9 PM Daily Brief 1 February 2016

Via ForumIAS by ForumIAS

Brief of newspaper articles for the day bearing

relevance to Civil Services preparation
What is 9 PM brief?

GS PAPER 2
1. Gujarat must give up terror bill {State Laws and Bills}
2. Arunachals double crisis {State Emergency}
3. What teachers must learn {Education}
4. Deepening the French Connection {India & France}
5. Russia encouraging provinces to develop ties with India {India & Russia}
6. US considers re-merger of India, Pakistan desks {International Affairs}
GS PAPER 3
1. Visa on arrival to attract Japan, Korea investors {Investment & Tourism}
2. Push for IMF reforms {International Monetary Organisation}
3. Government may ask central bank to consider roads as a priority sector {Banking Priority Sector}
4. From Plate to plough: How to expand inclusion {Inclusive Growth}
5. China and India in same choppy waters {Global Financial Crisis}
6. Conservation of Malabar wetlands remains a far cry {Environment & Ecology}

GS PAPER 2
[1]. Gujarat must give up terror bill
The Hindu

Context: Gujarat control of Terrorism and Organised Crime Bil, 2015 has been refused by recalled by Union Home
Ministry.

The different objections to the bill:

a) Some provisions of the bill are considered to be draconian.
b) APJ Abdul Kalam refused to sign the bill objecting to interception of communication made admissible evidence in court of
law.
c) The centre forced the state to delete the clause which empowered State Home Secretary to authorise for interception of
calls.

The recall of bill:

Bill has been recalled to rework on it taking more inputs from the state. There has also been concern that bill might get
refused by the President again.

No learning from experience:

The bill has been modeled on the lines of Maharashtra Control of Organised Crime Act. There is no learning from the fact
that Maharashtra law hasnt achieved its objective. Also, whenever it has been initiated it has found itself falling flat on the
face as such random clauses dont help them put a solid case in court of law.

According to the author, there is no need for such laws at state level. Better resources, training to police personnel is the
rather more important thing which is needed to combat the dark alley of organised crimes.

[2]. Arunachals double crisis

The Indian Express

Already discussed
Extra points:Quite frequently, the party faces either of two problems:
The state-level leader, often the CM, becomes so powerful that internal negotiations are just not possible
Arunachal seems to fall in this category.
Or, there are state leaders not able to function effectively because of rampant factionalism. The Congress in Punjab
has witnessed this again and again in the recent past. Karnataka, too, is fast moving in this direction.
Arunachal is a reminder of two things: One, the failure of institutional mechanisms is eroding our democracy; and two, it is
becoming increasingly difficult to expect democratic sagacity from our political parties. Both reminders coming as a followup to Republic Day is indeed sobering and worrying.

[3]. What teachers must learn

The Indian Express

Context:Education should achieve three broad objectives. First, provide skills required for professional growth. Second, provide life
skills, which include soft skills, maturity, and emotional growth. Third, build a strong character for being a good human being
and citizen.

Problems of current educational framework:Education Machinery:First, there are systemic problems in our education machinery. India does not have enough teachers who can even
understand, let alone practise, the methods being recommended by the various frameworks.
According to the World Bank, the average pupil-teacher ratio at the primary level in India is 35 this is the highest among
emerging economies, and much higher when compared to the developed world.
A high pupil-teacher ratio impedes the imparting of soft skills and has an adverse impact on the emotional growth of
children. Finally, the heavily regulated private sector is hampered by archaic laws that discourage, and even prohibit,
innovation.

Employability:The second set of reasons concerns the abundance of alternatives, which render the formal system ineffective, if not
completely useless. The most glaring example is that of on-job training. The formal system is so de-linked from the
industrys requirements that practically every new entrant in the workforce has to be first skilled by the employer. The
National Employability Report 2014 found that only 18 per cent of engineering graduates are employable.

Education system is yet to be updated:In this information age, our education system is one of the things most reminiscent of the bygone industrial age. It was
designed for a standardised workforce to fill government offices and factories.
Today, for the most part, computers can handle standardisation tasks. What we now need is differentiation and innovation.

Rethinking the framework:We should rethink the necessity of children spending 12 years in school, compartmentalised into different classes with a
nationally fixed curriculum.
Why should two kids in Class 8 study the same level of maths and history when one of them is passionate about maths and

Why should two kids in Class 8 study the same level of maths and history when one of them is passionate about maths and
the other about history? Should they do so just because they are of the same age?
The initial 12 years, when children are most capable of learning, can be better spent in learning some other skills that will
help them lead a happier and more successful life. A similar rethinking is needed for pedagogy and teacher-training, laws
and regulations, and emotional and integral development.

Conclusion:In this process, policymakers should be facilitators, not implementers. They should improve the capacity of the failing public
infrastructure, provide authority to the capable institutes, and allow flexibility where the private sector is concerned.
In the current situation, people achieve not because of the system but despite the system. This has to change so that we
can effectively use our human resources.

[4]. Deepening the French Connection

The Hindu

Context: Presence of French President Francois Hollande as chief guest on Republic Day Parade. He is the fifth French
leader to grace the occasion making France being the most number of invitee than any other country on Republic day.

India and France:

Robust Strategic Partnership:
a) Strategic partnership institutionalized at the level of National Security Adviser (NSA),
b) Includes understanding on Cyber security issues, counter terrorism, intelligence sharing in addition to
earlier agenda like nuclear, space and defense.
c) There are many other areas of cooperation like climate change and sustainable development, economic,
heritage preservation and cultural cooperation etc.

Terrorism:
a) Recent attacks in Paris and Charlie Hebedo office has made France realise the vulnerability. This has led to
stand alone joint statement on terrorism which denounced caste system in approaching terror attacks where
attacks in Mumbai , Nairobi etc. doesnt seem as important as that if any on Paris, New York or London.

Economy:
a) Push to Jaitapur nuclear plant. New projects for cooperation between India and French Space agency dealing
environment and weather monitoring, mapping of water resources and a joint Thermal Infrared Earth

with

Observation

mission.
b) Signing of MOU on Rafale Deal which freezes the technical parameters, weapon payload and lifetime
servicing and spares needed
c) Other significant things is joint venture proposed between private sector companies of both the countries.
which can provide impetus to Make in India.

The Challenges in India & France relationship:

There is a lack of economic and trade relations as well as people to people relations. A lot has been done to improve
business and trade relation with opening of many French enterprise in India and proposal of working together in areas of
urbanisation, smart cities etc. Nagpur, Chandigarh and Puducherry will get French assistance in developing smart infra.
Lack of people to people interaction can be understood from the fact that out of 7 million tourist only 3 lakhs only are
French. The people to people connection has been driven mostly by elite.
To renergise people to people relationship there is new vigour for educational exchanges and joint venture in the field of
skill development. Encouraging Indian students to go to France varsity at the same time encouraging French youth to intern
in Indian enterprise.

[5]. Russia encouraging provinces to develop ties with India

[5]. Russia encouraging provinces to develop ties with India

The Hindu

Context: Russia giving more freedom to its provinces to engage directly with Indian states.
Why is it being done?
a) India and Russia during inter-governmental discussion in 2015 decided to ramp up bilateral investment from $15 billion to
$30 billion.
b) Russia bid to promote other provinces of the country which are far from Moscow.

What has been done?

a) Russia has given its provinces free hand to deal with Indian states in the field of agriculture, health, education and
cultural cooperation
b) President Putin has been taking vacation to different provinces and engaging in activities there to showcase tourism
potential of different provinces.

[6]. US considers re-merger of India, Pakistan desks

The Hindu

Context: The speculation that India will be hyphenated (joined) with Pakistan for purpose of US International relations.
What is current situation?
Seven years ago State Department was restructured to dehyphenate US relations with India ad Pakistan.
De-hypehnate refers to policy of US government where it will deal with India and Pakistan on different ground thereby not
bringing in between their bilateral relations.

How it helped US?

US was able to forge stronger ties with India in coming days. Also, it was able to keep India on bay with regard to its military
alliance with Pakistan in Afghanistan ops.

The Different Bodies:

SRAP Special representative for Afghanistan and Pakistan Set up by Obama Administration in 2009.
Bureau of South and Central Asia (SCA) used to handle India, rest of subcontinent and central Asian republics.

Indias argument against the move:

1. It will mean US can now rake up bilateral issues of India & Pakistan, making US the third party.
2. Also, will mean indirectly that India supports US policy in Afghanistan.

GS PAPER 3
[1]. Visa on arrival to attract Japan, Korea investors
The Hindu

Context: Announcement in December by Indian PM that Japanese citizens would get visas on arrival has now been
truncated to business community. Also, the government is thinking of including South Korea in this category.

The reason behind the move:

The move is being seen as incentive to investor for them to see India as an attractive destination for investment. The travel
which is a precursor to any investment is thus being eased out for the investors coming from Japan and Korea.

[2]. Push for IMF reforms

[2]. Push for IMF reforms

The Hindu

Context: IMF recently adopted long standing demand for reforms in its structure (i.e.voting rights)
Reforms:
a) To adopt a country quota distribution that better reflects the power balance of emerging markets. This has resulted in shift
of 6% points of quota (fund capital and voting rights) from developed countries to emerging countries.
Benefit of this move has been majorly IMF which will see its revenue rise to $659 billion from $ 329
billion.
b) Opposition against nominated Managing Director which led to abolition of the post. Disinterest was shown by Indian
Executive director Arvind Virmani who brought forward the point the latest recession of 2008 was born in developed
countries and it shows how there is a need to reform international institutions.
According to author, the first reform is just the beginning for IMF and should not be the end.

[3]. Government may ask central bank to consider roads as a priority sector
The Hindu

Context: Lending constraints in the road construction sector, need to review non performing assets and revive Rs. 40,000
crore worth of highway projects that have not taken off.

The Start:
Road Transport and Highway ministry has held talk with Indian Banks Association and received the move as suggestion
which now it is ready to take up with RBI.

Case for Road Construction to be included in Priority Lending List:

Importance of road sector can be determined as its the nerve joining different economic centres in the country thereby
supporting economic growth and nation building.

What else government is expecting from RBI:

1. Ease non performing assets norms for bank loans to revive projects. Not to consider NPA if project has failed to take
off beyond two years.
2. Govt. can further ask RBI to allow banks to infuse more funds into projects which has cost overruns due to delays.

The Present Scenario & Reason for delay in Highway Project:

Government finding it hard to revive 19 projects worth Rs. 40,000 crore. The major reason for delay has been lack of funds
from banks due to mounting NPAs in the sector. Government also blames the inefficient managerial class in construction
companies.

Priority Sector Lending: The sectors of the economy which faces the crunch of funds due to delays or inaccessibility has
been given special provision by RBI. 40% of all credit in India given by banks has to be given to these sectors. This is
essentially meant for an all round development of the economy as opposed to focusing only on the financial sector.

Few Examples of Priority Sector In India:

a) Agriculture and allied activities
c) Education Loand

b) Small scale Industries ( Micro, Medium and Small)

d) Micro credit

[4]. From plate to plough: How to expand inclusion

The Indian Express

Context:-

e) Housing loans for poor

Context:Financial inclusion is an important policy pillar of the government to ensure inclusive development (sabka saath, sabka
vikas). What it means, in brief, is to mainstream financial services for the masses, especially credit at affordable costs from
institutional sources.

Earlier Initiatives:This is not the first time financial inclusion is being given a thrust. Various governments tried to bolster it, and that was one
of the reasons bank nationalisation took place. There have been some successes during 1951 to 1991, when the share of
outstanding debt of rural households to institutional sources increased from 7.2 per cent in 1951 to 64 per cent by 1991.
But thereafter, the period of economic reforms showed a dismal performance, with the share of institutional sources
declining from 64 to 56 per cent during 1991-2013.

Jan

Dhan Yojana:-

Realising the importance of financial inclusion, the government took a bold step by introducing the Jan Dhan Yojana (JDY).
So far, around 20 crore bank accounts have been opened, and more than Rs30,000 crore deposits received under JDY.
However, the real challenge is to prevent these accounts from remaining dormant.

Report on Financial inclusion:The report of the RBI Committee on Medium-Term Path on Financial Inclusion, released in December 2015, emphasised the
role of a holistic strategy involving players like telecom operators, biometric systems, payment banks and land registrars for
last mile service delivery.
Some of its major recommendations include linking all credit accounts with a biometric identifier, such as Aadhaar; moving
away from short-term interest rate subvention on crop loans and towards a crop insurance scheme; and replacing various
input and output subsidies with direct benefit transfers (DBT).
The report finds that although there has been significant improvement in access to banking services through expansion in a
number of rural branches, banking correspondents and no-frill banking accounts, a large degree of financial exclusion
prevails in east and northeastern India.
High interest rates (above 20 per cent) charged by the informal sector as well as micro financial institutions continue to be a
concern.

Phasing out the interest subvention scheme:The interest subvention scheme was introduced in 2006-07, with the objective of providing substantial and cheap loans at
7 per cent interest (upper limit of Rs 3 lakh), and if payment is regular, gradually lowered to 4 per cent.
Some states have extended loans even at zero interest rate to farmers. This has resulted in a significant increase in shortterm agricultural credit, with actual disbursements consistently surpassing targets.
This is hailed as a grand success and the subsidy on account of it has increased from Rs 3,283 crore in FY12 to Rs 13,000
crore in FY16.

Agri credit scam:But this could be deceptive and a potential agri-credit scam. Theres reasonable evidence that a significant proportion of
crop loans granted at subvented interest rates isnt reaching target beneficiaries.
A farmer who receives loans at a concessional rate of 4 per cent can easily deposit at least a part of it in fixed deposits in
the bank, earning about 8 per cent interest, or even becoming a moneylender to offer loans at 15-20 per cent interest to
those who dont have access to institutional sources of finance.
This suspicion is reaffirmed when one looks at the month-wise disbursement of agricultural credit, which spiked to 62 per
cent of annual disbursement in the last quarter of FY14, with no corresponding spike in agri-production activities.
The latest crop insurance scheme is expected to cost the Centre around Rs 9,000 crore. This could easily be financed by
releasing funds allocated to interest subvention.

Price support policies:-

Price support policies:The report also states that meaningful financial inclusion will be elusive without social cash transfers from government-toperson (G2P).
Recognising large leakages in welfare and anti-poverty schemes, many countries have moved from price support to income
support.
However, India uses price policy (subsidised inputs) to support farmers and PDS grains for consumers. Such policies are
inefficient and at times regressive, as they promote leakages and sub-optimal use of scarce resources.
Recent policy interventions utilising DBT in LPG subsidy have seen good success. Similar efforts are needed for food and
input subsidies. Using the JAM trinity (Jan Dhan, Aadhaar, Mobile) and digitising land records will be significant drivers of
financial inclusion.

[5]. China and India in same choppy waters

The Indian Express

When Chinas growth rate has slowed down, some in India and many in the government seem to think it is a cause for
celebration.

Chinese success:China has been the main driver of world growth for a decade. Through the 1997 Asian currency crisis and through the 2008
international financial crisis, China continued to grow at an unprecedented rate.
China became the worlds factory from toys to shoes to steel to capital goods. China also accumulated the worlds
largest foreign exchange reserves which at one point stood at an unbelievable USD 4 trillion.
It was only a matter of time before Chinese entrepreneurs got into the leaderboard in non-manufacturing.
Among the worlds leading service sector companies are China Mobile, China Life Insurance and Alibaba.
Among the worlds top 5 banks, three are Chinese banks.

Transition from Manufacture to services:Chinas economy has gone through many transitions and is undergoing one today. It has to transit from manufacturing to
services, investment-driven to consumption-driven economy, and export-led to domestic demand-led growth.
Besides other causal factors, the pain and price of the transition are reflected in the slowdown of GDP growth and the
depreciation of the currency (yuan).

Strong points of china:Despite the slowdown to 6.9 per cent in 2015, China had a record trade surplus of USD 595 billion. Despite capital flowing
out at an average rate of USD 100 billion a month during the last eight months, Chinas reserves are at USD 3.3 trillion.
Despite world demand falling, Chinas exports in 2015 declined by only 2.5 per cent over 2014.
And despite bad investments, rising debt and loss of confidence among savers, the yuan depreciated by only 6 per cent in
2015.

Indias case:In comparison, Indias GDP growth in 2015-16 is not likely to exceed 7 per cent, Indias exports have declined by 18.08 per
cent during April-December 2015 over the same period last year, there will be a current account deficit of about USD 30
billion, and the rupee has depreciated by 9 per cent during April 2015 to January 2016.
The stock market indices are back to the levels they were in May 2014. Job creation has practically collapsed.

What we need to know?

Empty boast There is no reason to boast that India is doing better than China or that India is the fastest growing large
economy. Indias economy must transit from consumption-driven to investment-driven and from services-led to

manufacturing-led. We will also experience pain. Competition among countries is different from competition among
companies.
If Chinas demand falls, it will import less from India. If commodity prices do not recover, China will continue to dump its
products in India and Indian producers will suffer. If the yuans volatility roils world currency markets, the rupee will also be
hit.
It is believed that the RBI may have spent USD 3.6 billion in the first two weeks of January to arrest the depreciation of the
rupee.

Conclusion:So, in the short run, Chinas woes may cause us more pain, not less.
We need to deal with real issues: the exchange rate and how India should deal with the probability of some depreciation; the
travails of Indian producers and how the government can help them in the near term; how to arrest and then reverse the
decline in exports; and how to enthuse Indian investors to make investments in the real economy (especially in
manufacturing industries) when the reality is that many current projects are either stalled or have been scrapped.
China is a country that has recognised the imperative and the difficulties of transiting to a market economy and is struggling
to find the right mix of policies. India is in the same situation.

[6]. Conservation of Malabar wetlands remains a far cry

The Hindu

Context: Warning from various agencies regarding wetlands in North Kerala seems to be falling on dumb ears.

The issues pertaining to wetland:

a) Illegal land reclamation

b) Dumping of solid and non degradable waste

c) Human encroachment

d) Government attempt to st up sewerage plant in wetland areas.

17 wetlands has been identified on the verge of extinction

What are wetlands?

According to the Ramsar Convention on Wetlands; Wetlands are areas of marsh, fen, peatland or water, whether natural or
artificial, permanent or temporary, with water that is static or flowing, fresh, brackish or salt, including areas of marine water
the depth of which at low tide does not exceed six metres.

Importance of wetlands:
Provide habitat for a wide variety and number of wildlife and plants.
Filter, clean and store water in other words, acting like kidneys for other ecosystems!
Collect and hold flood waters.
Absorb wind and tidal forces.
Provide places of beauty and many recreational activities
Wetlands also act like sponges by holding flood waters and keeping rivers at normal levels. Wetlands filter and purify water
as it flows through the wetland system. Plants found in wetlands help control water erosion.

By: ForumIAS Editorial Team

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