Current Analyst February 2017 I

CURRENT
ANALYST
ISSUE I: FEBRUARY, 2017
Cover Story
Robot Tax and
the Future of
Employment
Freebies
Phasing Politics in Companies Need Forest
Out of FIPB: India: to Look Fires:
Will phasing out The freebies politics work Beyond CSR: Natural or
of FIPB increase on pleasing voters by Manmade
Responsible business
FDI flow? way of gifts and money Disaster
practices go beyond CSR
however, voters may be
and these practices should
poor, but their votes
be enshrined by Corporate
are not up for sale.
in order to ensure
sustainable business.
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2 Issue:I, February, 2017

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Contents
Issue I- February, 2017
North Korea Test Ballistic Missile

Cover Story 5-9 Women Safety and Government Initiatives
Politicization of the Post of Governor
Robot Tax and the Policy on Synthetic Biology
Future of Employment Phasing Out of FIPB
National Sex Offender Registry

Leachate of Groundwater in Urban Areas
Special Story 10-70 Companies Need to Look Beyond CSR
Freebies Politics in India Lancet Report on Healthcare Spending
Monetary Policy Committee Review Nagaland Issue
Women Voices in Elections
Chennai Oil SpillIssue, Impact and Solution
Forest Fires as Part of Ecosystem

US Sanctions on Iran
GI TagMeaning and Significance Sub-Prime Crisis in the Making
Make in India in Defence: Real or Rhetoric? Miscellaneous News
Issue:I, February, 2017 3

COVER STORY www.iasscore.in
COVER STORY
Robot Tax and the

FUTURE OF EMPLOYMENT
Context to industrial robots, medical operating robots, patent

assist robots, dog therapy robots, collectively
The robots haven't just landed in the
programmed swarm robots, UAV drones such as
workplacethey're expanding skills, moving
General Atomics MQ-1 Predator, and even
up the corporate ladder, showing awesome
microscopic nano robots. By mimicking a lifelike
productivity and retention rates, and
appearance a robot may convey a sense of
increasingly shoving aside their human
intelligence or thought of its own.
counterparts.
Thus experts came up with the concept of Why was it in the news recently?
Robot Tax. The revenue garnered from
Recently, Bill Gates has proposed that robots who
these robot taxes could then be used to
take human jobs should pay taxes and using the
support and retrain those unemployed
money to retrain the humans may be one way to
workers, ultimately moving them into new
deal with the upheaval ahead. Also robots are
forms of employment.
unlikely to complain about tax levels, they dont
Thus hereby analyzing the reason, why use services financed by tax revenue such as
robots are expanding and feasibility of the education or the health services and they are most
tax in present scenario. unlikely to salt away income and assets in a tax
haven.
Introduction
Machine vs Computer vs Robots
A robot is a machine, especially one programmable
by a computer and capable of carrying out a complex Machine is any device that uses energy to
series of actions automatically. The branch of perform some activity.
technology that deals with the design, construction, A computer is a machine that manipulates
operation, and application of robots, is robotics. data according to a set of instructions.
Robots can be autonomous or semi-autonomous A robot is a virtual or mechanical artificial
and range from humanoids such as Hondas agent. In practice, it is usually an electro-
Advanced Step in Innovative Mobility (ASIMO) and mechanical machine which is guided by
TOSYs TOSY Ping Pong Playing Robot (TOPIO)

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The resulting shifts mean that we live in a time

computer or electronic programming, and is
of great promise and great peril. The world has
thus able to do tasks on its own. Another
the potential to connect billions more people to
common characteristic is that by its
digital networks, dramatically improve the
appearance or movements, a robot often
efficiency of organizations and even manage
conveys a sense that it has intent or agency
assets in ways that can help regenerate the
of its own. Robots can be considered
natural environment, potentially undoing the
machines but not all machines are robots.
damage of previous industrial revolutions.
However, organizations might be unable to adapt,
The Fourth Industrial Revolution or the governments could fail to employ and regulate new
Second Machine Age technologies to capture their benefits; shifting
World is witnessing the beginning of fourth power will create important new security concerns;
industrial revolution that is fundamentally inequality may grow; and societies fragment.
changing the way we live, work and relate to
one another. The Second Machine Age and the
Previous industrial revolutions liberated humankind Global Employment Structure
from animal power, made mass production possible Emerging technologies like industrial robots,
and brought digital capabilities to billions of people. artificial intelligence, and machine learning are
This Fourth Industrial Revolution/ second Machine advancing at a rapid pace, but there has been
Age is, however, fundamentally different. It is little attention to their impact on employment
characterized by a range of new technologies that and public policy. While emerging technologies
are fusing the physical, digital and biological can improve the speed, quality, and cost of
worlds, impacting all disciplines, economies and available goods and services, they may also
industries, and even challenging ideas about what displace large numbers of workers.
it means to be human. The impacts of automation technologies are
The Second Machine Age involves the already being felt throughout the economy. The
automation of a lot of cognitive tasks that make worldwide number of industrial robots has
humans and software-driven machines increased rapidly over the past few years. The
substitutes, rather than complements to Human falling prices of robots, which can operate all
effort. It contrasts with the First Machine Age, day without interruption, make them cost-
or First Industrial Revolution, which helped make competitive with human workers.
labor and machines complementary. In the service sector, computer algorithms can
Initially it was assumed that computers could execute stock trades in a fraction of a second,
make human tasks easier but they could not do much faster than any human. As these
away with the human altogether. But after 50 technologies become cheaper, more capable, and
years of the computer age that barrier has finally more widespread, they will find even more
cracked. Robots nowadays are increasingly doing applications in an economy.
complex things as the mental and physical The recent trend towards increased automation
dexterity gap has been narrowed down. stems in part from the Great Recession, which
For Example - Googles driverless car is around forced many businesses to operate with fewer
the corner, Amazons robots pack delivery boxes workers. After growth resumed, many businesses
in warehouses so empty of people that there is continued automating their operations rather than
no need for light or a controlled temperature. hiring additional workers. This echoes a trend
Amazons Kiva Robots lift shelves that weigh among technology companies that receive
around 1,360kg, 24x7, without a toilet break, massive valuations with relatively few workers.
lunch hour, health insurance or pension plan. For example, in 2014 Google was valued at $370
They dont get stuck in traffic or snow and they billion with only 55,000 employees, a tenth the
dont have attitude. size of AT&Ts workforce in the 1960s.

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Utopia:
FOXBOTS: Foxconn plans to replace Experts disagree on the size of the impact that
human workers with robots automation technologies will have on the
The worlds largest manufacturer of workforce. They point out that technology may
electronic products, Taiwans Foxconn, is create new job categories that will employ
considering replacing its workforce with one displaced workers. They argue that the computers
million Foxbots. will have little effect on employment in the future.
Foxconn, the Taiwanese manufacturing giant In 1983, the economist predicted that the role of
behind Apples iPhone and numerous other humans as the most important factor of production
major electronics devices, aims to automate is bound to diminish in the same way that the
away a vast majority of its human role of horses in agricultural production was first
employees.The company has a three-phase diminished and then eliminated by the introduction
plan in place to automate its Chinese of tractors.
factories using software and in-house If one day there is a robot that can do everything
robotics units, known as Foxbots. humans can do, it is only a problem if humans do
The first phase of Foxconns automation not own it.
plans involve replacing the work that is Whether the future is a dystopia or a utopia
either dangerous or involves repetitious depends on ownership, not technology.
labor humans are unwilling to do.
The second phase involves improving Delivering benefits to displaced
efficiency by streamlining production workers
lines to reduce the number of excess In an economy that employs dramatically fewer
robots in use. workers, we need to think about how to deliver
The third and final phase involves benefits to displaced workers.
automating entire factories, with only a Any policy measures that address the future of
minimal number of workers assigned for employment must account for the uncertainty of
production, logistics, testing, and outcomes on employment. If automation
inspection processes,. technologies like robots and artificial intelligence
make jobs less secure in the future, there needs to
be a way to deliver benefits outside of employment.
Whether Robot Age is a dystopia or a Flexible security, is one idea for providing
Utopia? healthcare, education, and housing assistance
whether or not someone is formally employed.
Dystopia:
Expanding the Earned Income Tax Credit,
Globally, workers are worried that machines are providing a guaranteed basic income, and
taking their place in factories and offices. encouraging corporate profit-sharing are some
According to one of the reports, "The Future of ideas that need to be considered in the case of
Employment", it is predicted that 47% of current persistent unemployment.
jobs would be replaced by robots. China, a later
starter and the world's leading manufacturer has Taxation on Robots to offset the social
become the biggest buyer of robots. costs of automation
This process has been underway for a while and
Recently, it has been proposed that robots who
underscores a secular stagnation and worsening
take human jobs should pay taxes.
inequality in the advanced economies. The
typical worker in the US has not seen a rise in Case Study
their living standards since 1979 and since then A person makes a decent living operating a large
income inequality has steadily worsened. harvester. His salary generates income tax and

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social security payments that help finance Taxing robots might also help to counteract tax
government programmes for less fortunate avoidance, because the tax would be calculated
members of his community. Alas, Robot is about by taxing a notional salary paid to the robot, and
to replace him, a robot that can operate the the company would be allowed to deduct this
harvester longer, more safely, in any weather, notional payment for the purpose of corporation
and without lunch breaks, holidays, or sick pay. tax.
This shows how the robots may replace human Furthermore, taxing robots will not discourage
being thus it has been proposed by Bill Gates innovation. People are naturally anxious about
that to ease the inequality and offset the social the effects of such technology, but taxation is a
costs implied by automations displacement better way of allaying these fears than the
effects, either robot should pay income tax, or alternative of banning aspects of it.
the employer should pay a hefty tax for replacing There are three problems with this approach
employee with a robot. And this robot tax should
First, whereas employees income would have
be used to finance something like a Universal
changed over time had he not been fired, the
Basic Income (UBI).
reference salary cannot change, except arbitrarily
and in a manner setting the tax authorities against
Universal Basic Income:
business. The tax office and employee would
It is a form of social security in which all end up clashing over impossible estimates of
citizens or residents of a country regulary the extent to which employees salary would have
receive an unconditional sum of money from risen or fallen, had he still been employed.
the government in addition to any income Second, the advent of robot-operated machines
received from elsewhere. that have never been operated by humans means
there will be no prior human income to act as a
The whole point of automation is that, unlike reference salary for calculating the taxes these
employee, Robot will never negotiate a labor robots must pay.
contract with employer. Indeed, it will receive no Finally, it is hard philosophically to justify forcing
income. Thus the question arises what will be employer to pay income tax for Robot but not
the criteria of placing tax? for the harvester that it operates. After all, they
The only way to simulate an income tax on behalf are both machines, and the harvester has
of Robot is to use employees last income as a displaced far more human labor than ROBOT has.
reference salary and extract revenue income tax The only defensible justification for treating them
and social security charges equivalent to what paid. differently is that ROBOT has greater autonomy.
It will have many advantages such as - Another way of Taxation

We will be able to spend the money to finance Assuming that robots cannot be made to pay
jobs for which humans are particularly suited, income tax without creating new potential for
such as caring for children or the elderly. conflict between the tax authorities and business
Robots are also unlikely to complain about tax (accompanied by tax arbitrage and corruption),
levels. there is an alternate of taxing ROBOT at the
They dont use services financed by tax revenue point of sale to employer. The state would collect
such as education or the health services. a lump-sum tax from employer the moment he
They are most unlikely to salt away income and replaces employee with Robot.
assets in a tax haven. Bill Gates supported this second-best alternative
Taxing robots would, in reality, be a tax on the to making robots pay income tax. Slowing down
capital employed by businesses in using them automation and creating tax disincentives to
and might help to redress the long-term shift counter technologys displacement effect is,
away from taxing capital. overall, a sensible policy.

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But a lump-sum tax on robots would lead robot state. Coupled with stronger labor rights and a
producers to bundle artificial intelligence within decent living wage, the ideal of shared prosperity
other machinery. ROBOT will increasingly be would receive a new lease on life.
incorporated within the harvester, making it Criticisms
impossible to tax the robotic element separately
Taxing technologies is a slippery slope - There
from the dumb parts that do the harvesting.
are a number of technologies that already make it
Ever since the emergence of industrial easier for a human to work, or to work more
capitalism, we have been terrible at effectivelyfor instance, Microsoft Word. Kiosks
differentiating between property and capital, and replace human work by allowing customers to serve
thus between wealth, rent and profits. This is themselves, but dont involve artificial intelligence
why a wealth tax is so difficult to design. or robots. Vaccines prevent disease, so we might
UBD: An alternative to Robot Tax argue they destroy jobs in medicine. There is no
line between which technologies destroy jobs and
There is an alternative to a robot tax that is
which do not. Even if the government could create
easy to implement and simple to justify: a
a precise definition, tax authorities would be unlikely
Universal Basic Dividend (UBD), financed from
to effectively administer one.
the returns on all capital. Imagine that a fixed
portion of new equity issues goes into a public True innovation shouldnt be stifled -
trust that, in turn, generates an income stream Automation technology has the potential to
from which a UBD is paid. Effectively, society replace work that accounts for $14.6 trillion in
becomes a shareholder in every corporation, and wages globally. But along with its potential to
the dividends are distributed evenly to all citizens. dislocate workers, new technology can bring with
it improvements in goods and services. We
To the extent that automation improves
already benefit from technology that has given
productivity and corporate profitability, the whole
the world more efficient ways to book travel or
of society would begin to share the benefits. No
more precision in delicate surgeries. AIl currently,
new tax, no complications in the tax code, and
under development promises to do the same.
no effect on the existing funding of the welfare
Automated cars, for instance, are meant to be
state.
safer than human drivers. A tax on robots
Indeed, as higher profits and their automatic
risks squeezing innovation out of the system. In
redistribution via the UBD boost incomes, more
short, a sufficiently high tax on robots would
funds would become available for the welfare
prevent them from being produced.
Conclusion
The role of humans as the most important factor Gates proposal to tax robots on their income
of production is bound to diminish in the same or taxing their owners is to address inequality
way that the role of horses in agricultural and technological anxiety and it has opened
production was first diminished and then up discussion about what is likely to be one of
eliminated by the introduction of tractors. Robots the most crushing problems of the early 21st
are replacing human workers and they dont even century: the future of work and the role of
have to pay income tax. Bill Gates suggests automation.
that this should change.
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www.iasscore.in Polity
SPECIAL ISSUE
Freebies Politics in India

Context freebie culture that has developed few states, such
as Tamilnadu, in the last one and a half decade is
The biggest worry for the Election quite unique gifts have now evolved from
Commission (EC) these days as it conducts welfare goods to consumer goods like TV sets,
and oversees Assembly elections, is the mobile phones, sewing machines, etc.
excessive use of money by political parties The phenomena have become apparent in different
and their candidates to buy votes. parts of the country. Studies conducted by the Centre
Studies conducted by the Centre for the for the Study of Developing Societies indicate that
Study of Developing Societies (CSDS) while this practice is prevalent in most states to
varying degrees, it is much more rampant in the
indicate that while this practice is prevalent
southern states of Andhra Pradesh, Karnataka, Tamil
in most states to varying degrees, it is much
Nadu, but not in Kerala.
more rampant in the southern states.
During the Assembly elections in Tamil Nadu in 2011,
The freebies politics work on pleasing voters more than 70 per cent voters talked of either receiving
by way of gifts and money. Voters may be gifts or money themselves or they had heard of others
poor, but their votes are not up for sale. Thus receiving gifts or money from political parties during
hereby analysing the impact of freebies the election campaign. Similarly, in 2015 Delhi
politics and steps needed to curb that. Elections, the AAP government gained utmost
electoral mileage by promising free electricity, water
and wi-fi to the people. This is again being repeated
T
he competitive populism in India has given in Punjab where party has made such provisions in
space for freebies during the election.In their election manifesto.
competitive populism governments/parties, in
the name of welfare, establish client-patron Impact of freebies politics
relationship with poor, especially those deprived of The above facts are well known and widely publicized.
private goods. However, what is not so publicized isthe consequenceof
Freebies often in the form of private goods are shelling out such generous dole programs.
doled out by the parties to patronize this poor yet Loss of exchequer: Freebies in election cause loss
loyal section of the society and its apparent success of exchequer of the state. For example- In Tamil
in garnering votes and creating a vote-bank in Nadu, if one has to implement all the dole programs
election. Its mandatory practice by parties has as promised by DMK/AIADMK parties in last
predominantly overtaken the centre stage in all election, then it will cost the government exchequer
election campaigns. an additional Rs. 10,000 crore every year.
Freebies often take the form of cash, bribes, free Increasing debt burden: Due to distribution of
rice, saris, and loan wavers. In fact, the kind of freebies, Tamilnadus public debt has exceeded Rs.

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2, 00,000 crore in 2015-16. West Bengal has doubled In the fresh guidelines to political parties on election
its outstanding state liability in excess of Rs. manifesto, EC in the interest of free and fair
3,00,000 crore overthe last five years. elections directed political parties to adhere to few
guidelines. The guidelines are-
Quality of expenditure: One can argue that
Maharashtra, an industrially advanced state, has the The election manifesto shall not contain anything
highest debt at around Rs. 3, 50,000 crore. Butthen repugnant to the ideals and principles enshrined
most of this debt is because of industrialization, and in the Constitution and further that it shall be
due to aspurt in manufacturing and services. On the consistent with the later and spirit of other
other hand, for West Bengal and to some extent in provisions of Model Code of Conduct.
Tamil Nadu, a large component of public debt has Political parties should avoid making those
originated from unproductive freebies. Further, major promises which are likely to vitiate the purity of
expenditure is done on private goods which affect the election process or exert undue influence on
the revenue for public goods which have potential to the voters in exercising their franchise.
pace the economic growth. In the interest of transparency, level playing field
Unsustainable Fiscal deficit: Unfortunately, an and credibility of promises, it is expected that
increase in subsidies on non-merit goods such as manifestos also reflect the rationale for the
freebies makes the fiscal deficit of any government promises and broadly indicate the ways and
unsustainable. While freebies may keep voters in means to meet the financial requirements for it.
oblivion and even blissfully happy, the fact of the Trust of voters should be sought only on those
matteris that between 2011 and 2014, West promises which are possible to be fulfilled.
Bengals per capita income was less than the all- A list of reforms and recommendations, that may
India average by 12.2%. This figure is higher than be implemented for improvement regarding
it was during the Left rule between 2004 and 2011, regulation of freebies are:
when West Bengals per capita income lagged behind
It should be made obligatory for each political
the all-India average by 10.4%.
party to publish and submit their Manifesto to
Shakes the root of free and fair elections to a the Election Commission before the deadline of
large degree: Supreme Court while hearing the first phase of the nomination, failure of which
Subramaniam Balaji V. State of Tamil Nadu, should lead to debarring the party form contesting
though ruled out such freebies as practice of the particular election.
corruption under section 123 of Representation of To prevent laxity on part of the political parties
People Act, 1951, acknowledged that in reality and candidates on coming to power, strict judicial
distribution of free gifts by political parties does action should be taken against the political parties
influence the electorate and shakes the root of free for the non-fulfilment of promises made by them
and fair elections to a large degree.The apex court during the announcement of election manifestos.
agreed with the election commissionssubmission
Manifesto should be legally binding document
that freebies promised by the parties disturb
on the parties to implement the promises made
thelevel-playing field among players contesting the
before the pre-elections so as to avoid the
polls andvitiates the election process.
unpractical claims.
Reform The political parties should very carefully take
the statistical data to be used in the Manifestos
While hearing on the case Subramaniam Balaji V.
from reliable sources, preferably from government
State of Tamil Nadu, the apex court directed to
documents and database. Moreover, the
Election Commission to frame guidelines with
manifesto should lay down the fiscal roadmaps
consultation of political parties on its general conduct
to achieve such targets and the impact of such
and content of election manifesto including Model
commodity on the financial reserves.
code of Conduct (MCC) for the guidance of political
Due to the strict interpretation of the penal
parties and candidates.
statues of Section 123 of RP Act only candidates

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and its agents come under its preview. It should accept these gifts, but that does not mean that the
encompass its horizons to include political parties voters make any kind of real commitment to vote
as well. for the candidate from whom theyve received gifts.
If candidates and political parties believe that they Voters may be happy to receive freebies, but the
can win elections only by pleasing voters by way of long-term economic and political consequences are
gifts and money, they are seriously mistaken. Voters immense. Instead, political, judicial and
may be poor, but their votes are not up for sale. administrative reforms are needed to curb corruption.
It is true that when candidates and political parties To put it briefly, in the words of Ronald Reagan that
distribute gifts during the election campaign and a -We should measure welfare success by how many
day or two before the voting, voters are willing to people leave welfare, not by how many are added.
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Economy www.iasscore.in
Monetary Policy
Committee Review
Context targets at 4% (with a standard deviation of 2%) in the
Recently RBI undertook the monetary medium term . Under Section 45ZA(1) of the RBI Act,
1934, the Central Government determines the inflation
policy review. On the basis of an assessment
target in terms of theConsumer Price Index, once
of the current and evolving
in every five years in consultation with the RBI. This
macroeconomic situation at its meeting,
target would be notified in theOfficial Gazette. Though
the Monetary Policy Committee (MPC)
the central bank already had a monetary framework
decided to keep the policy repo rate under and was implementing the monetary policy, the newly
the liquidity adjustment facility (LAF) designed statutory framework would mean that the
unchanged at 6.25 per cent. Thus RBI would have to give an explanation in the form of
MPC has taken a neutral stance i.e. neither a report to the Central Government, if it failed to reach
increase or decrease the REPO rates. The the specified inflation targets.
decision has been taken in line with
Recently the Monetary Policy Committee (MPC)
mediumterm target of 4 per cent CPI decided to keep the policy repo rate under the
inflation within a band of +/ 2 per cent. liquidity adjustment facility (LAF) unchanged at 6.25
Thus, hereby analysing the reason for per cent.
taking neutral stance and its implications.
Inflation Targeting India
Inflation targeting is a monetary policy strategy used
T
he Monetary Policy Committee (MPC) is a by Central Banks for maintaining price level at a
committee of the Central Bank in India certain level or within a range. It indicates the primacy
(Reserve Bank of India), headed by its of price stability as the key objective of monetary
Governor, which is entrusted with the task of fixing policy. The argument for price stability stems from
the benchmark policy interest rate (repo rate) to the fact that rising prices create uncertainties in
contain inflation within the specified target level. decision making, adversely affecting savings and
encouraging speculative investments.
The MPC replaces the current system where the
RBI governor, with the aid and advice of his internal Inflation targeting brings in more predictability and
team and a technical advisory committee, has transparency in deciding monetary policy. If the
complete control over monetary policy decisions. A central banks could ensure price stability, households
Committee-based approach will add lot of value and and companies can plan ahead, negotiating wages
transparency to monetary policy decisions. on the basis of expecting low and stable inflation.
Under the Monetary Policy Framework Agreement, Various advanced economies including United States,
the RBI will be responsible for containing inflation Canada and Australia have been using inflation

targeting as a strategy in their monetary policy Second, economic activity in cash-intensive

framework. The case for inflation targeting has been sectors such as retail trade, hotels and restaurants,
made in India as the country has been experiencing and transportation, as well as in the unorganised
a high level of inflation till recently. sector, is expected to be rapidly restored.
The Reserve Bank of India and Government of India Third, demonetisation-induced ease in bank
signed a Monetary Policy Framework Agreement funding conditions has led to a sharp improvement
on 20th February 2015. As per terms of the in transmission of past policy rate reductions in
agreement, the objective of monetary policy lending rates, which should spur a pick-up in both
framework would be primarily to maintain price consumption and investment demand.
stability, while keeping in mind the objective of So, in nutshell adverse international outlook and better
growth. The monetary policy framework would be expected demand due to remonetisation may increase
operated by the RBI. RBI would aim to contain inflation in future, taking this into account MPC has
consumer price inflation within 6 percent by January desisted from reducing policy rates (Repo rates). At
2016 and within 4 percent with a band of (+/-) 2 the same time MPC expect banks to reduce lending
percent for all subsequent years. rates in response to earlier cut in policy rates.
Management of monetary policy and the express For better performance of monetary policy it is
objective of inflation targeting has been enshrined important for banks to allow transmission mechanism
as the responsibility of RBI by amending the to work. Transmission mechanism is the
preamble of the RBI Act, 1934 through the Finance reduction in lending rate because of reduction
Act 2016 (Chapter XII). The amendment give way in policy rates by RBI. A flawless transmission
to operation of a Monetary Policy Committee (MPC), mechanism insures effective working of monetary
this would be the institutional arrangement at the policy. But if transmission mechanism doesnt work
disposal of RBI for targeting inflation. the monetary policy will not show desired result
despite reduction in policy rates.
Reasons for Under taking Neutral
Why banks do not ensure easy flawless working
Stance
of transmission mechanism?
Future Risks which could increase inflation
Since 2011 banking sector has seen increase in
The hardening profile of international crude prices NPAs. This increase reduces the profitability of
- Crude oil prices firmed up with the OPECs banks as by definition NPA do not yield interests
agreement to curtail production. income for banks. So, banks have started cross
Volatility in the exchange rate on account of subsidization i.e. cover for loss due to NPA by not
global financial market developments including reducing lending rate with a decline in policy rate.
increase in federal rate- this could lead to outflow This increases profitability from well functioning loans
of FII, increase in US dollar exchange rates, thereby reducing losses from NPAs.
increase in price of imports which could impart
The environment for timely transmission of policy
upside pressures to domestic inflation.
rates to banks lending rates will be considerably
Effects of the house rent allowances under the improved if:
7th Central Pay Commission (CPC) award
The banking sectors non-performing assets
which have not been factored in the baseline
(NPAs) are resolved more quickly and efficiently,
inflation path.
by way of establishing Public Sector Asset
Impact of Demonetisation Rehabilitation Agency (PARA).
First, consumer demand held back by Recapitalisation of the banking sector is
demonetisation is expected to bounce back. hastened.
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Society www.iasscore.in
Women Voices in Elections

Context Historically under patriarchal family and social
Generally the issues of special concern to structures women have been relegated to the
household and their participation in public sphere
women are missing from election
has been very minimal. This trend continued
campaigns. Is this because women are not
even after the emergence of democratic polity
yet seen as a "vote bank" despite the fact
based on universal adult franchise.
that female voters are turning out in ever
Low level of literacy rates among women
larger numbers and, increasingly, exercising
hindered their empowerment, knowledge and
their franchise independently of male family
understanding of various issues, channels
members or due to patriarchal mindset?
available to them for redressal of their issues. In
The constitutional provisions and reservation these circumstances they followed what male
at local government are increasing their members said.
participation in the decision making process Indian women are tradition and custom bound.
but yet the women voices in elections are fewer Not raising their voice, accepting whatever male
as compared to their population size. members say have become part of their life.
Many even consider suffering as their destiny
and as part of penance for past acts.
R
ecent elections have seen a number of
Lower number of women candidates in elections
women issues being prominently taken up,
prevented mass mobilization of women around
the issues of liquor ban in Bihar, bicycles for
women issues. Out of nearly 8, 250 candidates
girls in UP, drinking water, sanitation are some of them.
in 3014 general elections only 668 were women.
This indicates that there is an increased qualitative
participation of women in elections and not just Less participation of women in rank and file of
quantitative. Despite this there are various issues like political parties was another factor. Rank and
domestic violence, low sex ratio, reservation for women, file plays very important role in taking the ground
better economic opportunities which are not taken or if issues to higher levels which then become
taken are shelved after elections. This presents a important issues in elections.
dismal picture of poor women voices in Elections which They have never voted on bloc like Dalits and
on one side shows increment in voices but it fades Muslims in any election. It also shows that there
after the election result. has never been a concerted effort by political
parties in mobilizing them.
Why low number of women issues in Women participation in media is also low. Media
elections? generally plays the role of opinion maker and
A number of historical, social, cultural and political highlights issues. In absence of women
factors have combined together to keep women participation women issues are relegated to
voices unheard in elections. backstage.

Despite these factors active recent elections have

shown women becoming vocal about their issues FPTP: First past the post system. It is a
and this has increased their voice in elections. voting method in which voters are required to
indicate on the ballet the candidate of their
Why in recent there have been rise in receives more votes than any other wing.
women Voice in elections?
Reservation for women in panchayats gave a Liberalization, globalization and penetration
dignified status and equality to women. It gave of media, cinema made women much more
them confidence that they can take up and solve aware, made them to compare them with others
their issues. Various women Sarpanchs took and understand their situation. Khabar Lahariya,
up the issues of liquor, street lights and women Network of Women in Media, India (NWMI)
safety, women trafficking, girl child marriage. are some news organizations which cater to the
Democratic politics at village and urban level issues of marginalized women at local level.
gave women understanding of their rights, working Emergence of women leadership, which take
of democracy and they started asserting their women issues proactively. Women Chief
rights through demands. Ministers, ministers and other role models gave
Emergence of SHG movement which gave voice women space for participation and putting their
and confidence to women. It also provided local concerns.
level leadership to women who were bold to Feminist movements have also played their own
mobilize women and preset their issues to role in raising women issues.
politicians.
Increased education among women made them What are its implications?
aware about their rights, factors which effect Increased women participation in elections in terms
their growth and they become more vocal about of voter turnout and issues raised is a good sign for
these issues. This is much more evident in urban Indian democracy. It will not only increase the faith
areas. Girls demand for their safety is the of women in democracy but will also help them in
prominent example of it. tackling various issues which they have been facing
till now. This will put pressure on the administration
A blog on Gender, Media and Election Watch to democratize the public spaces, government
lays out Girls' Charter of Demands for the offices like police station, judiciary (as happened in
Brihanmumbai municipal corporation polls on 21 Bihar and Delhi) and push out or reform patriarchal
February. The charter lays out a vision for a organizations like khap panchayats.
girl-friendly city, and lists a number of demands
under the "Right to safe and free mobility and What else should be done?
freedom from violence", "Functioning anti-
A quick scan of the manifestos of major political
sexual harassment cells in schools", "Right to
parties in the last few general elections shows that
safe spaces to learn and grow" and "Right to
gender issues figured prominently. But manifesto
hygiene, health and well-being".
promises on women's issues are clichd and are
conveniently forgotten afterwards. The failure in
It also lead to loosening the hold of patriarchy in passing the women's reservation bill in parliament
family. When women vote according to their own is a clear testimony of the lack of seriousness and
choice rather than according to the diktats of will of political parties in addressing women's issues.
male head it is natural that they will look for Therefore there is great need to change the mindset
candidates which address their issues. of men and focus on "he for she' campaign wherein
FPTP system which makes every vote important men see women as equal partners in development
and women as a block can play very important and give same importance to women issues.
role as it forced parties to take up women issues
to get their votes.

Election manifesto provisions related to Put women in power: Ensure political

Women should include: empowerment of women by approving the
Women's Reservation Bill in Lok Sabha.
Educate for equality: Comprehensive, well-
funded and long-term public education Police for the people: Change service rules
programmes to transform the culture of to recruit, promote and penalise police and
patriarchy and gender-based discrimination. prosecutors based on gender metrics.
Make laws count: Get each government Swift, certain justice: Improve the laws to
agency to produce a detailed and funded end violence and discrimination against
action plan to end violence against women women and sexual minorities.
and increase the number of judges to 40
Economic flourishing: Ensure dignified and
per million populations.
secure employment for women, with equal
pay for equal work.
**********

www.iasscore.in Environment
Chennai Oil Spill

Issue, Impact and Solution
Context and cycloalkanes, among other chemicals, that
On 28th January, MT BW Maple and MT are known to be toxic for fish and humans alike.
Further, the presence of such acutely toxic
Dawn Kanchipuram carrying LPG and
chemicals in the fish could prove fatal to animals
petroleum oil lubricant, respectively,
up the food chain.
collided off Kamarajar Port Limited in
Floating oil can be lethal to animals that are found
North Chennai resulting into spillage of
higher up the water column, such as sea turtles
bunker oil used by the ship into the Bay of
and dolphins that surface to breathe. Close to 40
Bengal. Since then it has made a catastrophic
turtles,classified as vulnerable by the International
impact on the environment in the region.
Union for the Conservation of Nature (IUCN), have
Hereby analyzing the concept of oil spill, its washed ashore covered in oil since the spill.
detrimental impacts on environment and Oil also poses a significant threat to sea birds
society. that dive to catch fish. Now is the time of the
year when migratory birds from all around the
world, like Siberian cranes and flamingos, visit
A
n oil spill is the release of a liquid petroleum
warmer climates. Heavy-oil messes with the
hydrocarbon into the environment, especially
hydrophobic properties of the birds feathers and
marine areas, due to human activity, and
reduces their ability to keep warm, exposing
is a form of pollution. The term is usually applied
individuals to severe weather conditions and even
to marine oil spills, where oil is released into the
death due to hyperthermia.
ocean or coastal waters, but spills may also occur
Heavily furred marine mammals exposed to oil spills
on land. Oil spills may be due to releases of crude
are affected in similar ways. Oil can also blind an
oil from tankers, offshore platforms, drilling rigs and
animal, leaving it defenseless. The ingestion of oil
wells, as well as spills of refined petroleum products
causes dehydration and impairs the digestive process.
(such as gasoline, diesel) and their by-products,
heavier fuels used by large ships such as bunker Another problem posed by floating sheets of oily
fuel, or the spill of any oily refuse or waste oil. liquids is that they reflect sunlight, thus reducing
the amount of light that percolates into the water.
Detrimental impacts of Oil Spill This stalls photosynthesis deeper down and
affects the balance of the ecosystem.
The recent Chennai oil spill has adversely affected the
humans, animals and rich biodiversities of the region. Mud and clay particles present in the sea, along
with the chemicals used in oil dispersants, get mixed
Impact on marine ecosystem together and settle in the form of heavy, oil-rich
An oil spill, no matter how big or small or where, particles on the seabed. This is a predicament for
is considered a serious threat to marine bottom-feeding organisms, especially
environment. Petrochemical oil contains several commercially valuable species such as prawn and
aromatic hydrocarbons such as alkanes, xylenes crabs whose primary habitat is the seabed.

Impact on mangroves Physical recovery- In the case of an oil spill in the

It will cause problem to forests in the region and sea, it is advised to barricade the area with booms,
hence will affect the rich marine biodiversity of which are like floating tyre tubes. This arrests the
the region. Reports indicate that the slick has spread of oil due to water currents. The first option
spread to Cuddalore in the south, will soon reach is always physical recovery, once the oil is contained
the Pichavaram mangroves and then northwards to use a vacuum sucker to remove the oil.
to affect the Pulicat mangroves. The Bioremediation- It is a recovery method to control
compromising of mangroves would be a disaster oil spill where oil-eating bacteria are used. These
of epic proportions. are 3 kinds namely Sulfate Reducing Bacteria (SRB),
Impact on human livelihood Acid Reducing Bacteria and General Aerobic
Bacteria (GAB). Microorganisms such as Alcanivorax
There are two groups of chemicals in crude oils
or MethylocelaSilvestris can be used to break down
that are particularly hazardous to the health of
or remove oil.
Human beings. One is volatile organic
compounds (VOCs), which include chemicals like Oil zapping- It is a kind of bioremediation
benzene and xylene, and the other is polycyclic technique. In this technique, five bacterial strains
aromatic hydrocarbons. They can cause irritation are mobilized and mixed with a carrier material like
of the skin, inflammation of the eyes, and powered corncob. This mixture of five bacteria is
respiratory problems. called oil zapper. Oil zapper feeds on hydrocarbon
Volunteers and residents of the region have made compounds present in crude oil and converts it into
complaints of such issues. In the long term, the harmless CO2 and water.
damage could be far more severe in the form of Bioremediation accelerator- Oleophilic and
Cancer, specifically leukemia and skin cancer, hydrophobic chemical, containing no bacteria,
along with chronic body pain and an increased chemically and physically bond to both soluble and
likelihood of heart attacks. insoluble hydrocarbons. This bioremediation
Further, it will impact the livelihood of fishermen accelerator acts as a herding agent in water and on
as oil spill affect their fish catching ability; the surface. Undetectable levels of hydrocarbons
coastal trade and tourism and marine resource can be obtained with the use of Bioremediation
extraction activities in the region. accelerator.
Controlled burning- Controlled burning can
Solutions
effectively reduce the amount of oil in water, if
Measures to Prevent oil Pollution done properly. But it can only be done in low wind
A major effort needs to be made to control and and can cause air pollution.
remove oil pollution. In order to control oil spills at Use of dispersants- Oil floats on water because of
sea, it is necessary to take the following actions: high surface tension, dispersants work by reducing
Transferring oil from a tanker which has been involved the surface tension between oil and water. So oil
in an accident to another vessel using either the would dilute and it will fall to the ocean floor.
tankers own pump or the suction pump of the reserve However, laboratory experiments showed that
vessel to limit the amount of spill transferring. dispersants increased toxic hydrocarbon levels in
fish by a factor of up to 100 and may kill fish eggs.
Containing spilled oil: immediate attempts have
It can also contaminate coral in the sea.
to be made to contain the spill and prevent it
from spreading to beaches, navigation channels, Solidifying- Solidifiers are composed of tiny,
harbors etc. floating, dry ice pellets, and hydrophobic polymers
World over many technologies have been implied to that both adsorb and absorb. They clean up oil
containing and neutralizing impact of Oil spill such spills by changing the physical state of spilled oil
as Oilzapping, bioremediation, control burning, use from liquid to a solid, semi-solid or a rubber-like
of dispersants etc. material that floats on water. Solidifiers are insoluble

in water, therefore the removal of the solidified oil have been proven to be relatively non-toxic to aquatic
is easy and the oil will not leach out. Solidifiers and wild life.
Conclusion
As per the Geneva Convention (1958) every state harmful agents. The coastal state is obliged to
must draw its regulation to prevent pollution of the undertake in the safety zones (around island/
seas through discharge of oil from ships or installations) all appropriate measures for the
pipelines or resulting from exploitation and protection of the living resources of the sea from
exploration of the sea-bed and its sub-soil. It must harmful agents.
take measures to prevent pollution of the seas
Concrete steps are must to reverse the
from the dumping of radioactive waste and other
environmental impacts of oil spill.
**********

Culture www.iasscore.in
GI Tag
Meaning and Significance
Context Protection under TRIPS is defined in two articles
Article 22 and 23.
A geographical indication (GI) is a name or
sign used on certain products which As per Article 22, GIs are protected to avoid
corresponds to a specific geographical location providing public with misleading information and
to prevent unfair competition, and thus, products
or origin (e.g. a town, region, or country).
under this article are provided with standard
India, as a member of the World Trade protection. On the other hand.
Organization (WTO), enacted the Geographical Article 23 is mostly used for GI tags for wines
Indications of Goods (Registration and and spirits and are subject to a higher level of
Protection) Act, 1999 has come into force with protection.
effect from 15 September 2003. GIs have been defined under Article 22(1) of
Darjeeling tea became the first GI the WTO Agreement on Trade-Related Aspects
tagged product in India, in 200405, since of Intellectual Property Rights (TRIPS)
Agreement as: Indications which identify a good
then by November 2015, 272 had been
as originating in the territory of a member, or a
added to the list.
region or a locality in that territory, where a given
The GI tag ensures that none other than those quality, reputation or characteristic of the good
registered as authorised users (or at least those is essentially attributable to its geographic origin.
residing inside the geographic territory) are It is significant to mention that GI rights are
allowed to use the popular product name. given to an association of persons, producers,
organization and not to a single person because
Introduction geographical indications are not built up by one
The origin of the GI tag can be traced back to individual but by a community of persons.
when WTO administered an international The registration of GI is valid for a period of 10
agreement in 1994 called the Agreement on Trade years each which can be renewed from time to
Related Aspects of Intellectual Property Rights time. If the GI is not renewed then it will be
(TRIPS) to safeguard IPs of member countries removed from the register.
and set down certain standards for it.
GI TRADEMARK
It is given to a product from a certain place It is given to a product from a certain place.
It can only be made at a certain place It can be manufactured anywhere around the world
by the same company.
It is given for Goods It can be given for the Goods or the Services
It indicates the geographical location of the It is enjoyed by a single entity and is exclusive and
product and is enjoyed by the entire not shared.
community of the region

A product is best known by its reputation, cases, and it can lead to extra earnings from
characteristics and its quality, which is in most tourism, and indirectly leads to sustainable
cases dependent on its place of origin. Development.
GI status is also believed to be the oldest form The tag is developed to protect consumers from
of Intellectual Property (IP) protection. Some misleading information and fake products,
products worldwide with GI tag include and producers from having to resort to selling
Champagne, Feta cheese, tequila, Ceylon tea, goods for lowered prices. For instance, if
Antigua (Guatemalan) coffee, and Kalamata olive. someone sells counterfeit Darjeeling tea, he can
The tag is given to authorised users in a certain be taken to court, because that product bears a
country, who can use it exclusively, and no GI tag in India.
unauthorised person is permitted to use the Products with a GI tag get premium pricing,
same. thus helping exporters earn better, and which in
Customs authorities have the power to seize turn incentivises producers.
imported goods at the border, if there is prima For poorer economies, the product recognition is
facie evidence that a product is in infringing on like an insurance or protection, especially for
the geographical indication of the rights holder. those where manufacturing happens across rural
Once a GI is registered for any good in a country, areas and with producers who cannot invest in
the database on WTO website should be updated branding owing to a lack of marketing muscle.
and a circular or notice should be shared with its For these producers the GI tag helps create
member governments. The government in turn brand equity. Like it has in the case of tequila
should publicise in their respective countries the manufacturers in Tequila (Mexico).
fact that a certain GI registration has been Seven agricultural products of the Maharashtra
awarded. This multilateral GI registration system state were issued the Geographical Identification
is inarguably required immediately. (GI) mark this week.
GI tags have to be registered country-wise if
Beeds custard apples, Jalnas sweet
they are to bear any significance because
oranges, Jalgaons Bharit Brinjal, Waigaons
multilateral GI registration system hasnt been
turmeric, pomegranate from Solapur, figs from
established yet under WTO; except of course in
Purandar and raisins from Sangli were issued
the case of wines and spirits.
GI certificates by the Agricultural
For Example: Sometimes countries go for a joint
Geographical Indications.
GI: Philippines and other countries are selling
their rice as Basmati in EU and USA.
As most of the GI products are from villages, an
Significance: export market is created for these areas and leads
As per the TRIPS agreement, member nations to spurt in international demand for them. Moreover,
have to respect geographical indications, and farmers are benefited by this process after they
have to undertake measures to prevent violation register as authorized users.
of GI rights and another nation cannot impart The GI tags helps consumers to get quality
trademark for the same product that enjoys GI products of desired traits.
status in a member nation. This identity helps in preventing misuse of a
The GI tag ensuresthat none other than those registered GI. Moreover, the legal protection of
registered as authorised users (or at least those GI boosts exports. GI tag not only helps the
residing inside the geographic territory) are countrys export market but also helps in
allowed to use the popular product name. promoting economic prosperity of the producers.
GI tag helps in increasing brand visibility and Registration of the product under the GI
increases the price of the product international facilitates better legal protection and the
market (because consumers in first world prefer authorised user can exercise his right to use the
such exotic items), it boosts exports, in certain tag effectively.

Fig. 1
India - GI Tags: The top five states that have the maximum
Government of India enacted Geographical number of products with GI tags are Karnataka
Indications of Goods(Registration and Protection) (33), Tamil Nadu (24), Kerala (22), UP (21) and
Act in 1999. (Came into force in 2003). Under Odisha (15).
this act, Registrar of Geographical Indications is GI tag surely makes us proud of the various products
the person that will take petitions for GI tag. of our country and if India wants to use the GI tags
An Intellectual Property Appellate Board hears for gaining a toe-hold in the world market, the
appeals over the decisions of the Registrar of government must first encourage awareness amongst
Geographical Indications. Geographical those producing these goods. There is a need to
Indications Registry is there to keep the GI- create a policy framework for it. While there is no
database at Chennai. In India, GI can be given doubt that GI status in itself is a brand building
to agricultural, natural or manufactured goods tool, the government will need to provide funding,
originating in the said area. tax breaks andeducation to make GI tags count.
**********

www.iasscore.in Defence
Make in India in Defence:

Real or Rhetoric?
Context
The 'Make in India' programme puts great procedural measures that have been
thrust on sustainability. The Make in India introduced to make the procurement
defence initiative by the Government is process more efficient and effective.
focusing its efforts on increasing
Under this the Centre is attempting to boost
indigenous defence manufacturing
MSME sector's contribution towards
and becoming selfreliant. For Makein
indigenous manufacturing in defence from
India to take off in defence production,
the present 20-30 to 70 per cent in the
Govt has taken effective measures in the
next five years. This will not only boost
last one year.
opportunities for the MSME sector, but
First and foremost step is to revamp the also lead to job creation. Besides
India's infamously longdrawn Government is also working to promote
procurement process which leads to manufacturing clusters for indigenous
technology obsolescence, higher cost and defence production and finalising Request
frustrated investors. On this line for Proposals (RFPs) for procuring
government has released new Defence ammunition of the value of Rs 2,500 crore
procurement Procedure in 2016. per year.
DPP2016 has introduced specific However, the released DPP 2016 document
provisions that will act as a growth stimulus is not a complete one, as a key chapter on
to the domestic defence industry in order strategic partnership and all the relevant
to promote indigenous design and annexure, appendices and schedules are
development of defence equipment. still a work in progress and are expected
to be released later as part of the
DPP 2016 has introduced the BuyIDDM?
comprehensive DPP2016.
category of acquisition and accorded it the
top most priority. For the first time ever,
provision to procure equipment with Introduction
enhanced performance parameters, has
India has the third largest military in the world
been accounted for this will enable the
and is the sixth biggest defence spender. The
armed forces procure the most advanced
military budget of India is about 2.4% for year 2015
weapon systems available in the market. of the total GDP as per World Bank statistics.
DPP 2016 also provides greater impetus
According to the Stockholm International Peace
to the MSMEs, with certain category of
Research Institute (SIPRI) report, India was the
"Make? projects reserved exclusively for
worlds largest importer of weapons and military
them. There are also other provisions and
equipment in 2013, 2014 and 2015.

India is one of the largest importers of conventional its client as an inducement. Under the offset
defence equipment and spends around 30% of its clause - Mandatory offset requirements of a
total defence budget on capital acquisitions. At present minimum of 30% for procurement of defence
60% of defence related requirements are met through equipment in excess of USD 307.69 million have
imports, this makes it imperative to bolster domestic been envisaged.
manufacturing to reduce imports and evolve robust Defence Procurement Procedure (DPP) - DPP
domestic defence industrial ecosystem. has been amended in 2016 to provide for IDDM
products (Indigenously Designed, Developed and
Make in India in Defence Manufactured). Under this category preference
Indias imports, accounting for 14 per cent of global would be given to procurement from Indian
arms imports, were three times greater than those vendors of products that are indigenously
of China and Pakistan. A major reason for the designed, developed and manufactured, and have
high level of imports is that Indias arms industry at least 40% indigenous content.
has so far largely failed to produce competitive Duty Exemption: The custom duty exemption
indigenously-designed weapons. on import of defence equipment has been
This is largely because defence sector is dominated removed to encourage imports and incentivize
by inefficient public sector in design development, domestic manufacturing.
research and Manufacturing. Strategy for Defence Exports: In September
2014, the Strategy for Defence Exports (SDE),
We need to learn from US and China both draw heavily
which provides clear cut procedures and an
on experts from their industry, universities and the
institutional mechanism for export promotion and
SME sector and use sale of defence products as a
regulation, was announced.
strategic tool in diplomatic negotiations.
Make in India Defence Portal: A Make in India
There is a need to encourage private sector portal for Defence Production has been launched.
participation in Defence production. Private sector It provides policy and procedural issues relevant
participation will help foreign original equipment for defence manufacturing industry.
manufacturers to enter into strategic partnerships
with Indian companies and leverage the domestic Defence Procurement Procedure (DPP)
markets as well as aim at global markets.
The Defence Procurement Procedure (DPP) is
Besides helping in building domestic capabilities not merely a procurement procedure- it is also
this will also bolster exports in the long term, reduce an opportunity to improve efficiency of the
imports and current account deficits significantly. procurement process, usher change in the mind-
The countrys extensive modernisation plans with sets of the stake holders and promote growth of
an increased focus on homeland security and Indias the domestic defence industry.
growing attractiveness as a defence sourcing hub However, these opportunities are not natural
could act as incentives for luring Private sector too. outcomes of merely publishing the DPP and are
highly dependent on the manner in which the
Government Policy DPP is implemented. In that sense, DPP should
Various steps taken up by government in this be amply supported by an eco-system of result
context are as follow: orientation, commitment to timelines, iterative
learning and continuous improvement- involving
FDI: 100% FDI in defence sector: Up to 49%
the active ownership of all stakeholders
under automatic route; FDI above 49%, through
concerned. Hence the Ministry of Defence (MoD)
Government route where it is likely to result in
is determined to treat DPP 2016 as a dynamic
access to modern technology.
and an evolving document and is committed to
Offset requirement: Offsetagreements are
making improvements based on emerging data
arrangements in which the seller of a product or
and anecdotal evidence, to realize the vision of
service agrees to buy products or services from
Make in India in the defence sector.

The Ministry of Defence (MoD) has released the

revised Defence Procurement Procedure (DPP) the revised DPP has enhanced the
on 28 March 2016. The document came into indigenous content requirement under the
effect from 01 April 2016 and is applicable to all existing Buy (Indian) category from the
procurement since then. The revised document earlier 30 per cent to 40 per cent.
has set the tone to boost the Make in India New Make Chapter - Effecting a crucial
initiative in the defence sector, and to speed up change, the new DPP has divided the Make
the procurement process. projects into two categories Make-I
(Government Funded) and Make-II (Industry
DPP2016: SALIENT ISSUES Funded) besides giving a decisive say to
the Micro, Small and Medium Enterprises
The DPP-2016, envisages an array of features
(MSMEs), which had long craved government
which articulates the peculiar nature of
attention for their role in defence
defence acquisition and the imperatives of
indigenisation efforts.
self-reliance in defence production, a new
procurement category, favouring purchase of For the MSMEs, the new procedure
locally designed, developed and provides them the first right to undertake
manufactured products, higher yet flexible prototype development up to Rs.10 crore
indigenisation content requirement in the under the government-funded Make projects
existing Buy (Indian) and Buy and Make (up to Rs. 3.0 crore in case of Make (Industry
(Indian) procurement categories, a Funded)). In other words, only when MSMEs
comprehensively revamped Make procedure; are not interested in taking up small valued
an institutionalised set of steps for processing projects, it can be opened up for participation
the request for information (RFI) and certain by the bigger industry players.
measures to deal with procurement in single-
Introduction of L1-T1 Methodology for
vendor situations.
Award of Contracts. In a clear departure
Buy (Indian-IDDM) Category - DPP-2016 from the past, DPP-2016 has, for the first
has introduced a new procurement category, time, introduced what is widely known as
Buy (IndianIndigenously Designed, the L1-T1 methodology for selecting the
Developed and Manufactured), or Buy (Indian vendor under the Buy and Buy and Make
IDDM). In terms of prioritisation, the new schemes. The new methodology, in
category, which would also be used for essence, means that the final bidder would
procurement of all locally designed and not necessarily be selected on the basis of
developed items under the revamped Make lowest price quoted by the technically-
procedures, is placed above the existing compliant vendors (the so-called
Buy (Indian) category which, in turn, is L1methodology), but by a combination of
placed above the other categories, namely price and superior technology offered by
the Buy and Make (Indian), Buy and Make qualified vendors.
and Buy (Global), in that order. Under the
Provision for Single OEM, Multiple Bids
new category, indigenously designed
and Multiple Bids by Single Indian
equipment with 40 per cent indigenous
Vendor. Accepting the uniqueness of
content (IC), or equipment not necessarily
defence procurement, DPP-2016 has
designed in-house but having a 60 per cent
incorporated two provisions single OEM,
IC, is intended for procurement from the
multiple bids and multiple bids by single
local industry.
Indian vendor in which although the bids
Higher yet Flexible Indigenous Content are single-vendor in nature they would not
Requirement. With a clear intention to be retracted because of lack of competition.
boost the local content in procurement, The first case is likely to arise in Buy and

radical reforms, they were the fifth-largest arms

Make (Indian) category in which a single exporters by 1987 and, in 2014, the third-largest.
foreign original equipment manufacturer
In contrast, India, with the third-largest military
(OEM) offers the same product through
and the seventh-largest defence budget, is totally
multiple bids in collaboration with a number
dependent on the West for critical equipment.
of Indian companies.
Several parliamentary committees and experts
Hike in Offset Threshold Limit. DPP-2016 have highlighted a shortage of fighter jets,
has raised the offset threshold limit to Rs helicopters, submarines, missiles, artillery,
2,000 crore (approximately USD 305 million) assault rifles and ammunition, etc. Indias battle-
from Rs 300 crore. readiness vis-a-vis the China-Pakistan alliance
is getting worse by the day. This needs to
Definition of Indian Vendor. Providing
change.
clarity as to who is an Indian vendor, DPP-
2016 defines the same as an Indian entity
Way Forward
(which could include incorporation, ownership
model, and proprietorship, among others) We need a bold three-pronged approach: abolish
that is established under the Companies Act state monopolies, support Indian private
or any other applicable regulations sector, and ease the entry of global OEMs.
Defence procurement should be handled by an
Single Vendor Situation. In a major
independent Defence Commission, headed by a
departure from the earlier DPPs, DPP-2016
technical person of cabinet rank, reporting directly
has allowed the procurement process to
to the PM, akin to Indias highly successful
continue in certain situations where only one
Space and Atomic Energy Commissions. MoD
bid is received in response to an request for
being the enduser can provide its requirements,
Proposal (RFP).
inputs and/or criticism but not interfere.
The Defence Commission should connect with
Comparative Analysis of Defence private sector, academia, military veterans and
talented individuals and identify critical technologies
Production and Procurement INDIA vs
that India should be completely selfreliant in. These
US & CHINA
could be stealth systems, avionics, propulsion
The two defence giantsthe US and China systems, precision munitions, UAVs and advanced
have contrasting manufacturing models, with materials etc. The rest can be imported as trying
dependence on private and government sector, to do everything is impractical.
respectively. Excellence in the US is driven by
DRDO and the DPSUs needs to be privatised -
the capital markets and in China by the fear of
Their scientists, engineers and technical staff
instant retribution. The US allows fully owned
would be more productive under private owners.
subsidiaries of foreign defence companies such
They should compete with other private entities
as Airbus, BAE, Saab, Rolls Royce, Elbit, etc,
for business.
while China doesnt follow this path.
MoD needs to undertake a Procurement Maturity
There are similarities as both the US and China
Assessment (PMA) by external experts. Large
have a fierce will to dominate the world through
procurement programs in the west are handled
a robust economy and a strong military. Both
bydulyqualified private consulting firms under
draw heavily on experts from their industry,
the overall supervision of MoD.
universities and the SME sector; and use sale
of defence products as a strategic tool in The FDI limit in defence should be raised to
diplomatic negotiations. 100% and subjective conditions like modern
technology should be dropped. MoD should
In the late 1970s, the Chinese realised that their
select strategic partners for at least three large-
defence industry was becoming a golden rice
scale procurement programs by the end of 2017,
bowlrich, yet begging for more. Undertaking
to facilitate longterm investments.

Conclusion
Make in India in defence has unfortunately A year has passed in the debate on FDI. The
not taken off till now,despite the talk. Changing increase from 26% to 49% has yielded
the statusquo requires a radical shift in precious little. It needs to be raised to at
procurement strategy, approach and funding. least 74% to enable real high-tech
For real Make-in-India to happen, we need a investments. The ecosystem that will be
bold three-pronged approach: abolish state created will allow Indian companies and
monopolies, support Indian private sector, and professionals to learn, innovate and export
ease the entry of global OEMs further. India is back to the OEMs. Two decades from now,
the next emerging Superpower. It is important some Indian companies may rise to become
that we build our Defence capabilities competitors to global defence players.
indigenously to realise this dream.
**********

Int. Affairs www.iasscore.in
North Korea
Test Ballistic Missile
Context The recent launch of a medium-range ballistic missile
North Korea had successfully testfired a by North Korea on 12 Feb, 2017 is yet another
new type medium-to-long-range reckless provocation by its leader Kim Jong Un.
ballistic missile on 12Feb 2017. N. Last year, the Kim regime tested a dozen missiles
Korean leader Kim Jong Un supervised the and even vowed to launch an intercontinental ballistic
test of the Pukguksong2, aweapon capable missile that could hit the U.S. Each time the tests
have triggered angry and anxious responses from
of carrying a nuclear warhead. The missile
world leaders, particularly from Japan, South Korea
was fired at a high angle in consideration of
and the U.S.
the safety of neighbouring countries.
The UN Security Council has already imposed a
Its first such test since U.S. President
host of sanctions on the country. But neither
Donald Trump was elected in November, sanctions nor warnings issued by other powers have
2016. It drew swift condemnation globally had any impact on North Koreas aggresive
and the leaders of South Korea, China, Japan behaviour.
and US are worried over the unstoppable
The latest missile test, the first after Donald Trump
nuclear developments in North Korea.
became the U.S. President, comes at a time when
Japan condemned the test, while the head of he was hosting Japanese Prime Minister Shinzo
the UN security council cited it as a "clear Abe. This is not the first time North Korea is
violation" of numerous Security Council challenging a new U.S. President with a weapons
resolutions. North Korea has been hit by five test. In 2009, a few months after Barack Obama
sets of UN sanctions since it first tested a took office, Pyongyang conducted an underground
nuclear blast. US saw it as a provocation and
nuclear device in 2006, but has insisted it
responded with the tightening of international
will continue to build its Nuclear capabilities.
sanctions on the country.
Introduction Pyongyangs weapons programme
The founder and first leader of North Korea, Kim Il North Korea has a long history of developing
Sung, created the countrys policy of juche or self- lethal weapons, including long-range missiles
reliance, which cut off North Korea economically and nuclear bombs
and diplomatically from the rest of the world, even 1970s North Korea starts working on a
in times of great need, such as famines. version of the Soviet Scud-B (range 300
To become self reliant in defence capabilities, North km). Test-fired in 1984.
Korea has conducted five nuclear tests since 2006, in 1987-92 North begins developing variant of
violation of international law. Previous two tests were Scud-C (500 km), Rodong-1 (1,300 km),
conducted in 2016, including one that was a powerful Taepodong-1 (2,500 km), Musudan-1 (3,000
hydrogen bomb. The North Korea is believed to have km) and Taepodong-2 (6,700 km)
an arsenal of nuclear weapons but the size is unknown.

All countries must inspect cargo in all airports and

1989 US satellite pictures reveal a nuclear sea ports destined for and coming North Korea.
reprocessing plant at North Koreas
Countries working in North Korea financial and
Yongbyon complex
banking sector are obliged to freeze assess of
1998 August North Korea test-fires its first companies and other entities linked to its missile
long-range ballistic missile, a Taepodong-1. and nuclear programmes
2003 North Korea withdraws from the Nuclear Tightens an arms embargo by banning sales of
Non-Proliferation Treaty. small arms and bars vessels suspected of
carrying illegal goods for North Korea from Ports.
2005 For the first time, North Korea states
UN member states will expel North Korean diplomats
that it has nuclear weapons.
engaged in smuggling or other illegal activities.
2006 July 5 North test-fires seven missiles,
Ban on aviation fuel exports to North Korea,
including a long-range Taepodong-2
including kerosene type rocket fuel
2006 October 9 North Korea carries out its A missile test launch would further three goals
first nuclear test for North Korea
2009 April 5 The North launches a long- North Korea wants to test years of investment
range rocket and announces it will restart in missile research and development. A test would
its Yongbyon complex despite UN not only serve as a stern warning to the region
condemnation. about the strength of North Koreas ballistic
2009 May 25 North Korea conducts its missile capabilities, but also would enhance the
second underground nuclear test, sparking legitimacy of North Korean missiles in the
tougher UN sanctions. weapons proliferation marketplace.
Pyongyangs strategic objective is to raise the
2009 July 4 North test-fires seven ballistic
stakes for the Six-Party talks, which have stalled
missiles off its east coast.
since North Koreas refusal to return to the table
2013 February 12 North Korea conducts third last November. With little incentive for
and largest nuclear test. Washington to relent on its long-standing
2015 May North Korea says it successfully insistence that Pyongyang must first agree to
test-fired a submarine-launched ballistic return to the talks without preconditions and the
missile. global perception that Iran has become
Washingtons top priority, a missile test would
2016 January 6 North Korea says it has raise the level of tension and bring focus back
detonated a hydrogen bomb. to North Korea.
2017 February Test fired medium to long Further, a test launch would put yet another issue
range ballistic missile on the negotiating table and, Pyongyang hopes
distract attention from the core issue of its nuclear
weapons program.
UN Sanction
Domestic pressure may also be at play. A missile
The UN Security Council agreed to start work on test would demonstrate the militarys supremacy
new measures even though five sets of UN in national policymaking. A launch could also be
sanctions since the first nuclear test in 2006 have a tremendous morale boost for the North Korean
failed to halt the Norths nuclear drive. public.
Sanctions Imposed on North Korea The regime has been testing engines for a new
missile since at least 2002, and a successful
Ban or severe restriction on exports of iron and
test would bolster Kims claims that he is
iron ore, coal, gold, titanium and rare earth metals
developing advanced technology for his people.
from North Korea and Prohibits the supply.
This would have the added benefit of boosting

nationalism as a counterweight to increased Way Forward

international pressures on the regime.
As during the Iran case, the European Union
Implications: could also play the role of mediator by inviting
The North Korean ambition to attain long-range both sides to a dialogue for managing the crisis,
missiles has severe implications for military strategy and insisting on a peaceful resolution.
and geo-politics of the region and at international The US should refrain from an over-hasty
fora. Some of these are as follows: deployment of the THAAD system or of its
nuclear weapons on the territories of its regional
North Koreas actions may in turn compel its
allies. Such actions may exacerbate the current
rival countries, especially South Korea, Japan
standoff, not only with the DPRK, but also
and USA, to deploy nuclear weapons for the
antagonize China and Russia as well, as both
defense of US allies in the region against any
are vehemently opposed to the deployment of
provocative measures by the DPRK.
the THAAD system in the Korean Peninsula.
The DPRKs actions can inappropriately
Both sides must refrain from further provocation
encourage to other NPT member countries to
to try and arrive at a universally acceptable
purse nuclear weapons technology.
solution. In the current scenario, engagement
DPRK military initiatives will disturb arms via dialogue is the best, and perhaps the only
control and disarmament initiatives at regional
option that could lead to the denuclearization of
and global levels among major competitors. Any DPRK. The Iran Nuclear Deal is a useful
countermeasure taken by USA in the region, in prototype for the international community to
the form of deployment of THAAD or of nuclear
develop such a roadmap
weapons, could lead to increased antipathy
As China and Russia have closer relations to
between China, Russia and the US. These
DPRK, they may act as a bridge between it and
measures would also negatively impact arms
the US, South Korea and Japan, potentially reducing
control and disarmament initiatives.
tensions, encouraging a negotiated solution and
A test would raise questions about the future working towards denuclearization of DPRK to
stability and security of the region and North restore peace and stability in the region. The Six-
Koreas enduring role as the regions troublemaker. party talks initiative should therefore be restarted.
International security and strategic stability is
locked in complex matrix of arms control The six-party talks aim to find a peaceful
measures and balance of power. In this context, resolution to the security concerns as a
if even one country be it USA, Russia or result of the North Korean nuclear weapons
China triggers an arms race, it would create a program. There has been a series of
catastrophic chain reaction among all nuclear meetings with six participating states: 1.
countries, especially the US, China, Russia, South Korea, 2. North Korea, 3. United
DPRK, India, and Pakistan, due to their existent States of America, 4. China, 5. Japan, 6.
threat perception and security dilemmas Russia. These talks were a result of North
North Koreas long-range missile is a direct threat Korea withdrawing from the Nuclear Non-
to the US, its territory, strategic forces and Proliferation Treaty (NPT) in 2003.
military bases in the region. The capability is
also a challenge for other nuclear countries. Sanctions are already in place. The regime is
Continuous provocative actions by North Korea already isolated. War is out of the question as
are also an indicator that it may take similar North Korea could directly target Americas allies
confrontational measures against its closer rivals, in East Asia with nuclear weapons. One less
especially South Korea, Japan, and the US and explored and apparently feasible idea is to get
also provoking to its rival countries. DPRK may China, which still has some leverage over
also attempt to challenge the security and territorial Pyongyang, on board and engage the Kim regime
integrity of its ideologically rival countries. diplomatically, without removing the sanctions.
**********

www.iasscore.in Society
Women Safety
and Government Initiatives
Context Insufficient presence and unresponsive/
aggressive attitudes of police and civic
Women safety has been a major talking
authorities.
point during last few years with new funds,
schemes like Nirbhaya Fund, One Stop Isolation from neighbors and lack of community
life.
Crisis Center being announced along with
amendments to legislations related to their Traditional notions of privacy and refusal of
safety. Despite these new initiatives and neighbors/police to intervene in situations of
domestic violence.
recognition of the requirement for women
safety the resources are not sufficiently Ideas and beliefs about appropriate behavior,
leading to reluctance to protest in cases of public
allocated for these interventions and if
violence.
allocated are not efficiently utilized
resulting into a situation where the crime A macho culture and a lack of respect for
women and womens rights, leading to cases of
rate against women has not been declining.
violence or harassment being ignored or trivialized
The low level of allocations in recent
by the general public as well as those in positions
budget is an example of it.
of authority.
What are the main inter ventions
O
ver the last few years, the issue of womens related to women safety?
safety has gained public attention. Even a
Women safety plays a very important role in the
random scan of the daily newspapers is
inclusion of women into the mainstream, their
enough to support this. Women run the daily risk
participation in economy and their empowerment.
and fear of harassment, attack, assault, rape and
Keeping these things in mind a number of schemes
murder, both within their homes and outside.
related to women safety had been launched. Some
Reasons: of them are:
The following are the reasons that make women Nirbhaya Fund: The Ministry of Finance,
in the city vulnerable: Government of India had set up a dedicated
fund called Nirbhaya Fund in 2013, for
A poor urban infrastructure dark or badly lighted implementation of initiatives aimed at enhancing
streets, derelict parks and empty lots, badly the safety and security for women in the country.
maintained public spaces, inadequate signage, It is a non-lapsable corpus fund. Various
lack of public toilets. ministries have proposed their schemes using
Empty streets at night because of early closing this fund. One Stop Centre, Universalisation
of shops and businesses or lack of a tradition of of Women Helpline and Mahila Police
street life. Volunteer were initiated by the Ministry of
Lack of adequate public transport and apathy of Women and Child Development from the
bus drivers, conductors and passengers. Nirbhaya Fund.

One Stop Center: One Stop Centres (OSC) is Apart from the above schemes a number of other
intended to support women affected by violence, initiatives like Scheme for Combating
in private and public spaces, within the family, Trafficking, provision of Protection Officers
community and at the workplace. Women facing under the Domestic violence Act are their which
physical, sexual, emotional, psychological and aims at ensuring the security of the women.
economic abuse, irrespective of age, class, caste,
education status, marital status, race and culture What has been the status of
will be facilitated with support and redressal. implementation?
Swadhar Greh: is a scheme catering to the Most of the schemes launched for women safety
primary need of shelter, food, clothing, and have been plagued by low allocation of resources,
medical treatment of women in distress. which has been shown in following table:
Name of Scheme
Nirbhaya Fund Swadhar Greh One Stop Center
Total corpus of Fund Estimated requirement Estimated requirement
3000,000 cr 675,000 cr 1,50,000 cr
Proposals recommended Fund allocated Fund Allocated
2200,000 cr 187,000 cr 1,11,000 cr
Fund allocated in budget
1100,000 cr (2016-17)
700,000 cr (2017-18)
Why has there been low level of there were only 311 Swadhar Grehs in the
implementation? country. Likewise, as of July 2016, there were
only 17 One Stop Centres supported by MWCD
There have been a number of reasons which have
throughout the country.
come together to result into low level of utilization
of the resources. Low level of women participation in the decision
making.
Lack of proper planning and needs assessment,
Though almost all States have appointed
Slow uptake of the scheme reflected in few
Protection Officers for implementing the Act, it
proposals received from States, and
is important for the Union Government to
Bottlenecks in implementation such as delay in continue supporting States for implementation
receipt of Utilization Certificates combined with of the Act. There are significant variations in the
the problem of low budgetary outlays, result in provision of Protection Officers and service
low coverage and poor outcomes of programmes. providers by different states and appointment of
The low budgetary outlays also result in low Protection Officers with independent charge,
coverage of these programmes. As of July 2015, which is not being done in several States.
Conclusion
Many cities across the world have implemented interventions with police and administration (such
innovative solutions to these problems. Strategies as sensitization and training) and activities with the
include community mobilization (such as forming general public (such as safety audits).
neighborhood associations), activities for women
Women use and benefit from the city in ways that
(such as self-defense training), activities with men
are different from those of men. This aspect must
(such as campaigns against violence), urban safety
be woven into even field of planning and managing
planning (such as safe design of public spaces),
the cityfrom gender assessment of major and

minor infrastructure projects to ensuring crisis The importance accorded to the issue of womens
centers and protocols at police stations and courts, security in the policy discourse is yet to translate
to conducting extensive media and education into budgetary priorities. Though it is argued that the
campigns and re-engineering the politics, and more. onus of instituting and funding these measures lies
with states, given the criticality of the issue, the Union
However, it must also be recognized that enhancing
Government must continue to supplement the efforts
womens safety requires a wider range of measures
of the States in this domain substantially. It is hoped
to be instituted by a range of ministries in sectors
that forthcoming Union Budgets will reflect a greater
like urban and rural development, sanitation,
commitment towards womens safety.
transport, police, law, and education among others.
**********
**********
Polity www.iasscore.in
Politicization of the
Post of Governor
Context administration as, even though Chief Ministers may
come and go, the Governor remains for a period of
Functioning of governor has come under
five years. Unfortunately the current position of law
criticism because of their partisan actions
permits the Centre to dismiss a Governor without
in recent times. It has been argued that the
even assigning any reasons.
politicization of the post of Governor has
impacted their functioning and which in Governor is supposed to wear two hats, one that of
turn is affecting the governance of the administrative head of state and the other of agent
of union government. India is a federal polity with
states. Therefore there is an urgent need
states being the federal units. In such
to look into the process of appointment
circumstances need was felt to appoint Governor
and removal of the Governor to arrest this
as the agent of union to ensure that
trend.
The administration of the state is carried out
according to the constitutional provisions
T
he federal structure of Indian democracy To prevent failure of Constitutional machinery
ensures that States, like the Centre, have a and recommend Presidents Rule in such
parliamentary form of government headed by circumstances
the Governor.
To reserve certain bills which goes against the
The Governor of a State plays a multifaceted role. In larger interest of the country, against DPSPs
the normal circumstances, he acts as a vital link and certain other types.
between the Central and the State Government. Under Apart from this he envisaged to act in his own
the Constitution, Governor is expected to play a double discretion in certain circumstances like appointment
role, as the head of the State and as the of CM when no party has clear majority, reservation
representative of the Centre. The Central Government of bills for Presidential assent.
has been kept strong in the Indian federal set up by
providing more powers under the Constitution. Under all such circumstances he is supposed to
Moreover, the procedure of appointment and the work in an impartial manner and in the best interest
removal of the Governor, also make the Centre strong of the country and state.
because his term of office is not secure and he acts
only on the directions of the Centre.
Why there has been politicization of
the post of Governor?
What is the Role Envisaged for The powers of the Governor combined with process
Governor? of appointment and removal of Governor leaves a
The post of Governor is not merely of symbolic lot of scope for political manipulations and this has
importance. He plays a crucial role in smooth been the reason for the politicization of the post.
functioning of federal democracy. Fixed tenure for Absence of security of tenure of Governor has
the Governor ensures continuity in the State been used to remove Governors which do not

align with the political ideologies of the Union for the overall growth and development of the
government. This was observed in 2004 and then country.
in 2014. Politicization of the Governor post and his
Absence of any criteria for appointment has been partisan functioning affects the co-operation
used to appoint persons favoring a political party. among federal units. The casuality can be
As a result of this Governors instead of functioning important legislations like GST which are
as independent constitutional functionaries have delayed. Certain anti-terror bills have blocked
functioned as agent of political parties. Destabilizing because of this.
the polity of the state through instigating factionalism The energies of the governments which should
(allegedly done in Arunachal Pradesh), stifling have been used for providing effective governance
governance by acting as parallel centers of powers are used to counter the designs of Governor or
(as accused by TMC government in West Bengal), Union government or political party in power in
reserving bills for Presidential assent and delay in center.
appointment of CM to allow for horse trading and It gives rise to factionalism, horse trading at the
then using it a means of imposing President Rule state levels, which attacks the principle based
has been some of the modus operandi. polity. Faith of people in democratic institutions
In the real effect and substance, the Governor looks and political parties is shaken which can give
after as well as nourishes the interests of the party rise to low voter turnouts.
or alliance to which he is politically related. He is Therefore there is urgent need to depoliticize the
there in the State to care for the interests of the office of Governor if democratic set-up, federal polity,
leaders of party as well as the interests of workers governance are to be strengthened in order to
of the party which has inducted him in the State. achieve the aspirations of the people.
These party leaders and party workers are in a
position to attract the vote bank of the State in What Steps Should be Taken to Avoid
favor of the party to which the Governor is politically this Trend?
related.
To achieve this, a lot of recommendations have
Governor in the real sense is a protem of the party been made by various commissions.
in power. As a natural corollary, he is to look after
Sarkaria Commission on center-state relations
the vested interests and health of the party in power
recommended that:
to which he is politically related. Consequently, his
judgment is bound to affect the States decision Governor should be provided with the security of
making process by the ideas which he already has tenure,
on his slate. In this state of mind intrinsically he He should not be a member of ruling political
will be pushed to do even apolitical act to safeguard party,
the health of his party, may it adversely affect the Chief Minister must be consulted for appointment
smooth functioning of the State. While passing of Governor,
through this sort of affairs, off and on, he has to He should not be from that state and should be
act as a cross Governor. It is submitted that the a person detached from politics
contradictory provisions relating to his tenure of
Governor should be removed before his tenure
office are the hurdle in his path to be realized as a
only on the grounds as if aspersions are cast on
positive Governor. Thus, Article 156 of the
his morality, dignity, constitutional propriety, etc
Constitution is used and misused to meet the
partisan ends of the party in power at the Centre. Puncchi Commission said that doctrine of pleasure
of President should be removed for office of
How it Affects Indian Polity? Governor.
India is a federal polity in which close co-operation Related to functioning of Governor and imposition
between the union and states is very much essential of President Rule, Supreme Court in S. R

Bommai case said that the substance used for Despite these recommendations the post of Governor
imposition of President Rule can be reviewed by has continuously been embroiled in one controversy
judiciary, thus putting a check on unscrupulous use or other, signifying that the individuals and their
of Article 356. It further affirmed that the test of ethics plays an important role in functioning of an
majority has to be done on the floor of assembly institution. Thus the solution lies in putting
not in Governor house, thus putting a check on the individuals with high moral standards who can
discretion of Governor. discharge their functions in an efficient, transparent
and impartial manner.
**********

www.iasscore.in Science
Policy on Synthetic Biology

Context accelerate the design, manufacture and/or
modification of genetic materials in living
Synthetic biology is an interdisciplinary
organisms. Unlike traditional genetic engineering,
branch of biology and engineering.
which typically involves the transfer of individual
Synthetic biology aims to make biology
genes between cells, SB involves the assembly
easier to engineer. Synthetic biology is the
of new sequences of DNA and even entire
convergence of advances in chemistry, genome.
biology, computer science, and engineering
It goes far beyond the modification of existing
that enables us to go from idea to product
cells by inserting or deleting small numbers of
faster, cheaper, and with greater precision genes. Cells can be equipped with new functions
than ever before. and entire biological systems can be designed.
A community of experts across many Compared to traditional GMOs therefore, synthetic
disciplines is coming together to create organisms involve much larger-scale
interventions.
these new foundations for many industries,
including medicine, energy and the SB provides tools to better understand biological
environment. systems and can also produce valuable products,
such as drugs, fuels, or raw materials for
India is taking its first steps to evolve a industrial processes or food. By reducing the
policy on Synthetic Biology (SB) through time, cost and complexity of developing these
which new life forms can potentially be products, the field represents opportunities for a
made in labs and existing life forms, such range of industries and has been linked to future
as bacteria and other microbes, tweaked economic growth and job creation. One report
to produce specific proteins or chemically (McKinsey Global Institute, 2013) suggests that
useful products. The Environment the field could be worth $100 billion by 2025.
Ministry will be convening a group of
Application and Benefits:
experts on biodiversity and biotechnology,
to assess synthetic biology work pursued Synthetic Biology is still an emerging field but there
in Indian labs, potential benefits and risks, are growing numbers of applications in the
pharmaceutical, chemical, agricultural and energy
and the implications of the transboundary
sectors.
movement of such life forms.
Commercial applications of SB tend to focus on
This technology could help produce drugs, creating microorganisms (such as E. coli, bakers
vaccines, fuel components and other yeast and microalgae) that can synthesize
chemicals in the future. valuable products, such as fuels, food and
pharmaceuticals. A notable example is the
Introduction engineering of yeast cells that synthesize
artemisinin, a drug used to treat malaria. Other
Synthetic Biology is the application of science,
medical applications of synthetic biology include
technology and engineering to facilitate and

engineering bacteria to attack cancer cells and Synthetic biology in microbial systems holds
designing new antibiotics. promise for production of drugs, vaccines, fuel
It is also possible to develop organisms that components and other chemicals. There are
can process waste and purify water (and therefore assorted labs in India that work on synthetic
restore damaged sites) by removing biology. Last December, Government officials
contaminants such as heavy metals and participated in the United Nations Biodiversity
pesticides. E. coli able to degrade methyl Conference of the Convention on Biological
mercury, a toxic metal that can accumulate up Diversity (CBD) at Cancun, Mexico, where about
the food chain. 8,000 delegates from 180 countries discussed
matters related to biodiversity.
Biofuels produced by engineered organisms such
as algae could be a more sustainable alternative India, so far, has no policy on synthetic biology,
to fossil fuels, as they can be farmed without and according to a presentation made at the
using arable land. As photosynthetic organisms, venue, it has promised to put in place a
algae also remove CO2 from the air, reducing it Synthetic Biology Team for articulating Indias
into energy rich hydrocarbons view at a forthcoming meeting.
SB has for some time been hailed as a potent Challenges:
contributor to food security, by developing new
crop varieties that are resistant to pests or that Although synthetic biology may have benefits for
have enhanced nutritional value. society, there are many scientific uncertainties
surrounding the development of synthetic life, cells
It reduce the impact of human land use on
and genomes, especially in terms of their impact
biodiversity, by, for example, reducing the need
on the environment.
for pesticide use
Engineering biosynthetic pathways provides an Transfer of genetic materials: The escape or
alternative and cost-effective method of release of novel organisms into the environment
producing drugs of natural origin, such as could radically and detrimentally change
morphine and aspirin. ecosystems. The transfer of genetic material to
wild populations is a major risk. Genes could be
It could be used to engineer solutions to other
transferred through horizontal or vertical gene
threats to biodiversity, including infectious
transfer, which could lead to toxic effects on
diseases like white nose syndrome, a fungal
other organisms, spread of harmful characteristics
disease that affects hibernating bats.
and loss of genetic diversity.
It is also possible to use SB for control of
Disrupt conservation projects and displace
disease vectors. Using gene drive systems, it is
small-scale farmers: while replacing natural
possible to change the genomes of populations
products with synthetic ones could reduce
of mosquitoes to make them less dangerous.
pressure on natural habitats, it could also disrupt
India and the Synthetic Biology conservation projects and displace small-scale
farmers. Saffron for example is usually picked
India is taking its first steps to evolve a policy
from crocus flowers but, now, it can be
on Synthetic Biology (SB), an emerging science
synthetically produced by yeast. Each hectare
through which new life forms can potentially be
of natural saffron growing (in Iran) provides jobs
made in labs and existing life forms, such as
for around 270 people a day replacing that
bacteria and other microbes, tweaked to produce
with synthetic versions therefore threatens
specific proteins or chemically useful
livelihoods.
products.The Environment Ministry will be
Raises serious and complex issues of global
convening a group of experts on biodiversity and
justice: A growing range of products (such as
biotechnology, to assess synthetic biology work
palm oil, rubber and Artemisinin) are beginning
pursued in Indian labs, potential benefits and
to be provided by synthetic biology, which may
risks, and the implications of the trans-boundary
deprive farmers of their only source of income
movement of such life forms.

and raises serious and complex issues of global structure and contribute to biodiversity loss due
justice. to the conversion of natural land
Large-scale increase in the use of biomass: Food and security challenges: These land-use
Another major concern relates to the large-scale changes may also have adverse impacts on food
increase in the use of biomass. A large number and livelihood security. The increased production
of synthetic biology applications involve of biomass could reduce access to local natural
organisms that convert biomass into valuable resources and cause small, self sufficient farms
products. Although use of feedstock could benefit to be replaced by large-scale commercial farming.
the environment by representing a shift away Temporary Solution: Finally, there are deeper
from non-renewable resources, increased demand concerns that synthetic biology may act as a
for biomass could also lead to increased sticking plaster rather than providing a profound
extraction of biomass from agricultural land. solution to biodiversity loss. In other words,
Soil Fertility and Structure: Fuel production synthetic biology may distract policymakers,
may require particularly large amounts of scientists and industry from the deeper underlying
biomass, which could reduce soil fertility and causes of biodiversity loss.
**********

Economy www.iasscore.in
Phasing Out of FIPB

Context The Minister of Finance who is in-charge of FIPB
would consider the recommendations of FIPB on
Recently Finance minister during his
proposals with total foreign equity inflow of and below
Budget Speech has announced phasing out
Rs. 3000 crore. The recommendations of FIPB on
of FIPB. The Budget has given a clear
proposals with total foreign equity inflow of more
indication of the government's intent to
than Rs. 3000 crore would be placed for consideration
further liberalise policies related to foreign of Cabinet Committee on Economic Affairs (CCEA).
direct investment. This decision is logical
as 90% of FDI comes through Automatic Why FIPB has been abolished?
route and there are plans to further
Over the years, increasing liberalisation of the
liberalize the FDI rules. countrys FDI regime has resulted in more and more
FDI through the automatic route. The FIPB has lost
its erstwhile pre-eminence and the discretionary
Background
power. Bureaucratic decision doesnt inspire much
There are two ways in which FDI could enter into confidence within foreign investors and create
India. They are Approval route and Automatic route. negative Investor Sentiments. Decision to scrap this
institution would show seriousness of present regime
The Foreign Investment Promotion Board (FIPB)
in creating enabling environment. This is in line with
offers a single window clearance for applications on
other reforms taken in recent past.
Foreign Direct Investment (FDI) in India that are
under the approval route. The sectors under About 90 per cent of the FDI is coming through
automatic route do not require any prior approval automatic route and only 10 per cent has to go
from FIPB and are subject to only sectoral laws. through theForeign Investment Promotion
Board(FIPB). Further in most of the foreign
The Foreign Investment Promotion Board (FIPB),
investment proposals under the government approval
housed in the Department of Economic Affairs,
route, an investor has to seek identical approvals.
Ministry of Finance, is an inter-ministerial body,
responsible for processing of FDI proposals and With the abolition of the FIPB, the proposal can be
making recommendations for Government cleared by the ministry concerned itself. Commenting
approval. In the process of making on the move, which is likely to reduce M&A
recommendations, the FIPB provides significant timelines.
inputs for FDI policy-making.
Over the last two years, government has taken up
The FIPB was initially constituted under the Prime a number of reforms to liberalise the FDI regime
Ministers Office (PMO) in the wake of the economic Under Make In India Program to make India a
liberalization drive of the early 1990s. The Industrial sector Powerhouse. The aim is to create
recommendations of the FIPB were approved through jobs for Millions of Indians. Currently, 65% of Indians
a 3-tier approval mechanism. The Board was are below the age of 35 years. Some important
reconstituted in 1996 with transfer of the FIPB to reforms undertaken are; In November 2015, 15
DIPP. The FIPB was transferred to the Department sectors were liberalised for FDI. Then in June 2016,
of Economic Affairs; Ministry of Finance in 2003. the government made sweeping amendments to the

FDI policy in seven sectors, most importantly in This is a clear message to investors that India is
defence, civil aviation and pharmaceuticals. the best bet for assured and rapid growth in an
otherwise uncertain global scenario. In the climate
Further, the government has taken other kinds of
of increasingly inward looking and protectionist
measures such as relaxing FDI norms for NRIs,
tendencies across the world, the abolishing of FIPB
PIOs and OCIs allowing their non-repatriable
and the statement of intent to further liberalise FDI
investments to be treated on a par with domestic
policy sends out an encouraging signal.
investments and not be subjected to FDI caps.
The liberalisation of FDI along with various other Benefits
measures including those under the Make in India
Government has shown its clear intent towards
initiative has shown visible impact. Foreign Direct
fast-tracking inflow of FDI, and the scrapping of
Investment (FDI) increased from 1,07,000 crores
FIPB is a notable step that would go a long way
in the first half of last year to 1,45,000 crores in
in supporting the objective of ease of doing
the first half of 2016-17. This marks an increase by
business.
36%, despite 5% reduction in global FDI inflows.
More than 90% of the total FDI inflows are now
India has emerged as the sixth largest manufacturing
through the automatic route and government also
country in world, up from ninth. We are seen as the
intent to further liberalize FDI. So, approval route
growth engine of the world.
would be applicable in only to few cases. For
But there is a lot of potential and they need to grow such cases government will come out with a
further. The net FDI inflows as a proportion of GDP revised mechanism. The powers will be
have shown a sharp rise, but it is still 1.7 per cent, delegated to the regulators or to the individual
compared to 2.8 per cent of China or 4.9 per cent ministries or department.
in the case of Vietnam - the highest among major
The decision could also be viewed in light of
developing countries.
government aim to bring transformative Shift in the
The decision to abolish FIPB and come up with a way country is governed. By moving from a
new roadmap can therefore be seen as part of the discretionary administration to a policy and system
larger strategy of the government to boost FDI based administration, from favouritism to
inflows. transparency and objectivity in decision making.

National sex
Offender Registry
Context base. This will include, inter-alia name and aliases,
registration of primary or given name, nicknames,
Amid growing crimes and offends against
pseudonyms, telephone numbers, addresses
women such as rape, voyeurism, stalking
including temporary lodging information, travel and
and aggravated sexual assault need is felt
immigration documents.
to set up a National Sex Offender Registry
(NSOR) in the country on the lines of those Besides, the information on offenders to be collected
maintained in western countries including for the Registry include those related to their jobs,
professional licenses, information of school, college,
United States, the United Kingdom,
institute with which they have been associated,
Australia, Canada ext.
vehicle information, date of birth, criminal history,
Thus, hereby analyzing the feasibility of current photograph, fingerprints and palm prints, DNA
such registry and its implication on society. sample, drivers license, identification card, PAN card
number, Aadhaar card number and Voter ID number.
The government plans to publicize offenders
A
ccording to National Crimes Records photographs, addresses, PAN card details, Aadhaar
Bureau, sexual crimes such as rape have card number, fingerprints and DNA samples through
increased from 24,923 in 2012 to 36,735 in this registry.
2014 and in case of children; it has increased from
8,541 to 13,766 during the same period. Cases of Pros
assault on women with intent to outrage her identity
As a result of this, government is expecting a
have more than doubled from 40,613 in 2010 to
number of benefits that this registry will ensure.
82,235 in 2014. Similarly, 11,335 cases were reported
in 2014 of assault on girl children with intent to Registry will maintain the profile of criminals and
outrage their modesty and 444 cases were registered offenders. Hence, it will help in identifying and
under the category of insulting the modesty of girl tracking sex offenders
children during the same period. It would be a handy tool for the law enforcement
agencies as well. Nabbing the offenders will be
On account of this, the central government has
relatively easy
gone ahead with NSOR portal which is expected to
function from March 2017. This will be an online It will instill fear in the minds of repeat sexual
database of charge-sheeted sexual offenders in the offenders and the public would be benefited from
entire country, which people can access through a it.
Citizen Portal in the upcoming Crime and Criminal Easy to surveillance and monitoring the sex
Tracking Network and Systems (CCTNS) project. convicts after their release
Details of sexual offenders even below 18 years of People will have better information regarding their
age would be included in the database, which will neighbors whom they are living with. This will
be put up on the website of National Crime Records ensure security and safety of people
Bureau (NCRB). Extensive information on the Naming and shaming will act as a deterrent for
offender will be collected and maintained in the data online tech savvy offenders

This registry will allow citizens access to a The offenders can be a subject of further harassment
nationwide list of people convicted in crimes from enforcement agencies and others. Several
relating to sex or child abuse. studies find that because of open and free public
Sex offender registration laws and public access access to these registries, former convicts often
to these records create a sense of security to face threat, harassment and violence from other
parents and residents members of the community. Their status as former
sex offenders has the effect of stigmatizing them
Cons for life, rendering reformation and a dignified life
after prison impossible
Contrary to this, rights groups are concerned that
such a list might violate the rights of convicts. Critics also argue that such registration have failed
They argue that publicizing the even charge-sheeted in making any significant difference in sex crimes.
offenders will move society towards extreme punitive Even in the U.S., where stringent registration laws
action and branding. Similarly, the proposal to put with public access have been around for over 30 years,
juvenile on a sex offender register displays a several independent studies arrive at the same
complete lack of understanding of their rights under conclusion: that these registers are simply not
the Constitution and our international obligations reducing sex crimes. Further, Psychologists say
under theUN Convention for the Rights of the sexual assaulters in India are not tech-savvy; so an
Child(UNCRC). online record will not really bother them, hence it will
not prove to be a deterrent to the actual offenders.
Critics argue that such compulsory listing will prove
to be counterproductive. It will alienate convicts More importantly, before proposing a sex offender
from society. Once on the list, all possibility for a registry it is significant to have a look at how our
convict to improve and move on in life will be lost. sexual offences have been framed. A brieflook at
It puts severe restrictions on where a previously the cases registered under POCSO Act tells us
convicted sex offender can reside and work. Since, that most special courts are now barraged with
the names of offenders will be available in a public romantic cases instigated through complaints filed
domain it may affect their employability. The convict, by objecting parents. In the state of the current law,
who may have changed his behaviour after coming a person could possibly face the consequences of
out of the jail, may have to face discrimination being on the register for a lifetime for having a
because of his past. consensual sexual relationship.
Conclusion
NSOR is surely a progressive step towards ensuring minimize the offence against women will equally require
safety, security and dignity of life for women. However, time bound delivery of justice in sexual offences cases
it is important to consider that merely establishing in court, high rate of conviction and strong investigative
registry will not prevent sexual offences. The efforts to and institutional machinery.
**********

Environment www.iasscore.in
Leachate of Groundwater in
Urban Areas
Context cost encourages excess water withdrawal, an
inefficient usage pattern commonly exacerbated by
Ground water contamination is nearly
ineffective application methods and the wastage of
always the result of human activity. In
agricultural produce between farm and market. In
areas where population density is high and
order to feed a growing and wealthier population, it
human use of the land is intensive, ground is projected that agricultural water demand in the
water is especially vulnerable. Virtually India of 2030 would need double to 1,200 billion m3
any activity whereby chemicals or wastes if these inefficient practices continued. the state of
may be released to the environment, either groundwater quality in India is a critical health issue.
intentionally or accidentally, has the
Alongwith decline in groundwater resources, leachate
potential to pollute ground water. of waste has become a major issue.
The leachate of Groundwater in urban areas A leachate is any liquid that, in the course of passing
has become a major issues these days. through matter, extracts soluble or suspended solids,
or any other component of the material through
which it has passed.
I
ndias declining groundwater resources are the
product of a number of drivers. Utilization of How it is produced?
groundwater facilitates irrigated agriculture in areas
When water flows through improperly disposed waste
far from rivers; in fact, this was key to the agricultural
and percolates to the ground, sometimes with toxic
green revolution that occurred from the mid 1960s.
substances drawn from the waste it passes through.
In places where surface water is available but unsafe
Water could be rain, or contained in the waste itself.
for drinking or farmingmore than 70% of Indias
surface water resources are polluted by human waste Sometimes water is used in industrial plants,
or toxic chemicalsgroundwater has often been seen compost plants to remove impurities and then
as a safe alternative. Urban water supply this water is allowed to drain.
infrastructure is often poor and unreliable: well drilling Dumping of the waste by industrial units without
is typically the most economical means of obtaining their proper scientific disposal. When rainfall
household water. In Delhi, the local government occurs water dissolves many harmful
estimates that 40% of the water transmitted through compounds and percolates.
the mains system is lost through leakages; for many, Leachtaes from landfill sites also drains and
the only other alternative to bores are expensive contaminates other water bodies and groundwater.
supplies purchased from water-trucks.
The leachate then pollutes the water with these
In rural areas, electricity subsidies allowing farmers substances, making nearby water sources unusable
to pump groundwater cheaply have become for consumption. This is an acute problem in urban
entrenched in the political landscape. They are likely areas around the landfill sites, around drains and
to become even more so as energy requirements highly polluted rivers, where water percolates down
increase to extract water from greater depths. Low and deteriorates the underground water quality.

Typical Sources of Potential Ground Water Contamination by Land Use Category

Category Contaminant Source
Agriculture Animal burial areas Irrigation sites
Animal Feedlots Manure spreading areas/pits
Fertilizer storage/use Pesticide storage/use
Commercial Airports Jewelry/metal plating
Auto repair shops Laundromats
Boats yards medical institutions
Construction areas Paint shops
Car washes Photography establishments
Cemeteries Railrod tracks and yards
Dry cleaners Research laboratories
Gas stations Scrap and junkyards
Golf courses Storage tanks
Industrial Asphalt plants Petroleum production/storage
Chemical manufacture/storage Pipelines
Electronics manufacture Septage lagoons and sludge sites
Electroplaters Storage tanks
Foundries/metal fabricators Toxic and hazardous spills
Household lawns
Other Hazardous waste landfills Recycling/reduction facilities
Municipal incinerators Road deicing operations
Municipal landfills Road maintenance depots
Municipal sawer lines Storm water drains/basins
Open Buming sites Transfer stations
Affects of Water leachate

Groundwater pollution of Ranipet district by
The water is used for consumption purpose and
Tamil Nadu Chromates and Chemicals
agriculture purpose, which if contaminated is very
Limited (TCCL): In 1995, a chromium factory
harmful for health.
in Tamil Nadus Vellore district shut shop
Apart from health affects leachate degrades the leaving behind a legacy of contaminated soil
land quality, its agriculture capacity, the wetland and water: Two decades after the factory was
ecosystem and thus affecting the ecosystem shut down, agriculture remains unviable and
services. people continue to flock to hospitals
Health effects could be from an acute/short exposure,

or long term chronic exposure to leachates from Chemical/metal Health effects from acute exposure
landfills. Lead = Abdominal pain, diarrhoea, vomiting,
confusion, drowsiness, seizures

Mercury = bloody diarrhoea, dehydration, renal waste. They should not be allowed to dispose
failure off in open.
Cadmium compounds = metallic taste, cough, Lining of the leachate tanks of the industries, so
chest pain, nausea, diarrhoea, skin irritation that water does not percolates.
Nickel = skin irritation, dermatitis, diarrhoea, gum Proper lining of the landfills and measures to
disease drain of leachates.
Benzene = blood-related disorders Proper oversight of the landfill sides, industrial
units for the handling of the waste by the pollution
What should be done? control boards. Involvement of the locals can be
A range of steps must be taken to stop the leachate done in this.
from contaminating the groundwater, which could Awareness creation among residents to
be: understand the harmful health affects, supply of
Proper scientific disposal of the industrial safe drinking water
affluents by the industries and treatment of their Health check facilities so that whenever residents
find any health issue immediate steps can be taken.
**********

www.iasscore.in Economy
Companies Need to
Look Beyond CSR
Context The industry has responded positively to the reform
Oxfam India in collaboration with measure undertaken by the government with a wide
interest across the public and private sector, Indian
Corporate Responsibility Watch, Praxis
and multinational companies.
and Partners in Change launched India
Responsible Business Forum (IRBF) in But India Responsible Business Index (IRBI),
2015. IRBF launched an index (IRBI 2016), developed by collaboration of non-profit organizations
ranking the top 100 companies listed on Oxfam India, Corporate Responsibility Watch, Praxis
and Partners in Change- shows that the number of
the Bombay Stock Exchange on inclusive
companies looking at backward regions and
policies.
communities to conduct CSR activities has risen
This index highlights that, while CSR rules from 25 in 2015 to 32 in 2016 and that of companies
of 2014 have had a positive impact on identifying vulnerable communities to work with has
company ratings in IRBI 2016, they are increased from 71 in 2015 to 85 in 2016.
no substitute for responsible business While Corporate Social Responsibility (CSR) rules
practices. Responsible business practices of 2014 have had a positive impact on company
go beyond CSR and these practices should ratings in IRBI 2016, they are no substitute for
be enshrined by Corporate in order to responsible business practices. Experts say that
ensure sustainable business. In order to responsible business has to be part of the business
demystify the debate we would look at CSR process right from the point of procuring raw
2014, Responsible Business practices materials, acquiring land, setting up manufacturing
which are captured by IRIB 2016 and or business operations to mitigating any adverse
importance of Responsible business impact that such a process might have on society
and environment.
practices for long term sustainability of
Business.
Corporate social responsibility (CSR)
rules 2014
A robust and thriving development sector is central
With effect from April 1, 2014, every company,
to Indias quest for equitable, inclusive and
private limited or public limited, which either has a
sustainable growth. Indias development sector has
net worth of Rs 500 crore or a turnover of Rs 1,000
evolved substantially over the last few decades and
crore or net profit of Rs 5 crore, needs to spend at
is now witnessing unprecedented interest and
least 2% of its average net profit for the immediately
investments across the value chain. With the
preceding three financial years on corporate social
passage of the Companies Act, 2014- which direct
responsibility activities.
certain firms to spend 2% of their average profits
on focial development projects- the mandate for The activities that can be undertaken by a company
Corporate Social Responsibility (CSR) has been to fulfil its CSR obligations include eradicating
formally introduced to the dashboard of the Boards hunger, poverty and malnutrition, promoting
of Indian companies. preventive healthcare, promoting education and

promoting gender equality, setting up homes for Why Responsible business practices
women, orphans and the senior citizens, measures important?
for reducing inequalities faced by socially and
Responsible business practices result in better
economically backward groups, ensuring
financial performance and deliver superior returns in
environmental sustainability and ecological balance,
the long run.
animal welfare, protection of national heritage and
art and culture, measures for the benefit of armed Adoption of best practices in non-financial aspects
forces veterans, war widows and their dependents, of business is increasingly becoming as important
training to promote rural, nationally recognized, as it is in the financial aspects.
Paralympic or Olympic sports, contribution to the Investors are keen that firms mitigate social and
Prime Ministers National Relief Fund or any other environmental damage to avoid financial strain and
fund set up by the Central Government for socio ensure best practices in environment, social and
economic development and relief and welfare of governance (ESG) aspects along with financial
SC, ST, OBCs, minorities and women, contributions performance.
or funds provided to technology incubators located
within academic institutions approved by the Central Responsible business practices mean better loan
Government and rural development projects. prospects. For ex - SBI Mutual Fund has evolved
an internal rating system for companies when
Responsible business practices considering them for loans. This rating reviews the
environmental and social impact of the business
A responsible business ensure not merely spending
that is seeking a loan.
a small amount of profit on CSR projects and meeting
compliances but it is about maximising the well-being A substantial part of the market value of a company
of all its stakeholders. Any business or industry is is intangiblethis includes reputation and goodwill
made up of various stakeholdersshareholders, among other things. And to protect these, any
consumers, suppliers and communities directly or business needs to adopt responsible practices.
indirectly affected by pollution etc. Business leaders An increasing number of home-grown firms are thus
need to go beyond minimum towards maximising the looking to internalize processes to address these
positive impact on all stakeholders. CSR is just a external impacts that their businesses may have.
subset of Responsible business practise. Responsible business is risk mitigation and ensures
IRBI 2016 - has been launched to gauge the extent longevity.
of engagement that Indian companies have with the National voluntary guidelines on Social,
stakeholders around them, non-profit organizations Environment and Economic Responsibilities of
Oxfam India, Corporate Responsibility Watch, Praxis Business drafted by the Ministry of Corporate Affairs
and Partners in Change collaborated on an index. in 2012 mentioned nine principles of responsible
The India Responsible Business Index measures business practices-
100 listed companies on five criteria to see how
Businesses should conduct and govern
socially inclusive they are. These criteria are
themselves with ethics, transparency and
inclusive supply chain, accountability.
community as stakeholders, Businesses should provide goods and services
community development, that are safe and contribute to sustainability
employee dignity and human rights, and throughout their life cycle.
non-discrimination at the workplace Businesses should promote the wellbeing of all
employees.
As it is visible from constituents of IRBI Index,
CSR component only have impact on community Businesses should respect the interests of, and
development. CSR has very few linkages with other be responsive towards all stakeholders,
four aspects of index. This means companies have especially those who are disadvantaged, 30
to move beyond CSR. vulnerable and marginalized.

Businesses should respect and promote human Companies should support and respect the
rights. protection of international human rights and
Business should respect, protect, and make ensure that business is not complicit with human
efforts to restore the environment. rights abuses. Similarly, they should respect labour
rights of Individuals. They should uphold freedom
Businesses, when engaged in influencing public
of association and effective recognition of the right
and regulatory policy, should do so in a
to collective bargaining, elimination of all forms of
responsible manner.
forced and compulsory labour, effective abolition of
Businesses should support inclusive growth and
child labour and elimination of description in respect
equitable development.
of employment and occupation.
Businesses should engage with and provide value
That companies should take responsibility in
to their customers and consumers in a
conservation of the environment in which they
responsible manner.
operate is a matter that needs no elaboration.
From the above nine principles and Schedule VII of Environmental stewardship means a company is
the Companies Act, 2013 it can be stated that while concerned about the direct and indirect impact of the
community remains the focal point in CSR, however, activities on living and non-living natural systems,
companies need to look beyond the CSR and including ecosystems, land, air, biodiversity and water.
philanthropy. It needs to look beyond the definition
of CSR as- a management concept whereby It is sad that companies continue to engage in
companies integrate social and environmental community initiatives geared towards environmental
concerns in their business operations and conservation externally while ignoring internal
interactions with their stakeholders (UNIDO). It is initiatives geared towards ensuring the environment
important to understand that- is not affected by their activities. While mitigating
climate change should be a part of the companys
The CSR approach is holistic and integrated with
strategic goals, this has not been the case for many
the core business strategy for addressing social
companies. The practice should be that companies
and environmental impacts of businesses.
use resources in a sustainable manner.
CSR needs to address the well-being of all
Other areas of focus for corporate responsibility
stakeholders and not just the companys
should be the market place in terms of upholding
shareholders.
integrity and standards, product quality,
Philanthropic activities are only a part of CSR,
reliability, safety and good customer relations.
which otherwise constitutes a much larger set of
In the supply chain, this is through doing business
activities entailing strategic business benefits.
with suppliers, who have shared values and business
Taking a cue from this broader perspective, CSR standards. For example, companies should desist
means the willingness by companies to take from buying raw materials from suppliers who are
responsibility and be accountable. Considering that using child labour or abusing human rights.
the ISO 26000 draws guidance and complements Community development should be through
relevant declarations and conventions by international supporting education, community health,
bodies such as the ILO, UN Global Compact and sponsorships and donations.
Organisation for Economic Cooperation and
Companies should have a continued commitment
Development, it is important for companies, both
to behave ethically and contribute to economic
public and private, to be mindful of basic principles
development while improving the quality of life of
such as respect for human rights, Labor rights,
the workforce as well as of the local community
environmental protection, community
and society at large, failure to which they risk losing
engagement and governance reforms.
business opportunities.
**********

Lancet Report on
Healthcare Spending
Context becomes a populist cause in India, the country
might finally be able to achieve health outcomes
UK medical journal The Lancet in a
commensurate with its economic and technical
recent analysis of India's annual budget
achievements.
has questioned low public expenditure on
India vastly underperforms in terms of quality
health. High public investment in health
clinical research. Only 1-5 per cent of global
care is one of the most efficient ways of
clinical trials are done in India; and between
delivering healthcare, and for this reason,
200514, fewer than half the medical colleges in
this commitment to higher public
the country published a single research article.
expenditures is essential.
India has 17 per cent of the worlds population,
In this context, we would first look at the and has more deaths of children aged five and
highlights of the report. Then we would under close to 12.5 lakh every year the
look at public expenditure on heath by highest in the world. Also one third of all worlds
government and its impact. Finally we cases for diseases such as tuberculosis,
would look at some of the required premature cardiovascular diseases and diabetes
responses to the current situation. originate from India.
Indias current Health Expenditure

Health is a state of complete physical, mental and The countrys public spending on health is little
social well-being and not merely absence of disease. over 1 per cent of GDP.
But the recent The Lancet Report highlighted low
public expenditure on health. Public spending on health was an unusually low
0.22 per cent of the GDP in 1950-51.
Highlights from the Report This has risen to a little over 1 per cent today, but
In India, the challenge is that health has a low well below the world average of 5.99 per cent.
status as a popular demand. This has meant According to World bank Data, Indias public
that the discussion on universal health coverage
expenditure is among the lowest within SAARC
(UHC) has remained almost entirely confined to
academic and policy circles.
It also said that between 2005 and 2013, India had
spent the entire fund allocated to health only once.
Indias per capita spending on healthcare remains
one of the lowest in the world, and in some
health indicators, India trails behind SAARC
countries like Nepal, Sri Lanka, and Bangladesh.
According to the report, India spends less
because health is not a populist issue. If health Fig. 6

countries. Even war torn Afghanistan spends more Leprosy by 2018 and Measles by 2020. Elimination
the India on health. of tuberculosis by 2025 is also targeted. Similarly,
action plan has been prepared to reduce IMR from
The Economic Survey said that a distinctive feature
39 in 2014 to 28 by 2019 and MMR from 167 in
of the Indian economic model is the weakness of
2011-13 to 100 by 2018-2020.
state capacity, especially in delivering essential
services such as health and education. A full achievement of the goals and principles of
equitable, affordable and accessible healthcare would
A low expenditure by state leads to high out-of-
require an increased public health expenditure to 4
pocket expenditure. A large proportion of the
to 5% of the GDP.
population is impoverished because of high out-of-
pocket healthcare expenditures and suffers the With the projection of a promising economic growth,
adverse consequences of poor quality of care. The the fiscal capacity to provide this level of financing
data on health by the NSSO, Key Indicators of should become available. The Government would
social consumption in India: Health, 2015, 71st explore the creation of a health cess on the lines of
Round (JanuaryJune 2014) shows that private the education cess for raising the necessary resources.
sector continues to play a significant role in the Other than general taxation, this cess could mobilise
provision of outpatient and hospitalized care. The contributions from specific commodity taxes- such as
average total medical and other related nonmedical the taxes on tobacco, and alcohol, from specific
expenditure per hospitalization in rural and urban industries and innovative forms of resource
areas are Rs. 16,956 and Rs. 26,455 respectively. mobilization. Extractive industries and development
These expenditures reect the challenges that India projects that result in displacement, or those that have
faces in the provision of affordable and accessible negative impacts on natural habitats or the resource
health care to the population. base can be considered for special taxation thereby
allowing investment and job opportunities in education
Required Response and health for affected communities.
With limited resources and competing demands in the Corporate social responsibility has now been made
health sector, it is essential for Government to prioritize mandatory- and this avenue should be maximally
expenditure. Preventive health care has always been leveraged. Though actual CSR flows to health care
a priority area because of its long-term societal benefits. may be modest in comparison to needs, these could
Preventive healthcare includes immunization, proper be leveraged for well-focused programmes,
nutrition during initial years of birth etc. communities or geographies with special levels of
Government has therefore prepared an action plan vulnerability which require special attention.
to eliminate Kala-Azar and Filariasis by 2017,
Conclusion
The aim of good health and well-being for all as and digitisation would mean increase in revenues of
envisaged in the Sustainable Development Goal government. A relatively high portion of such gains
(SDG), Ensure healthy lives and promote well should be invested in healthcare (especially primary
being for all at all ages. Achieving this goal require healthcare). At the same time focus should be on
adequate public expenditure in healthcare sector. preventive healthcare to reduce healthcare burden.
Expenditure on healthcare has been low because Finally CSR funds should be channelized to
it has not been populist issue. Better economic complement public expenditure in healthcare.
performance, GST and gains from demonetisation
**********

Polity www.iasscore.in
Nagaland Issue
Context shall apply to the State of Nagaland unless the
Legislative Assembly of Nagaland by a resolution
The recent eruption of violence to subvert so decides.
the implementation of a 33 percent quota
While tribal bodies have always taken resort to
for women in Nagaland's urban civic
Article 317(A) in respect to various socio-economic
bodies has put paid to the oftencirculated
issues, civic elections in the state have not been
myth about the state's gender sensitive
held since Article 243(T) of the Constitution, which
credentials. provides for 33 per cent reservation for women in
United under the Joint Coordination local bodies, came into force in 1993.
Committee (JCC), a host of Naga tribal All-male tribal bodies have been against the 33%
bodies have unleashed a violent agitation reservation for women in urban local bodies (ULBs)
to oppose elections to the state's urban on the grounds that reservation for women in ULBs
local bodies. would violate Article 371(A) of the Constitution and
infringe on Naga culture, traditions and customary
Allmale tribal bodies have been against
laws. Faced with vehement opposition, the Nagaland
the 33% reservation for women in urban
government did not conduct elections to civic bodies
local bodies (ULBs) in Nagaland right from
for over 10 years.
the time the Nagaland government enacted
the Nagaland Municipal (First Background
Amendment) Act in 2006, on the grounds Naga Mothers Association (NMA) filed a writ
that reservation for women in ULBs would petition challenging the State governments
violate Article 371(A) of the Constitution refusal to hold municipal elections before the
and infringe on Naga culture, traditions Gauhati High Court on June 26, 2011.
and customary laws. The court directed the government to hold
It's a conflict between Naga customary elections to municipal councils and town councils
laws and the constitutional provisions. on or before January 20, 2012.
But before the deadline, the state government
filed an appeal before a Division Bench of the
A
rticle 371(A) of the Indian Constitution Gauhati High Court, which stayed the previous
(Special provision with respect to the State ruling.
of Nagaland) states, Notwithstanding In September 2012, the State Assembly adopted
anything in this Constitution, (a) no Act of Parliament a resolution rejecting womens reservation in
in respect of (i) religious or social practices of the ULBs on the ground that it infringes on the social
Nagas, (ii) Naga customary law and procedure, (iii) and customary practices of the Nagas, which
administration of civil and criminal justice involving Article 371(A) safeguards and claim that
decisions according to Naga customary law, (iv) implementing such a law would upset the
ownership and transfer of land and its resources, peace in Nagaland.

The Joint Action Committee on Women

Reservation (JACWR) then moved a Special No woman has ever been elected to the
Leave Petition in the Supreme Court in state assembly in over 53 years of
September 2012. Nagalands existence as a state.
The Supreme Court ruled in the favour of the The village development boards in the state,
Naga Mothers Association (NMA) in April 2016, on the other hand, do have 25% seats
following which the state cabinet gave a go- reserved for women.
ahead to conduct the polls, which had not taken Most of the tribal bodies which act as the
place in Nagaland for well past a decade and a custodians of tribal culture and traditions
half. are dominated by men.
Counter Arguments As a result, the property and inheritance
Article 371(A) of the Constitution secures a rights are highly skewed against women.
special status for Nagaland. It gives special This is also a system developed over the
status to the State based on distinct political years to keep property from being taken
and cultural structure. outside the community in the eventuality of
However, urban local bodies are not part of a woman deciding to marry outside the tribe.
traditional Naga society, argued by the civil
society groups who are striving for reservation Unconstitutional demand
and ULBs are constitutional bodies to which
Nagaland government has decided to write to
customary Naga laws cannot be applied.
the Centre demanding that Nagaland be
Womens reservation is necessitated in
exempted from Part IX A of the Constitution,
patraichial societies for reasons of inequality that
which contains a mandatory provision under
is present in society. Women do not have political
Article 243T for 33% women reservation in ULBs.
space in Nagaland which reduces their
If Nagaland is exempted from the purview of
empowerment.
Part IX of the Constitution, Naga women will
Threats: have absolutely no hope of entering into and
The tribal bodies protested and threatened participating in decision-making bodies.
candidates who intended to file nominations. As
a result, some candidates didnt file nominations 74th Amendment:
and some others withdrew their papers.
74th Constitutional Amendment Act, 1992
Through all this, the State government remained
is aimed to strengthen the ULBs through
a silent spectator and failed to assert the rule of
devolution of power towards decentralization.
law.
When the State government refused to call off The aim and objectives of 74th constitutional
the elections, the tribal bodies announced a amendment is:
bandh from January 28 to February 1. To set up institutional mechanism to
Things soon took an ugly turn, and the Nagaland facilitate decentralization.
government declared the elections null and Demarcate role of ULBs & specify their
void. function.
Specify areas deemed as urban to
Women representation: Reality
include new urbanizing areas.
The state has sent a sole woman
Ensure representation of specially
representativelate Rano M. Shaiza in
deprived class/woman.
1977to Parliament.

Conclusion
The reservation for the women should not be seen traditions preclude women from inheriting land and
as a charitable grant to a weaker section,but rather participating in the decision-making process, which
an impetus and a step toward creating a level- is exactly what Article 371(A) protects.
playing field in policy and decision making.
Undeniably, the constitutionally guaranteed rights
Reservation for women is necessary in patriarchal of Naga women now depend on the Centre, as much
societies like Naga society, for instance, where as on the gender sensitised public of India.
there is a historical culture of inequalities even
A drive towards genuine egalitarian society can be
though Nagas dont practise sati, female foeticide
achieved only when all sections of the society are
and infanticide, and do not believe in dowry or the
genuinely empowered equally to participate and exist
caste system. But Naga customs, culture and
cohesively within its ambit.
**********

www.iasscore.in Environment
Forest Fires as Part of Ecosystem

Context That is when an ignition source is brought into
contact with a combustible material such as
The National Forest Policy 1988 aims for
vegetation that is subjected to sufficient heat
33% of the country's geographical area
and has an adequate supply of oxygen from the
under the forest cover for ecological and
ambient air.
environmental security. While aiming to
A high moisture content usually prevents ignition
expand the forest cover in the country, it is
and slows propagation, because higher temperatures
equally important to improve the state and
are required to evaporate any water within the
quality of existing forests and protect them material and heat the material to its fire point.
against various threats and drivers of
Dense forests usually provide more shade,
degradation. Forest fires are a major cause resulting in lower ambient temperatures and
of degradation of India's forests. greater humidity, and are therefore less
Thus hereby analyzing the concept of forest susceptible to wildfires.
fire, reasons and its impact. Less dense material such as grasses and leaves
are easier to ignite because they contain less
water than denser material such as branches
A
Forest fire is a fire in an area of combustible and trunks.
vegetation that occurs in the countryside or Plants continuously lose water by
rural area. evapotranspiration, but water loss is usually
Frequency of forest fires have drastically increased in balanced by water absorbed from the soil,
last few years partly because of environmental factors humidity, or rain.
especially climate change and other man made When this balance is not maintained, plants dry out
intentional activities. The change in climatic conditions and are therefore more flammable, often a
such as rising temperature, wind speed and direction, consequence of droughts.
level of moisture in soil and atmosphere and duration
of dry spells cause wildfires. Other natural causes are Impact
the friction of bamboos swaying due to high wind
It is estimated that the proportion of forest areas
velocity, lightening strike, global warming and rising
prone to forest fires in India annually ranges from
instances of EL-Nino. These all factors have
33% in some states to over 90% in others. About
cumulative effect on rising temperature, change in
90% of the forest fires are started by humans. Forest
precipitation patterns ad air moisture, increasing heat
Fires cause wide ranging adverse ecological,
waves, and drier soil etc. On the other hand Man-made
economic and social impacts.
factors include small fires by grazers and gatherers,
shifting cultivation, tourist bonfire, and timber mafia. In a nutshell, fires cause
Loss of valuable timber resources and depletion
Properties of Forest Fire of carbon sinks.
Wildfires occur when all of the necessary elements Degradation of water catchment areas resulting
of a fire triangle come together in a susceptible area. in loss of water.

Loss of biodiversity and extinction of plants and as possible. Ministry of Environment and Forest
animals. implemented a plan scheme Modern Forest Fire
Loss of wild life habitat and depletion of wild life. Control Methods in India under which practices
like creation and maintenance of fire lines, fire
Loss of natural regeneration and reduction in
tracks, control burning, and engaging fire watchers
forest cover and production.
during the fire seasons etc. were encouraged.
Loss of carbon sinks resource and increase in
percentage of CO2 in the atmosphere. However, with current understanding of forest fires
as a natural and healthy part of forest ecosystem
Change in micro climate of the area making it
ecology, forest management efforts typically are
unhealthy living conditions.
now focusing on a combination of containment where
Soil erosion affecting productivity of soils and
necessary to protect human communities, as well
production.
as periodic fires for the sustainability and health of
Ozone layer depletion. forest ecosystems. In view of this, it is felt
Health problems leading to diseases. necessary to try the new technologies of forest fire
Indirect affect on agricultural production: Loss of prevention and control.
livelihood for the tribals as approximately 65
million people is classified as tribals who directly Forest Fires in India
depend upon collection of non-timber forest A report titled Forest Fire Disaster Management,
products from the forest areas for their livelihood. prepared by the National Institute of Disaster
Whereas if forest fire is natural and controllable Management, a body under the Ministry of Home
then it plays many important roles in ecosystem. Affairs, in 2012, said about half of Indias forests
were prone to fires.
Many types of forests have evolved to utilize fire
disturbances to maintain ecosystem health and 43% were prone to occasional fires and 5% to
to regenerate. For example, many tree species frequent fires, and 1% were at high or very high
actually require fire to germinate their seeds, and risk, the report said, quoting data from Forest Survey
forest fires return important nutrients to the forest of Indias State Forest Report, 1995, a compilation
soil that was previously being stored in biomass. of 25 years of observations and analyses.
Wildfires help to clear out dead wood and other The fire season usually begins from mid-February
materials that would otherwise have taken much and lasts until mid-June, when the rains arrive.
longer to break down and provide soil nutrition
March-May is the peak fire season for most states
for the next generation of trees and plants living
in India.
in that forest. This process helps to keep a
forest ecosystem healthy. This year (2016), the fires started early the first
Burned forests serve as important habitat for incident was reported on February 2.
many species, such as the Black-backed In Himachal, the first fire was reported on April 7.
Woodpecker, Picoides arcticus, that is
Their frequency and intensity increased after April
specialized to live and thrive in forests that have
25, the day the state saw 80 incidents of fire.
experienced severe burning.
After a forest fire occurs, a process called More than 95% of wildfires in India were man-made.
ecological succession takes place, where the [FSI Report]
ecosystem goes through a series of changes Villagers reportedly burn leaves and grass in
and eventually develops into a mature forest order to get better growth of grass the following
again. At each stage of succession, the changing year.
forest provides habitat for many types of species, They also burn the needles of the Chir pine,
including plants, animals, and birds. which form a slippery carpet on the ground.
Historically, when fires from natural or other causes In the Terai region, honey collectors often start
began, efforts were made to control them as quickly fires to drive away bees.

Steps Adopted by Forest Department Surveillance through drones: Drones can play a
big role in wildfire suppression in the future. One of
The government has banned people from carrying
the most effective time to fight a fire is at night,
matchboxes to forests, and is running awareness
when the winds are down and containing fire during
campaigns as 95 percent of forest fire is manmade.
that time is slightly easy. Unmanned vehicles could
Many have argued for more modern systems of fire be especially useful for fighting fires. It can also be
monitoring alongside traditional methods like effective instruments for doing aerial surveillance
maintaining fire lines, so there is a clearing between and monitoring of the forest fires areas especially
two forests to prevent the fire from spreading from in night. Drones equipped with thermal cameras
one to the other. could do the job better and more safely than
The third method of counter fire too is being adopted airplanes and helicopters. However, one limiting
with forest officials starting fires from the opposite factor is that such drones are expensive.
end of a forest to check the flames at a defined Further, In contrast to a manned airplane, the
boundary. remotely piloted aircraft doesnt risk the life of
the pilot, and can fly over the fire for much
However, critics say the measures are too late and
longer. Firefighters are using information gathered
too little.
by the drone to guide the allocation of firefighting
Recent scientific steps resources on the ground to where they are most
needed. The aerial view also reveals the location
Better fire shelter: The newest generation of fire of critical infrastructure such as power lines, gas
shelters are started to be used by The U.S. Forest lines and water systems in the fires path.
Service (USFS) since 2003. This latest version
Use of satellite images: To better understand when
consists of an outside layer made of high-
and where wildfires occur, researchers comb through
temperature resistant silica cloth and an inside
satellite imagery. These satellite data helps in
layer composed of a lightweight, fiberglass scrim
determining the best techniques for preventing
cloth. Both layers are laminated to aluminum foil,
wildfires. This information helps in understanding
which is an excellent reflector of radiant heat. The
forest thinning and prescribed burns both of which
aluminum foil is designed to slow heat transfer
aim to eliminate fire fuel before the fire occurs, which
from the outside to the inside of the shelter.
is described as best methods to control forest fire.
Improved wind models: The most dangerous
Firing out: Firing out is a technique when
types of wildfires often occur during what scientists
firefighters create a controlled burn to direct the
call extreme fire weather, when conditions are hot,
fires spread. In this technique a fire is created
dry, and windy. To better combat these kinds of
between the wildfire and a natural barrier, such
fires, researchers are developing computer models
as a road, to remove any vegetation in the
to simulate how wind moves across the landscape.
wildfires path.
With the help of this modeling software and taking
into account the weather, landscape and fuel Spraying of flame retardant chemicals:
conditions, scientists can now predict wind motion Helicopters fly over and dump water or sometimes
on ever smaller scales. The model helps in suppressant foam on fire hotspots. The foam
providing a snapshots of the fires potential and acts as insulation to prevent unburned fuels from
thereby help in channeling and blocking the wind catching fire. Fixed wing aircraft called air tankers
speed and direction thereby restricting the fly over the blaze dumping flame retardant
progress of forest fires. chemicals, such as ammonium phosphate.
Conclusion
Community based approach should also be It should provide environmental education to local
residents and officials.
initiated. State governments should Involve their
community-led van panchayats (forest councils) Finally, the imperative is to stop the havoc wrought
in preventing fires. by man-made fires, and compensate those affected.
**********

Int. Affairs www.iasscore.in
US Sanction on Iran
Context
In 2015 the Obama administration led been recently imposed are not severe, but
successful negotiations for a nuclear deal if the tension escalates further it can have
intended to dismantle Iran's nuclear implications globally.
weapons capabilities, and when Iran
complied with it in 2016, sanctions on Iran
Introduction
were lifted. The U.N. Security Council
resolution that endorsed the 2015 deal, The current friction between the US and Iran is in
called on Iran to refrain from testing ballistic contrast to the easing of tensions that took place
under the Obama administration. In 2015 the Obama
missiles that could carry nuclear warheads.
administration led successful negotiations for a
But recently, Iran tested a missile that the nuclear deal intended to dismantle Irans nuclear
USA says defied the UN resolution. In weapons capabilities, and when Iran complied with
response to that USA's Trump it in 2016, sanctions on Iran were lifted. The U.N.
Administration has announced new Security Council resolution that endorsed the 2015
sanctions against Iran. deal, called on Iran to refrain from testing ballistic
missiles that could carry nuclear warheads.
Later, the Iranian Revolutionary Guard
carried out extensive military exercises in Why was it in the news recently?
the Iran, calling the manoeuvres a response
Recently, Iran has test-fired a medium-range missile,
to US President Trump's sanctions. Iran's
which the US contends violated a UN Security
supreme leader, Ayatollah Ali Khamenei,
Council resolution proscribing missiles that could
had called on Iranians to use the carry a nuclear device. Tehran has confirmed it
anniversary of the revolution, which tested a ballistic missile, but denied it was a breach
overthrew the U.S. backed shah in 1979, as of a 2015 nuclear deal with world powers or UN
an opportunity to "respond" to the Trump resolutions. The current sanctions are against 13
administration's forceful rhetoric. This individuals and 12 entities thatare linked to Tehrans
year's gathering paid notice to the deep U.S. ballistic missile program and its proxies across the
political divides over Trump's executive Middle East.
order to bar entry from seven Muslim Those individuals and companies sanctioned are
majority countries, including Iran. The prohibited from doing any business in the United
demonstrations were a message to the States or with American citizens. Foreign companies
USthat Iran will not bow to any threats or that do business with the targeted individuals and
Sanctions from the west. companies risk being blacklisted by the United
States.
In this context, the history of sanctions
against Iran and reasons for them has been History of Sanction since 1979
analysed. Though sanctions which have Following the Iranian Revolution of 1979, Iran
and USA share no formal diplomatic relations.

The two nations instead of exchanging Curbing the Plutonium Path - Iran was
ambassadors, maintains an interests sections. constructing a nuclear reactor at Arak that would
Iran maintains an interest sections at the have used natural uranium to produce Pu-239,
Pakistani Embassy in Washington, D.C. while which can fuel bombs. The agreement Iran has
the USA has maintained a corresponding agreed to redesign and rebuild the Arak reactor
interests section at the Swiss Embassy in so it will not produce weapons-grade plutonium.
Tehransince 1980s. Iran also agreedwill not build any additional heavy
Since 1979 the US imposed economic sanctions water reactors for 15 years.
against Iran and expanded them in 1995 to Ensuring That Iran Wont Cheat - Iran poses
include firms dealing with the Iranian government. many challenges for atomic inspectors who have
In 2006, the UN Security Council passed to police the agreement and gain access not
Resolution and imposed sanctions after Iran only to scientists, labs and factories, but also to
refused to suspend its uranium enrichment many underground sites and military bases. The
program. U.S. sanctions initially targeted principal concerns were how to detect the covert
investments in oil, gas, and petrochemicals, sites. The Iran has agreed to provide the
exports of refined petroleum products, banking International Atomic Energy Agency greater
and insurance transactions (including with the access and information regarding its nuclear
Central Bank of Iran), shipping. program, and to allow the agency to investigate
Over the years, sanctions have taken a serious suspicious sites or allegations of covert facilities
toll on Irans economy and people. Since 1979, related to uranium enrichment anywhere in the
the United States has led international efforts to country.
use sanctions to influence Irans policies, including Timeline of the Agreement - The deal requires
Irans uranium enrichment program, which Western Iran to reduce its current stockpile of low-enriched
governments fear is intended for developing the uranium by 98 percent, and limits Irans
capability to produce nuclear weapons. enrichment capacity and research and
Sanctions have reduced Irans access to development for 15 years. Some inspections and
products needed for the oil and energy sectors, transparency measures will remain in place for
have prompted many oil companies to withdraw as long as 25 years.
from Iran, and have also caused a decline in oil
Recent Sanction on Iran
production due to reduced access to technologies
needed to improve their efficiency. Consequently, Just after US President Donald Trump assumed
crude oil prices have risen up due to restricted the office, he passed an executive order temporarily
supply. barring travel to the US for Iranian citizens, as well
as citizens of six other majority-Muslim countries.
The Iran Nuclear Deal 2015 Later on, Donald Trumps administration has imposed
In, 2015, the P5+1 and Iran, meeting in Lausanne, sanctions on Iran following its recent ballistic missile
Switzerland, reached a historic accord to limit test.
Tehrans nuclear ability in return for lifting The sanctions target 13 people and 12 companies,
international oil and financial sanctions. Key including groups in China, Lebanon and the UAE.
Highlights of the Deal are US claimed that Irans continued support for
The talks were aimed at curbing Irans ability to terrorism and development of its ballistic missile
useUranium and Plutonium elements in weapons. programme poses a threat to the region, to
Curbing the Uranium Path - Iran has agreed to itspartners worldwide and to the United States. Irans
transform its deeply buried plant at Fordo into a continued support for terrorism is a reference to
centre for science research. Iran has also agreed Iranian support for Shia militias and involvement in
to limit enrichment to 3.7 percent and to cap its countries such as Syria, Iraq and Yemen. Among
stockpile of low-enriched uranium at 300 the newly sanctioned groups are members of the
kilograms for 15 years. Islamic Republics Revolutionary Guards Corps. US

observe that Irans belligerent conduct had increased Iran in 2015. However, situation could get worse
since the very favourable nuclear deal that six due to adverse regime in US. Some of the effects
world powers struck two years ago with Iran to halt in such situation could be:
its nuclear programme. India cannot freely buy crude-oil from Iran. This
along with the fact that crude oil prices would
Impact of Sanctions and Global
rise up due to restricted supply from OPEC cartel
Reactions would worsen the Current account deficit
Iran claimed that it was the US sanctions that problem.
breached the UN resolution, which endorsed the Last Year India and Iran signed an agreement
2015 nuclear deal. for a $150 million line of credit, from the Exim
The Iranian said it would impose legal restrictions Bank, for the development of the Chahbahar port.
on a number of American individuals and This development project could be derailed.
companies which have been involved in creating A memorandums of understanding was also
and supporting extremist terrorist groups or are signed on provision of services by Indian
helping in the killing and oppression of Railways, including financing to the tune of $1.6
defenceless people in the region billion, for the - Chahbahar-Zahedan railway line
Also, Iran announced a ban against US wrestlers a line that is also part of the trilateral agreement
from competing at a championship in the western between India, Iran and Afghanistan on a transit
Iranian city of Kermanshah. and trade corridor. This project would also get
Saudi Arabia supported the view that its time to hampered and Link between India and
change Irans behaviour in the region as the Afghanistan via. Iran may not be realized.
Irans involvement in neighbouring countries such Oil and Natural Gas Corp (ONGC), discovered
as Iraq, Syria and Yemen must be stopped. the Farzad-B gas field in the Farsi offshore block
in 2008, but was unable to get permission to
Impact of Sanctions on India-Iran develop it due to Western sanctions against Iran.
Relations A considerable progress has been made on this
These sanctions are not severe and do not violate but western sanctions could affect these
the spirit of agreement reached between P5+1 and developments.
Conclusion
They are the first Iran sanctions of Mr Trumps new of the sanctions is largely symbolic and will likely
presidency. There maystill be echoes of Obamas not have a large effect on Irans economy. But, a
policies today, but the whole framework of the new regime in USA with the America First policy
approach has changed now. Analysts say theimpact could nullify the gained grounds during 2015 deal.
**********

www.iasscore.in Economy
Sub-Prime Crisis in the Making

Context There are two statistics for a corporate house, which
need to be looked at to understand the nature of
The share of debt of firms with failing the debt crisis. One is the amount of bank loans
financial health has been going up every taken in a particular year and the other is whether
year since 2011, leading to mounting NPAs. the firms were financially healthy enough to take
In the recent times, the Indian corporate the loan in the first place. The latter is measured by
sector is grappling with a severe bad debt whether they made enough profits in a particular
crisis, and as a result, the banks (public period to even cover for the interest payments
sector banks) are increasingly getting accrued on past debts. Simple logic says that latter
saddled with NonPerforming Assets. should not be given more loans. At the heart of the
U.S. sub-prime crisis was the fact that loans were
Calling it India's subprime crisis might be dished out increasingly to households which were
an exaggeration but in the future it's very finically weak in paying back loans (called sub-
likely. Moreover in conditions such as these, prime borrowers). Thats where the similarity lies.
with the global economic crisis in the What was true for the household sector could be
background, it's better to be cautious right true for the corporate sector in India.
now. This might also help policymakers to For a firm to be financially healthy, just as a family
take regulatory steps in time to control the taking a loan, it should make enough profits to
contagion before it spreads in the banking cover for both (in financial terms, these are called
system in a big way. hedged firms). On the other hand, an unhealthy firm
(the Ponzi firm )is one which does not even cover
its interest payments . The ponzi firms should not
Introduction
be given more loans as that is a sure-shot recipe
The rising debt of corporate firms with less ability for disaster.
to repay is taking India towards the path of Crisis.
Also, banks (public sector banks) are increasingly Measuring Financial Health
getting saddled with Non-Performing Assets. This
The health of a firm is measured by what is called
Problem is called Twin Balance Sheet problem.
the Interest Coverage Ratio (henceforth ICR). It is a
For some time, India has been trying to solve it ratio of net profits to interest payments due on past
using a decentralised approach, under which banks debt. It being less than 1 is a danger sign for the
have been put incharge of the restructuring decisions. lender because it means that the firm is not even
But decisive resolutions of the loans, concentrated making enough profits to pay for its past interest
in the large companies, have eluded successive payment commitments let alone the principal amount.
attempts at reform.
The data for 2011-2015 shows that debt of firms
Perhaps it is time to consider a different approach with failing financial health (ICR less than 1) has
a centralised Public Sector Asset Rehabilitation been going up since 2011. This means firms were
Agency that could take charge of the largest, most able to extract fresh borrowing from the banks
difficult cases, and make politically tough decisions despite not paying interest on previous debt.
to reduce debt.

The three other measures to measure the financial Solutions and the Way Forward
health are:
4Rs solution suggested by Economic survey 2015-
Profitability i.e. whether the firms were making 16 are: Recognition, Recapitalization, Resolution,
positive post-tax profits and Reform.
Ratio of current assets to current liabilities to Recognition: Banks must recognition the problem,
measure what part of the liabilities they can pay earlier they were shy of presenting the true picture
off if they were to sell their assets about stressed assets but Asset quality Review
Debt to equity (own capital) ratio to measure by RBI has shown the true extent of stressed
how much have they stuck their own neck out assets including NPA in banking sector.
compared to other peoples money in the risky Recapitalization: capital position of PSB must
adventure they are undertaking. be safeguarded via infusions of equity
The well-accepted thresholds for these measures (recapitalization) as the banks have been
are 0, 0.5 and 5 i.e. firms which are making negative demanding. In this context, the capital requirement
profits, can honour at least half their liabilities by of extra capital for years up to FY 2019 is likely to
selling off the assets, while debt is five times as be about Rs.1,80,000 crores. Out of the total
large as own capital respectively. requirement, the Government of India proposes
to make available Rs.70,000 crores.
Impact of high NPAs Reform: Future incentives for the private sector
Banks have reported that nonperforming assets and corporate must be set right (reform) to avoid
had soared, to such an extent that provisioning a repetition of the problem. In PSB, structural
had overwhelmed operating earnings. As a result, reform aimed at preventing future increase in
net income had plunged deeply into the red. NPA should take place through diluting
NPAs nonetheless continued to climb, reaching government majority ownership in the public
9percent of total advances by September sector banks and infusing market discipline.
double their year-ago level. Equally striking was Resolution: The underlying stressed assets in the
the concentration of these bad loans. More than corporate sector must be sold or rehabilitated.
80% of the non-performing assets were in the Three of these mechanisms is particularly notable.
public sector banks, where the NPA ratio had For some time, the RBI has been encouraging the
reached almost 12 percent. At its current level, establishment of private Asset Reconstruction
Indias NPA ratio is higher than any other major Companies (ARCs). Secondly, the Strategic Debt
emerging market higher even than the peak Restructuring (SDR) scheme was introduced, under
levels seen in Korea during the East Asian crisis. which creditors could take over firms that were
At least 13 of these banks accounting for unable to pay and sell them to new owners. Thirdly,
approximately 40 per cent of total loans are the Sustainable Structuring of Stressed
severely stressed, with over 20 per cent of their Assets(S4A) was announced, under which creditors
outstanding loans classified as restructured or could provide firms with debt reductions up to 50
NPAs. With such a large fraction of their percent in order to restore their financial viability.
portfolios impaired, it has become extremely In principle, these schemes taken together might
difficult for them to earn enough income on their have provided a comprehensive framework for
assets to cover their running and deposit costs. dealing with solvency problems. Their success,
however, has been limited.
So, Indian economy is facing twin balance sheet
(TBS) problemthe impaired financial positions Insolvency and Bankruptcy Code:
of the Public Sector Banks (PSBs) and some Moreover, majority of participating banks
large corporate houses.TBS problem is the major believe that the Insolvency and Bankruptcy
impediment to private investment, growth of credit Code provides an effective mechanism for
and it has increased cost of credit to MSME resolution of insolvency and will help banks
and home loans. in their recovery efforts.

Miscellaneous News
Context India Innovation Index
Hereby, compiling the important short To make India an innovation-driven economy, NITI
notes of February (1 to 15), 2017. Aayog, Department of Industrial Policy & Promotion
(DIPP) and Confederation of Indian Industry (CII)
together launched a mega initiative India Innovation
Swachh Dhan Abhiyan Index that will rank states on Innovations through
Income Tax Department (ITD) has initiated Operation countrys first online innovation index portal that
Clean Money. Initial phase of the operation involves will capture data on innovation from all Indian states
e-verification of large cash deposits made during on innovation and regularly update it in real time.
9th November to 30th December 2016. Data The India Innovation Index Framework will be
analytics has been used for comparing the structured based on the best practices followed in
demonetisation data with information in ITD Global Innovation Index (GII) indicators and
databases. additionally by adding India-centric parameters those
In the first batch, around 18 lakh persons have truly reflect the Indian innovation ecosystem. This
been identified in whose case, cash transactions initiative will be the point of reference for all
do not appear to be in line with the tax payers international agencies to collect Indias up to date
profile. ITD has enabled online verification of these data points for global indices and analytic.
transactions to reduce compliance cost for the This portal will be a first-of-its-kind online platform
taxpayers while optimising its resources. where Global Innovation Index indicators and India
The Swachh Dhan Abhiyan will help track all the centric data from various states will be coalesced
accounts in which money has been deposited. and disseminated and updated periodically. This will
be a one-stop data warehouse and will track progress
Data analytics will be used to select cases for on each indicator at the National level and the State
verification, based on approved risk criteria. If the level on real-time basis. The access to this portal
case is selected for verification, request for will be hosted on the NITI Aayog website, and NITI
additional information and its response will also be Aayog will update this data periodically.
communicated electronically. The information on the
online portal will be dynamic getting updated on Data collated on this portal will not only be used to
receipt of new information, response and data ameliorate current data gaps w.r.t the GII, but be
analytics. The response of taxpayer will be assessed the prime source for theIndia Innovation Index,
against available information. which will be jointly developed byNITI Aayog, DIPP
and CII, in consultation with World Economic Forum,
In case explanation of source of cash is found the World Intellectual Property Organization, Cornell
justified, the verification will be closed without any University, OECD, UNIDO, ILO, UNESCO, ITU and
need to visit Income Tax Office. The verification others with the objective to rank Indian states as
will also be closed if the cash deposit is declared per their innovation prowess and provide impetus to
under Pradhan Mantri Garib Kalyan Yojna (PMGKY). them to build their respective innovation ecosystems

and spur the innovation spirit among institutions The implementation of the Scheme would be carried
and people. out under the overall supervision of Ministry of
Electronics and IT in active collaboration with States/
About Global Innovation Index UTs through their designated State Implementing
Agencies, District e-Governance Society (DeGS),
The Global Innovation Index (GII), co-
etc.
published byWorld-Intellectual Property
Organization (WIPO), Cornell University and
Mission XI Million
INSEAD with CII as a Knowledge Partner
since inception,has been ranking world Union sports ministry has launched Mission XI
economies including India since 2007 million, the biggest school sports outreach
according to their innovation capabilities and programme.
outcomes using 82 indicators among a host The key idea of Mission Xi Million is that every
of other important parameters. It has child should have the opportunity to play the worlds
established itself as both a leading reference most popular sport.
on innovation and a tool for action for policy
makers. The programme will encourage children to play
football and the approach is to work with school
India currently ranks 66thout of 128 countries principals and sports teachers andencourage and
on the Global innovation Index (GII) 2016. incentivise them to make children play football
games on a regular basis.
Pradhan Mantri Gramin Digital The main aim of the programme is to instill the
Saksharta Abhiyan passion for football in 11 million children from every
As per the 71st NSSO Survey on Education 2014, part of the country. The programme will also provide
only 6% of rural households have a computer. This schools with necessary knowledge and equipment
highlights that more than 15 crore rural households to encourage football as a sport played on a regular
(@ 94% of 16.85 crore households) do not have basis.
computers and a significant number of these The program will be rolled out in every state of the
households are likely to be digitally illiterate. country.
Thus the Union Cabinet has approved Pradhan
Mantri Gramin Digital Saksharta Abhiyan Lost Continent
(PMGDISHA) to make 6 crore rural households Scientists have confirmed the existence of a lost
digitally literate. continent under the Indian Ocean island of Mauritius.
PMGDISHA is expected to be one of the largest It is left over by the break-up of the super-continent
digital literacy programmes in the world. Under the Gondwana, which started about 200 million years
scheme, 25 lakh candidates will be trained in the ago.
FY 2016-17; 275 lakh in the FY 2017-18; and 300 The piece of crust, which was subsequently covered
lakh in the FY 2018-19. To ensure equitable by young lava during volcanic eruptions on the
geographical reach, each of the 250,000 Gram island, seems to be a tiny part of ancient land that
Panchayats would be expected to register an average broke off from the island of Madagascar, when Africa,
of 200-300 candidates. India, Australia and Antarctica split.
Digitally literate persons would be able to operate The lost continent is just a small piece of island
computers/digital access devices (like tablets, smart that probably broke of when Africa, India, Australia
phones, etc.), send and receive emails, browse and Antarctica split up and formed the Indian Ocean.
internet, access Government Services, search for The scientists found zircons on the island of
information, undertaking cashless transactions, etc. Mauritius that are three billion years old. These
and hence use IT to actively participate in the remnants are too old to belong to Mauritius as it
process of nation building. has no rock older than nine million years old. The

piece of crust of lost continent was subsequently

covered by young lava during volcanic eruptions. globally, despite the availability of a safe and
There are many pieces of various sizes of effective vaccine. Approximately 134 200
undiscovered continent which are collectively called people died from measles in 2015 - mostly
as Mauritius. children under the age of 5.
Measles is caused by a virus in the
Zircons are minerals that occur mainly in paramyxovirus family and it is normally
granite from the continents. They contain passed through direct contact and through
trace amounts of uranium, thorium and lead, the air. The virus infects the respiratory tract,
and due to the fact that they survive then spreads throughout the body. Measles
geological processes very well, they contain is a human disease and is not known to occur
a rich record and can be dated extremely in animals.
accurately.
Committee on Girl's education
Measles Rubella (MR) vaccination
The Union HRD Ministry has constituted a sub-
campaign launched committee of Central Advisory Board of Education
To protect children from major childhood diseases (CABE) under Chairmanship of Telangana's Deputy
measles and rubella, the government has launched Chief Minister to look into issues of girl's education.
a nationwide vaccination campaign.
The terms of reference of the sub-committee would
The Measles-Rubella (MR) vaccine is one vaccine be
that protects against two deadly diseases - measles To examine the reasons for low participation of
and rubella. Measles and Rubella are only girls in education, including the socio-economic
preventable through vaccination. factors with resultant gender bias, and suggest
Under the campaign, children aged between nine ways to reduce gender disparity so as to achieve
months and 15 will be administered the measles- better gender parity index.
rubella vaccine (MR-VAC). The campaign will start It will analyse girls' participation at all levels of
from Karnataka, Tamil Nadu, Puducherry, school education across socio-economic groups
Lakshadweep and Goa. of SC/ST, minorities and in rural-urban areas
and reduce existing educational disparities among
Following this, the vaccine will be introduced in the
them.
Universal Immunisation Progarmme, replacing the
currently given two doses of measles vaccine at 9- It will also examine the existing schemes,
12 months and 16-24 months of age. UNICEF and measures and incentives aimed at enhancing
WHO are providing technical support to the girls' participation and ensuring their retention in
programme. education and suggest improvements and
modifications in the existing schemes.
The sub-committee will further look into the
Measles is a highly contagious, serious
issues of safety of girl students in schools,
disease caused by a virus. In 1980, before
particularly in residential schools and hostels.
widespread vaccination, measles caused an
estimated 2.6 million deaths each year. It will also identify infrastructure gaps such as
non-availability and/or non-functionality of girls
The disease remains one of the leading
toilets which impede retention of girl students
causes of death among young children
and compile best practices adopted by states/
UTs for raising standards of girls education.
**********

Current Analyst February 2017 I

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Current Analyst February 2017 I

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