Highlight of Economic Survey Part 2

Overview and Outlook for Policy

Economic Survey 2016-17 Volume 2 was laid in the Parliament today. The Survey notices a rekindled optimism on structural reforms in Indian economy.

Various factors such as launch of the GST;Positive impacts of demonetization;decision in principle to privatize Air India;further rationalization of energy subsidies andActions to address the Twin Balance Sheet (TBS) challenge contribute to this optimism.

The document also adds that a growing confidence that macro-economic stability has become entrenched is evident because of a series of government and RBI actions and because of structural changes in the oil market have reduced the risk of sustained price increases.

However the Survey cautions that anxiety reigns because a series of deflationary impulses are weighing on an economy, yet to gather its full momentum and still away from its potential. These include: stressed farm revenues, as non-cereal food prices have declined; farm loan waivers and the fiscal tightening they will entail; and declining profitability in the power and telecommunication sectors, further exacerbating the TBS problem.

Examining if India is undergoing a structural shift in the inflationary process toward low inflation, the Survey notes that the oil market is very different today than a few years ago in a way that imparts a downward bias to oil prices, or at least has capped the upside risks to oil prices. Also Farm loan waivers could reduce aggregate demand by as much as 0.7 percent of GDP, imparting a significant deflationary shock to an economy. Spurt in New Tax Payers and Reported Income After Demonetization; 5.4 lakh New Tax Payers Post-Demonetization. Demonetization’s impact on the informal economy increased demand for social insurance, particularly in less developed states. MGNREGS and its implementation by the Government have met the programme’s stated role of being a social safety net during times of need. It also adds that sustaining current growth trajectory will require action on more normal drivers of growth such as investment and exports and cleaning up of balance sheets to facilitate credit growth.

The ratio of stressed companies in the power sector (defined as the share of debt owed by companies with an interest coverage (IC) ratio of less than 1) has been steadily rising this year, reaching 70 percent, with an associated vulnerable debt of over Rs. 3.6 lakh crore. The telecommunications sector has experienced its own version of the “renewables shock” in the form of a new entrant that has dramatically reduced prices for, and increased access to, data, thereby benefitting—at least in the short run— consumers; after launching of services by the new entrant in September 2016, the average revenue per user (ARPU) for the industry on aggregate has come down by 22 percent vis-à-vis the long term (December 2009-June 2016) ARPU, and by about 32 percent since September 2016.

As regards Outlook for Growth 2017-18, Survey (Volume I) had forecast a range for real GDP growth of 6.75 percent to 7.5 percent for FY 2018. For Outlook for Prices & Inflation 2017-18, the Survey notes the outlook for inflation in the near-term will be determined by a number of proximate factors, including

The outlook for capital flows and exchange rate which in turn will be influenced by the outlook and policy in advanced economies, especially the US; the monsoon;the introduction of the GST;the 7th Pay Commission awards;likely farm loan waivers; and the output gapthe recent nominal exchange rate appreciation;

The document says that the fact that current inflation is running well below the 4 percent target, suggests that inflation by March 2018 is likely to be below the RBI’s medium term target of 4 percent.

Monetary Management and Financial Intermediation

· The fiscal outcome of the Central Government in 2016-17 was marked by strong growth in tax revenue, sustenance of the pace of capital spending and a consolidation of non-salary/pension revenue expenditure. This combination allowed the Government to contain the fiscal deficit to 3.5 per cent of GDP in 2016-17.

· The Union Budget for 2017-18 opted for a gradual fiscal consolidation path: the fiscal deficit is expected to decline to 3.2 percent of GDP in 2017-2018. The fiscal deficit target of 3 per cent of GDP under the FRBM framework is projected to be achieved in 2018-19.

· The Budget for 2017-18 introduced a number of procedural reforms, including: the integration of the Railway Budget with the Union Budget; advancing of the date of the Union Budget to February 1, almost by a month; elimination of the classification of expenditure into ‘plan’ and ‘non-plan’; and, restructuring of the Medium Term Expenditure Framework Statement with projected expenditures (revenue and capital) for each demand for the next two financial years.

· Overshadowing these otherwise significant fiscal policy initiatives is the introduction of the Goods and Services Tax with effect from the 1st day of July 2017, encompassing a plethora of the Central and State level indirect taxes, paving the way for a dramatic transformation of the Indian markets and the economy.

· The Reserve Bank of India cut the policy rate by 50 basis points during 2016-17. However, it shifted its monetary policy stance from accommodative to neutral in February 2017. As of August 2017 Repo rate stood at 6.00 per cent and reverse repo rate at 5.75 per cent.

· Monetary aggregates decelerated significantly following the withdrawal of legal tender status of specified bank notes on November 9, 2016. As of 31st March 2017, currency in circulation contracted by 19.7 per cent whereas reserve money contracted by 12.9 per cent.

· Credit off-take from banks continued to decelerate further. During 2016-17, gross bank credit outstanding grew at around 7 per cent on an average. The average gross bank credit to industry contracted by 0.2 per cent in the FY 2016-17.

· Sluggish growth and increasing indebtedness in some sectors of the economy have impacted the asset quality of banks and this is a cause for concern. The gross non-performing advances (GNPAs) ratio of SCBs rose from 9.2 per cent in September 2016 to 9.5 per cent in March 2017.

· Financial inclusion is proceeding apace under the Pradhan Mantri Jan DhanYojana. Zero balance accounts under PMJDY has declined consistently from nearly 58 per cent in March 2015 to around 24 per cent as of December 2016.

Prices and Inflation

· Significant moderation in CPI headline inflation during the last three years. CPI inflation fell to a series low of 1.5 percent in June 2017.

· Broad based decline in all commodity groups during 2016-17, the most significant being decline in food.

· Food inflation, which was the main driver of inflation in the past, declined significantly during the year because of improvements in supply of pulses and vegetables on the back of a normal monsoon. Core inflation-indicative of underlying trends — too declined in the last few months.

· Convergence between CPI and WPI inflation in the last few months.

· Most States/UTs witnessed sharp decline in CPI inflation in 2016-17 as compared to the previous year.

· Both rural and urban inflation have declined in 2016-17 and the gap between rural and urban inflation has narrowed down in recent months.

Climate Change, Sustainable Development and Energy

· India ratified the Paris Agreement on 2nd October, 2016. India’s actions for the post-2020 period are based on its Nationally Determined Contribution (NDC).·

India’s NDC targets to lower the emissions intensity of GDP by 33 – 35 per cent by 2030 from2005 levels, to increase the share of non-fossil based power generation capacity to 40 per cent of installed electric power capacity(cumulative) by 2030, and to create an additional carbon sink of 2.5-3 Gt CO2e through additional forest and tree cover by 2030.

· At the multilateral level, the international community is engaged in writing the “Paris rule book” which includes guidelines and modalities for the implementation of the Paris Agreement for the transparency framework for action and support, features and accounting of NDCs etc. At the national level, the roadmap for implementation of India’s NDC is being prepared, by constituting an Implementation Committee and six Sub-Committees. The Committees are working to elaborate their respective NDC goals and identify specific policies and actions aimed at achieving them.

· India has set itself ambitious targets in the area of renewable energy. Moving ahead in this direction, India is implementing the largest renewable energy expansion programme in the world. It envisages a 5-fold increase in the overall renewable energy capacity to 175 GW by 2022. This includes 100 GW of solar, 60 GW of wind, 10 GW of biomass, and 5 GW of small hydro power capacity.

· There is an urgent need to further increase the access of the poor to more efficient energy resources. Many schemes have been implemented by the government to tackle this like Pradhan Mantri Ujjwala Yojana, PAHAL scheme, Deen Dayal Upadhyaya Gram Jyoti Yojana. A large number of focused initiatives have been taken in various sectors of the economy to ensure a pathway of lower emission and climate resilient development.

· India is at a stage of development that requires it to grow at a fast rate and lift the large number of their citizens from below the poverty line. Energy deprivation levels for a sizeable portion of population remain at high levels. The SDG 7 is to ensure access to affordable, reliable, sustainable and modern energy for all.

· Social cost analysis of coal and renewables based power done in the chapter indicate higher social costs for renewables. Storage costs and stranding of assets based on coal based power are major costs associated with the renewables based power. Given that the first goal for India is to provide 100 per cent energy access to its population and bridge the development deficit gap, all energy sources need to be tapped.

· A number of initiatives have been taken in the Indian financial sector also. In the renewable energy segment, as per the notification of the RBI in May 2016, bank loans of up to Rs.15 crore for solar-based power generators, biomass-based power generators, wind mills, micro-hydel plants, etc. will be considered part of Priority Sector Lending. The External Commercial Borrowing (ECB) norms have been further liberalized so that green projects can tap this window for raising finance across the borders. The Securities and Exchange Board of India (SEBI) has, in May 2017, put in place the framework for issuance of green bonds.

External Sector

· India’s balance of payments situation which was benign and comfortable during 2013-14 to 2015-16, further improved in 2016-17, as a result of low and falling trade and current account deficits and moderate and rising capital inflows, resulting in further accretion of foreign exchange reserves.

· Reflecting the slowly improving world economic situation, India’s exports turned positive at 12.3 per cent in 2016-17 after an interregnum of two years. This along with a marginal decline in imports by 1.0 per cent resulted in narrowing down of trade deficit to US$ 112.4 billion (5 per cent of GDP) in 2016-17 as compared to US$ 130.1 billion (6.2 per cent of GDP) in 2015-16.

· The current account deficit (CAD) narrowed down progressively to 0.7 per cent of GDP in 2016-17 from 1.1 per cent of GDP in 2015-16 led by sharp contraction in trade deficit which more than outweighed a decline in net invisibles earnings.

· Net capital inflows were slightly lower at US$ 36.8 billion (1.6 per cent of GDP) in 2016-17 as compared to US$ 40.1 billion (1.9 per cent of GDP) in the previous year, mainly due to fall in NRI deposits.

· Gross FDI inflows to India increased significantly to US$ 60.2 billion in 2016-17 from US$ 55.6 billion in 2015-16. Net FDI inflows (i.e. net of outward FDI) at US$ 35.6 billion, however, moderated marginally by 1.1 per cent from US$ 36.0 billion in 2015-16.

· In 2017-18 (April-June) there was double digit export growth at 10.6 per cent with export growth continuing to be in positive territory continuously for the last eleven months.

· Among the major economies running current account deficit, India is the second largest foreign exchange reserve holder after Brazil with reserves at US$ 386.4 billion as on 7th July, 2017.

· The average monthly exchange rate of the rupee against the US dollar after depreciating continuously from November 2016 to January 2017, has appreciated continuously from February to June 2017, while in the case of the Pound sterling, Euro and Japanese yen there have been monthly variations. The rupee performed better than many other EME-currencies in 2016-17.

· During 2016-17, while on an average (on a y-o-y basis), the Indian rupee depreciated by 2.4 per cent against the US dollar, in terms of the nominal effective exchange rate (NEER) against a basket of 6 and 36 currencies, the rupee depreciated by 0.5 per cent and 0.1 per cent, respectively. However, in terms of the real effective exchange rate (REER) against a basket of 6 and 36 currencies, it appreciated by 2.7 per cent and 2.2 per cent, respectively in 2016-17.

· Most of the external debt indicators of India improved at end-March 2017 compared end-March, 2016. India’s aggregate external debt stock at end-March 2017 stood at US$ 471.9 billion registering a decline of US$ 13.1 billion (2.7 per cent) over end-March 2016. The ratio of external debt to GDP fell to 20.2 per cent from 23.5 per cent, while foreign exchange reserves provided a cover of 78.4 per cent to external debt compared to 74.3 per cent in the previous year. Debt service ratio fell to 8.3 per cent from 8.8 per cent and ratio of concessional debt to total external debt increased to 9.3 per cent from 9.0 per cent. Short term debt (residual maturity) to total external debt fell to 41.5 per cent from 42.7 per cent. Short term debt (residual maturity) to forex reserves also fell to 52.9 per cent from 57.4 per cent. Cross country comparison of external debt indicates that India continues to be among the less vulnerable countries.

· Some green shoots have started to appear in the trade horizon as well with world trade growth projected at 3.8 per cent and 3.9 per cent in 2017 and 2018 and India’s trade growth also picking up.

Agriculture and Food Management

· The average farm size in India is small, and declining since 1970-71. The predominance of small operational holdings is a major limitation to reap the benefits of economies of scale in agriculture operations.

· The progress in agriculture needs to be evaluated in terms of outcomes such as catching up with global yields of various crops as a means to increase incomes of farmers.

· Credit is an important mediating input for agriculture to improve productivity. The predominance of informal sources of credit for farmers is a concern. There is regional disparity in the distribution of agricultural credit which also needs to be addressed.

· The key challenge that the horticulture sector faces in India are post-harvest losses, availability of quality planting material and lack of market access for horticultural produce of small farmers.

Industry and Infrastructure

· Industrial performance has shown a moderation from 8.8 percent during 2015-16 to 5.6 percent in 2016-17.
· Industrial growth as per Index of Industrial Production (IIP) new series of 2011-12 shows overall IIP growth at 5 percent in 2016-17 as compared to 3.4 percent last year.

· The Index of Eight Core Industries growth during 2016-17 was 4.8 percent as compared to 3.0 percent in 2015-16.
· The Government in 2016 introduced imposition of Minimum Import Price (MIP) to counter dumping of Steel into Indian markets. Steps taken by the government have borne fruit since imports of Steel by India have declined by 36.2 percent while exports have risen by 102 percent in 2016-17.

· The apparel sector is a highly employment intensive industry especially for women. The Government on 22nd June 2016 approved Rs.6,000 crore special package for textile & apparel sector. Post the release of funds in November 2016, there has been a marked rise in clothing exports.

· The measures taken by the Government has resulted in FDI equiy inflow of 43.4 Billion USD in Financial Year 2016-17, which is the highest ever FDI Equity inflows.

· India is far ahead than many emerging economies in terms of providing qualitative transportation related infrastructure.

· During 2016-17, Indian Railways registered freight earnings at Rs.104339 crore (P), registered a negative growth of 4.5 per cent over 2015-16 due to carrying larger volume of low fare freight in the year. Passenger earnings at Rs.46280 crore (P) registered an increase of 4.5 per cent during 2016-17.

· Indian domestic airlines have a very lower share in international traffic to and from India. Factors like foreign airlines utilising the 6th freedom of the air, expansion of capacity entitlements under bilateral air service agreements with foreign countries, lower utilisation of India’s own capacity entitlements, the 0/20 rule and fleet constraints are responsible for the same.

• The Government formulated and launched the UDAY scheme for financial turnaround of power distribution companies on November 20, 2015. The 26 states and 1 UT which have joined the UDAY scheme account for total outstanding debt of Rs. 3.82 lakh Cr. So far, fifteen states have issued UDAY bonds totaling Rs.2.09 lakh Cr. and DISCOMs have issued Bonds worth Rs. 0.23 lakh Cr.

• After the introduction of UDAY, National average (all UDAY states) of AT&C loss has come down to 20.2 per cent in FY 2017 from 21.1 per cent in FY 2016; billing efficiency has been increased by 2 per cent from 81 per cent in 2015-16 to 83 per cent in 2016-17 at all India level and 15 states have issued tariff-revisions for FY 2017-18.

• Under Smart Cities Mission, 57 projects worth Rs.941 crore have already been completed as of April 2017. An estimated additional 462 projects worth Rs.15307 crore are likely to be completed through 2018 provided all the projects that have commenced implementation and those that have been tendered stick to their timelines.

Services Sector

· The services sector remains the key driver of India’s economic growth, contributing almost 62 per cent of its gross value added growth in 2016-17. However, the growth of this sector has moderated to 7.7 per cent in 2016-17 compared to 9.7 per cent achieved in the previous year, though it continues to be higher than the other two sectors and nearly at the top among the 15 major economies.

· The services growth moderation is mainly due to deceleration in growth in two services categories- trade, hotels, transport, communication and services related to broadcasting (7.8 per cent), and financial, real estate & professional services (5.7 per cent). The share of services sector in total gross capital formation (GCF), at current prices has increased consistently over the last four years from 53.3 per cent in 2011-12 to 60.3 per cent in 2015-16.

· There has been a significant growth in FDI equity inflows in 2014-15 and 2015-16 in general (27.3 per cent and 29.3 per cent) and to the services sector in particular (67.3 per cent and 64.3 per cent for top 15 services). However, in 2016-17, the growth rate of total FDI equity inflows moderated and FDI equity inflows to the services sector (top 15 services) declined.

· India’s and world’s services export trend growth were almost flat in the pre-crisis period, while in the post-crisis period, the deceleration in trend growth of India’s services was sharper than world services export growth. In 2016-17, services exports recorded a positive growth of 5.7 per cent with pick up in some major sectors like transportation, business services and financial services; and good growth in travel. However, Software services exports, accounting for around 45.2 per cent of total services, declined though marginally by 0.7 per cent.

· The performance of India’s Services Sector has been subdued in 2016-17 in line with the global trend. However, some services continue to be key drivers of India’s economic growth. There was reasonably good performance in telecom with increase in telecom connections reflecting the Jio effect, aviation particularly domestic travel, tourism related services particularly in terms of foreign exchange earnings, and even information technology-business process management (IT-BPM) despite fall in growth in computer software.

· As per the Ministry of Tourism data, Foreign Tourist Arrivals (FTAs) during 2016 grew by 9.7 per cent and Foreign Exchange Earnings (FEEs) through Tourism, in US$ terms, grew by 8.8 per cent. Various initiatives have been taken by the Government to promote tourism sector of the country that include e-Visa for the citizens of 161 countries, promotion of India as a 365 days destination, launching of Multilingual Tourist Infoline, and Swachh Paryatan Mobile App.

· As per NASSCOM, in 2016-17 India’s total revenue (exports plus domestic) of the IT-BPM sector including and excluding hardware is expected to touch US$154 billion and US $140 billion, with growths of 7.8 per cent and 8.1 per cent respectively. IT-BPM exports are expected to reach USD 117 billion, with a growth of 7.6 per cent. Meanwhile, the Government of India’s rapid adoption of technologies as a platform to delivery of government-to-government and government-to-citizen services is a tremendous push factor for the domestic IT-BPM market.

· Real estate sector including ownership and dwellings accounted for 7.6 per cent share in India’s overall GVA in 2015-16. The growth of this sector decelerated in the last three years from 7.5 per cent in 2013-14 to 6.7 per cent in 2014-15 and further to 4.5 per cent in 2015-16. Despite the subdued demand, residential prices did not fall with the NHB RESIDEX, showing increase in prices in 33 cities out of 50 cities in 2016-17 Q4 over 2015-16 Q4.

· Satellite mapping and launching services are two areas in which India is making a mark and has huge potential for the future. The foreign exchange earned by India from satellite mapping in the last five years was more than Rs 100 crores. Foreign exchange earnings of India from export of satellite launch services has increased noticeably in 2015-16 and 2016-17 and consequently India’s share in global satellite launch services revenue has also increased.

· India’s services sector growth, which was highly resilient even during the global financial crisis, has been showing moderation in recent times. However, pick up is seen in recent months with some segments of the sector showing better performance.

Social Infrastructure, Employment and Human Development

· The deterioration in quality learning in primary education sector and achievement of targeted enrolment level in the middle education is a challenge

· Employment in India poses a great challenge in terms of its structure which is dominated by informal, unorganized and seasonal workers, and is characterized by high levels of under employment, skill shortages, with the labour markets impacted by rigid labour laws, and the emergence of contract labour.

· The health sector in India faces many challenges in the form of declining role of public delivery of health services, high Out of Pocket (OoP) expenses on health and issues of accessibility and affordability of health services for many.

· The Government’s Swachh Bharat Mission has had remarkable progress since its inception. With its focus on cleanliness and Open Defecation Free (ODF) India, there has been a significant decline in the number of people who defecate in the open, which is estimated at less than 35 crores.

Highlights of Reforms Measures in the Economic Survey 2016-17 Volume-2

Agriculture and Food Management

Reforms: Managing and reducing the various risks in agriculture activities can make the sector resilient, increase profitability and can ensure stable income flows to the farmers. The following reforms are suggested for increasing productivity in agriculture and allied sector:

· To address the price risks in agriculture and allied sectors, marketing infrastructure along the entire value chain needs to be built and strengthened.

· To address production risks, the share of irrigated area should be expanded by increasing the coverage of water saving irrigation systems like micro irrigation systems.

· To increase productivity of crops, standards should be set and enforced for better quality, pest and disease resistant seeds.

· Trade and domestic policy changes should be announced well before sowing and should stay till arrivals and procurement is over.

· To enhance women’s involvement in the dairy projects, funds should be earmarked through appropriate mechanisms.

· Providing timely and affordable formal and institutional credit to the small and marginal farmers is the key to inclusive growth.

· Regime based on timely interventions needs to be adopted.

Industry and Infrastructure

· Railways should go for more non-fare sources along with station redevelopment and commercially exploiting vacant buildings at the station, monetizing land along tracks by leasing out to promote horticulture and tree plantation, and through advertisement and parcel earnings.

· During the last few years the non-major ports are gaining more share of cargo handling compared to major ports. It is required to develop non-major port and also enhance their efficiency and operational capacity.

· Reforms such as privatization/ disinvestment of Air India, creation of aviation hubs and reconsidering the 0/20 rule are some suggestions to improve Indian airlines’ share in the international market.

Social Infrastructure, Employment and Human Development

· India, is emerging as a knowledge based economy, poised for double digit growth, and needs to strengthen social infrastructure by investing in health and education.

· The education policies need to be designed with focus on learning outcomes and remedial education with interventions which work and maximize the efficiency of expenditure. There is need for bio-metric attendance of school staff, independent setting of examination papers, neutral examination and for DBT for schools. There is need to adopt outcome measures for the education and skilling activities to ensure improvement in delivery of schemes/ programmes.

· In order to make the labour market system dynamic and efficient, the government has taken several reforms/initiatives, both legislative as well as technological such as notification of ‘Ease of Compliance to maintain Registers under various Laws Rules, 2017’ and introduction of e-Biz Portal. These registers/forms can also be maintained in a digitized form.

· Government has been imparting short term skill training through Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and long term training through Industrial Training Institutes (ITIs). Model Skill Centers are being set up in every district of the country under Pradhan Mantri Kaushal Kendra Scheme. The emphasis is on enhancing the quality of skill training programmes and making a competency-based framework with giving individuals an option to progress through education, training, prior learning and experiences.

· There has to be concerted efforts by the Central and State governments to reform the health sector, by addressing quality issues, standardising rates for diagnostic tests, generating awareness about alternative health systems and introduction of punitive measures like fines on hospitals and private health providers for false claims through surgery, medicines etc. For more equitable access to health services, government should provide health benefits and risk cover to poorer sections of thesociety.

· Towards addressing the challenges in health sector, the Government has formulated the National Health Policy, 2017, which aims at attaining the highest level of good health and well-being, through a preventive and promotive health care orientation in all developmental policies, and universal access to good quality health care services, without anyone having to face financial hardship as a consequence.

· Addressing the social security of large number of vulnerable workers in the informal economy should be prioritized by the Government along with ensuring the safety and security of women to raise their participation in economic activities.

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Daily current affairs (24th July)

Here daily we are going to present news items analysis from various sources. We don’t need to read news but need to generate views. Some news will be analytical, some would be factual and some would be merely informative. We need to use factual and informative news as an examples in our GS Papers and Essay answer writing. Analytical news will provide us a chance to discuss any matter in 360 degree angle, I meant, in multi-perspective.

1- Scientist U R Rao is no more

His contribution: –
a) fourth Chairman of Indian Space Research Organisation (ISRO) during its critical formative years between 1984 and 1994
b) Gave a push to Geo Stationary Launch Vehicle (GSLV) and the cryogenic technology projects in 1991 (during this time, Russia denied cryogenic technology to Indian. Read about Cryogenic technology)
c) ‘Aryabhata , the first Indian satellite,  was launched in 1975 under his leadership. (Read about Aryabhatta )
d) first Indian to be inducted into the prestigious Satellite Hall of Fame, Washington. (Find out other Indian name)
e)  First chairman of Prasar Bharati

2- Right to Privacy is a fundamental right ?

Context: There is a case in SC where it has been interpreting the constitutionality of Right to Privacy through the prism of Fundamental rights that means whether it comes under Part III of Indian constitution or not?

The right to privacy is not explicitly mentioned in the Constitution. But then the right to “due process” too was not there.
If the text of the Constitution alone is going to determine the nature of the right to privacy, then the collegium system, the right against arbitrariness and the freedom of press too could go soon. As none of the above features are mentioned in Indian constitution.

What if Right to privacy is not a FR?
a) citizens may not have protection against surveillance
b) the state could target those who speak against it
c) even voting preferences may be influenced
d)telephone tapping could be routinely resorted to and our mails intercepted

Right to privacy subsumes under right to life and personal liberty. Without right to privacy, right to life cant exist.

In Kharak Singh (1963) case where a dacoity accused was released and put under surveillance. Police constables would knock at his door, wake him up during night and disturb his sleep. The judiciary conceded that “everyman’s home is his castle” and struck down surveillance over Kharak Singh. But the court said that there was no fundamental right to privacy in India.

In the Gobind case (1975), court has recognised right to privacy as an integral part of right to personal liberty. Today, liberty is a part of the basic structure of the Constitution.

In ADM Jabalpur (1976) judiciary accepted the government’s argument that when the right to life and personal liberty is suspended, citizens have no remedy against illegal detention.

Despite the recognition of privacy as a fundamental right, the government will continue to have powers to impose “reasonable restrictions”.-

Q- Denial of privacy neither promotes national security nor curbs terrorism, it merely takes away citizen’s freedom to be left alone and curtails his/her choice in personal decisions. Critically examine!

3- MPC members to get Rs. 1.5 lakh per meet, must disclose assets

Context: To avoid any conflict of interest, MPC members are asked to disclose assets.

What is MPC?
The Monetary Policy Committee (MPC) is a committee of the Reserve Bank of India, headed by its Governor, which is entrusted with the task of fixing the benchmark policy interest rate to contain inflation within the specified target level.

From RBI side

  1. Urjit Patel – RBI Governor
  2. R Gandhi – RBI Deputy governor
  3. Michael Patra – Executive Director in charge of monetary policy

From Government side

  1. Ravindra Dholakia, Professor of Economics at IIM Ahmedabad
  2. Chetan Ghate, Associate Professor at Indian Statistical Institute
  3. Pami Dua, Director, Delhi school of economics

For every bi-monthly monetary policy meeting, the decision of increase/decrease in interest rates and money supply would be decided by MPC throught votes. In case of a tie, Governor’s vote will decide the decision forward.

4- Waterways to connect India with Bangladesh

Context: Bangladesh and India have signed a memorandum of Understanding (MoU) to connect the North-East and West Bengal with Bangladesh through new waterways.

Other facts:
1) India and Bangladesh share a 4,095-km border, of which 1,116 km is through rivers.
2) Bangladesh receives water from 54 rivers in India.
3) New Water ways will help in India’s ‘Look east’ or ‘Act East’ policy.
4) The signing of the Coastal Shipping Agreement, the renewal of the Trade Agreement and the Protocol on Inland Water Transit and Trade, as well as the flagging off of new bus services are examples of connectivity across the region to reduce inequalities and maximizing welfare gains.
5) Bus service: Kolkata-Dhaka-Agartala and Dhaka-Shillong-Guwahati bus services
6) Connectivity between the two countries by road, rail, rivers, sea, transmission lines, petroleum pipelines and digital links are poised to increase trade, prosperity and decrease the poverty in south Asian countries.
Image result for india bangladesh connectivity

5- Project Mausam 

What is it?
It is initiative of Ministry of Culture
It is implemented by the Archaeological Survey of India (ASI)

To explore the multi-faceted Indian Ocean ‘world’–collating archaeological and historical research in order to document the diversity of cultural, commercial and religious interactions in the Indian Ocean.
To promote research on themes related to the study of Maritime Routes
To inscribe places and sites identified under Project Mausam as trans-national nomination for inscription on UNESCO’s World Heritage List
To focus on Monsoon patterns, cultural routes and maritime landscape.

Image result for PROJECT MAUSAM

6- Yoga was inscribed as Intangible Cultural Heritage

What is Intangible cultural Heritage?
Intangible cultural heritage is defined as the practices, representations, expressions, as well as the knowledge and skills (including instruments, objects, artifacts, cultural spaces), that communities, groups and, in some cases, individuals recognise as part of their cultural heritage.

It is sometimes called living cultural heritage, and is manifested inter alia in the following domains:

  • Oral traditions and expressions, including language as a vehicle of the intangible cultural heritage;
  • Performing arts;
  • Social practices, rituals and festive events;
  • Knowledge and practices concerning nature and the universe;
  • Traditional craftsmanship

Lists of Intangible Cultural Heritage in India:

1- Nawrouz or Novruz
2- Yoga
3- Traditional brass and copper craft of utensil making among the Thatheras of Jandiala Guru, Punjab, India
4- Sankirtana, ritual singing, drumming and dancing of Manipur (This year UPSC has asked about it in Prelims Exam)
5- Buddhist chanting of Ladakh: recitation of sacred Buddhist texts in the trans-Himalayan Ladakh region, Jammu and Kashmir, India
6- Chhau dance (UPSC asked)
7- Kalbelia folk songs and dances of Rajasthan
8- Mudiyettu, ritual theatre and dance drama of Kerala (UPSC asked)
9- Ramman, religious festival and ritual theatre of the Garhwal Himalayas, India
10- Kutiyattam, Sanskrit theatre (UPSC asked)
11- Tradition of Vedic chanting
12- Ramlila, the traditional performance of the Ramayana

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Today’s important articles/news in various newspapers (25th July)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you!

1- Taxing times for the States

The new Goods and Services Tax (GST) regime, introduced by way of the 101st Constitutional Amendment, is based on a fundamental notion that uniformity in tax administration across the country is an idea worth cherishing.

Q- The amendment act of GST makes core changes to the fiscal division and its against the federal feature of Indian Constitution. Discuss.

2- What’s brewing in Darjeeling
The Darjeeling hills are in crisis. A resurgent Gorkhaland movement and subsequent state crackdown have infused life with violent uncertainty. Visitors to the ‘queen of the hills’ will be hard-pressed to find the idyllic tea plantations, mountain views, and quaint footpaths that characterise Darjeeling.

Q- Whereas the British planters had developed tea gardens all along the Shivaliks and Lesser Himalayas from Assam to Himachal Pradesh, in effect they did not succeed beyond the Darjeeling area. Explain.

Q- Gorkhaland is a classic subnationalist movement. Is it going to affect integrity and unity of India?

3- Bilateral catalyst

Prime Minister Narendra Modi’s recent visit to the U.S. is likely to deepen bilateral ties in multiple strategic areas. Among them, science and technology, a key driver for innovation and job creation in both countries, needs to take centre stage.

Link it with India – USA relationship , GS Paper 2

4- Network challenges

There’s a fresh twist in the tale for India’s telecom sector, which is a success story with around a billion connections issued so far and about 350 million subscribers estimated to have smartphones.

Hint- Try to collect some facts here

5- IMF retains India 2017 GDP growth forecast at 7.2%

The International Monetary Fund’s (IMF) July World Economic Outlook Update retained India’s projected GDP growth rate for 2017-18 at 7.2%, and at 7.7% for 2018-19.

Q- Enumerate strengths and weaknesses of Indian economy.

6- The Aryan chromosome

Where did the Aryans come to India from? When did they migrate? Genetics is now beginning to affirm archaeological and literary evidence.

7-  Private healthcare with public money

Two recent developments related to public health in India hold the prospect of changing the nature of service provision for the people. Both lean heavily on the private sector in an effort to improve the deplorable state of healthcare services for India’s 1.3 billion people.

Q- Since Private healthcare in India usually offers quality service but is often expensive and largely unregulated so government regulation is required but not over-regulation. Comment

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Today’s important articles/news in various newspapers (11th July)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you!

1- The think tank and the ashram

Anniversaries often become moments of rhetoric and hypocrisy rather than a space for recollection, a crossroads about future strategies and debates. One needs to rethink them. The more literally charismatic the person, the greater the attempt to embalm him in mothballs. The Gandhian idea suffers most from it as the regime plays officially Gandhian, even moving into the Khadi and Village Industries Commission calendar.

Q- On Sabarmati Ashram’s 100th anniversary it is time to retune it, so the great rituals of freedom, faith and inventiveness can begin again. Discuss

2- Reading between the numbers

July 11 has been designated by the United Nations as World Population Day. The UN chooses one aspect of population to draw attention to each year; this year the theme is access to family planning.

Q- What is ‘demographic dividend’ ? The demographic dividend can either be taken advantage of as a fortuitous economic opportunity or be a lost chance, depending on how the Government deploys the huge emerging workforce into productive streams of economic activity. Comment

3- Bring the House up to date

Parliamentary privileges originated during the long struggle for democracy and citizen’s rights in Britain, between a monarch and Parliament as kings used to get members who spoke or were likely to speak against the king arrested. Today, our legislators get citizens and journalists arrested.

Q- The balance between fundamental rights and parliamentary privilege must be re-examined. Comment

4- Targeting trawling

Tamil Nadu must hasten the transition from trawling to deep sea fishing.

5- The great Indian migration

Despite the decline in total fertility rates (TFR) countrywide, 12 States continue to have TFR above 2.1 children per woman, known as replacement-level fertility. However, when the TFR declines, the drop does not stop at 2.1, as seen in Kerala (1.6), Tamil Nadu (1.7) and Karnataka (1.8).

6- A Patriot And A Gentleman

Naresh Chandra underplayed his role in nuclear programme, economic liberalisation.

Link it with GS Paper 4 (Administrators)

7- How ‘economic complexity’ translates into diversified trade and faster growth

Economic pole of global growth has moved from China to India, shows Harvard research. Why do some countries grow faster than others?

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Today’s important articles/news in various newspapers (10th July)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you!

1- Power games at the tri-junction

The current border stand-off suggests India is likely to become bolder in resisting the idea of power disparity.

Q- “India-China relations are undergoing a change”. “China believes that India should acknowledge the power disparity between the two sides and show appropriate deference to China.” Examine

2- Corruption in the era of liberalisation

With its tentacles spreading to every branch of the state, corruption’s salience has never been higher.

Q- Liberalization has ushered in corruption in a much greater variety of forms and on an unimaginably greater scale than anything seen under the so-called licence raj. Critically examine.

3- Is artificial intelligence fuelling natural stupidity?

We are at a stage where the genial news environment committed to truth and public interest is under pressure.

Link it with Essay paper.

4- ‘China seen as more innovative in IT than India’

A 7% growth rate is not good enough for India and its IT industry has missed the bus on innovation by sticking to a template that worked 25 years ago, believes economist Soumitra Dutta who co-authors the World Economic Forum‘s annual Global Information Technology report. 

5- Internal insecurity

It is unfortunate that even though we have a strong government at the Centre, the internal security situation of the country has not shown any marked improvement over what it inherited from the UPA regime.

Link it with GS Paper 3 (Internal security).

6- LG vs CM in Puducherry: Understanding the question of nomination to UT House

What exactly did the LG do, which precipitated the latest round of confrontation with the Chief Minister? What are the provisions under which she acted? What is the background and context of that law? The Indian Express explains.

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Today’s important articles/news in various newspapers (7th July)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you!

1- Should we grow GM crops?
To hide her nakedness, India has borrowed a ‘fig leaf’ from U.S. regulation of genetically modified orgamisms (GMOs), i.e. in the non-regulation of these novel laboratory organisms. The U.S. invented GMOs and commercialised them despite serious safety concerns expressed by government scientists.

Q- What is GM crops? Enumerate advantages and disadvantages of GM crops .

2- Making of a monumental crisis

India’s monumental heritage is on the brink of a shameful shift. The Central government is poised to introduce an amendment to the Ancient Monuments and Archaeological Sites and Remains Act, 1958, in Parliament, which would remove the security net that exists around our nationally protected monuments.

Q- India’s monuments form an irreplaceable archive of our civilisational heritage. Parliament must resist a proposed amendment that compromises the 100-m no-construction zone. Discuss.

3- Postscript to the proxy war

On June 18, a U.S. warplane shot down a Syrian regime jet after it bombed American-backed rebels in northern Syria — the first time the U.S. has downed a Syrian warplane since the start of the country’s civil war in 2011.

Read it to aware yourself about current happening in world news.

4- Mr. Modi in Israel

While welcoming Prime Minister Narendra Modi to Tel Aviv, his Israeli counterpart, Benjamin Netanyahu, said his country had awaited the visit for “seventy years”. Since the birth in 1948 of Israel, whose admission to the UN India subsequently opposed, Israeli leaders had always sought full diplomatic ties.

Q-  India’s evolving ties with Israel should be based on pragmatism and not based on symbolism.

5- ‘Asia-Africa corridor to respect sovereignty’

The guiding principles of the Asia Africa Growth Corridor (AAGC), initiated by India with the backing of Japan, will be to ensure sustainability through respect for sovereignty and territorial integrity as well as boosting regional economic connectivity through the use of responsible debt financing practices, a former top government official said.

Q- What is Asia Africa Growth Corridor (AAGC)?

6- Coins for thought

With over $22.4 billion in market capitalisation, cryptocurrency is rapidly emerging as the new-age disruptive technological currency, transcending itself as a new “medium of exchange” and “store of value”.

Q- Define the terms like Blockchain, Big Data, Artificial Intelligence. How these innovative technologies are going to revive the growth and development?

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Today’s important articles/news in various newspapers (6th July)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you!

1- India, Israel to set up $40 mn research fund

India and Israel announced a strategic partnership between the two countries after a meeting between Prime Minister Narendra Modi and his Israeli counterpart Benjamin Netanyahu, and signed seven agreements in the fields of water, agriculture, space, including a $40 million joint fund for research and development in innovation.

2- Speaking the language of change?

Q- Development is not the expansion of economic freedom, but following Amartya Sen, is the removal of all kinds of “unfreedoms” so that governance delivers the three goals of security, growth and equity achieved in ecologically sustainable ways. Examine.

Link it with GS Paper 2 (inclusive development)

3- Realise the de facto realities on J&K

The row over the U.S. terming a part of Jammu and Kashmir as being “India-administered” is a bit overdone, if not hypocritical. Especially Ghulam Nabi Azad, a Kashmiri, and a Leader of the Opposition in the Rajya Sabha, attacking the government for not contesting the American characterisation. Mr. Azad called it a ‘compromise’ as regards national security.

Link it with GS Paper 3 (Internal security)

4- Missile diplomacy

In early January, Donald Trump, then the U.S. President-elect, tweeted that North Korea would never develop a “nuclear weapon capable of reaching parts of the U.S.”. But Pyongyang appears to have done exactly that, defying warnings issued by Washington.

5- Search for a new inflation normal

Paradoxically, policymakers are toying with the idea of tweaking up the inflation target for the industrialised economies though most central banks have consistently fallen short of the current 2% rate in the last 10 years.

Q- Concerns mount that a prolonged low interest rate scenario could risk stability. Explain.

6- Importance of being simple

What is a good and simple tax and why is the present indirect tax structure bad and complicated? There are several reasons behind the bad, ugly and complicated visage — the constitutional structure, history and legacy, differential treatment of goods vis-à-vis services, multiple rates and exemptions. Exemptions mean loss in revenue.

Link it with GS Paper 3 (Tax reform)

7- The real lessons of the July 1997 Asian crisis

Many of the most wildly successful economies in Asia tumbled into a crisis in July 1997. They had to be bailed out by the International Monetary Fund on terms that led to a lot of political angst. India was hit as well.

Its importance is in knowing historical economic crisis.

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Today’s important articles/news in various newspapers (5th July)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you!

1- The terrorisms we overlook

The state’s association with terror — in mob lynchings or in extortion — is not compatible with freedom.

Link it with GS Paper 3 (Internal security)

2- ‘EC’s biggest challenge is parties’ use of tainted money in polls’

The outgoing Chief Election Commissioner on his eventful tenure, the controversy over EVMs, and concerns such as paid news and opacity in electoral funding.

Q- Discuss about the challenges faced by Election commission in India.

Link it with GS Paper 2 (Election)

3- Signs of a Persian gulf

New Delhi needs to work with Tehran to resolve bilateral irritants affecting economic ties.

Link it with GS Paper 2 (Indo-Iran relations)

4- Going beyond cultural heritage

There has been a visible effort by the state in recent times to increase awareness about speciality handloom products and to make them things of aspiration for customers. This is being done through aggressive promotion of the process, the product and the context.

Q- What is meant by ‘hand-loom industry’ ? Handloom industry needs to be freed from the limited narratives linked to preserving cultural heritage and the merger of the industry with individual fashion. Comment

Link it with GS Paper 3 (Indian Economy)

5- UDAY covers 97% of discom debt: Centre

About 97% of the total outstanding debt of all state power distribution companies (discoms) has been covered under the Ujwal DISCOM Assurance Yojana (UDAY), the government announced on Tuesday.

So far, 86% of the restructurable debt has been revamped under the scheme.

6- My journey to Israel

In the time since 1998, the year of my ‘goodwill mission’, the scope for deepening collaboration and joint ventures has only grown for the two countries.

7- Behind the ongoing stand-off in Doklam, century-old manoeuvres of geostrategy

Until 1959, China made no claims on Bhutan, but now, its Ministry of Foreign Affairs cites the 1890 China-Britain treaty, which states that the border runs west from Doka-La along the ridgeline — that is, south of the Doklam plateau.

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Today’s important articles/news in various newspapers (4th July)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you!

1- The organising principle of lynch mobs

What encourages Indians who subscribe to different religious persuasions, speak different languages, and hold different conceptions of the good to believe that they are equal members of a democratic political community?

Q- Right to life has to be read along with the right to equality and the right to freedom, granted by Articles 14 and 19 of the Fundamental Rights. Explain.

2- The delta miracle

Fresh evidence of loss of forest cover in the Indian Sundarbans, which represent a third of the largest contiguous mangrove ecosystem in the world, is a reminder that an accelerated effort is necessary to preserve them.

3- ‘Manufacturing slows to 4-month low’

Manufacturing activity slowed to a four-month low in June due to challenges posed by the implementation of Goods and Services Tax, a challenging economic environment, and water shortages in parts of the country, according to a private sector survey.

4- PM Modi lands in Israel today, his eyes set on removing more ‘hesitations of history’

When Narendra Modi lands at Tel Aviv’s Ben Gurion airport today — the first Indian PM to visit Israel — he will be initiating a historic process of formally changing India’s public and political approach towards dealing with the Jewish nation.

Link it with GS Paper 2 (Indo-Israel relations)

Q- “The relationship with Israel, so far, was like the one with a mistress, a clandestine affair”. Comment

5- Sikkim-Tibet border: an historical perspective

Of the entire 3,488km Sino-Indian border, the only section on which both countries agree that there is no dispute is the 220km Sikkim-Tibet section of the boundary. This is because under the Anglo-Chinese Convention of 1890, the Sikkim-Tibet border was agreed upon and in 1895 it was jointly demarcated on the ground.

Read this for historical perspective.

6- NPA resolution: a rough road ahead

The most important takeaway from the latest “Financial Stability Report”, released by the Reserve Bank of India (RBI) last week, is that conditions in the Indian financial system are expected to deteriorate further before they improve. There is more pain ahead.

Q- What is meant by NPA? Mentions about the steps taken by RBI to solve the menace of NPA in banking sector.

Link it with GS Paper 3 (Banking sector)

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Today’s important articles/news in various newspapers (3rd July)

Dear aspirants, following are the links of various articles taken from various newspapers. Click the link to read further. To get notification, follow the blog. Thank you!

1- Written-off in the hinterland

Our education system has failed to integrate the rural into the larger political community, the nation.

Q- What is meant by ‘hinterland’? The impact of education on rural life has remained consistent since colonial days. Explain.

2- ‘Inequality changes the system’

Thomas Piketty’s Capital in the 21st Century is the most-widely discussed work of economics in recent history. At its centre is the argument that due to the powerful forces generated by the underlying dynamics of wealth, it is most likely that we are heading to a future where inherited wealth will shape economic structures, and lead to widespread inequality.

Link it with Essay paper.

3- Climate-proofed and inclusive

How will future climate change affect the poor and how does one address both poverty and climate change? This is a conundrum faced by policymakers in India and other developing countries.

Link it with GS Paper 3 (Climate change)

4- Step back

The boundary stand-off with China at the Doka La tri-junction with Bhutan is by all accounts unprecedented; it demands calmer counsel on all sides.

Link it with GS Paper 2 (Indo-China)

5- The missing learning curve

Humans have incredible powers of learning and adaptation. Every few years, looking back, one feels the younger version of oneself was so unwise. But as human life is finite, the lessons of a lifetime often get lost with the individual. Societies, on the other hand, (can) last thousands of years, and much has been written about the accelerating learning curve of the human species.

6- Irrigation tips from an arid country

Prime Minister Modi’s visit to Israel should build on the partnership between the two countries in water management.

Q- It is well-known that India is water stressed. Enumerate how to augment water supplies and water using efficiency?

7- Why are India-Israel ties so special?

Despite Modi’s admiration for Israel’s achievements, the structural differences between Indian and Israeli national security situations, their worldviews and the absence of explicitly shared enemies limit stronger strategic rapprochement.

Link it with GS Paper 2 (Indo-Israel relations)

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