Answers: Mains Marathon – UPSC Mains Current Affairs Questions – February 8, 2018

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Q.1) The Indo-U.S. civil nuclear agreement is seen as a watershed in India-USA relations and introduced a new aspect to international nonproliferation efforts. Has India been able to accrue any benefit out of this deal? (GS–2)

Introduction:

• Signed in 2005, The 123 Agreement signed between the United States of America and the Republic of India is known as the S.–India Civil Nuclear Agreement or Indo-US nuclear deal.
• As per the deal, India agreed to separate its civilian and military nuclear activity.
• India also agreed to open up the civilian part to inspection by the International Atomic Energy Agency (IAEA).
• In return, the US offered to resume full nuclear trade (selling of reactors, transfer of technology, Uranium sale) with India, ending its nuclear ostracism.

Has India been able to accrue any benefit out of this deal?

Yes, India been able to accrue any benefit out of this deal. They are as follows:

Fissile material:

• The best way to get access to the requisite fissile material for India would be through uranium imports, which was not possible without ending India’s nuclear isolation by US and the Nuclear Suppliers Group (NSG).

Energy security concerns:

• This deal would partially ease India’s energy security concerns.

Growth under the Make in India scheme:

• Access to uninterrupted reliable power would aid in industrial growth under the Make In India scheme and would bring in foreign investment.

Access to better technologies:

• India also gets access to better technologies in the civilian power generation ambit.

Recognizes India as a de-facto nuclear power:

• Strategically, this deal recognizes India as a de-facto nuclear power and has taken Indo-US relations (in all matters including political, economic, military, etc) to the next level (the N deal has turned into a flag-point for Indo-US relations).

India as a possible counter to China:

• The US views India as a possible counter to China in the Asian region and this is good for India.

Nuclear ties will other NSG signatories:

• By getting the Nuclear Suppliers Group (NSG) waiver, India can now look to have nuclear ties will all the other NSG signatories.

Development of a strategic reserve of nuclear fuel:

• The Agreement provides for the development of a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors.

Bringing India closer to Non-Proliferation regime:

• The US wants to bring India closer to the Non-Proliferation regime by placing most of its nuclear capabilities under IAEA safeguards.

Boost India’s economic growth:

• Financially, the U.S. also expects that such a deal could spur India’s economic growth and bring in $150 billion in the next decade for nuclear power plants, of which the U.S. wants a share.

Allow Uranium sale to India:

• It also was under pressure from other nations to allow Uranium sale to India as India is one of the largest buyers of Uranium and everyone wants a share of this market.

Benefit from Indian technology:

• The US may also benefit from Indian technology, especially the Thorium based research, as India had to develop its capabilities in isolation, it may well have developed novel techniques.

Q.2) What do you mean by Non-Performing Assets? Is it different from stressed assets? What are the adverse effects of India’s bad loan problem on a bank’s revenue stream? (GS–3)

Introduction:

• A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.

How NPA are different from stressed assets?

• A stressed asset is an indicator of the health of the banking system.
• It is a combination of NPA, Restructured loans and Written off assets.
• Assets of the banking system comprises of loans given and investment in bonds made by banks.
• Quality of the asset indicates how much of the loans taken by the borrowers are repaid in the form of interests and principal.

What are the adverse effects of India’s bad loan problem on a bank’s revenue stream?

The adverse effects of India’s bad loan problem on a bank’s revenue stream are:

• The higher is the amount of non-performing assets (NPA) the weaker will be the bank’s revenue stream.
• Indian Banking sector has been facing the NPA issue due to the mismanagement in the loan distribution carried by the Public sector banks.
• As the NPAs of the banks will rise, it will bring a scarcity of funds in the Indian markets. Few banks will be willing to lend if they are not sure of the recovery of their money.
• The shareholders of the banks will lose of money as banks themselves will find it tough to survive in the market.
• This will lead to a crisis situation in the market.
• The price of loans, interest rates will shoot up badly. Shooting of interest rates will directly impact the investors who wish to take loans for setting up infrastructural, industrial projects etc.
• It will also impact the retail consumers, who will have to shell out a higher interest rate for a loan.
• All these factors hurt the overall demand in the Indian economy.
• Finally, it will lead to lower growth and higher inflation because of the higher cost of capital.

Q.3)  Discuss the role of NITI Aayog’s Three Year Action Agenda  in reforming various sectors of the economy including agriculture. (GS–3)

Introduction:

• NITI Aayog’s Action Agenda forms a part of larger Vision Document which spans a seven year strategy and a 15 years vision till fiscal year 2031-32.
• NITI Aayog’s Three Year Action Agenda document is a comprehensive framework for policy changes to be implemented in the short term in India.
• The action agenda has replaced the five-year plans of the erstwhile Planning Commission.
• It covers the different sectors of the economy—agriculture, industry and manufacturing

What are the objectives of NITI Aayog’s Action Plan?

The objectives of NITI Aayog’s Action Plan are:

• Target of doubling farmers’ income by 2022,
• It will address the problems of increasing suicides & distress of the farmers,
• Schemes like PMKSY, E-NAM, and digitalization of land-records are in the right direction in this regard,
• Increasing productivity of land and water,
• Reforming agri-markets on the lines of e-NAM,
• Reforming tenancy laws,
• Relief measures during natural disasters,
• Shift to high value commodities: horticulture, animal husbandry, fisheries,
• Improve the profitability of cultivation by “getting markets right”,
• Investing in water to fulfill its slogan of “har khet ko pani” and “more crop per drop”,
• Focusing on Direct Benefit Transfer (DBT) of food and fertiliser subsidies to the accounts of targeted beneficiaries,
• Ensuring that the new Pradhan Mantri Fasal Bima Yojana (PMFBY)delivers compensation to farmers in time, and
• Setting up logistics from grading, storage to movement, and linking them to organised retail (including e-retail), large processors and exporters.