{"id":12128,"date":"2017-11-16T13:02:28","date_gmt":"2017-11-16T07:32:28","guid":{"rendered":"http:\/\/blog.forumias.com\/?p=12128"},"modified":"2017-11-13T15:03:23","modified_gmt":"2017-11-13T09:33:23","slug":"answers-mains-marathon-upsc-mains-current-affairs-questions-november-15","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/answers-mains-marathon-upsc-mains-current-affairs-questions-november-15\/","title":{"rendered":"Answers: Mains Marathon \u2013 UPSC Mains Current Affairs Questions \u2013 November 15"},"content":{"rendered":"<p><strong><a href=\"http:\/\/blog.forumias.com\/mains-marathon\/\" target=\"_blank\" rel=\"noopener\">Archives<\/a>\u00a0<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Q.1 India and China will hold the 20th round of border talks in the end of December, the first since the 73 days standoff at Doklam. Discuss the Indo \u2013 China border conflict in light of the above statement. Also discuss the commercial relations between them. (GS-2<\/span>)<\/p>\n<p><b>Introduction<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India \u2013 China relations have undergone dramatic changes over the past five decades, ranging from the 1950\u2018s with a deep hostility in the 1960\u2018s and 1970\u2018s to a rapprochement in the 1980\u2018s and a readjustment since the demise of Soviet Union.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The modern relationship began in 1950 when India was among the first countries to end formal ties with the Republic of China and recognize the PRC as the legitimate government of Mainland China. China and India are the two most populous countries and fastest growing major economies in the world.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India and China are playing an increasingly important role in the world economy. A better relationship would boost trade ties, investments and employment in the two countries, and even augment global growth.<\/span><\/li>\n<\/ul>\n<p><b>The Indo-China border conflict<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Sovereignty over two large and various smaller separated pieces of territory have been contested between China and India<\/span><\/li>\n<\/ul>\n<ol>\n<li><span style=\"font-weight: 400;\"> \u00a0\u00a0<\/span> <span style=\"font-weight: 400;\">The <\/span><b>westernmost, Aksai Chin<\/b><span style=\"font-weight: 400;\">, is claimed by India as part of the state of Jammu and Kashmir and region of Ladakh but is controlled and administered as part of the Chinese autonomous region of Xinjiang.<\/span><\/li>\n<\/ol>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It is a virtually uninhabited high-altitude wasteland crossed by theXinjiang-Tibet Highway.<\/span><\/li>\n<\/ul>\n<ol start=\"2\">\n<li><span style=\"font-weight: 400;\"> \u00a0\u00a0<\/span> <span style=\"font-weight: 400;\">The other large disputed territory, the easternmost, lies south of theMcMahon Line. It was formerly referred to as the <\/span><b>North East Frontier Agency, and is now called Arunachal Pradesh<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ol>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The McMahon Line was part of the 1914Simla Convention between British India and Tibet, an agreement rejected by China.<\/span><\/li>\n<\/ul>\n<p><b>What were the troubled areas between India and China?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Chinese road building project in the Himalayas has become the center of an escalating border dispute between India and China, with both sides accusing the other of territorial intrusions.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The controversial road which runs through the disputed Doklam Plateau, on the unmarked border between China and Bhutan.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">China is becoming a major hurdle to India\u2019s membership to NSG.<\/span><\/li>\n<\/ul>\n<p><b>The commercial relations between the nations<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Trade volume between the two countries in the beginning of the century, year 2000, stood at US$ 3 billion.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In 2008, bilateral trade reached US$ 51.8 billion with China replacing the United States as India\u2019s largest \u201cGoods trading partner.\u201d<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In 2011 bilateral trade reached an all-time high of US$ 73.9 billion.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In 2016, India\u2019s top exports to China included diamonds, cotton yarn, iron ore, copper and organic chemicals.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In 2016, China exports of electrical machinery and equipment saw an increase of 26.83%to US$ 16.98 billion.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India was the largest export destination of Fertilizers exports from China.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There are three border trade points between India and China viz. Nathu La Pass (Sikkim), Shipki La Pass (Himachal Pradesh) and Lipulekh Pass (Uttarakhand).<\/span><\/li>\n<\/ul>\n<p><b>Investments<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">According to data released by China\u2019s Ministry of Commerce, the Chinese investment in India in Jan-Mar 2017 were to the tune of US$ 73 million.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Cumulative Investment in India till March 2017 stood at US$ 4.91 billion.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">According to data released by China\u2019s Ministry of Commerce, the cumulative Indian investment in China till March 2017 reached US$705 million.<\/span><\/li>\n<\/ul>\n<p><b>Economic Relations<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India-China economic relations constitute an important element of the strategic and cooperative partnership between the two countries.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Several institutional mechanisms have been established for enhancing and strengthening economic cooperation between the two countries.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In accordance with the MoU signed during Chinese Premier Wen Jiabao\u2019s visit to India in April 2005, the two sides have since successfully held eight Financial Dialogues in April 2006, December 2007, January 2009, September 2010,November 2011, September 2013, December 2014 and August 2016 respectively.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Q.2 China advocated India to shed its objections to the China Pakistan Economic Corridor (CPEC) and take benefit from the Belt and Road Initiative (BRI). In reference to above statement, Explain how both OBOR and CPEC is a threat to India and how should India counter it.\u00a0<\/span><span style=\"font-weight: 400;\">(GS-2)<\/span><\/p>\n<p><b>Introduction<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">CPEC (China-Pakistan Economic Corridor) already runs through the Indian Territory illegally occupied by Pakistan, signing OBOR at such violations would be disrespectful towards our own sovereignty.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It poses a major security threat to India as Beijing is trying to encircle New Delhi by undertaking construction projects in the neighbouring countries<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Joining OBOR can give legitimacy to the alleged state-sponsored terrorism from Pakistan,that can now spread to the rest of J&amp;K.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">China is trying to connect railway lines to Pakistan, Myanmar, Nepal and Bangladesh primarily with a view to further create far greater difficulty for India from the security point of view<\/span><\/li>\n<\/ul>\n<p><b>OBOR<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The most ambitious project of Xi Jinping announced in year 2013 is referred to as One Belt One Road.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There are 2 components of this initiative: the Silk Road Economic Belt and the 21st Century Maritime Silk Road (exhibit<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Silk Road Economic Belt is envisioned as three routes connecting China to Europe (via Central Asia), the Persian Gulf, the Mediterranean (through West Asia), and the Indian Ocean (via South Asia).<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The 21st Century Maritime Silk Road is planned to create connections among regional waterways.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It focuses on improving connectivity among Asian countries Africa, China and Europe.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The main crux is to grow land routes as well as maritime routes.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The policy is significant to China as it aims to boost its deistic growth.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">China\u2019s uses OBOR as a strategy for economic diplomacy.<\/span><\/li>\n<\/ul>\n<p><b>Significance of OBOR<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Creating an infrastructure and providing connectivity to foster economic cooperation as partners in development are the explicit objectives. Its implicit objectives include both economic and political.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">OBOR could help earn higher returns on surplus savings or capital exports and it could provide a new source of external demand.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It could use the excess capacities in railways, steel, metals and cement, to provide work for their construction companies, while using their experience of infrastructure projects.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">OBOR is a means of extending political spheres of influence, mostly in Africa at present, to South East Asia, South Asia, Central Asia and West Asia. It is about buying regional leadership in the quest for hegemony.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It is a stepping stone for China\u2019s aspirations of global leadership by creating a rival to the transatlantic economic area with the US at its apex.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">OBOR should make the world recognize the global aspirations of China.<\/span><\/li>\n<\/ul>\n<p><b>China-Pakistan economic cooperation (CPEC)<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">China-Pakistan cooperation projects are focused on four areas:<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Energy projects, transport infrastructure, <\/span><b>Gwadar Port<\/b><span style=\"font-weight: 400;\">, and industrial cooperation.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Major energy projects include construction of a 300 megawatt solar power plant by Chinese company Synergy, and work has already started on more than half of the remaining sixteen planned energy projects.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In terms of transport infrastructure, reconstruction and upgrade works of the <\/span><b>Karakoram Highway (KKH) <\/b><span style=\"font-weight: 400;\">within Pakistan are underway<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The construction of the <\/span><b>Karachi-Lahore Motorway<\/b><span style=\"font-weight: 400;\"> also started this March.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">For the development of Gwadar Port, on November 11, 2015, Pakistan handed over 280 hectares of land use rights to a Chinese company for a term of forty-three years, and construction on new facilities is already underway.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Chinese projects in Pakistan under the <\/span><b>China-Pakistan Economic Corridor<\/b><span style=\"font-weight: 400;\"> already employ more than 6,000 Pakistani workers, showing that the close relationship between China and Pakistan has already moved from the policy announcement to the project implementation stage.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The amount of funds involved, the depth of the exchanges, and the number of people participating is unprecedented in relations between these two countries.<\/span><\/li>\n<\/ul>\n<p><b>A great threat to India<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">For India, to be a part of OBOR or to not be, has been a dilemma for some year but in May the government decided not to.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The decision appears to be strong keeping sovereignty as the main agenda upfront.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Being part of OBOR would have raised several questions on connectivity, financial responsibility, transparency and the environment.<\/span><\/li>\n<\/ul>\n<p><b>Ways to counter OBOR<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India should ramp internal connectivity.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It should modernize connectivity across its land and maritime frontiers with neighbouring countries.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India must work with countries like China did with Japan and multilateral institutions to develop regional connectivity in the Indian Subcontinent and beyond.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India\u2019s vision document on ASIA- AFRICA GROWTH CORRIDOR can be a good front.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India and Japan has launched their own infrastructure development projects to balance OBOR- GREAT WALL.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There is proposed corridor Bangladesh, China, India and Myanmar-Economic Corridor (BCIM-EC) involving four nations and has generated much interests as well as concerns.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">BCIM agenda is transforming landlocked and underdeveloped border regions of the countries involved, the latter pays more attention to the strategic implications it might have on the region.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Q.3 The Reserve Bank of India (RBI) continues to remain the net purchaser of the U.S. currency after it bought $1.259 billion in September from the spot market. In line with the exchange business, discuss the impact of the intervention and RBI\u2019S role as a custodian of the Indian Foreign exchange market.\u00a0<\/span><span style=\"font-weight: 400;\">(GS-3)<\/span><\/p>\n<p><b> Introduction<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">In September, RBI bought $3.788 billion, while it sold $2.529 billion in the spot market.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">In August too, the central bank was net purchaser of 3.226 billion of the greenback, buying $4.556 billion and selling $1.330 billion in the spot market.<\/span><\/li>\n<\/ul>\n<p><b>Why does RBI intervene in the foreign market?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The RBI intervenes in the foreign market to <\/span><b>contain volatility in the rupee and not set a price band.<\/b><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In FY17, RBI had a net purchase of 12.351 billion of the U.S. currency as it bought $71.764 billion and sold $59.413 billion in the spot market.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The RBI has been intervening in the currency markets because a weaker currency pushes up the country\u2019s import bill \u2013 you pay more rupees for the same amount of dollars \u2013 and contributes to the current account deficit.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It is also indicative of a country\u2019s economic health and a weaker currency is a signal to investors that the economy is not being well-managed.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">India has a huge import bill largely because it buys almost 80 per cent of its oil from abroad, and a weak rupee can wreak havoc with the government\u2019s finances.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Market decides the value of the rupee and the central bank only intervene to halt volatile currency movements caused by speculative trades.<\/span><\/li>\n<\/ul>\n<p><b>What is the impact of the intervention?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The reason that the rupee has continued to fall is because the RBI is caught in a cycle where it has to battle inflation, liquidity crunch and a falling rupee at the same time.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Unfortunately, any action it takes to tackle one could be negated by the others. To tackle inflation, the RBI must keep rates high and liquidity tight, but that can stifle economic growth and push the currency down.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If it sells dollars to support the currency, that too sucks liquidity out, choking growth. Slower growth makes India an unattractive destination for foreign investors, which in turn leads to drying up of dollar flow.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">But if it releases too much liquidity into the system, inflation could go into double digits and push the value of the rupee down, completing the vicious cycle.<\/span><\/li>\n<\/ul>\n<p><b>RBI as a custodian of India\u2019s foreign exchange reserves<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The RBI acts as the custodian of the country\u2019s foreign exchange reserves, manages exchange control and acts as the agent of the government in respect of India\u2019s membership of the IMF.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Exchange control was first imposed in India in September 1939 at the outbreak of World War II and has been continued since. Under it, control was imposed on both the receipts and payments of foreign exchange.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The foreign exchange regulations under the law required that all foreign exchange receipts whether on account of export earnings, investment earnings, or capital receipts, whether oh private account or on government account, must be sold to the RBI either directly or through authorized dealers (mostly major commercial banks).<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This resulted in centralization of country\u2019s foreign exchange reserves with the RBI and facilitated planned utilization of these reserves, because all payments in foreign exchange were also controlled by the authorities.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The exchange control was so operated as to restrict the demand for foreign exchange within the limits of the available supplies of it.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Foreign exchange was rationed among competing demands for it according to the government policy.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">All this became essential in the context of actual or potential shortage of foreign exchange, which had been an important constraint on India\u2019s efforts at planned economic development, most of the time.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Archives\u00a0 Q.1 India and China will hold the 20th round of border talks in the end of December, the first since the 73 days standoff at Doklam. Discuss the Indo \u2013 China border conflict in light of the above statement. Also discuss the commercial relations between them. (GS-2) Introduction India \u2013 China relations have undergone&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/answers-mains-marathon-upsc-mains-current-affairs-questions-november-15\/\">Continue reading <span class=\"screen-reader-text\">Answers: Mains Marathon \u2013 UPSC Mains Current Affairs Questions \u2013 November 15<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":2292,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[25,9],"tags":[],"class_list":["post-12128","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mains-marathon-answers","category-public","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2017\/06\/pen-paper-laptop.jpg?fit=1000%2C500&ssl=1","views":{"total":0,"cached_at":"","cached_date":1704645654},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/12128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=12128"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/12128\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/2292"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=12128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=12128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=12128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}