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Front Page / NATIONAL
- India, Afghanistan corner Pak. on terror at Amritsar
- ‘Centre doesn’t have to raise dispute with foreign govt. over private claim’
- Environment Ministry postpones forest policy indefinitely
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INTERNATIONAL
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Editorial/OPINION
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Economy
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Indian Express
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Live Mint
Click here to Download 9 PM Daily Brief PDF (5th Dec. 2016)
Front Page / NATIONAL
[1] India, Afghanistan corner Pak. on terror at Amritsar
Context
Mr. Modi and Mr. Ghani jointly inaugurated the ministerial deliberations at the Heart of Asia-Istanbul Process conference.
Happenings at HoA Conference
- Strong statements against terror: Both India & Afghanistan gave tough statements on terror pointed at Pakistan. Both countries urged Islamabad to end its “selective” approach to fighting terror groups on its soil, and end “terror sanctuaries” for groups that target them
- Rejecting Pak fund: Afghanistan rejected Pakistan’s proposal of $500 million fund for development in Afghanistan. It suggested that this amount of money should be used to contain extremism rising from Pakistan’s borders
- No bilateral meeting: Putting an end to speculations that there might be an India-Pak bilateral engagement on the sidelines of the HoA conference, Pakistani representative left without any such activity.
- Russian support for Pakistan: At the conference, Russian delegation supported Pakistani stance. This should be a cautionary sign to India as Russia-Pak close co-operation could spell bad weather for its bilateral engagement with its long standing ally
For details on HoA conference: Refer to brief dated 16th November 2016
[2] ‘Centre doesn’t have to raise dispute with foreign govt. over private claim’
Context
The court made the statement while denying relief to a woman who had sought directions to the Centre to take action for the realisation of the money deposited by her deceased husband.
Backdrop
Court was hearing a petition wherein the petitioner had sought directions to the Centre to take action for the realisation of the money deposited by her deceased husband, an Indian National Army office, in his accounts with the General Post Office in Shanghai, China
Court’s view
Court said that the Indian government is under no obligation to raise a dispute with a foreign government in relation to the private claim of the petitioner by merely acknowledging the fact of a representation made by him/her
Entire backstory
The woman’s husband had died in 1979. In 2003, the woman made a representation to the Indian government for the release of the amounts lying deposited. Her claim was forwarded to the Indian Embassy in China.
- Time elapsed: Meanwhile, the Shanghai Post Office in October 2003 informed the woman that her claim stood abandoned as the same was not registered within the assigned time after the issuance of the said policy of the Chinese government.
- High Court’s view: She moved the High Court in 2015, when a single-Judge Bench dismissed her appeal saying: “Merely because the Indian government, on a representation being made, has forwarded the claim of the petitioner to the Embassy of India in China would not create an obligation on the part of the Indian government to take further steps in the matter. The Indian government cannot raise a dispute with a foreign government qua the private claim of its citizens.”
- Appealed again: She then filed an appeal, saying the Indian government was under obligation to help emigrants under the Emigration Act, 1983.
[3] Environment Ministry postpones forest policy indefinitely
Context
Article lists developments in the quest for an updated forest policy
What has happened?
The Environment Ministry has indefinitely postponed an ambitious plan to update India’s forest policy. It further decided to
- Abstain from committing to a timeframe by which it would have a third of India’s land under forest or tree cover, a key promise of the forest policy.
No time limit set
Ministry issued a statement saying that “the national goal is to have a minimum of one-third of the total land area of the country under forest or tree cover. However, no time limit has been prescribed to achieve this target”
Why update the forest policy?
This was the first time that the policy was being re-looked since 1988 because
- Ministry wants to update the several changes in the forest laws and provide a forward-looking policy that talks about increasing India’s forest cover and tackling the effects of climate change.
Report rejected
The MoEFCC had tasked the Bhopal-based Indian Institute of Forest Management (IIFM), an affiliated organisation, with reviewing and revising the existing forest policy.
- The organisation had submitted its report and was available on the Environment Ministry’s website, as a “Draft National Policy
- However, on June 22, the Ministry rejected the report and claimed it had “inadvertently” uploaded the draft policy and claimed it to be so, when it was only a “study” by the IIFM.
INTERNATIONAL
[1] Sagarmala could deepen India’s trade and investment ties with China
Context
India’s decision to rapidly develop ports, especially along the east coast, and China’s renewed focus on an expansion of its harbors are resulting in an unintended fusion of the Sagarmala initiative and Beijing’s Maritime Silk Road (MSR)
Similarity between Sagarmala& MSR
In a way, Sagarmala follows the same model pursued by China, where the coastal centers of the Shenzhen, Shanghai and Guangzhou became engines for opening up a vast hinterland
Liaison office
At a brainstorming session organised after the conference co-hosted by the Indian Consulate General in Guangzhou and the local branch of the China Council for the Promotion of International Trade (CCPIT) it was decided that a Liaison Office of the China India Business Council (CIBC) would be established
Krishnapatnam
Under MSR, China has prepared an inter-ministerial document under which some of the lesser known ports are to be developed. India’s Krishnapatnam port, which falls within the Sagarmala blueprint has connectivity to 4 Chinese ports, viz. Shanghai, Qingdao, Zhanjiang, and Nansha. These four ports are directly connected to Krishnapatnam port on a weekly basis
Hunan
Hunan provinces’ status as manufacturer of both high-speed and Maglev trains is important from India’s perspective as it is looking tom modernise its railway system
Cultural ties
Officials in Changsha are also keen to revive cultural ties, with Buddhism which is the shared heritage of India and China as its foundation
Sagarmala
Fact: Total Ports in India – 180
Types of ports –
- Major ports – These are government owned ports under the Major Ports Trust Act, 1963. These Ports operate as Trusts, except the Port of Ennore, which is a Company under the Companies Act. There are 12 Major Ports in India.
- Minor ports– These ports have not been set up under the Major Ports Trust Act. For eg: Mundra, Gangavaram, Krishnapatnam
- State Government ports– These ports are purely state owned. For eg: Kakinada, Veraval
- Small ports– These are like fishing harbors. These have been set up under the Indian Ports Act, 1928.
Sagarmala (Image source: Indian express)
What is Sagarmala Project?
This project has been formulated keeping in mind the vast maritime potential that Indian ports hold and if developed properly it can boost India’s GDP by 2%.
Entire country has been divided into 9 maritime zones, coinciding with 9 maritime states. Each maritime zone would prepare schemes that would use ports as a mainstay of the development activities.
National Authority has been proposed under this project to oversee inter-ministry, inter-state and centre-state co-ordination.
State level bodies to ensure co-ordination between various state departments.
What this project aims for?
India suffers from poor port linkages, under performance of existing port infrastructure and lack of developed infrastructure near ports, for value addition of inbound or outbound merchandise. Along with this, an inefficient inter-modal transport connectivity results in high cost of logistics and exports. The share of merchandise trade in GDP for Germany is 75%, and for European Union it is 70%. For India, it is 42%. The Sagarmala project aims to improve this.
Formula for success
Sagarmala projects’ success depends on how well we are able to transform our Major Ports to ‘Smart Ports’.
What ails our ports?
They have not kept pace either with the requirements of emerging technology on-shore or off-shore or with the requirements of international trade, and most importantly the emerging trends in containerization, size of ships and flexible rules needed in a modern global world.
Need of the day
A dynamic, flexible, highly efficient and competitive port aka Smart port
Framework for a smart Port
- Governance structure: The port administration instead of running day to day port activities should only be confined to infrastructural and safety matters. The ports should be registered under the Companies Act.
- Reducing the pensionary liability: Pensionary liability of the ports runs into thousands of crores should be completely removed or transferred to New Pension scheme, resources for which can be generated by using the large tracts of high valued land lying unused at the ports.
- Compensating Ports: Ports have to be compensated for disadvantages inherent to them like Kolkata Port; the only riverine port of India needs subsidy to continue its operation.
- Competition from non-major ports must force the Major Ports to innovate and become more efficient in their operative mechanisms.
- Lack of flexibility: Section 13d of the Prevention of Corruption Act under which any action can be challenged and declared as malafide has ensured that the system remains inflexible.
- Efficient partners: The need of the day is that the all the participating departments like railways, customs, health and environment should come up with efficient solutions to ensure that the ports remain competitive.
- Regulation of companies/industries: There is a dire need to introduce transparency and to the regulate trade practices so that logistic providers, agents, transporters and freight providers are not able to exploit importers and exporters.
- Private sector: Private sector should be roped in to develop smart ports. Private companies can help build, own and then transfer the port to relevant government authorities
Editorial/OPINION
[1] Due diligence, unsafe drugs
Context
The Delhi High Court verdict quashing all notifications banning the manufacture and sale of 344 Fixed Dose Combination (FDC) drugs is a lesson in how not to administer a regulatory law.
Backdrop
Centre had imposed ban on manufacture and sale of 344 Fixed Dose Combination Drugs (FDCs) on March 10 2016 by issuing a notification.
- The Centre had imposed the ban under Section 26A of the Drugs and Cosmetics Act.
For more details: Refer this news
Entire issue
- Licenses granted without approval: Initially it was noted that in the case of FDC drugs for which manufacturing licences were granted by State licensing authorities between September 1988 and October 2012, the process was done without any approval from the Drugs Controller
- Formation of 10 committees: When they applied afresh to the Centre, on being asked to do so, their applications were not considered by the Drugs Controller; instead, the Centre formed 10 committees
- Kokate Committee: When these panels failed to consider all the applications, another one, the Kokate Committee, was formed. However, this panel went into the question whether these drugs posed a risk to consumers or lacked therapeutic value and justification. Based on its report, the Centre issued notifications banning these FDCs
- Delegation of power to a non-statutory body: In effect, the Centre seemed to have delegated its power to ban drugs to a non-statutory committee, when the Act itself provided for expert bodies through which technical aspects of administering the law were to be considered.
What is a FDC drug?
An FDC is one that contains two or more drugs combined in a fixed ratio of doses and available in a single dosage form.
Key issues
- Statutory bodies not consulted: Statutory bodies such as the Drug Testing Advisory Board (DTAB) and the Drugs Consultative Committee (DCC) not being involved in the process.
- Ban invalid: The ban was declared invalid because the power under the Drugs and Cosmetics Act was exercised without consulting the DTAB and DCC, and the government went about the process in a haphazard manner. Court expressed its reservations with the consultative process by which the Centre arrived at the decision.
Merit behind the ban
- Unsafe combinations & promote antibiotic resistance: The government believes, as do many health activists, that some combinations are unsafe and/or promote antibiotic resistance, while others lack particular therapeutic value, justification or advantage.
Conclusion
Author concludes by saying that good intentions alone are not enough to secure the public interest, the manner in which it is protected is equally vital.
[2] A roadmap for the CBI
Context
In the light of an interim CBI chief being appointed, author takes a look at the troublesome situations with which he will have to deal with and some suggestions on how CBI can unshackle itself from being a caged parrot.
Issues & tackling them
- Taking action against its own: Author says that the interim chief will have to take into account the adverse reports by Enforcement Directorate against two former CBI chiefs. Proper action taken against its own erring officers will goa long way in restoring public trust and faith in the agency
- Politicization of CBI: Author says that less than 10 per cent of investigative cases have political overtones and this is what gives the agency a bad name.
Solution: The new chief should have a team of reliable deputies who can ensure that investigations are protected from external pressures
- Delay in investigations: Another issue with CBI is the delay it takes to conclude the investigations
Solution: Taking up select cases is one way. But then there is no professional alternative agency at the Centre to which the less important cases can be diverted. The need, therefore, for expanding the CBI’s infrastructure, especially its manpower, is vital. DOPT can help in this regard
- Service conditions: Author points out that CBI is not an attractive avenue for employment for today’s youth other than those recruited for All India Services via UPSC. This makes a case for a fresh look at the service conditions for direct recruitment to the CBI.
Solution: Author proposes an increased pay and direct campus recruitment of youngsters to the CBI as is done by Central Intelligence Agency (CIA)
- Dependence on State governments: Another great constraint on the CBI is its dependence on State governments for invoking its authority to investigate cases in a State, even when such investigation targets a Central government employee. Since police is a State subject under the Constitution, and the CBI acts as per the procedure prescribed by the Code of Criminal Procedure (CrPC), which makes it a police agency, the CBI needs the consent of the State government in question before it can make its presence in that State. It is a cumbersome procedure
Solution: Author states that as there is no possibility of police being placed in the concurrent list, so a separate CBI Act must be promulgated to empower CBI officers with independent powers of investigation outside CrPC
Conclusion
Making CBI more autonomous or powerful will only empower it to act in an independent manner without coming under any sort of external pressure while simultaneously imposing a further layer of accountability on its officers.
ECONOMY
[1] As India goes digital, hacking targets multiply
Context
Article talks about the increasing threat of cybercrime and occurrence of hacking incidents recently
Surge in cybercrime
In India, there has been a surge of about 350 per cent of cybercrime cases registered under the Information Technology (IT) Act, 2000 from the year of 2011 to 2014, according to a joint study by The Associated Chambers of Commerce and Industry of India and consulting firm PricewaterhouseCoopers.
Phishing websites identified
Researchers in India at cybersecurity company FireEye discovered phishing websites created by cybercriminals that spoof 26 Indian banks in order to steal personal information from customers. FireEye said that it has notified the Indian Computer Emergency Response Team.
What is Phishing?
It is the fraudulent practice of sending emails purporting to be from reputable companies in order to induce individuals to reveal personal information, such as passwords and credit card numbers, online.
Consumers need to be aware
Article states that with increased penetration of digital banking, cyber criminals have turned their attention towards spoofing people of their hard earned money by stealing their sensitive information
Shift in the strategy
Experts are also seeing a shift in the strategy of hackers, who are now targeting mobile devices in order to obtain the sensitive information that is stored on them
Gooligan
Israeli cyber security firm Checkpoint said that its security researchers have revealed a new variant of Android malware, breaching the security of more than one million Google accounts.
- The new malware campaign, named Gooligan, roots Android devices and steals email addresses and authentication tokens stored on them. With this information, attackers can access users’ sensitive data from Gmail, Google Photos, Google Docs, Google Play and Google Drive
- The infection begins when a user downloads and installs a Gooligan-infected app on a vulnerable Android device, or by clicking on malicious links in phishing attack text messages.
What is a Malware?
Malware (short for “malicious software”) is considered an annoying or harmful type of software intended to secretly access a device without the user’s knowledge
- Types of malware include spyware, adware, phishing, viruses, trojan horses, worms, rootkits, ransomware and browser hijackers.
Indian Express
[1] Tightening the net
Context
The doctrine of extradition ensures an orderly process that protects the fugitive’s interests as it is subject to judicial review.
Backdrop
In the light of recent cases of culprits like Vijay Mallaya taking refuge in UK after defaulting on high value loans in India, the need to scale up co-operation wrt extradition was being felt. Consequently, during recent Indian visit by British PM, Theresa May, talks were held on the issue of extradition.
- It should be noted that a joint statement at the end of the visit, both India & UK expressed strong commitment to enhance cooperation under the MLAT (Mutual Legal Assistance Treaty) and to facilitate pending extradition requests from both sides
What is MLAT?
A mutual legal assistance treaty (MLAT) is an agreement between two or more countries for the purpose of gathering and exchanging information in an effort to enforce public laws or criminal laws. Modern states have developed mechanisms for requesting and obtaining evidence for criminal investigations and prosecutions
Doctrine of extradition
Five major constituents of extradition treaty as stated by Supreme Court in Abu Salem Ansari vs State of Maharashtra,
- Reciprocity: An understanding that both sides shall consider and honor each other’s requests
- Double criminality: This principle requires that charges against the fugitives are punishable in both countries
- Extraditable offences: An understanding that certain offences invite extradition
- Speciality: fugitives should not be prosecuted for offences not cited in the extradition request
- Non-inquiry: This principle implies that barring exceptions, the intentions of requesting state should not be questioned
Frameworks developed by India & UK
Author states that both India & UK have developed a comprehensive framework to meet the above listed requirements. This framework includes,
- National legislations such as Indian Extradition Act (1962) & UK Extradition Act (2003)
- India-UK mutual legal assistance treaty 1992 (MLAT): MLAT now also includes fiscal offences under its wing. The 2002 amendments to the Commonwealth Scheme allows extradition of fiscal offenders
- In India provisions in CrPC and the Prevention of Money Laundering Act 2002 deal with reciprocal arrangements.
Live Mint
[1] The unresolved problem of twin balance sheet
Context
Even in a favorable economic condition, revival may be difficult for some companies.
Twin Balance Sheet problem
Author has talked about this problem in the article. Let us learn a little about it.
Twin Balance Sheet problem was mentioned in the Economic Survey 2015-16 which acknowledged that it is one of the critical problems plaguing the Indian economy at present. This problem here refers to the terrible condition in which the balance sheets (financial statements) of two entities are in presently. These two entities are,
- Public Sector banks
- Corporate houses
What has happened?
Author states that RBI has revised rules in order to help banks deal with higher levels of non-performing assets (NPAs) and is tightening norms so that a similar problem is averted in the future
- Last week, the banking regulator released guidelines to contain concentration of loans in a single company and a group of connected companies
New rules
According to the new rules,
- Individual company: Banks will have to limit their exposure in an individual company at 20% of their tier 1 capital compared with 15% of the total capital currently
- Connected companies: For a group of connected companies, the exposure has to be limited at 25% of the core capital from the present norm of 40% of total capital
Applicable from
These new norms will be applicable from 1 April 2019
Similar steps taken in the past
- Lending made expensive: Earlier in 2016, RBI announced measures that will make lending to large borrowers expensive for banks beyond a specified limit
Rationale: To push large borrowers to the bond market and avoid concentration of loans in the banking sector
- Empowering the lenders: The central bank has empowered lenders to deal with non-performing loans. For instance, banks can convert a part of the debt into equity to take controlling stake in a stressed company under certain conditions and sell it to a new promoter
Rationale: Taking Banks out of the NPA (Non-performing Asset) crisis
Till now we have seen one side of the twin balance sheet problem and the steps being taken to address that. Now we shall focus on the corporate side of the problem.
Problem: While Banks are struggling to recover loans on the one side, companies who have borrowed huge amount of loans are struggling & finding it difficult to repay.
Present situation
Companies are selling assets to reduce debt burden because of the weak asset quality (Those assets which cannot be revived or a high risk like a project which is unlikely to be revived in near future)
Demonetization
Author points out that the current demonetization drive by the government may delay the loan recovery process
Conclusion
Author concludes by saying that even though India’s corporate debt as a proportion of gross domestic product is lower than some of the major economies in the world, the twin balance sheet problem is likely to remain an obstacle in the revival of investment and growth
[2] More decentralization and more democracy
Context
Decentralization is not merely for local governments, it also extends to greater flexibility for states
Issue tackled: Decentralization vs Centralization
Author sets up the premise by stating that although we have made a great deal of progress on various fronts like a successful institutionalization of the democracy, an unhindered federalism but still we have not achieved our full potential. Some people blame democracy for it citing examples of China & Singapore.
Author refutes above claim & states that there is no substitute to democracy, and the failings of democracy can only be overcome by more democracy, not extinguishing liberty
Highly centralized system
Author states that in India, for our size and diversity, we probably have the smallest number of final decision-makers—the prime minister, the chief ministers and occasionally the district magistrate or the Supreme Court
- Such a centralized system in a democratic setup is bound to be dysfunctional
Decentralization is the way to go
Author cites examples to show that it in India every great accomplishment was a result of local or sectoral initiative or leadership, delegation of power and devolution of resources with accountability.
Examples: Success of the Indian Space Research Organization, the milk revolution engineered by VergheseKurien, the green revolution, the remarkably efficient conduct of elections, disaster relief etc.
Present situation
Author states that we have only paid lip service to the concept of democratic decentralization
- State governance controlled by constitution: Although states today are stronger and more autonomous in a federal polity than ever before, the governance structure of states is controlled by the Constitution with no local flexibility
- Single constitution: In no other democracy does the federal Constitution dictates the manner of election of the executive or legislature and the structure of bureaucracy at state level, or the constitution of local governments
- Weak & Ineffective local governments: Author states that although local governments were established but they have failed to materialize into a strong governance unit. State legislators and the senior bureaucrats in the state are threatened by their rise hence prevent them from functioning properly
- No share in revenue & paltry grants: Author points out that even Finance Commission is only allocating paltry grants to local governments, and despite the constitutional status of local bodies, there is no assured share of Union and state tax revenues to them
Solutions
Author proposes that only effective solutions are,
- Effective empowerment of local governments
- Devolution of adequate resources
- Strong, independent local ombudsmen to enforce accountability
Decentralization: not a concept limited to local governments
Decentralization is not merely for local governments. It extends to
- Greater flexibility for states within the boundaries of constitutional freedoms and the unity and integrity of India
- The empowerment of all kinds of stakeholders from cooperatives to schools, local housing colonies to self-help groups
Conclusion
Author concludes by saying that we made British leave on the ground that good government is not a substitute for self-government but today we are struggling between centralized, bad government and self-government.
Read more: Decentralization
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