippages from restructured assets by closely monitoring them. In the long-term as well, with capital requirements all set to shoot up with the stage-wise implementation of Basel-III, providing adequate returns to equity shareholders by judiciously deploying capital would become a critical differentiator across banks.

Courtesy – Hindu Newspaper

What is LAF, Repo rate (RR), reverse-repo rate (RR)?

  • Liquidity adjustment facility (LAF) is a monetary policy tool which allows banks to borrow money through repurchase agreements.

  • LAF is used to aid banks in adjusting the day to day mismatches in liquidity (Basically it is used to moderate short-term liquidity fluctuations)

  • LAF consists of repo and reverse repo operations.

  • Repo or repurchase option is a collaterised lending i.e. banks borrow money from Reserve bank of India to meet short term needs by selling securities to RBI with an agreement to repurchase the same at predetermined rate and date. The rate charged by RBI for this transaction is called the repo rate. Repo operations therefore inject liquidity into the system.

  • Reverse repo operation is when RBI borrows money from banks by lending securities. The interest rate paid by RBI is in this case is called the reverse repo rate. Reverse repo operation therefore absorbs the liquidity in the system. The collateral used for repo and reverse repo operations are Government of India securities. Oil bonds have been also suggested to be included as collateral for Liquidity adjustment facility.

Courtesy -Wikipedia

What is NPA (also known as “non-performing loan”)?

  • A classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset.

  • Non-performing assets are problematic for financial institutions since they depend on interest payments for income. Troublesome pressure from the economy can lead to a sharp increase in non-performing loans and often results in massive write-downs.

Courtesy- Investopedia

What are Basel-III norms?

  • Basel III is part of the continuous effort made by the Basel Committee on Banking Supervision to enhance the banking regulatory framework. It is a global, voluntary regulatory standard on bank capital adequacy, and seeks to improve the banking sector’s ability to deal with financial and economic stress, improve risk management and market liquidity risk (strengthen the banks’ transparency)

  • It builds on the Basel I and Basel II documents.

  • A focus of Basel III is to foster greater resilience at the individual bank level in order to reduce the risk of system wide shocks.

Courtesy- Investopedia

For more information on Basel III norms refer the below link:

http://profit.ndtv.com/news/corporates/article-what-are-basel-iii-guidelines-303293

http://www.allbankingsolutions.com/Banking-Tutor/Basel-iii-Accord-Basel-3-Norms.shtml

The tough task ahead for new bank licences

  • The process for issuing new bank licences is gathering pace. Reserve Bank of India (RBI) Governor Raghuram Rajan has said that a few licences will be issued by January 2014. An important step towards that end has been the setting up of a committee headed by former RBI Governor Bimal Jalan to vet the 26 eligible applications, after the RBI has scrutinized them initially.

  • This external scrutiny was built into the procedure. It has been the intention of the RBI to keep the process as free from controversy as possible.

  • The committee has three other members, former RBI Deputy Governor UshaThorat, former SEBI Chairman C. B. Bhave, and NachiketMor, former ICICI Bank official, who is into financial inclusion in a big way.

Stringent norms:

  • The applicants, drawn from the public and private sectors, had to meet the RBI’s stringent norms for setting up new banks.

  • The banks should have a minimum capital of Rs.500 crore and sound credentials &financial track record of 10 years. Foreign capital will be allowed to an extent of not more than 49 %

  • Obviously, it is not the quantifiable target as much as the subjective criteria that will pose daunting challenges. Checking the credentials of promoters is not going to be easy at all, and will lend itself to controversy. For instance, an FIR filed against Kumar Mangalam Birla, in his capacity as the chief promoter of Hindalco in the coal scam, has led to speculation, whether the A. V. Birla group, one of the top eligible contenders for a bank licence, will be disqualified. There being no precedent, it would be interesting to see whether a totally extraneous development can derail the bid of one of India’s most admired groups.

Controversial issues

  • In any case, the process of awarding a new bank licence was never expected to be smooth. Among the several controversial issues, allowing large industrial houses to start a bank has been the most contentious. A very large number of respondents to RBI’s discussion paper were not in favour of awarding licences to big business houses.

  • However, such policy issues have been decided. A few large industrial houses will be given permission to start banks. Amidst the riveting interest on the subject, two related developments merit attention.

  • Another development that clouds the picture is the settlement one of the biggest global banks JP Morgan Chase reached with authorities in the U.S. to earn a reprieve from civil prosecution though not criminal cases. The bank agreed to pay a record $13 billion to federal and state agencies in settlement of cases relating to its role in the sub-prime home loan crisis of 2008 which morphed into a global economic crisis. Five years on, the U.S. regulators are sending out a tough message after being accused of going soft on banks initially.

  • There may not be banks of the size of JP Morgan Chase in India. Nor has any bank, foreign or Indian, been guilty of alleged acts of misdemeanor of gargantuan proportion.

  • Yet, the question is do we have a regulator and rules to regulation to take on such banks should such an eventuality arise.

Role for foreign banks

  • Dr.RaghuramRajan has said that foreign banks will be allowed in India, provided they incorporate themselves under Indian laws. Equally importantly, their governments must follow the principle of reciprocity, meaning that they must allow Indian banks to open branches there. Further, these banks will be allowed to buy a few local banks. It is the last point that has created some confusion. There is no hint of such a radical move in a policy paper that RBI has put up on its website.

Courtesy Hindu Newspaper

 

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Insights Secure – 2014: Questions On Current Events

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Questions From The Hindu 26/10/2013

1. Explain the importance of gender equality in politics. (150 Words)

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2. How many power grids are there in India? Sometimes they fail. What causes their failure? (200 Words)

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3. “13th Amendment is like a vessel with a hole and seems good for nothing,”  Comment. (150 Words)

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4. Write a critical note on the visa controversy between India and China. (150 Words)

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5. Do you think regulation of poll campaign activities of political parties on internet by the Election Commission is a right step? Substantiate. (150 Words)

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6. What are the highlights of India’s Whistleblower’s Bill 2011? Analyze its drawbacks and suggest improvements. (200 Words)

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7. Write a critical note on the recent rise of religious extremism and terrorism in the African continent. What is its implication on the African economy. (200 Words)

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8. Hydra Mission (50 Words)

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9. What is ‘junk’ DNA? Explain its significance. (100 Words)

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10. Can freedom of speech be absolute? Comment. (150 Words)

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11. What are rare earth minerals? Throw light on their importance and distribution pattern across the world. (200 Words)

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12.  “Industrialization in developing countries  was not the magic of markets that produced the sudden spurt in industrialization. It came from the foundations that were laid in the preceding quarter century.” Critically analyze. (250 Words)

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13. “The Constitution (120th Amendment) Bill, 2013 in its present form is a threat to judicial independence.” Critically comment. (250 Words)

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14. “Cyberspace is the largest experiment in anarchy in history … the world’s biggest ungoverned space.” Comment (150 Words)

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15. “Reform of procurement practices and agricultural marketing is long overdue.” What are the roadblocks in implementing model APMC act? Throw light on the need for reforms in agricultural marketing in India. (200 Words)

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Insights Daily Current Events, October 26, 2013

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October 26, 2013

NATIONAL

EC regulates poll advertisements, campaign on Net, social media

  • Political parties and candidates will now have to account for the money spent on the use of social media for the poll campaigns.

  • The Election Commission has issued a series of instructions to political parties and candidates on utilising the Internet and social media websites for poll campaign and advertisements, asking them to strictly abide by the model code of conduct. This regulation has come into force in the interest of “maintaining transparency and a level playing field during polls.”

  • The order would be applicable to social media sites such as Wikipedia, blogs, microblogs such as Twitter, content communities like YouTube, social networking sites such as Facebook, and virtual game-worlds (Apps).

  • As per the new order, every candidate, at the time of filing the nomination, has to give their e-mail Ids and accounts of their social networking sites, if any, for monitoring by poll/expenditure officials. Contents of the advertisements issued by parties/candidates in such websites should be pre-certified by the appropriate authorities and all expenditure made towards such campaign/advertisement would be included in the election expenditure accounts of candidates/parties.

  • The provisions of the code of conduct and related instructions issued by it would apply to the content being posted on the Internet, including the social media websites, by candidates and parties. And with regard to content posted by ‘persons other than candidates and political parties’ especially those who are related or somehow connected with the election campaigning of political parties and candidates, further clarity would be given on consultation with the Ministry of Communication and Information Technology on practical ways to deal with the issue

  • Payments made to social media websites for carrying advertisements, expenditure on development of content, and spending on salaries for staff hired to maintain the social media accounts of the parties and the candidates would be included in poll expenses.

  • The Commission’s order is significant in view of the ongoing election process for the Assembly polls in Delhi, Chhattisgarh, Madhya Pradesh, Mizoram and Rajasthan. The SMS facility, availed of by candidates and political parties during campaign, is already under the scanner of the Commission’s poll expenditure monitoring officials.

India ranks 101 on gender gap index

  • India was ranked 101 out of 136 countries on a global gender gap index.

  • The index is compiled by Geneva-based World Economic Forum (WEF). According to which the countries are ranked based on the division of resources and opportunities between men and women in the areas of economy, education, politics, education and health.

More about WEF

  • The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.

  • Incorporated as a not-for-profit foundation in 1971, and headquartered in Geneva, Switzerland, the Forum is tied to no political, partisan or national interests.

  • Klaus Schwab is the Founder and Executive Chairman

Courtesy- WEF website

INTERNATIONAL

Stapled visa issue continues to stay: India –China

  • India will have to bear with China’s policy of issuing stapled visas for people from Arunachal Pradesh(ArP)

  • Earlier in 2009, China had decided to relax its policy of not issuing travel documents to ArP residents and instead hand out stapled visas, it was impossible for Indians from the State to travel to China.

  • Though China has dropped its practice of giving stapled visas to people from Jammu & Kashmir, it won’t do the same with ArP. According to a report, about six lakh Indians visited China in 2012 as against one lakh Chinese to India.

  • It should also be noted that, ‘No MoU on simplifying visa procedures was signed during Manmohan’s China visit’.

  • However China has allowed visa-free entry to spouses of diplomats.

  • To encourage more travel to India, China has requested India to ease a two-month bar on second entry applied to all foreigners after David Coleman Headley was found to have entered India several times in quick succession to conduct preliminary observation for the 2008 Mumbai attacks.

Troubled West Asian Nation ‘Mali’ and the UN mission

  • French, UN and Malian forces are engaged in a major operation aimed at preventing a resurgence of Islamist rebels in Mali.

  • The Malian army and U.N. mission “Minusma” are engaged in a large-scale operation in the Niger Loop (refer the map beside), an area hugging a curve of the Niger River between Timbuktu and Gao.

  • About 1,500 troops were involved, including some 600 French, 600 Malians and 300 U.N. soldiers. This is the first time forces of significant size are working together.

  • The goal of the mission known as “Hydra” was ‘to put pressure on any terrorist movements to avoid their resurgence’.

  • This is one of those operations that are conducted regularly for stabilisation of the country.

  • Earlier, Al-Qaeda-linked militants had declared that they were behind the attack on a United Nations checkpoint in the far northern town of Tessalit.

  • The UN Security Council had strongly condemned the attack, following which the UN mission in Mali requested for more troops.

Courtesy Hindu newspaper

  • U.N. forces have been facing an upsurge in rocket attacks and bombings by militants ahead of nationwide elections In November, 2013 in the troubled West African nation.

  • A French-led martial in January, 2013 had drove Islamist groups linked to al-Qaeda out of cities of northern Mali  including Gao, Kidal and Timbuktu, that they occupied in the wake of a coup in Bamako(Mali) in 2012.

  • But the rebels have taken to bases in the surrounding mountains and launched strikes on the French and peacekeeping forces.

What is MINUSMA?

  • United Nations Stabilization Mission in Mali.The United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) was established by Security Council resolution 2100 of 25 April 2013.
    Under the terms of the resolution, the mission would support the political process and carry out a number of security-related stabilization tasks, with focus on major population centres and lines of communication, protecting civilians, human rights monitoring, the creation of conditions for the provision of humanitarian assistance and the return of displaced persons, the extension of State authority and the preparation of free, inclusive and peaceful elections.

  • The mandate also includes protection of civilians under imminent threat of physical violence and protection of United Nations personnel from residual threats, within its capabilities and its areas of deployment. This could include the conduct of operations on its own or in cooperation with the Malian defence and security forces. French forces deployed in Mali were also authorized to intervene in support of MINUSMA when under imminent and serious threat upon request of the Secretary-General.

Courtesy – UN website

Greenland opens way for mining boom

  • Greenland’s Parliament has agreed to remove a 25-year-old ban on uranium mining, paving the way for an industrial boom that the Arctic island hopes will help it gain independence from former colonial master Denmark.

  • Greenland, a semi-autonomous part of Denmark, wants to step up its mining of rare earths.

  • An Australian company has estimated it could extract up to 40,000 tonnes of rare earth metals per year.

  • Since uranium is often found mixed into rare earths, the mining activity was banned in southern Greenland.

  • The Arctic Island wants to use mineral resources to reduce its dependency on a subsidy from Denmark which now accounts for about two-thirds of the island’s economy. Denmark is open to allowing Greenland greater independence, but there is currently no way the island can support its current costs without the subsidy.

  • Also selling of the minerals cannot be done by Greenland alone since Denmark still handles its security and foreign policy.

Courtesy Hindu newspaper

What are rare earth materials? Its application?

  • Rare earths are a group of 17 chemically similar elements crucial to the manufacture of many hi-tech products. Despite their name, most are abundant in nature but are hazardous to extract.

  • The group consists of yttrium and the 15 lanthanide elements (lanthanum, cerium, praseodymium, neodymium, promethium.  …).Scandium is found in most rare earth element deposits and is sometimes classified as a rare earth element.

  • Rare earth metals and alloys that contain them are used in many devices that people use every day such as: computer memory, DVD’s, rechargeable batteries, cell phones, car catalytic converters, magnets, fluorescent lighting, weapons systems, and other modern technologies.

  • In early 2010 China accounted for over 95% of the world’s rare earth production. China is also the dominant consumer of rare earth elements, used mainly in manufacturing electronics products for domestic and export markets. Japan and the United States are the second and third largest consumers of rare earth materials.

Courtesy Geology.com

Pakistan seeks early meet of DGMOs

  • In spite of the recent ceasefire violations by the Pakistan in the LoC, the Pakistan government has stood by its stand saying that, it was in fact India which has violated the ceasefire on number of occasions; and it was Pakistan’s policy not to indulge in firing first.

  • Pakistan govt. has said that the Indian side has carried out unprovoked firing on its 27 posts recently. So it wants immediate dialogue to resolve this matter. On this line, the Pakistan has suggested that the meeting of the two DGMOs (Directors-General of Military Operations) be implemented quickly to resolve the issue of ceasefire violations.

  • The proposal for the DGMOs meet was agreed upon by the two countries, when PM’s of both the countries had met in New York in September, 2013.

Five killed as violence erupts in Bangladesh

  • The Bangladeshi opposition coalition has called for a 60-hour hartal across the country, by the time government needs to initiate dialogue on a neutral poll-time government.

  • According to reports, five people were killed in the police firing on opposition protests across the country.

  • Leader of the main opposition Bangladesh Nationalist Party Khaleda Zia, called the Sheikh Hasina government “illegal” alleging that its tenure had expired on 24th October, 2013 and wanted a legal provision that requires a neutral caretaker government to be set up three months before elections slated for January 24, 2014.

  • But the ruling Awami League had abolished the provision in 2011, handing the job of overseeing polls to a reformed Election Commission.

  • Hundreds of activists of the Jamaat-e-Islami and its student wing Islami Chhatra Shibir participated in Ms. Khaleda Zia’s rally, calling for the release of their leaders who have been convicted or are undergoing trial for war crimes.

  • However, the opposition leader Ms. Zia, for the first time, supported the trials of war criminals “on principle” though she alleged that the war crimes tribunals were selectively picking Jamaat and BNP leaders.

Madagascar conducts first post-coup vote

  • Citizens of Madagascar for the 1st time voted on 25th October, 2013 in the first presidential election after a 2009 coup.

  • The country had plunged into turmoil after current President Andry Rajoelina seized power from President Marc Ravalomanana with the help of the military in 2009.

  • If none of the candidates garners more than 50 % of the votes, the two top candidates will compete in a runoff scheduled for December 20, 2013. The two front-runners are backed by rivals Mr. Rajoelina

‘Night of rescues’ in the Strait of Sicily

  • Nearly 700 refugees including dozens of Eritreans have been rescued off Sicily in five operations, as leaders grapple with the issue of illegal immigration at a European Union (EU) summit.

  • Italian coastguard and navy vessels and a Maltese cargo ship have saved asylum-seekers from five boats in the past 24 hours

  • (From Prelims point of View)

The Strait of Sicily is the strait between Sicily and Tunisia. It divides the Tyrrhenian Sea and the western Mediterranean n Sea from the eastern Mediterranean.

Courtesy Wikipedia

Kenya Dy-President’s presence needed: ICC

  • The International Criminal Court (ICC) has overturned a decision excusing Kenya’s Deputy-President from attending his trial on charges of post-poll violence in 2007.

  • This means William Ruto must in principle appear at his trial, but can still be excused on a “case by case” basis.

  • The ruling could deepen a rift between the court and African leaders and could also set a precedent for Kenya’s President, whose trial on similar charges is scheduled to start from November, 2013.

74 Boko Haram fighters killed: Nigeria

  • Nigeria’s army has killed 74 suspected Boko Haram fighters in a raid in northeastern Borno state, as gunmen from the Islamist group battled security forces.

  • The army is battling since four-years, to crush the Islamist uprising in Nigeria.

  • According to a report, the conflict had cost more than 3,600 lives, including killings by the security forces. The current toll is certainly much higher.

  • Damaturu, the capital of Yobe state, is another area repeatedly targeted by Boko Haram in an insurgency aimed at creating an Islamic state in Nigeria’s mainly Muslim north.

  • The Islamists have killed hundreds of people across the northeast since June, 2013 including a number of students. In September, 2013 the President Goodluck Jonathan had ordered the top military leaders to redouble their efforts following a spate of brutal attacks on civilians.

Who are Boko Harams? What is their Ideology?

  • The Congregation of the People of Tradition for Proselytism and Jihad better known as Boko Haram is an Islamic jihadist militant organisation based in the northeast of Nigeria, north Cameroon and Niger. Founded by Mohammed Yusuf in 2001, the organisation seeks to establish a “pure” Islamic state ruled by sharia law, putting a stop to what it deems “Westernization.”

  • The group is known for attacking Christians and government targets, bombing churches, attacking schools and police stations, but has also assassinated members of the Islamic establishment.

Their Ideology:

  • Boko Haram was founded as an indigenous group, turning itself into a Jihadist group in 2009.It proposes that interaction with the Western world is forbidden, and also supports opposition to the Muslim establishment and the government of Nigeria

  • The members of the group do not interact with the local Muslim population and have carried out assassinations in the past of anyone who criticises it, including Muslim clerics.

Courtesy Wikipedia

ECONOMICS

Tower companies to come under licensing regime

  • Following the government’s decision to allow 100% foreign direct investment (FDI) in the telecom sector, the Department of Telecommunications (DoT) is set for a proposal to bring mobile tower companies under the licensing regime.

  • Mobile tower companies (called IP-I in technical jargon) would now have to pay 8 % licence fee on the revenue earned from telecom services once brought under the licensing regime.

  • At present, they can operate by paying Rs.5,000 to register with DoT.

  • The DoT’s proposal would be placed before the Telecom Commission, an inter-ministerial panel, and if approved, tower firms would have to obtain telecom licence for carrying out their operations.

  • Earlier, Telecom Regulator Authority of India (TRAI) had recommended bringing telecom tower companies under the licensing regime. TRAI estimated that bringing IP-I under the licensing regime will fetch the government revenues of around Rs.1,900 crore a year.

  • However, the suggestion had been opposed by industry players. The Tower and Infrastructure Providers Association (TAIPA), the industry body representing mobile tower companies such as Bharti Infratel, Reliance Infratel and Indus Tower, opposed the proposal on mainly two grounds:

  • FDI limit and

  • definition of revenue on which they would have to pay the licence fee.

Hurdles to include the Tower companies earlier:

  • In order to include IP-I in the licensing regime, one of the hindrances was that the FDI limit was 74 % for telecom services, and IP-I was allowed with 100 % FDI. Now that the issue has been resolved with 100 % allowed in the telecom sector, the IP-I can be brought under the licensing regime.

  • The AGR (adjusted gross revenue) definition had to be revisited for which a reference may be required to be made to TRAI. Keeping this in view, the approval of the Telecom Commission will be sought to include IP-I in licensing regime.

Significance to the Government:

  • As per government, bringing mobile tower companies under the licensing regime will help in reducing cost of telecom services, faster nationwide roll out of infrastructure, sharing passive as well as active infrastructure such as optical fibre network and the like, and contribute to the government’s revenue in terms of licence fee, among others.

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Insights Daily Current Events Day 6 (October 16, 2013)

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NATIONAL

A third of Western Ghats to get protective cover

  • The Environment Ministry has decided to turn approximately 60,000 square kilometres of the Western Ghats across six States (Gujarat, Maharashtra, Goa, Karnataka, Kerala and Tamil Nadu) into an Ecologically Sensitive Area (ESA).
  • The area will turn into a ‘no-go zone’ for mining and thermal power plants i.e., banning mining, quarrying, thermal power plants and polluting industries over the entire range. All other projects would be allowed only with the prior consent of gram sabhas (village councils) in the zone.
  • The decision was taken on the lines of Madhav Gadgil and K. Kasturirangan’s report. Going with the recommendations of later, the Ministry has decided to declare the ESA over 37% of the Western Ghats under the Environment Protection Act, 1986.
  • The Western Ghats now would become the largest protected forests in India, ranging over 1,500 km linear distance from the Tapti river in the north to Kanyakumari in the south.

Decisions taken in line with the panel:

  • Three criteria that the panel had recommended:
  •   the use of biodiversity richness,
  •   fragmentation of forests and human population density to demarcate these forest patches that would turn into a no-go zone for mining, thermal power plants and other dirty industries. The type of industries banned would be those included in the ‘red list’ issued by the government under the Environment Protection Act. These are usually considered to be the most polluting of the lot.
  •   the hill areas with high population densities be kept out of the ESA ambit.

The above recommendations were approved.

  •  Within the ESA, prior consent from the gram sabhas and strict adherence to the Forest Rights Act would be made mandatory for any of the projects that are not on the negative list. This too would be done after studying cumulative impacts of the projects in the region.
  • Townships and buildings over 20,000 square metres in the region too would not be allowed.
  •  Hydroelectric projects would be permitted in the ESA but with a new set of strict regulations that the Kasturirangan panel has recommended, including those on maintaining ecological flows in the rivers.The decision on the 163-MW Athirapally in Kerala and 400-MW Gundya in Karnataka to be deferred.
  •  The moratorium on mining in most parts of the two districts of Maharashtra – Sindhudurg and Ratnagiri would be removed since the panel has found that most of the areas of the two districts fall outside the demarcated forest zone which is to be declared as the ESA.

Decisions taken against the recommendation of the panel:

  •  The Ministry has decided not to go with the recommendations of the high-level panel in the case of windmills. Construction of windmills would be permitted in the ecologically sensitive area though environment regulations to review their impact may be brought in through other legal routes available to the government.

What was the recommendation of Madhav Gadgil Committee?

  •   The eminent ecologist Madhav Gadgil-led Western Ghats Ecology Expert Panel (WGEEP) had recommended that the entire Western Ghats should be declared as an ecologically sensitive area; had suggested three levels of categorization where regulatory measures for protection would be imposed and had recommended the establishment of the Western Ghats Ecology Authority for management.

Recommendation of Dr K Kasturirangan’s report:

  •  In August 2012, MoEF constituted the High Level Working Group (HLWG) to examine the large numbers of public responses received to the recommendations of the Gadgil report and to suggest the way ahead. Dr K Kasturirangan, is the Chairman of the HLWG.
  •  Dr K Kasturirangan’s report draws upon the basic framework suggested by WGEEP to use remote sensing technologies to demarcate the ecologically sensitive areas of the Western Ghats but with two key differences. It used satellite data, down to 24 m resolution, as against 9 km used by WGEEP. This is used to distinguish vegetation types over the landscape of the entire Western Ghats.
  •   It distinguishes between the cultural and the natural landscape of the region. According to the report approx. 60 % of the Western Ghats region is under cultural landscape- human dominated land use of settlements, agriculture and plantations. The natural landscape ranges the remaining 40%
  •   A prohibitory regime on those activities with maximum interventionist and destructive impact on the environment.
  • To “incentivize green growth in the Western Ghats”. These include managing forests and improving their productivity to ensure inclusive growth and economic benefits for local communities; integrating forest accounts into state and national economic assessments; initiating an ecosystem service fund to help villages around the forests; promoting sustainable agriculture and; encouraging ecotourism for local benefits.
  •   As part of the governance of ecologically sensitive areas it has proposed to set up a Decision Support and Monitoring Centre for Geospatial Analysis and Policy Support in the Western Ghats, which will monitor changes and advise state government on policy reform.
  •   It has also recommended that the high-resolution map, which demarcates ecologically sensitive areas, down to each village settlement, must be put in the public domain so that people can be involved in taking decisions about environment, which is first and foremost their concern.

 Source -PIB

Aversion to the Judicial Appointments Commission Bill

  • The Bar Council of India (BCI) has urged the Union Government to withdraw the Judicial Appointments Commission (JAC) Bill.
  • The Bill provides for constitution of a National Judicial Commission (NJC) for appointment of judges of High Courts and the Supreme Court.

Why is BCI opposing JAC Bill?

  •   According to BCI, the constitution of NJC would interfere with the independence of the judiciary and also affect the basic structure of the Constitution as appointments would be made by the executive.
  •  The constitution has provided for Independence of Judiciary. Judicial Independence is vital and based on the doctrine of separation of powers. Separation of powers is the considered as the basic structure of the constitution. So anything which affects the ‘basic structure of the constitution’ would be void.
  •  There was also opposition to the 120th Constitutional Amendment Bill to amend Articles 124 and 217 on appointment of judges.
  •  The JAC Bill provides for constitution of the JAC comprising the Chief Justice of India, an ex officio chairperson; two Supreme Court judges next to the CJI in seniority as ex officio members; the Union Law Minister and two eminent persons, to be nominated by the collegium consisting of the Prime Minister, the CJI and the Leader of the Opposition in the Lok Sabha, as members. The Secretary in the Department of Justice in the Law Ministry will be the convener.
  •   The Supreme Court had evolved the collegium system through its judgment in 1993 and reaffirmed it in 1998; the government then had not sought any clarification or review of the system and had introduced the two Bills despite strong objections voiced by the Bar.

Suggestion from the BCI:

  •   Instead it has suggested a Central Advisory Committee comprising the Prime Minister or his/her nominee or the Union Law Minister; the Leader of the Opposition in either of the Lok Sabha or the Rajya Sabha or his nominee; the Attorney-General or the Solicitor-General; a representative of the Bar Council of India and a representative of the Supreme Court Bar Association. The committee might be formed by the Supreme Court itself to aid and advise the collegium for appointment of Supreme Court judges.
  •   At the High Court level the advisory committee to advise the High Court collegium would consist of the Chief Minister or his/her nominee or the Law Minister; the Leader of the Opposition in the Legislature; the Advocate-General; one representative each of the State Bar Council and the High Court Bar Association. If this system was adopted, the collegium procedure would be more transparent, the statement added.
  • The existing collegium system has been functioning well. However, it needs to be more transparent and the mechanism of the appointment procedure should be strengthened.

INTERNATIONAL

Switzerland signs agreement with OECD, puts an end to banking secrecy

  • Switzerland, well known for its anonymous numbered bank accounts and tight banking secrecy became the world’s 58th nation to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
  • the Convention “prepares the way for the automatic exchange of tax information.”
  • This has a huge impact on India and other countries which are fighting against ‘tax havens’ and routing of black money in their economy.

What is Organisation for Economic Co-operation and Development (OECD)?

  •    Though 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 (Word war-II) it was officially recognized as Organisation for Economic Co-operation and Development (OECD) in 1961. HQ: Paris, France. Totally there are 34 members in OECD.

Mission

  • The mission of OECD is to promote policies that will improve the economic and social well-being of people around the world.
  • The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. It works with governments to understand what drives economic, social and environmental change. It measures productivity and global flows of trade and investment, this data is analysed and compared to predict future trends. And then set  international standards on a wide range of things, from agriculture and tax to the safety of chemicals.
  • It also looks into issues that directly affect the lives of ordinary people, like how much they pay in taxes and social security, and how much leisure time they can take.

Source – OECD website

What do you mean by Tax haven?

  •   A tax haven is a state, country or territory where certain taxes are levied at a low rate or no tax at all. Individuals and/or corporate entities can find it attractive to establish shell subsidiaries or move themselves to areas with reduced or nil taxation levels relative to typical international taxation.
  • The OECD identifies three key factors in considering whether a jurisdiction is a tax haven:
  • Nil or only nominal taxes.
  •   Protection of personal financial information.
  •   Lack of transparency.
  •   Tax havens also provide little or no financial information to foreign tax authorities.

 Source – Wikipedia

Iran’s nuclear talks with P5+1 begins on a positive note

  • The recent meeting with the European Union (EU)- chaired P5+1 group the U.S., Britain, France, China and Russia, plus Germany ends a six-month hiatus over Iran’s refusal to curb uranium enrichment in exchange for the easing of punishing sanctions.
  • For the first time, Presentation was delivered in English, underlining a positive environment over the issue.

ECONOMICS 

Disagreement over FDI in pharma

  • There is a disagreement over FDI in pharmaceuticals companies among Finance, Commerce, Health & Family Welfare ministries and Prime Minister’s Office (PMO).
  • All the three ministries have strongly voiced for urgent reversal of the current policy which according to them threatens access to affordable medicines not only in India but also developing countries, including in Africa; whereas the PMO is for continuation of the policy.
  • The Parliamentary Standing Committee of Commerce has recommended a blanket ban on FDI in existing pharma projects and urged that further takeover/acquisition of domestic pharma units be stopped.
  • Rational behind the Ministries argument is that, if the policy continues to be implemented in the existing manner, the access to medicine in India could adversely impact production, availability and prices. This would lead to ‘dependency syndrome’ – India dependent for life-saving medicines either on domestic facilities of MNCs or imports. India is already import-dependent for intermediates and critical drugs like penicillin. Around 70% of India’s intermediates are imported from China.
  • FDI is desirable in the production facilities, but cautious approach has to be taken since pharma is a sector impacting life and health of the people.
  • The concerns of these Ministries come in the wake of major acquisition of Indian pharma companies during the last few years by MNCs. Some of the high profile ones include the acquisition of Ranbaxy by Daiichi Sankyo, Shantha Biotech by Sanofi-Aventis and Nicholas Piramal by Abbott raising concerns about future access to affordable medicines.

Widening India-China trade deficit

  • According to the recent data released, India’s trade deficit with China in 2013 is likely to surpass even last year’s record $28 billion.
  • After 9 months of this year, the trade imbalance in China’s favour has reached $24.7 billion, with India’s exports to China down by as much as 22.5% in September.
  • The new figures, have underlined the increasingly skewed trade relationship, between the two countries. India has to take necessary steps to curb this deficit.
  • The major imports of India include machinery, power and telecom equipment, whereas China imports iron-ore. Both sides have set a target of $100 billion by 2015.
  • The down-trend in trade is mainly attributed to mining bans in Karnataka. With India struggling to diversify exports in other sectors, and power and telecom imports from China gloomy, following moves to impose duties and security concerns, the future of the trade relationship has appeared increasingly uncertain.
  • Both countries are exploring new avenues to revive the waning ties. One proposal, made during the recent Chinese Premier’s visit to India was to set up dedicated industrial parks.

India, Finland sign MoU to produce ethanol

  • India and Finland have signed a pact to set up a pilot project to produce ethanol, bio-chemicals and bio-coal from biomass residual matters.
  • The technology used would all cellulose-based waste products into ethanol.
  • The project will utilise wheat straw, which is now being burnt and not being put to productive use. The project would cost around Rs.300 crore is expected to be commissioned in 18-24 months.

Significance of this pact:

  •   Since 75 % of India’s ethanol requirements are met through imports, there is a large requirement which is not being met by indigenous production.
  •  This pact would help in production of indigenous ethanol to promote use of clean technologies and cut down the oil import bill.

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Insights Secure-2014: Questions On Current Events Day – 14

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Questions From The Hindu 14/10/2013

Opinion Page

1. “In India a staggering 30 million cases are said to be pending in the country’s courts today. And to tackle this intimidating problem requires comprehensive judicial reform, more judges of quality and improvement of the judicial infrastructure.” Critically comment on the need for judicial reforms in the context of low conviction rates in serious crimes committed against vulnerable sections of the society. (250 Words)

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Link -Opinion Page

2. “Rampant encroachment and the misuse and usurpation of wakf assets representing Islamic religious endowments is the reality across India.” Throw light on different measures taken by the government to bring transparent administration and to stop illegal encroachments of wakf assets . (200 Words)

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3. “It is arguably better to be Hindu in Indonesia, than Muslim in India.” Do you agree with the view? Critically comment. (200 Words)

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4. “The American foreign policy transition to diluted  ‘Rebalance to Asia’ from ‘Pivot to Asia’ has helped China to reassert its influence in the Asia-Pacific region.” Comment. (250 Words)

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5. Do you think the ‘land pooling model’ is a viable and alternative step to rehabilitate slum dwellers and eradicate slums in our cities? Critically comment with suitable examples. (250 Words)

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National

6. Write a critical note on China’s visa policy on Arunachal Pradesh and India’s response to it. What measure you think India should adopt to deal with China’s ambiguous visa policy with respect to Arunachal Pradesh? (200 Words)

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7. Is India’s food security law in violation of WTO norms? Examine with example from around the world. (200 Words)

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8. Shivendra Singh Dungarpur (50 Words)

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Business

9. India’s domestic pharmaceuticals industry must get its act together particularly in compliance systems and must invest more in processes.” Comment (200 Words)

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