Jun 10, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 10th June, 2016

Archives   IASbaba’s Daily Current Affairs – 10th June, 2016   INTERNATIONAL    TOPIC:  General studies 2 India and its neighborhood relations, International relations. Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests. Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora. Important International institutions, agencies and fora- their structure, mandate.   Quest for another Holy Grail - Nuclear Suppliers Group (NSG) India’s 30 year old effort to secure a permanent seat in UNSC has been characterized as the pursuit of a diplomatic holy grail. A similar but less intense effort is on to seek admission to APEC (Asia Pacific Economic Cooperation). India has now embarked on another quest to seek membership of NSG.   Nuclear Suppliers Group NSG is a body of 48 nuclear supplier countries established to prevent the civilian nuclear trade from being used for military purposes. It seeks to prevent nuclear proliferation by controlling the export of materials, equipment, technology that can be used to manufacture nuclear weapons. It was formed in reaction to India’s nuclear technology demonstration test in 1974. And to prevent Indian advance towards nuclear weapons (to avoid diversion of nuke material exported from US and Canada to build nuclear warheads) India successfully tested the Nuclear bomb (Smiling Buddha) on 18th May 1974. The bomb was detonated on army base in Pokhran Test Range in Rajasthan. It was the first confirmed nuclear weapon test by a nation outside the five permanent members of UNSC. The plutonium used in the test was created in the CIRUS reactor supplied by Canada and using Heavy water supplied by United States.   Why India wants to Join NSG? It gives access to the state of art technology that the countries within NSG possess. There is a pressing need to scale up nuclear power production in India. At present we can buy power plants from global market (NSG wavier in 2008) but, there are several technologies India can be denied as it is outside the NSG. With access to latest technology, India can commercialize the production of nuclear power equipment. This, in turn will boost innovation and high tech manufacturing in India and can be leveraged for economic and strategic benefits. Should India get access to advanced nuclear technologies, it can start building updated versions of its own fast breeder reactor and sell it to countries such as Sri Lanka or Bangladesh. Bangladesh is currently looking at buying Russian reactors for power generation. Having the ability to offer its own nuclear power plants to the world means spawning of an entire nuclear industry and related technology development. This could give the Make in India programme a big boost. We have an unstable and unpredictable neighbour. Signing NPT and CTBT to gain access to all the technologies would put curbs on any further nuclear tests. Hence NSG membership is significant here. China and Pakistan factor- China is the main roadblock towards Indian ambition to join NSG. Should India get membership to the NSG, it can block Pakistan from its membership as entry into the grouping is by consensus only. This is one of the reasons why China is pushing to include Pakistan as well as pointing out that India as a non-signatory to the NPT cannot be a member.It comes down to a power game—keep India out and deny it access to various technologies. India’s contention is that its nuclear technologies are indigenously developed and it has a clean non-proliferation record unlike Pakistan and China.   Arguments against the inclusion of India to NSG “There are standards on nuclear proliferation to which other nuclear weapons states adhere and to which India doesn’t.” “United States has sought to bend the rules for India’s nuclear program to maintain India’s cooperation on trade and to counter China’s growing influence. In 2008, President George W. Bush signed a civilian nuclear deal with India that allowed it to trade in nuclear materials. This has encouraged Pakistan to keep expanding a nuclear weapons program.” “Membership would enhance India’s standing as a nuclear weapons state, but it is not merited until the country meets the group’s standards.” “India would be in a position to keep Pakistan, which has also applied for membership, from gaining membership because group decisions must be unanimous. That could give Pakistan, which at one time provided nuclear technology to North Korea and Iran, new incentives to misbehave.” Counter Arguments India, despite being outside the NPT, is strictly adhered to the guidelines of NPT. China secretly sold nuclear­ weapons technology to Pakistan last year (violation of article 1 of NPT). Even if the US and Russia have cut the size of their arsenals – retaining enough to destroy each other and the world – China, France and Britain have shown no inclination to pursue negotiations on disarmament (clear violation of Article 4 of NPT) Pakistan’s nuclear weapons programme is expanding, but it has nothing to do with the civilian nuclear deal India signed. A crucial part of that deal was a separation plan that India implemented in which it agreed to place several of its indigenous power reactors under international safeguards – thus surrendering the ability to use those reactors to produce fissile material for weapons. India aligned its export regulations with those of the NSG, it has also committed itself to implementing any new guidelines the group may adopt – even if this means hurting India’s commercial interests. The irony is that the NSG today has members, notably China, that do not meet the group’s standards. Before Pakistan aspires to membership of the NSG, shouldn’t it be encouraged to first sign on to the “responsibilities and practices” Challenges ahead Despite the huge advantages India may gain by joining NSG, there are some other issues which need to be look into otherwise it may likely put India in an uncomfortable position. NSG membership will not immediately open up nuclear trade as India has already pledged not to transfer nuclear know-how to other countries. If we attempt to dilute the guidelines to liberalize the supply, it will be resisted by other members. Membership of NSG will only mean greater pressure on us to sign NPT and CTBT and commit in advance to a fissile material cut off treaty, which would impose restrictions on existing stockpiles of the fissile material. Background 2008 Civil nuclear deal with US: Paved way for India’s application as a member of NSG. NSG issued an India ­specific waiver allowing it to engage in nuclear trade. India has since signed civilian nuclear cooperation agreements with the U.S., U.K., France, Canada, Argentina, Russia, Kazakhstan, Mongolia, Namibia, and South Korea. The U.S., U.K., France and Russia are in favour of including India in the NSG India’s commitment to separate its civilian and military nuclear programmes and its non-proliferation record—ie ensuring that its indigenously developed technology is not shared with other countries—is what works in its favour. India has also ratified an Additional Protocol with the International Atomic Energy Agency (IAEA) which means that its civilian reactors are under IAEA safeguards and open for inspections—ie ensures increased transparency.   Also read CTBT- http://iasbaba.com/2015/10/iasbabas-daily-current-affairs-2nd-3rd-october-2015/   Connecting the dots: Critically analyse the role of multilateral nuclear export control regimes in nuclear non-proliferation. Which among the various non-proliferation regimes India should Join and which are not to? Substantiate your views “The high level pursuit of NSG membership may give the impression that India is unrealistic in its expectations from international community.” Discuss.   NATIONAL TOPIC: General studies 2 Government policies and interventions for development in various sectors and issues arising out of their design and implementation Issues relating to development and management of Social Sector or Services relating to Health, Education, Human Resources   The grip of ‘Drug’ Hurricane The thriving de-addiction centres, a continuous inflow of patients of whom the majority falls in the 18 to 35 age group, children selling drugs to earn money to fund their addiction… The seriousness of Punjab’s drug problem The only state to commission a drug abuse study—The Punjab Opioid Dependence Survey, which was conducted between February and April 2015, found that 230,000 people in the state were drug users; 836 drug users per 100,000 people in the state Average rate of crime under NDPS Act in Punjab has been the highest in the country between 2005 and 2014; about 44.5% of total convicts under the NDPS Act in India at the end of 2014 were in Punjab— much more than the next highest state at 10% (figures consistently rising) Crime rate under NDPS Act in Punjab has been consistently higher than all other states Punjab ranks among the top five states that reported the biggest drug seizures in 2014 (Other four: Mizoram, Manipur, Assam and Uttar Pradesh— Punjab isn’t alone— Wedged between the Golden Triangle (Thailand, Laos and Vietnam) in the east and the Golden Crescent (Afghanistan, Iran and Pakistan) in the west, many regions in India, such as the north-east, are particularly vulnerable) The Punjab Opioid Dependence Survey found that 89% of opioid dependents in Punjab were literate and educated, 83% were employed and they were mostly male   Reasons— Economically Can be traced back from early 1960s with the advent of green revolution which bought more labourers to the lucrative fields; leading to a huge surge in demand for the poppy husk and opium (Studies suggests that landowners supply raw opium to farm labourers to encourage them to work harder) Case of the drivers of trucks or simply a driver for a long distance— tend to believe that these drugs help them stay wide awake, and so acts like a buffer between their sleep and accidents. Sociologically Commercialisation of education— Not much efforts is being put in to improve the quality of education in government schools. New colleges are being opened up without undertaking any kind of quality check. Clash between unemployment and the culture of aspiration- Joblessness has prevailed big time despite the economic reforms brought in the country. Being in the vicinity of the disease called terrorism, industrialization as well as the agriculture sector kept on suffering— leading to the lack of absorption capacity of their increasing population. (Also count Partition, Khalistan, Operation Blue Star, communal riots, Black Thunder) Shift in industries gradually took place due to heavy tax rebates and concessions on taxes in neighbouring states like Himachal Pradesh and Uttarakhand— Led to the increase in unemployment Expanding Social Disconnect: is the root cause of every addiction like drugs, gambling, smoking, pornography, and alcohol and thus, embracing them in our lives holds the key to bringing the addicts back to the society Politically Narco-terrorism— there has been a steady supply of drugs from across the border Heroin (chitta) is mostly home-grown (easy access) Corruption and laxity in border security architecture Modus operandi among smugglers in both Pakistan and India of supplying and receiving consignments through border villages— With the fence now being electrified, these smugglers use a large and long plastic pipe to drop the narcotics Widespread political ties: There exists a vicious circle— a part of what they earn through drugs sales goes into election campaigns and part of it is used to buy more drugs. No mention of drug abuse in any of the manifestos being distributed by most of the political parties Governmental approach— emphasizes criminality rather than a holistic approach integrating demand reduction, harm reduction and supply reduction Inadequate system in place— the police station and the prisons; to deal with the addicts’ challenging physiological and psychological symptoms and illnesses Vacant psychiatrist’s post; no full-time doctor No male nurse, ward attendant or other paramedical staff Easy availability of drugs inside A war on its addicts: Misplaced definition of a drug addict— Means a person suffering from mental or psychological disease; the overriding stigma attached and the practice of sending them to the jails robs one of his chance to rehabilitate oneself— Should be sent to de-addiction centres and not to jails The staggering human and social cost of Punjab’s skewed crackdown on drugs— Scrutiny of FIRs in the most affected districts by The Indian Express reveals an average of over 25 addicts being booked each day — in effect, dragging 25 families into a broken penal system. At least 174 individuals charged under the Narcotic Drugs and Psychotropic Substance (NDPS) Act, have died in prisons — 88 in 2014 and 86 in 2015. People found with burnt matchsticks and silver foils were also arrested under the NDPS Act Crackdown has been majorly flawed with no foresight and planning— The big fish continue to roam free owing to their political connections   Way Forward: A change in approach of the government is of utmost importance— Harm reduction—providing clean needles, sterilization equipment and the like, to drug users—has proved to be effective in Manipur as well as in other countries in minimizing secondary damage such as the spread of AIDS and Hepatitis C Demand reduction strategy— Involves Perception management of the youth and parents, Effective affordable rehabilitation centres, Focus on high-prevalence drug groups such as sex workers, transportation workers and street children Simultaneous development of the state and redressal of the unemployment situation Supply side reduction— Zero-tolerance policy towards drug cartels, syndicates and peddlers Preventing diversion of licit cultivation of opium and opiate pharmaceutical drugs Checking illicit cultivation of opium Closing porous borders (be made a non-negotiable clause in India’s drug abuse prevention policy) Courtesy: http://media2.intoday.in/indiatoday/images/stories//2014April/jaitley_650_041714033808.jpg Connecting the Dots: Has the political nexus in India enabled and facilitated the increase in drug trafficking? Discuss the magnitude of the issue and provide an action plan to counter the same. There has been a widespread discussion over the upcoming Indian crime thriller film, ‘Udta Punjab’. Does a creative piece deserve the kind of treatment that is being meted out to it? Is it the case of flawed expectations out of the Indian audience or the ‘withdrawal symptom’ being witnessed owing to the pending changes in the standards of film certification?   MUST READ Pushed into hysterectomies Hindu   Preparing cities for high water Hindu Related Articles: Disaster Management, Urbanization Issues and Governance – The Chennai Disaster   Strategic symphony Indian Express Related Articles: India to become 35th member of MTCR TLP – 2016   Connecting Asia Indian Express Related Articles: Shanghai Cooperation Organisation – Mind Map   India needs a weaker exchange rate Livemint MIND MAPS   1.  Kidney Market Rules

Jun 9, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 9th June, 2016

Archives   IASbaba’s Daily Current Affairs – 9th June, 2016   INTERNATIONAL    TOPIC:  General studies 2 India and its neighborhood relations, International relations. Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests. Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora. Important International institutions, agencies and fora- their structure, mandate.   India to become 35th member of MTCR MTCR, NSG, Australia Group and the Wassenaar Arrangement – are the four nuclear regimes – aim to restrict the proliferation of items that could lead to the spread of, among others, weapons of mass destruction and chemical and biological weapons. India has continuously put efforts to gain entry into these nuclear regimes. It has taken a number of steps to align its export regulations with what these regimes specify. Finally, India to join the missile treaty club, as the countries belonging to the 34-member Missile Technology Control Regime (MTCR) raised no objection to India’s membership later this year. (Note: Before going to read further, it is important to know some basics.) Basics: Nuclear proliferation Nuclear proliferation is the spread of nuclear weapons, fissionable material, and weapons-applicable nuclear technology and information to nations not recognized as "Nuclear Weapon States" by the Treaty on the Nonproliferation of Nuclear Weapons, also known as the Nuclear Nonproliferation Treaty or NPT. Non-Proliferation Treaty (NPT) The Treaty on the Non-Proliferation of Nuclear Weapons, commonly known as the Non-Proliferation Treaty or NPT, is an international treaty whose objective is to prevent the spread of nuclear weapons and weapons technology, to promote cooperation in the peaceful uses of nuclear energy, and to further the goal of achieving nuclear disarmament and general and complete disarmament Missile Technology Control Regime (MTCR) The Missile Technology Control Regime (MTCR) is an informal and voluntary partnership among 34 countries to prevent the proliferation of missile and unmanned aerial vehicle technology capable of carrying a 500 kg payload for at least 300 km. Nuclear Suppliers Group (NSG) Nuclear Suppliers Group (NSG) is a group of nuclear supplier countries that seek to prevent nuclear proliferation by controlling the export of materials, equipment and technology that can be used to manufacture nuclear weapons. It is a 48-nation club that governs trade in commercial nuclear technology and was originally set up in response to India’s first atomic weapons test in 1974.   Australia Group The Australia Group is an informal group of countries (now joined by the European Commission) established in 1985 (after the use of chemical weapons by Iraq in 1984) to help member countries to identify those exports which need to be controlled so as not to contribute to the spread of chemical and biological weapons. Wassenaar Arrangement The Wassenaar Arrangement (not to be confused with the Wassenaar Agreement), (full name: The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies) is a multilateral export control regime (MECR) with 41 participating states. The Wassenaar Arrangement was established to contribute to regional and international security and stability by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies, thus preventing destabilizing accumulations. Participating States seek, through their national policies, to ensure that transfers of these items do not contribute to the development or enhancement of military capabilities which undermine these goals, and are not diverted to support such capabilities. Courtesy (image)- http://ouic.kaist.ac.kr/eng/images/sub/compliances_img03.gif The first step India to join first of the four nuclear regimes it is trying to gain entry into. The members of the Missile Technology Control Regime, a key anti-proliferation grouping, have agreed to admit India. None of the 34-nation group objected to India’s admission. India’s entry into the MTCR comes days after India announced that it is subscribing to the Hague Code of Conduct against ballistic missile proliferation, which is considered to be complementary to the MTCR. The MTCR is one of four international non-proliferation regimes that India — which in recent decades has gone from being a non-aligned outsider to a rising nuclear-weapons power — has been excluded from. In general, MTCR is a missile control group, which was set up in 1987 to limit the spread of unmanned systems capable of delivering weapons of mass destruction. Membership of the MTCR would require India to comply with rules — such as a maximum missile range of 300 km (186 miles) — that seek to prevent arms races from developing.   What would be the benefits for India in becoming MTCR member? Admission to the MTCR would open the way for India to buy high-end missile technology, also making more realistic its aspiration to buy state-of-the-art surveillance drones such as the US Predator, made by General Atomics. It would allow India to become a significant arms exporter for the first time. (helps India to export its supersonic cruise missile, the Brahmos, which is built through joint venture with Russia) India is also hopeful of building on the MTCR entry with membership to the Nuclear Suppliers Group. India wants to be part of the rule-making groups rather than being out of them and on the sidelines. India’s entry into the Missile Technology Control Regime (MTCR) will open the gateways for India’s membership in other nuclear regimes as well. Challenges in joining NSG: Nuclear Suppliers Group (NSG) is a 48-nation club that governs trade in commercial nuclear technology and was originally set up in response to India’s first atomic weapons test in 1974. Joining the NSG will be much more difficult because China is a member and has backed the membership aspirations of Pakistan, its ally and India’s arch-rival. Beijing has cited India’s refusal to sign The Treaty on the Non-Proliferation of Nuclear Weapons (NPT) as a reason to oppose India’s membership of the NSG. However, NPT is no prerequisite to apply for NSG membership.   India’s present status: India has taken a number of steps to align its export regulations with what these regimes specify. It has now cracked MTCR and already fulfils all the criteria for NSG. India has also made significant progress in harmonising its Special Chemicals, Organisms, Materials, Equipment and Technology (SCOMET) export list with the control lists of the Australia Group and the Wassenaar Arrangement. India has also committed to adhering to future NSG guidelines despite not being a member. It is a proponent for finalizing a verifiable and non-discriminatory Fissile Material Cut-off Treaty. In addition, India has been a consistent votary of non-discriminatory disarmament efforts—one of the three pillars of non-proliferation regimes, along with civil nuclear cooperation and non-proliferation itself. However, India with the breakthrough on the MTCR, improved its chances of ending its nuclear pariah status and joining the elite Nuclear Suppliers Group (NSG) Now all eyes are on India’s pitch to join the NSG, preliminary discussions for which will begin next week in Vienna. Connecting the dots: India wants to be part of the rule-making groups rather than being out of them and on the sidelines. Examine the statement keeping in view the steps and efforts taken by India to gain entry into the missile treaty club. India’s entry into the Missile Technology Control Regime (MTCR) will open the gateways for India’s membership in other nuclear regimes as well. Substantiate.   ECONOMICS TOPIC:  General studies 3 Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment   Winding up FIPB The Foreign Investment Promotion Board (FIPB) was set up as a government body that offers a single window clearance for proposals on Foreign Direct Investment (FDI) in India that are not allowed access through the automatic route (Department of Economic Affairs, Ministry of Finance) Over a decade ago, former finance Minister Jaswant Singh had proposed the regulatory reform, saying that the FIPB bureaucracy was losing its relevance with the liberalisation of the investment regime (Automatic route accounting for almost 90 per cent of the foreign investment proposals)—the challenge really was not about deregulation but de-bureaucratisation, and moving in that direction purposefully would help greater flow of foreign investment.   How FIPB has become a hurdle to easy investing into India Everything Online: Right from the applications to the clarifications as well as consultations—everything is online. Also, the body lacks the pre-requisites of what to be looked for and what effects to be measured precisely. Interpretation of the vague guidelines, thus open up new avenues of misconduct and hurdles. For example, the case of equity warrants which were not permitted and were still given a go ahead, with investors investing, converting and making exits post the process. Lack of a forum to appeal against FIPB: With the absences of written rules and regulations and the lurking ‘cronyism’, it has become difficult to appeal against the decision taken by the government of the day. ‘Press Notes’ (statements of policy intent) are the way via which govt. has controlled the terms of foreign investment into India—completely dependent upon government’s will and not ‘rules’. This also marks a fertile growth for more problems for the aggrieved without a clear sense of conduct for relief. Being non-statutory, it does not have checks and balances to scrutinize its own outcomes Press Notes: It said that any multinational that wanted to come on its own would have to convince the FIPB that it wouldn't hurt its existing collaborations—leading the bureaucrats become the arbiters of this rule. Behavioural Issues: It testifies to the notion of “rent-seeking” behaviour. More sectors are now under the automatic route where investors only need to inform the Reserve Bank of India (RBI) that regulates capital flows through the Foreign Exchange Management Act (FEMA). Therefore, just getting a stamp of “approval”, makes no sense when all it does is—increases the ambiguity and elongates the process. Long drawn out process increase time cost and cost overrun to delays Bureaucratic inertia and scope for bureaucratic corruption by means of red tapism and complex rules Perceived Benefits of dismantling FIPB— To move towards more opening up and to have more process driven activities and methods Putting more sectors under the automatic route – which means investors only have to inform RBI once they invest To further ease rules on foreign investments and allow new instruments that go beyond the traditional equity shares to boost the start-up eco-system (Ease of doing Investment—Aligning itself with the objective of "minimum government, maximum governance) Facilitation of quick job creation—Further push to Start Up India, Stand Up India Scheme and Make In India Scheme Reduction in the compliance costs of start-ups Time cost due to delays will be reduced Enabling regulatory environment, will boost start ups Single window online operations enabling minimum government and maximum governance Concerns to take care of— Oversight of sensitive sectors like defence and telecommunication owing to the "security considerations" in the long run Study of Indian economy vulnerability with respect to the external shocks: Domestic sector investments getting reduced while facing stiff competition Unplanned and unsustainable development Monopoly of big players in the market Way Forward— All FDI approvals must be made automatic to enable the government swiftly wind up the FIPB along with the scrapping of the sectoral caps, except in areas such as media where foreign control can skew public discourse, and freely allow foreign capital in all other sectors. An institutional arrangement should be in place to review any foreign investment proposal that could be a threat to national security. For example in Australia—There exists a legal framework, the Foreign Acquisitions and Takeovers Act 1975—Investment decisions are made by the treasurer, based on the advice of the foreign investment review board. The treasurer has the power to block investment proposals if they are a threat to national security. Connecting the Dots: Enumerate the major reforms required w.r.t ‘Foreign Investment’ in order to boost the ease of doing business in India and to further promote 'Make in India' and 'Start-up India' initiatives.   MUST READ Quest for another holy grail Hindu   The rights of the terminally ill Hindu Related Articles: Right to Die with Dignity Euthanasia Bill   Missing the point Indian Express   Falling for the popular Livemint Related Articles: Right to Education (RTE) Act: It’s working and Challenges   Would you like to live in a cognitive city? Livemint For Detailed Analysis on ‘Smart Cities’, refer the below links http://iasbaba.com/2015/09/iasbabas-daily-current-affairs-16th-september-2015/ http://iasbaba.com/2015/09/iasbabas-monthly-yojana-september-smart-city/ http://iasbaba.com/2015/05/big-picture-smart-cities/   What we need is digital disruption Business Line Related Articles: Digital India: Its challenges and opportunities India’s digital transformation Digital India   Water woes Business Line MIND MAPS   1. Nuclear Suppliers Group

Jun 9, 2016 60 Days Plan 2019 - Daily Prelims Test

IASbaba ’60 Day Plan- Prelims Test 2016 ECONOMICS & CURRENT AFFAIRS [DAY 22]

Click here to get all the Tests- ArchivesHello FriendsHope you are enjoying Daily questions. The link for Day 21 solution is active now. Why we asked you to comment?Now go back to check your answers that you posted with honest effort. Edit your answers with marks. Everyday like this you can self monitor your progress for all 60 days.Accountability to self is the only way for successIASbaba '60 Day Plan' - Prelims Test 2016 [Day 22]Q.1) Which of the following are correct w.r.t. Asset Reconstruction Companies? It is set up to reconstruct or re-package assets to make them more saleable. The assets in question here are loans from banks, card companies, financial institutions etc. The word "asset reconstruction" in India was used in Narsimham I report where it was envisaged for the setting up of a central Asset Reconstruction Fund with money contributed by the Central Government. ARCs focus on NPAs and allow the banking system to act as "clean bank".Select the correct answera) 1 onlyb) 2 onlyc) 2 and 3 onlyd) All of the above Q.2) Which of the following are correct about Monetary Policy? The strategy to influence money supply and interest rates to affect output and inflation. Balancing savings and investments is a major objective along with generating employment. Exchange rate stabilization is achieved through monetary policy. Monetary policy can be expansionary or contractionary depending on the status of the macroeconomic parameters.Select the correct answera) 1 and 3 onlyb) 1 and 4 onlyc) 3 and 4 onlyd) All of the aboveQ.3) Consider the following statements about Cash Reserve Ratio: It is the ratio of deposits which banks have to keep with RBI as savings account. Banks get a fixed interest on CRR from RBI. With increase in CRR the lending capacity of banks will increase.Which of the above statements are correct?a) 1 and 2b) 2 and 3c) 1 and 3d) None of the aboveQ.4) Which of the following is incorrect about Bank rate?a) It is rate at which RBI lends long term to commercial banks.b) It requires collateral security like in case of repo-reverse repo rate.c) It is a penal rate and is aligned with MSF in 2011.d) Lower bank rates can help to expand the economy, when unemployment is high, by lowering thecost of funds for borrowers.Q.5) Consider the following about ready forward contracts. It’s a transaction where 2 parties agree to sell and repurchase the same security. Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. The difference between Repo and Reverse repo rate is always 100 basis points with the latter being lower. The difference between Repo and MSF is always 100 basis points with the latter being higher.Select the correct answer:a) 1 and 3 onlyb) 1 and 2 onlyc) 2 and 3 onlyd) 1, 3 and 4 onlyQ.6) Marginal standing facility (MSF) is a window for banks to borrow from the Reserve Bank of India in an emergency situation when inter-bank liquidity dries up completely. Which of the following is incorrect about MSF?a) MSF is a penal rate as the repo limit is exhausted and also SLR limit is breached at times.b) MSF operations also become necessary as the repo operations are limited to a specific period of the day.c) Only scheduled commercial banks can use this route with government securities including SLR as collateral.d) If banks do not have excess SLR it cannot borrow under MSF.Q.7) Consider the following about SLR. Which of the following are correct? The ratio of liquid assets to net demand and time liabilities (NDTL) that they should keep in designated liquid assets is called statutory liquidity ratio (SLR). To control expansion of bank credit and ensure solvency of commercial banks is major objective. Banks hold public sector bonds, current account balances with other banks and gold as SLR. Banks can also hold multilateral bonds and foreign exchange as part of SLRSelect the correct answer:a) 1 onlyb) 1 and 2 onlyc) 1, 2 and 3 onlyd) All of the above.Q.8) Consider the following about SLR and CRR. SLR restricts the bank’s leverage in pumping more money into the economy while CRR is the portion of deposits that banks have to maintain within central bank. CRR is allowed only in Cash and Government securities while SLR is allowed in multiple other designated forms.Select the correct answer:a) 1 onlyb) 2 onlyc) Both 1 and 2d) None of the aboveQ.9) Which of the following is incorrect about qualitative and quantitative methods used by RBI to control credit supply?a) Qualitative method controls the manner of channelizing cash and credit in the economy.b) Qualitative method restricts credit for certain section and expands for others depending on the erstwhile situationc) Marginal requirement is increased for those business activities where the flow of credit is to be restricted and hence a quantitative method.d) Under rationing of credit RBI fixes ceiling of credit setting a limit to the loans and advances that can be made to particular sector is a qualitative method.Q.10) Consider the following about Market Stabilization scheme. MSS (Market Stabilization Scheme) securities are issued with the objective of providing the RBI with a stock of securities with which it can intervene in the market for managing liquidity. These securities are issued not to meet the government's expenditure. The amounts raised under the MSS will be held in a separate identifiable cash account titled the Market Stabilization Scheme Account (MSS Account) to be maintained and operated by the RBI.Select the correct answera) 1 onlyb) 2 onlyc) 1 and 3 onlyd) All of the aboveQ.11) Consider the following about fixed and floating interest rates. A floating interest rate is an interest rate that is allowed to move up and down with the rest of the market or along with an index but linked to an underlying benchmark rate. A fixed interest rate is an interest rate on a liability, such as a loan or mortgage, that remains fixed either for the entire term of the loan or for part of this term.Select the correct answer:a) 1 onlyb) 2 onlyc) Both 1 and 2d) None of the aboveQ.12) The Reserve Bank of India (RBI) constituted and Expert Committee to Revise and Strengthen the Monetary Policy Framework under the Chairmanship of Dr. Urjit R.Patel. Consider the following. It has suggested that the apex bank should adopt the new CPI (consumer price index) as the measure of the nominal anchor for policy communication. The committee asked the Central Government to ensure that the fiscal deficit as a ratio to GDP (gross domestic product) is brought down to 3.0 per cent by 2016-17. The Patel panel felt that the monetary policy decision-making should be vested with a monetary policy committee (MPC) which has participation of both government and RBI. The FSLRC under Justice (retd) B N Srikrishna had also suggested for the formation of an MPC.Select the correct answer:a) 1 and 2 onlyb) 1 and 3 onlyc) 1, 2 and 3 onlyd) 1, 2 and 4 onlyQ.13) What is common for all the following? S S Tarapore Committee of 2006 Percy Mistry Committee on 2007 Jahangir Aziz working group of 2008 Raghuram Rajan Committee of 2009 Justice B N Srikrishna’s FSLRC of 2013Select the correct answer.a) Capital and Current account convertibility.b) Poverty alleviationc) Public Debt management Agencyd) Categorisation of states for discretionary grants.Q.14) Which of the following is incorrect about Public Debt Management Agency the government intends to set up?a) Public Debt Management Agency (PDMA) is a specialized independent agency that manages the internal and external liabilities of the Central Government in a holistic manner and advises on such matters in return for a fee.b) PDMA is considered to be set up with the objectiveof "maximising the cost of raising and servicing public debt over the long-term within an acceptable level of risk at all times, under the general superintendence of the central government".c) An autonomous PDMA can be the catalyst for wider institutional reform, including building a government securities market, and bring in transparency about public debt.d) Genesis of the thinking on an independent debt management office is traced back to the Committee on Capital Account Convertibility (1997) and the Review Group of Standing Committee on International Financial Standards & Codes (2004).Q.15) Which of the following is not correctly matched?a) Lakadwala – Poverty estimationb) Justice R V Eshwar – Taxationc) Kirit Parikh – Disinvestmentd) Urjit patel – Monetary Policy Q.16) Consider the following about Phillips Curve. The Phillips curve represents the relationship between the rate of inflationand the unemployment rate. Phillips found a consistent inverse relationship: when unemployment was high, wages increased slowly; when unemployment was low, wages rose rapidly. It showed the rate of wage inflation that would result if a particular level of unemployment persisted for some time. Price stability has a trade-off against unemployment and some level of inflation could be considered desirable in order to minimize unemployment, is the core argument.Select the correct answer:a) 1 and 2 onlyb) 1 and 4 onlyc) 2, 3 and 4 onlyd) 1, 2, 3 and 4 onlyQ.17) Consider the following. Deflation is used to describe instances when the inflation rate has reduced marginally over the short term Disinflation is a general decline in prices, often caused by a reduction in the supply of money or credit.Select the correct answer:a) 1 onlyb) 2 onlyc) Both 1 and 2d) None of the aboveQ.18) If deflation is general decline in prices caused by a reduction in the supply of money  then which of the following is not the possible consequence of the same?a) Demand from businesses and consumers to buy products fallsb) Employment growth rate stabilizes and is upward in trendc) Debt servicing becomes more expensived) Governments can resort to tax cuts to boost demand from consumers and businessesQ.19) Consider the following about inflation. When the government doesn’t attempt to curb price rise allowing the free market mechanism to function it is said to be open inflation. When international bodies interrupts a price rise in a country through price control measures and subsidies it is said to be internationally controlled inflation.Select the correct answer:a) 1 onlyb) 2 onlyc) Both 1 and 2d) None of the above Q.20) Suppressed inflation adversely affects the economy. What are the probable consequences? When the distribution of commodities is controlled, the prices of uncontrolled commodities rise very high. Suppressed inflation reduces the incentive to work because people do not get the commodities which they want to have. Suppressed inflation leads to black marketing, corruption, hoarding and profiteering. It invites extra­legal powers of control.Select the correct answer:a) 1 and 2 onlyb) 1 and 3 onlyc) 2 and 3 onlyd) 1, 2 and 3 onlyQ.21) The “Nairobi Package” was adopted at the WTO's Tenth Ministerial Conference, held in Nairobi, Kenya. It contains a series of Ministerial Decisions on  Special Safeguard Mechanism for Developed Countries Issues of Least Developed Countries Export Competition Export of Cotton, Pulses and Rice and its by products Public StockholdingsSelect the correct codea) 1, 2, 3 and 5b) 2, 3, 4 and 5c) 1, 2, 3 and 4d) 2, 3 and 5Q.22) Consider the following statements regarding “Channapatana handcraft” Channapatana toys are special type of wooden toys They are protected by GI tag Channapatana handcraft can be traced back to the reign of Tipu Sultan It flourished with the assistance of Persian Art formSelect the correct codea) 1, 2 , 3 and 4b) Only 1c) 1, 3 and 4d) 1, 2 and 3Q.23) In a major boost to the sustainable development of the Eastern Ghats, with special focus on its fragile environment, the United Nations University has sanctioned one more Regional Centre of Expertise (RCE) to India. What are the RCEs in India? RCE-Srinagar, working on western Himalayas RCE-Guwahati on Eastern Himalayas RCE-Gujarat on wetland ecosystems RCE-TERI (Mumbai) on Youth empowerment and energy RCE-Kodagu on traditional knowledge and tribal communities of Western Ghats. RCE-Tirupati will work on Eastern Ghats, coastal communities, marine ecosystem, biodiversity and sustainable development.Select the correct codea) 1, 2, 3, 4 and 6b) 1, 2, 5 and 6c) 2, 4 and 6d) 1, 3, 4 and 5Q.24) Consider the following with respect to Ganges River Dolphin Ganges river dolphin is the national aquatic animal of India Ganges river dolphin is Vulnerable as per IUCN red list Vikramshila Gangetic dolphin sanctuary is the only protected area for the endangered Gangetic dolphins in AsiaSelect the correct answer using the codes given below a) 1 and 2 onlyb) 2 and 3 onlyc) 1 and 3 onlyd) All Q.25) Consider the following lakes Lake Erie Huron Michigen Ontario SuperiorArrange the above lakes from West to Easta) 53124b) 53134c) 53214d) 53241 Q.26) Consider the following countries Liechtenstein Norway SwitzerlandWhich of the above is a Non EU country?a) 1 and 2 onlyb) 2 and 3 onlyc) 3 onlyd) AllQ.27) Consider the following statement with respect to SHILP SAMPADA The objective of this scheme is to upgrade the technical and entrepreneurial skill of Backward Classes by way of providing training and financial assistance The maximum loan limit under this scheme is Rs.1 Lakh. The scheme is spearheaded by Ministry of Social justice and empowermentSelect the correct answer a) 1 and 2 onlyb) 2 and 3 onlyc) 1 and 3 onlyd) AllQ.28) Which of the following properties of light is observed in the phenomena of Rainbow Formation? Dispersion Refraction Total internal reflection ReflectionSelect the correct answer using the options given below a) 1,2,3 onlyb) 2,3,4 onlyc) 3 onlyd) All of theseQ.29) According to RBI guidelines, Basel III norms are to be implemented by all banks till 2019. Consider the following statements: Capital to Risk weighted Assets Ratio(CRAR) is the percentage of bank’s risk weighted credit exposures. RBI has fixed CRAR as 9%. Capital Adequacy Ratio(CAR) is expressed as CRAR. Higher the CAR, higher is the risk.Which of the above statements are correct?a) 1,2 and 3b) 2,3 and 4c) 1,3 and 4d) All of the aboveQ.30) Consider the following statements: When Repo Rate increases, borrowing from RBI becomes more expensive. Increase in Reverse Repo decreases the liquidity in the market. Reverse Repo is fixed .5 percent points more than Repo.Which of the above statements are correct?a) 1 and 2b) 2 and 3c) 1 and 3d) All of the aboveDownload the Solution– Click hereP.S- Attempt these questions within 20 minutes with full honesty and write your results in the comment box. Next day, come back and check your result. You can also discuss the important concepts and issues, in case of doubts (among peers)All the bestIASbaba

Jun 8, 2016 60 Days Plan 2019 - Daily Prelims Test

IASbaba ’60 Day Plan- Prelims Test 2016 ECONOMICS & CURRENT AFFAIRS [DAY 21]

Click here to get all the Tests- Archives Hello Friends Hope you are enjoying Daily questions. The link for Day 20 solution is active now.  Why we asked you to comment? Now go back to check your answers that you posted with honest effort. Edit your answers with marks. Everyday like this you can self monitor your progress for all 60 days. Accountability to self is the only way for success IASbaba '60 Day Plan' - Prelims Test 2016 [Day 21] Q.1) RBI merged two funds to create a new Financial Inclusion Fund (FIF) to support developmental and promotional activities for expanding reach of banking services. Consider the following w.r.t FIF The new FIF will be administered by NABARD. FIF is created by merging National Innovation Fund and Financial Inclusion Technology Fund Select the correct statement/s a) Only 1 b) Only 2 c) Both d) None Q.2) Consider the following regarding River Information Services (RIS) They are software based system, combination of modern tracking equipment designed to optimize traffic and transport processes in inland navigation. They would facilitate environment protection and better safety provisions for ship to ship collisions. Select the correct code a) Only 1 b) Only 2 c) Both d) None Q.3) Consider the following statements about inflation. Inflation means a persistent rise the price of goods and services. Inflation increases the purchasing power of money. Inflation hurts those with fixed and rising incomes equally. Which of the above are correct? a) 1 only b) 2 only c) 2 and 3 only d) All of the above  Q.4) Which of the following are probable effects of inflation? It reduces savings Leads to depreciation of currency Make imports cheap Increases borrowing costs for businesses Select the correct answer: a) 1 only b) 1 and 2 only c) 1, 2 and 3 only d) 1, 2 and 4 only  Q.5) The GDP price deflator is an economic metric that accounts for inflation by converting output measured at current prices into constant-dollar GDP. Consider the following. It is the ratio of the value of goods and services an economy produces in a particular year at current prices to that at prices prevailing during any other reference (base) year. The deflator covers the entire range of goods and services produced in the economy — as against the limited commodity baskets for the wholesale or consumer price indices — it is seen as a more comprehensive measure of inflation. Select the correct answer: a) 1 only b) 2 only c) Both 1 and 2 d) None of the above Q.6) Which of the following are correct about Producer Price Index? a) The Producer Price Index (PPI)program measures the change in prices received by the seller. b) The PPI provides a broader coverage in terms of products and industries and it also includes services, something which is not a part of the WPI. c) PPI measures the price pressure due to increase in cost of finished goods. d) All of the above.  Q.7) Consider the following. Demand Pull inflation involves inflation decreasing as real GDP rises and unemployment decreases. It can be a result of easy money policy and also referred to as growth inflation. Select the correct answer: a) 1 only b) 2 only c) Both 1 and 2 d) None of the above  Q.8) Which of the following is incorrect? a) Supply shock inflation is caused by reduced supplies due to increased prices of inputs. b) A type of persistent inflation that occurs by deficiencies in the condition of the economy is structural inflation. c) Speculation and cartelization can cause inflation and hence vitiate the market dynamics. d) None of the above. Q.9) Consider the relation of inflation with BOP. Inflation discourages exports as domestic sales are attractive Inflation may erode external competitiveness of domestic products if it leads to higher production costs. Inflation leads to currency appreciation and hence increases imports. High inflation thus boosts trade and hence solve BOP crisis as such. Select the correct answer: a) 1 only b) 1 and 2 only c) 1 and 3 only d) 3 and 4 only  Q.10) Which are possible consequences of inflation? Repo rates may go up to squeeze out money. More OMO’s may be conducted by RBI by selling G-Secs. Government’s fiscal deficit may go up in need to subsidise and make services affordable. Select the correct answer: a) 2 only b) 1 and 2 only c) 2 and 3 only d) 1 and 3 only Q.11) Which of the following is correct about Inflation tax? a) Inflation taxis a term which refers to the financial loss of value suffered by holders of cash and as well those on fixed income, due to the effects of inflation; b) Inflation tax is the tax people pay in developed countries to help governments fight inflation. c) Inflation tax is imposed on the super-rich to subsidize the poor against the risks of inflation. d) Inflation tax is imposed on those who strike and cause harm to public property in times of high inflation.   Q.12) Which of the following is incorrect about Wholesale Price Index? a) Wholesale Price Index (WPI) represents the price of goods at a wholesale stage i.e. goods that are sold in bulk and traded between organizations instead of consumers. b) The WPI has 3 categories namely Primary article group, fuel and power category and the manufactured products category. c) Primary articles have the highest weightage whereas the manufactured products have the lowest weightage. d) Indian WPI is published by the Economic Advisor, Ministry of Commerce and Industry.  Q.13) Call and Term money markets are the sub-markets of Indian money market. Which of the following statements are correct about these short term markets? Call money refers to borrowing and lending of funds for one day. Term money refers to borrowing and lending of funds for a period of more than 14 days. Interest rates in these markets are fixed by banks. Since banks work as both lenders and borrowers in these markets, they are also known as Inter-Bank market. Select the code from the following: a) 1,2 and 3 b) 2,3 and 4 c) 1,2 and 4 d) All of the above Q.14) Consider the following statements: Import of gold is inflationary Providing subsidies through Direct Benefit Transfer causes demand pull inflation International increase in crude prices will cause cost push inflation in Indian market Inflow of FOREX causes inflation Which of the above statements are correct? a) 1 and 4 b) 1,2 and 3 c) 2,3 and 4 d) All of the above Q.15) Which of the following statements correctly explains the term ‘Stagflation’  a) Persistent high inflation combined with high unemployment b) Reduction of the general level of prices in the economy c) Decrease in the rate of inflation d) Constant prices of commodities for a long time in an economy  Q.16) Which of the following economic entities is are benefitted with inflation? Debtors Exporters Savings bank account holders Creditors Select the code from the following: a) 1 and 2 b) 1 only c) 2,3 and 4 d) None of the above Q.17) Consider the following statements regarding sugarcane and sugar pricing policy. The concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the ‘Fair and Remunerative Price (FRP)' of sugarcane. Sugar is an essential commodity under the Essential Commodities Act, 1955. The Central Government has been following a policy of partial control and dual pricing for sugar. Which of the above statements are correct? a) 1 and 2 b) 2 and 3 c) 1 and 3 d) All of the above  Q.18) Consider the following statements with respect to Missile technology control regime (MTCR) For non-signatories of missile technology control regime the maximum permissible payload of a missile can be up to 1 ton The range of missiles for non-signatories of MTCR should not exceed more than 300 Kms Select the correct answer a) 1 only b) 2 only c) Both d) None Q.19) Consider the following statements with respect to RBI RBI or Reserve bank of India was established under the government of India act 1935 A palm tree and a Bengal tiger form the logo of RBI Select the correct option a) 1 only b) 2 only c) Both d) None Q.20) Consider the following Tiger One horned rhinoceros Elephant Peacock Which of the following animals are found in the ten rupees Indian currency note? a) 1,2&4 only b) 2,3&4 only c) 1,3&4 only d) 1,2&3 only Q.21) The recent New Delhi Declaration is related to which of the following themes a) Satellite coordination to monitor human induced greenhouse gases b) To curb violence against women in tribal areas c) To enhance scientific temper among school going students d) To aim 100 % adult literacy by 2020 Q.22) Consider the following Chimmonoy Wild life sanctuary Parambikulam wild life sanctuary Eravikilam national park Which of the above wild life sanctuary/national park is not located in Kerala? a) 1&2 only b) 3 only c) 2&3 only d) All are present in Kerala Q.23) Consider the following statements. An extremely low aggregate demand. Comparatively lower inflation. Production houses go for forced labour cut in order to reduce production cost. Which of the following stage of Business cycle best represents the above characteristics? a) Recession b) Recovery c) Depression d) Boom Q.24)  Consider the following statements with regards to inflation indexed bonds (IIBs). IIBs will provide inflation protection to principal only. Existing tax provisions will be applicable on interest payment and capital gains on IIBs. Foreign institutional investors (FIIs) are not allowed to invest in IIBs. Which of the above statements are NOT correct? a) 2 and 3 only b) 1 and 2 only c) 1 and 3 only d) All of the above  Q.25) GPS-Aided Geo Augmented Navigation (GAGAN) system will provide augmentation service over which of the following areas? Bay of Bengal Middle East South East Asia Africa Russia Scandinavia Choose the correct code a) 1,2,3 and 4 b) 2,4,5 and 6 c) 3,4,5 and 6 d) 1 and 3 only Q.26) Consider the following statements with respect to Kaladan Multi-modal Transit Transport Project It is a project between India, Bangladesh and Myanmar The project consists of only naval routes It will reduce the need to transport goods through the “Chicken’s neck” Which of the following is incorrect? a) Only 1 b) Only 2 c) 1 and 2 d) 2 and 3 Download the Solution– Click here P.S- Attempt these questions within 20 minutes with full honesty and write your results in the comment box. Next day, come back and check your result. You can also discuss the important concepts and issues, in case of doubts (among peers) All the best IASbaba

Jun 8, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 8th June, 2016

Archives   IASbaba’s Daily Current Affairs – 8th June, 2016   INTERNATIONAL    TOPIC: General studies 2 India and its extended neighborhood (Iran)- relations, International relations Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests. Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.   India’s increased role in West Asia India and Gulf countries: In the last 10 months, the new government under PM Modi has engaged with almost all the Gulf countries and every interaction has yielded substantial agreements which will take bilateral relations into new areas and reshape ties to make them relevant to contemporary times. Every country visited expressed its admiration for India’s economic achievements and pledged to become a partner in India’s development efforts. Courtesy - http://www.rjgeib.com/biography/milken/crescent-moon/persian-gulf/gulf-states/gulf-states.jpg Economic and cultural ties central importance to boosting energy and economic ties commitment on both sides to upgrade the existing buyer-seller relations to long-term partnerships based on investments and joint ventures historic and civilisational links enhancing people-to-people links work closely with India to combat terrorism countering radicalisation through promotion of a moderate religious discourse espousing peace, tolerance, and inclusiveness enhancement of defence ties and cooperation in defence and intelligence cooperation in new frontier areas, such as space, telecommunications, renewable energy, food security, sustainable development, desert ecology, and advanced healthcare   India- Iran:  The joint statement with Iran, titled ‘Civilisational Connect, Contemporary Context’, particularly focussed on sustaining historic cultural ties through interactions among scholars, authors, artists, filmmakers, the media, and sportspersons. India-UAE: UAE has set aside a fund of $75 billion to invest in India’s infrastructure and developmental needs. Joint statements: for Strategic Partnership Most of the countries recognize India as their “strategic partner”, a status that represents a high degree of shared values, perceptions and approaches to matters of security concern. Joint statement with the UAE speaks of “shared threats to peace, stability and security”, and agrees to a “shared endeavour” to address these concerns, which is founded on “common ideals and convergent interests”. Joint statement with Saudi Arabia talks of the two countries’ responsibility to promote peace, security and stability in the region. Iran joint statement speaks of the strategic importance of regional connectivity linked with the development of Chabahar port.   Promoting regional stability Every one of the joint statements between India and the Gulf countries contains a subtext that imposes a new responsibility on India: how to shape a role to promote security in the Gulf India and UAE statement speaks of the need for the two countries to establish a “close strategic partnership” for “these uncertain times”, and calls upon them to “work together to promote peace, reconciliation, stability… in the wider South Asia, Gulf and West Asia region”. India and Saudi joint statement notes “the close interlinkage of the stability and security of the Gulf region and the Indian subcontinent and the need for maintaining a secure and peaceful environment for the development of the countries of the region”. The joint statement with Iran speaks at length about the threat from terrorism for the peace, security, stability and development of the region. It specifically refers to the peace and stability of the region being served by “a strong, united, and prosperous and independent Afghanistan” and their agreement to strengthen trilateral consultations and coordination. Challenges: West Asia today is in the throes (intense or violent pain and struggle) of the gravest crisis in its modern history. Besides two ongoing wars, there is the scourge of jihad, represented by the transnational al-Qaeda and the Islamic State. The two Islamic giants, Saudi Arabia and Iran, are locked in a competition in which each country sees the other as threatening its nationhood, regime, political order, and doctrinal standing in Islam. Saudi Arabia believes that Iran supports terror, interferes in the domestic politics of the neighbouring Arab states, and is a destabilising force that has regional hegemonic aspirations. Iran denies these allegations, arguing that the Saudi monarchy faces serious domestic economic and political challenges, particularly from its restless youth who chaff against an order that is on the wrong side of every issue in world affairs — constitutionalism, political participation, human rights, gender and minority sensitivity, and being unable to handle these challenges, the Kingdom is unfairly made a scapegoat by the Islamic Republic that has no regional territorial ambitions. With the deep doctrinal and political divide between them (Iran and Saudi Arabia), the proxy wars in Syria and Yemen, and the attendant proliferation of jihad, the stage is set for their differences to escalate into direct conflict. Responsibilities on India: India has every reason to be concerned: its energy security and its economic interests are linked with regional security, as is the welfare of its eight million-strong community. India’s abiding interests require that it get off the fence and contribute actively to regional stability by promoting engagement between Saudi Arabia and Iran, and India has to work with regional and extra-regional partners with a similar interest in regional security, to structure platforms for dialogue and confidence-building measures. This is a daunting challenge, but India is fully equipped to handle it. India’s growing capabilities and stronger national branding, in fact, makes it a credible partner. The interplay among these nations actually offers India new avenues of cooperation. The time has come to live up to this commitment. Connecting the dots: Explain the ongoing conflict between Saudi Arabia and Iran in West Asia. What will be the impact of this conflict on India? A peaceful West Asia is a necessity for India to maintain its energy security. Critically examine the above statement with respect to the ongoing conflicts in West Asia.   Related Articles: West Asia: Saudi Arabia’s deadly gamble OPEC & the present Global Order India’s ties with West Asia : An analysis  (Part I) The sprouting of the “ look west”  policy  (Part III) ECONOMICS   TOPIC: General studies 3: Banking & related Issues; Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Inclusive growth and issues arising from it   The path named Financial Inclusion Financial Inclusion (FI) is the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players. Mid-2000s: India embarked on an ambitious programme to ensure universal coverage of all households by financial institutions. 2006: Reserve Bank permitted banks to utilise the services of non-governmental organizations (NGOs), micro-finance institutions (other than Non-Banking Financial Companies) and other civil society organisations as intermediaries in providing financial and banking services through the use of business facilitator and business correspondent (BC) models. The BC model allows banks to do “cash in-cash out” transactions at a location much closer to the rural population, thus addressing the last mile problem 2014: Prime Minister’s Jan Dhan Yojana (PMJDY) was introduced which intends all households to have at least one savings account at a financial institution. One year after the PMJDY’s initiation, more than 21 crore bank accounts have been opened, utilizing a network of more than one lakh business correspondents (BCs). Issues being faced— Surveys that we are currently running in Bihar suggest that, even now, moneylenders represent the major source of loans for rural households, accounting for 35% of total loans: Family members account for 26% of loans Commercial banks for just 10% The primary reason for borrowing is ill-health: 38% of loans (48% of the loans from moneylenders) are for health-related expenses   Not treated as an Efficient Business Model: Banks are pursuing FI as a regulatory requirement rather than treating it as a business model. Solutions— Banks have to realize that the bankability of the poor holds a major opportunity for the banking sector in developing a stable retail deposit base and in curbing volatility in earnings with the help of a diversified asset portfolio. Therefore, Financial Inclusion programmes should be implemented on commercial lines as a sustainable and viable business model Ensure that poor people who deserve credit are provided access to timely and adequate credit in a non-exploitative manner Geographic Limitation (Rural areas) Higher non-performing loans in rural areas because rural households have irregular income and expenditure patterns—compounded by the dependence of the rural economy on monsoons, and loan waivers driven by political agendas Low Ticket Size: The average ticket size of both a deposit transaction and a credit transaction in rural areas is small. This means that banks need more customers per branch or channel to break even. Considering the small catchments area of a branch in rural areas, generating a customer base with critical mass is challenging. High Transaction Cost: due to small loan sizes, the high frequency of transactions and at a higher frequency, the large geographical spread, the heterogeneity of borrowers, and widespread illiteracy Higher risk of credit: Rural households may have highly irregular and volatile income streams. Irregular wage labour and the sale of agricultural products are the two main sources of income for rural households. Information Asymmetry: Since many rural people do not have bank accounts, there is a lack of information on customer behaviour in rural India   Government’s policies: Duplicate accounts with zero balances represent a high percentage of the total accounts High fiscal deficits and statutory pre-emptions imposed on banks Persisting interest rate restrictions—“floors” on short-term deposit rates and lending rates, “caps” on small loans Government’s domination of and interference in rural banks, particularly RRBs and cooperative banks, further distort bankers’ incentives; Inefficiencies arising from weak governance & poor management, Weak regulatory standards & Lack of supervision Political pressure on banks to achieve programme targets BC Model – Viability issues: Scarcity of staff Inadequate commissions Accounts opened have remained non-operational Though BCs have increased savings for poor households, this increase is not primarily held in savings accounts BCs should be selected on the basis of their residence as research has proven that BCs, who reside in the vicinity of their clients and are often from the same community, can more easily address such constraints— Reminders or “nudges” to save and contracts that commit households to save can be utilized. Peer pressure through social networks will lead to enhanced savings Proven results— Increased total savings of both landowning and landless households Savings of the landless increased more than those of landowning households Tie-up between the financial system and Mahatma Gandhi National Rural Employment Guarantee Act— access to a BC increased the wage income and hours of work of landless households, particularly that of women Infrastructure: Technology issues: Non-availability of physical and digital connectivity as well as low rural television-density Solution: Technological improvements allowing financial transactions through point-of-service instruments; enabling a model based on local bank agents significantly lowering the costs of serving the poor Lack of Bank branches—Limited delivery capability as ATM penetration is low and other channels such as Phone and Internet Banking are non-existent in rural areas Poor physical and social infrastructure—unpaved roads and limited access to modern transportation IASbaba’s Views: Financial Inclusion and Financial Literacy are two sides of the same equation— Financial Inclusion acts from supply side by providing financial market/services that people demand whereas Financial Literacy stimulates the demand side by making people aware of what they can demand. Therefore, access to financial services and Financial Education must happen simultaneously and must be a continuous, an ongoing process and must target all sections of the population. Need to- Create awareness of basic financial products through dissemination of simple messages of financial prudence in vernacular language—activities included publication of comic books on banking and RBI; games on Financial Education; arranging school/college visits for creating financial awareness; participation in exhibitions/fairs/melas at the State & District levels; conducting essay competitions and quizzes in schools to create awareness about banking and RBI; outreach programmes undertaken by the Top Management and Regional Offices; RBI’s Young Scholars Scheme, etc. Loans for education should be seen as an investment for economic development and prosperity, since knowledge and information would be the principal driving force for economic growth in the coming years. Facilitation of economically weaker sections of the society to avail educational loans from scheduled banks with modified easier norms should be made a priority. Digitisation of banking: will help access a wider range of customers in rural India; Digital applications (wallets, mobile-to-mobile payments) are adding to transaction traffic Inculcate saving & banking habit: Critical to conduct financial literacy and credit counselling programmes, offer skills training to enhance income generation, form self-help groups and fund these groups for income-generating activities thereby enabling the delivery of viable credit to the rural poor in a sustainable manner Connecting the Dots: The future of India is dependent upon the triad of financial inclusion, financial literacy and financial stability. Discuss   MUST READ A cautionary note Hindu   Controversy over Karnataka RS polls is an opportunity to bring in crucial electoral reforms Indian Express   House matters Indian Express   For Criminal Defamation Indian Express   MIND MAPS   1. Migration Wave & Indian Cities

Jun 8, 2016 Topper's From IASbaba

TOPPER’S STRATEGY: INDU JAKHAR RANK 30, CSE 2015, HIGHLY RECOMMENDED!

Read about other Topper’s Strategy MY JOURNEY TO IAS   When I began my preparation two years ago, I had just one dream-the three letter word-IAS. I am so glad that finally I have been able to achieve my endeavour. While beginning my new journey , I would wish to share my experience with fellow aspirants on IASbaba's request and i hope it’ll be useful to them in their pursuit.   MY BACKGROUND: I am 24 year old and a doctor by profession.I finished my MBBS from Maulana azad medical college, new Delhi in January 2014 and it was only after that I started my preparation. I secured AIR 688 in my first attempt in 2014 with just basic preparation. With greater focus on my weaknesses , I could secure AIR 30 in 2015. BEGINNING OF PREPARATION: MOTIVATION   Firstly I would say the most important aspect of this preparation is not studies. Rather it is building the right personality as this examination is a long drawn process. Thankfully my preparation in 2014 began with the right teacher at nirvana academy who focused on the latter aspect more. He always said you need to know why you want this service!! There are lots of people who can study but only those who focus on oneself are able to sail through this tumultuous path. There will be lots of days when you will doubt yourself, think about alternative career options and remorse the times you have to opt out of family and friends’ events as you have to study in that time. But if you are determined and passionate about your goal you’ll be able to endure such times. Hence your reason for your decision to take up this challenge should be firm as you will need to revisit it so many times. As someone rightly said ‘success is less about enjoying and more about enduring’. You should enjoy the process and be extremely zealous about it. In my first attempt in 2014, I got DANIPS with 688 rank but was disappointed that I couldn’t make it to my dream job. With little time left for prelims, it was only this conviction that could help me get back on my feet and work hard for the next attempt. A poem ‘Don’t quit’ by an unknown author has been an incredible support to me. Reading it in odd times helped me gain the strength to fight again and again.   IASBABA is a very nice platform for guidance specially for students who are not able to access coaching centres in Delhi due to time or distance issues. Though I haven’t been very regular as I had supplementary sources yet I have used it in my preparation for answer writing practice post prelims. I believe this consistent  daily answer writing ,even for few days, is more relevant for improving  quality of answers. Also their Mind Maps initiative is particularly useful for revision. I used these for value addition in my preparation. Yojana summary and the recent AIR and RSTV videos summary is also very good.     PRELIMINARY EXAMINATION: IASbaba has brilliantly simplified the preliminary preparation through this- Click here Also be regular with their 60 Days Plan. You will know its worth only after upcoming Prelims :) Click here These are the sources I referred  History:  RS SHARMA for ancient india , BIPIN CHANDRA for modern india, ncert 11th class fine arts for art and culture and several notes provided at nirvana Geography: atlas and all ncerts from 6th to 12th Polity: ncert 11th-our constitution at work along with pm bakshi (it was taught in a different manner in my coaching) Environment, science and technology: newspaper and ncert 12 biology ecology section. Economics: newspaper The Hindu.   With the increasing questions of environment being asked, people are losing focus as they are running after getting these questions right. The crux lies in doing otherwise, that is, getting questions of the other three topics absolutely right. So focus more on revising the history, geography and polity portion first. And don’t go with a preconceived notion regarding the number of questions you will attempt. Assess the paper and then attempt depending upon your knowledge.   Revision is the key. Go through the sources you had read primarily at least thrice before pre. Keep reading newspaper at least till 15-20 days before prelims with greater focus on facts and prelims type questions. And most of all ,don’t get bothered by what others are studying. Rather prepare yourself well. Develop your mind to reach to answers through exclusion as it works in solving a lot of questions.     MAINS EXAMINATION: An elaborate description of the syllabus along with sources to be referred to are given on IASbaba's  website ( Must Read)- Click here So I would more elaborate on what I did differently while preparing it.   I think the preliminary thing to do is that you write down the whole syllabus and then delineate your preparation strategy according to your strengths and time availability.  Make small time tables and keep checking your progress periodically. The most important part is simplify your preparation for general studies as the syllabus is vast. As you read something , maintain a notebook where you write its summary for all papers separately.This will help a lot in revision. Read all ncerts pertaining to different aspects of syllabus specially for gs 1 and 2. It will help in establishing a sound base which can be augmented with the information from newspapers. Yojana is extremely helpful for gs 2 and also for some topics of gs 3.The language of ncerts and yojana is important as it’s very balanced, exactly what can be written in examination. Apart from that I read very few books like V N KHANNA for foreign policy. For general studies 4,it is required that one has a good understanding of problems around and the ground level solutions that can be offered for the same. Analysis of given situation and its varied nuances is of utmost importance in case studies. Answer all parts that are asked .Use examples for the questions apart from case studies. Maintain a list of such examples and go through them again and again. Discussions will help a lot as it gives you access to wider number of perspectives. I also watched some of the justice harvard videos in my free time and they actually ignited my mind into thinking better in case studies.(Also they are fun to watch otherwise-so a perfect break time) RSTV is one of the finest inputs for ones’s preparation.I used to watch news hour and big picture daily on it and some other good programs like india’s world ,policy watch and special reports.It is a fun way to learn and you get opinions of many eminent people as well through it on different topics. Newspaper is a must for preparation. It is the essential building block of your preparation. You need to cultivate the habit and it actually becomes one’s leisure time. I never had this habit before this preparation but now yes it is one of the most important things of my day. Today the kind of questions that are asked can’t be answered after reading from books. They require one to synthesize their viewpoint through amalgamation of varied opinions. Even static portions are being asked after linking them to contemporary issues.E.g. question in geography on pollution in delhi or ill effects of ecotourism. These can only be covered through newspaper. Developing the acumen on how to approach a question is very important. The examination now requires greater focus on how to write than what to write. So answer writing is important but thats feasible once you have built your basics. Never ignore your base as it is going to be the key to your success. Bring out multiple dimensions in your answers and they become impressive. And mind it, this will come with time and practice. So don’t get demoralised ever. What matters is what you know in the end.     ESSAY PREPARATION:   It doesn’t require some separate preparation but practicing would be wonderful. In this specially , IASBABA is extremely handy. Do refer to these Essay Strategy- Click here Model Essay by IASbaba– Click here   Fortnightly there used to be essay practice tests on it. I had written a few times and I believe it helped a lot. Many students write so well and comprehensively. After sincerely writing your topic when you go through the essays of others,it helps a lot.  So many dimensions are covered by different writers and hence you get added inputs. It also brings a sense of discipline as you start writing essay periodically and the concept of peer review is very nice for mutual benefit as compared to any test series for it. Above all,i believe the basic premise of this site is good.It is bilateral and aspirants contribute as well which encourages participation positively.     OPTIONAL SUBJECT:MEDICAL SCIENCE I had written a detailed article for its preparation on my blog- Click here   Also find transcript of both my interviews on my blog. Click here   I hope my inputs are useful to some of the fellow aspirants.Wish you all the best. Hope you reach your destination soon. To sum up I would say what iI was told once “The biggest reward you will receive by doing easy things is that they will be easy to do. If you want more, go for the difficult ones”. Civil services would be one beautiful journey if you start enjoying the difficult parts of it. All the very best! Indu Jakhar- AIR 30 CSE 2015

Jun 7, 2016 60 Days Plan 2019 - Daily Prelims Test

IASbaba ’60 Day Plan- Prelims Test 2016 MODERN INDIA & CURRENT AFFAIRS [DAY 20]

Click here to get all the Tests- Archives Hello Friends Hope you are enjoying Daily questions. The link for Day 19 solution is active now.  Why we asked you to comment? Now go back to check your answers that you posted with honest effort. Edit your answers with marks. Everyday like this you can self monitor your progress for all 60 days. Accountability to self is the only way for success IASbaba '60 Day Plan' - Prelims Test 2016 [Day 20] Q.1) Which of the following statements are the correct reasons of Vellore Mutiny? There was a racial prejudice and Indian sepoys were considered inferior. Wearing ear rings and caste marks were prohibited. The sepoys were asked to shave the chin and trim the moustache. It was a popular belief that all the soldiers would be slowly converted to Christianity. Select the code from the following: a) 1 and 4 b) 1,3 and 4 c) 1,2 and 3 d) All of the above Q.2) During 17th and 18th Century, the East India company had a monopoly in the eastern trade. Bribes were often given to monarchs to have their political backing. Which of the following statements are correct about the relations between east India company and the crown of England? In 17th century company gave huge loans to the crown. Charles II granted series of charters, empowering company to build forts, raise army and make peace and war with the eastern powers. Company was allowed to administer justice to all Englishmen and others living in English settlements. Select the code from the following: a) 1 and 2 b) 2 and 3 c) 1 and 3 d) All of the above Q.3) Battle of Plassey between The Nawab of Bengal ‘Siraj ud Daulah’ and English East India company made company a major contender of political power in India. Consider the following statements: Siraj ud Daulah was defeated treacherously and there was hardly any fight in Battle of Plassey. British put Mir Qasim as a puppet nawab in place of Siraj ud Daulah. Mir Qasim was an able administrator who tried to maintain public discipline and tried to free himself from the influence of the British. Which of the above statements are correct? a) 1 and 2 b) 2 and 3 c) 1 and 3 d) All of the above Q.4) Fourth Anglo-Mysore war was a decisive war between British and Mysore. Tipu sultan was killed defending the city. Which of the following statements are correct about fourth Anglo-Mysore war? Mysore was attacked from all four sides by British, Marathas and the Nizam of Hyderabad. Tipu’s troops were outnumbered 4:1. British annexed almost all of Mysore. The core area was restored to the eldest son of Tipu whose ancestors ruled till 1947. Select the correct code from the following: a) 1 and 2 b) 2 and 3 c) 1 and 3 d) All of the above Q.5) Bahramji Malabari was one of the most prominent Parsi social reformers of India. Which of the following statements are correct about him? He criticized the prohibition of widow remarriage by Hindus and placed the blame squarely with that religion's "priestly class" and the "social monopolists" (i.e. the Brahmin caste) for their "vulgar prejudices. Malabari published a set of Notes on Infant Marriage and Enforced Widowhood, that he sent to 4,000 leading Englishmen and Hindus. He was instrumental in passing the Age of Consent Act in 1894. Malabari published a book in England “An Appeal from the daughters of India”. Select the correct code from the following: a) 1,2 and 3 b) 2,3 and 4 c) 1,3 and 4 d) All of the abov Q.6) The doctrine of lapse was an annexation policy purportedly devised by Lord Dalhousie, who was the Governor General for the East India Company in India between 1848 and 1856. Which of the following statements are correct about the policy of ‘Doctrine of Lapse’? This doctrine was based on the idea that in case a ruler of dependent state died childless, the right of ruling over the State reverted or ‘lapsed’ to the sovereign. The state was not to pass to an adopted heir unless the adoption was approved by the British authorities. Satara was the first state to be annexed under this policy. Awadh was the last state to be annexed under ‘Doctrine of lapse’ which triggered the great revolt of 1857. Select the code from the following: a) 1,2 and 3 b) 2,3 and 4 c) 1,3 and 4 d) All of the above Q.7) Which of the following Acts ended the monopoly of trade of East India company in India? a) Charter Act of 1793 b) Charter Act of 1813 c) Charter Act of 1833 d) Government of India Act 1858 Q.8) Consider the following statements regarding Permanent Settlement method of land revenue: It was introduced in Bengal and Bihar by Warren Hastings. The zamindars were made owners of the land and ownership was made hereditary and transferable. Cultivators were reduced to low status of mere tenants. Zamindars were to give 50% of the rental they derived to the state, keeping 50% to themselves. Which of the above statements are correct? a) 2 and 3 b) 1,2 and 3 c) 2,3 and 4 d) All of the above Q.9) The revolt of 1857 came as a bitter shock to the British empire. Since it started as an army revolt, key changes were made in the Army to avoid such a situation again. Which of the following statements are correct regarding the changes made in the Indian Army? The proportion of Europeans to Indians in the army was increased. European troops were kept in key geographical and military positions. Policy of ‘divide and rule’ was implemented by making battalions on the basis of caste and religion. The older policy of excluding Indians from officer corps was abandoned and loyal Indians were given higher posts. Select the code from the following: a) 2,3 and 4 b) 1,2 and 3 c) 1,3 and 4 d) All of the above Q.10) Consider the following statements regarding the Khaksar movement: It was started by a charismatic leader, Allama Mashriqi in Lahore. Its aim was revival of orthodox Islam in India and establish a Muslim government. Allama encouraged members of the movement to serve the people regardless of their caste or religion; and Khaksars were expected to convince others to join the movement through "love and affection. Mahatma Gandhi Called Allama Mashriqi to join Quit India movement in 1942. Select the correct statement from above: a) 1,2 and 3 b) 1,3 and 4 c) 2,3 and 4 d) 1 and 2 Q.11) Which of the following political entities supported the Quit India Movement? Muslim League Rashtriya Swayamsevak Sangh Hindu Mahasabha Communist Party of India Princely States Select the code from the following: a) 1 and 4 b) 2,3 and 5 c) 2 and 3 d) None of the above Q.12) Consider the following statements about Tattvabodhini Sabha: It was founded by Rabindranath Tagore. The objective of Tattvabodhini Sabha was to encourage religious inquiries and disseminate the essence of Upanishads. Which of the above statements are correct? a) 1 only b) 2 only c) Both 1 and 2 d) Neither 1 nor 2 Q.13) Consider the following matches: Author                                                                                    Literature Premchand                                                                          Bharat Durdasha New lamps for Old                                                            Aurobindo Ghosh Bhagat Singh                                                                      Why I am an Atheist Shyama Prasad Mukherji                                                Young India Select the correct code from the following: a) 3 only b) 1,3 and 4 c) 2 and 3 d) All of the above Q.14) Consider the following statements regarding Baba Ramchandra: He left for Fiji as an indentured labourer and changed his name to Ramchandra Rao to conceal his identity as Brahmin. He returned to India, became a Sanyasi and started working for the upliftment of peasantry. In 1920, he organized an all farmers association in Oudh, called Oudh Kisan Sabha. Which of the above statements are correct? a) 1 and 2 b) 2 and 3 c) 1 and 3 d) All of the above Q.15) The second half of the 19th century saw a remarkable growth in the vernacular press. They played a critical role in creating socio-political awareness in the masses. They also became a vehicle in exposing the exploitative policies of the British government. Alarmed, by its growth, the government passed a Vernacular Press Act. Which of the following statements are correct about this act? It was passed by Lord Ripon in 1878. The magistrates of the districts were empowered, to call upon a printer and publisher of any kind to enter into a Bond, undertaking not to publish anything which might “rouse” feelings of disaffection against the government. The magistrate was authorized to deposit a security, which could be confiscated if the printer violated the Bond. Select the code from the following: a) 1 and 2 b) 2 and 3 c) 1 and 3 d) All of the above Q.16) Consider the following statements with Rare earth metals As per IUPAC they are 17 rare earth metals Among the rare earth metals there are 15 rare earth metals belonging to lanthanoid group and other two being scandium and yttrium China has the largest reserves of rare earth metals  Select the correct option a) 1 & 2 only b) 2 & 3 only c) 1 & 3 only d) All Q.17) Consider the fund “SMILE” as mentioned in the budget 2016-17 a) It is debt fund by SIDBI that will be used  to provide soft term  loans for MSME sectors to meet debt to  equity norms b) It is fund that will be used to provide rehabilitation care  for women affected by violence c) It is fund used to develop scientific temper among students in school d) None of these Q.18) Consider the following statements with respect to Kanheri caves It is located in close proximity to Sanjay Gandhi National park in Madhya Pradesh Kanheri caves are constructed with the influence of Buddhism  Select the correct answer using the codes given below a) 1 only b) 2 only c) Both d) None Q.19) Consider the following George Yule Sarojini Naidu Annie besant Chadrashekar Azad Badruddin Tyabji Select the above personalities who presided over the sessions of Indian National congress a) 1 and 4 only b) 1,2,3 and 5 only c) 2,3,4 and 5 only d) All presided over INC sessions Q.20) Silambham is a Martial art patronised by which of the following ancient Indian kingdoms   a) Cholas b) Cheras c) Pandyas d) Pallavas Download the Solution– Click here P.S- Attempt these questions within 20 minutes with full honesty and write your results in the comment box. Next day, come back and check your result. You can also discuss the important concepts and issues, in case of doubts (among peers) All the best IASbaba

Jun 7, 2016 Important Articles

Important Notice: UPSC Annual Calender 2017

Hello Friends UPSC has released the Annual Calender for the year 2017. Important changes has been made in the dates of Prelims and Main Examination for 2017.   Prelims Examination to be conducted on- 18th June 2017   Main Examination to be conducted from- 28th October 2017   Notification to be released- 22nd February 2017   Click here for details Aspirants preparing for 2017 should take notice of this and prioritize their preparation.  IASbaba will publish about 2017 program in due time. All the very best 

Jun 7, 2016 Motivational Articles

Creative Guidance: Book Review – The Wealth of Nations – Adam Smith

The Wealth of Nations At about 1200 pages, ‘The Wealth of Nations’ is arguably the most comprehensive and complete understanding of the economic background and history of the modern world. ‘The Wealth of Nations’ explores the origin of the modern economic system, which has its roots in the ancient trade and exchange system. The book is a thorough and systematic analysis of the role of currency and its evolution. The book gives a thorough and readable narration about the systems of labor, taxes, wages, market and economy. This book is a delight for economists as it explores some of the most complex economic theories in the simplest possible way. ‘The Wealth of Nations’ can be credited with the fabulous task of simplifying the complex structures of economic theory for the understanding and education of a common mind. Every lay man can understand and comprehend the ideas explored here. Read this book to acquire the wealth of knowing about the wealth of the world. Where did all this come from; what are the important circumstances and events that shape our world; where are we headed and how will the future of economy look? ‘The Wealth of Nations’ by Adam Smith is almost a guide book for economists. You cannot miss this book if you have any interest in world economy. “This Book Review is a copyright of The Ahamo Movement and IASBABA.”

Jun 7, 2016 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 7th June, 2016

Archives   IASbaba’s Daily Current Affairs – 7th June, 2016   NATIONAL    TOPIC: General studies 1: Urbanization and related issues General studies 2: Local government & related issues Important aspects of governance and e-governance Government policies and interventions for development in various sectors and issues arising out of their design and implementation.   For creating “Vibrant Cities”: Decentralise and Empower City Governments   Municipal Governance: Background In 1992, India took some early steps to recognize metropolitan regions as agglomerations requiring coordinated economic and spatial planning. Towards this end it also passed the 74th Constitutional Amendment Act, 1992 74th constitutional amendment added Part IX-A to the Constitution of India. It is entitled as ‘The Municipalities’. The constitutional amendment inserted provisions from Articles 243-P to 243-ZG. In addition, it also added Twelfth Schedule to the Constitution. It contains 18 functional items of municipalities listed under Article 243-W. It gave constitutional status to the municipalities and brought them under the purview of judicial review. In other words, the state governments are under a constitutional obligation to add this new system of municipalities in accordance with the provisions of the Act. The Act aims at revitalizing and strengthening the urban governments so that they may function as effective units of local government. But progress thereafter has been limited.   How to bolster metropolitan governance? Sustained efforts on three fronts are needed to bolster metropolitan governance: Establish a powerful and effective Metropolitan Planning Committee (MPC) Add three important functions—housing, transport and police – to the 12th schedule India should consider moving to the system of a ‘directly elected mayor’   First, make MPC effective and powerful: Article 243ZE mandates the establishment of the Metropolitan Planning Committee (MPC) to prepare a draft development plan focusing on shared resources, investments, infrastructure and environmental conservation for the region as a whole for approval by the state government. But the MPC has failed to take off for two reasons. One, state governments are reluctant to concede power. Two, the design of the MPC as a supra-municipal authority has limitations. Being a body politic, the MPC does not have executive powers, staff and budgets. These shortcomings render it toothless. Some states have recommended reforms in Municipal Authority., where it wants to establish a Metropolitan Development Authority, which will be chaired by the chief minister and will have overriding powers on all matters ranging from economics to planning. It wants this body to be managed by an IAS officer who will be the de facto commissioner in charge of day-to-day affairs and suggests for participation from different quarters – such as MLAs, the chief secretary and other concerned secretaries. However well intentioned, such reforms will increasingly consolidate the powers of the state government and, will in turn, stunt decentralization The larger peril is that this could have a contagion effect across states, because there are absolutely no reasons to substantiate why successive chief ministers would want to cede control of such “a mother of all agglomerations”. Second, add three functions to the 12th Schedule: Despite Article 243W in the 12th Schedule, city governments lack the span of control required to administer cities effectively. In other words, the 12th Schedule is incomplete in mandating the transfer of functions to local bodies. It remains completely silent on three important functions—housing, transport and police. Consequently, state governments continue to hold these functions. This control provides state governments with unrestrained power over capital-intensive sectors, indirectly enabling them to control cities. Therefore, it is important to add these functions to the 12th schedule, so the Municipal bodies can perform their functions independently without any subjugation by the state governments. Third, move to a directly elected mayoral system of urban governance: Some state governments are recommending restructuring the Municipality, by splitting the city into different municipalities, each to be governed by a elected mayor. However, it would have been better off recommending a metropolitan mayor and government for the city as whole rather than different mayors who, when elected, could represent different political parties. Result would be chaos. Because politically fragmented, contiguous areas sharing civic amenities could be held hostage to political differences and potentially result in a stalemate and deteriorate the quality of life across the metropolitan region. Unfortunately, India is one of the few parliamentary democracies in the world yet to make the shift to the system of a directly elected mayor. Over time, India must consider moving to the system of a directly elected mayor similar to London.   The way ahead: A more democratic approach would be to create a metropolitan-level authority that ensures horizontal coordination by providing the MPCs with a full-time secretariat that has teeth, that is, staff, budgets and executive powers. This body (MPC) could act as an additional layer of government between the municipal bodies and the state government, and eventually the municipal commissioners could report to the metropolitan commissioner in addition to their elected governments to facilitate coordinated governance. Further, the MPC could draw participation from members of Parliament. Such composition would provide sufficient balance of power at the city level and ensure the central government has some stake in metropolitan cities as defined in the Constitution. In essence, India’s democratic set-up could suitably ensure independence of its metropolitan cities.   Conclusion: India is on course to have 69 metropolitan cities by 2025, and many of these cities are likely to equal the size of some countries today. For example, by 2030, the Mumbai Metropolitan Region will be more populous than Australia and, with its GDP at about $230 billion in 2030, its economy will be bigger than that of Thailand or Hong Kong today. To embark on this journey, parliamentarians across party lines need to work on a constitutional amendment that lays out the road map for urban governance reform. Supplementing this process with a vibrant and inclusive process of dialogue across stakeholders is vital to build consensus. India’s experiences show that the passage of path-breaking reforms, for example, the goods and services tax, requires a decade or more, for dialogue and passage. This makes acting with urgency a necessity.   IASbaba’s view: India needs a 10 Point Urban Reform Programme that has the ability to transform urban India, and visibly enhance the quality of life for its citizens. Reform the 74th Constitutional Amendment to empower city governments, bolster the metropolitan system of government, and move to a system of a directly elected mayor. Fix governance at the Centre and in the states to reduce fragmentation and facilitate alignment of functions. Make the office of the mayor politically relevant to create a culture of meritocracy and performance. Build world-class institutions to catalyse capacity at scale. Establish a National Urban Finance Corporation of India to fund urban infrastructure projects. Set up the regulatory architecture required to facilitate efficient and effective urban services delivery. Reform the civil service, and establish executive agencies to hollow out inefficiencies. Revitalize the role of the State Finance Commissions to bolster municipal finances. Introduce state-specific laws on land use and transport to override legislative vacuum. Deepen citizen engagement in cities to drive change across localities. Connecting the dots: Critically analyze the working of ‘City Governments’ in India. What immediate actions should India take to embark its journey of transforming the growing metropolitan cities into more sustainable and vibrant cities? There is an urgent need to reform the 74th Constitutional Amendment to empower city governments, bolster the metropolitan system of government, and move to a system of a directly elected mayor. Do you agree? Elaborate on your opinion.    ENVIRONMENT   TOPIC: General studies 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation General studies 3: Infrastructure: Energy; Conservation, environmental pollution and degradation   Mobilising Inputs for Renewable Energies With the new set of environmental challenges and their perceived dangers, there is an urgent need for India to develop a range of innovative environmental technologies to help increase its energy security, reduce the adverse impacts on the local environment, lower its carbon intensity, contribute to more balanced regional development, and realize its aspirations for leadership in high-technology industries. But for them to achieve their market potential—proper policy frameworks and financial instruments are necessary that give financiers the necessary assurance and incentives to shift investment away from carbon-emitting conventional technologies to large-scale investment in clean energy systems And to achieve these goals, India needs an order-of-magnitude increase in renewable energy growth enhancing the creation of an enabling environment for renewable energy development, while at the same time, not compromising on the environmental integrity that should be maintained. Critical elements to mobilize inputs for developing countries: Building innovative financial instruments— Global trade in wind turbines, water filters and other environmental goods amounts to nearly $1 trillion annually but are increasingly stifled by the high tariffs which put limitations on many countries in terms of accessing these technologies. Huge capital investment is required— around $95-100 billion equivalent of investments (at Rs 65/USD) to meet the 100 GW target of 2022 (current outstanding bank credit to the entire Indian power sector (conventional and RE) is $85 billion equivalent) Removing unnecessary taxes is the need of the hour for which forty-four countries under the World Trade Organization are working towards an Environmental Goods Agreement (EGA) that would eliminate tariffs on environmentally friendly goods — Affordable green technology solutions Spur Innovation Boost trade Protect the environment Studies on EGA— EGA could boost global exports of environmental technologies by up to $119 billion annually European Union projects a potential reduction of nearly 10 million tonnes of carbon dioxide by 2030 Creating strong financial institutions— Collective actions of Developed countries and International financial institutions to— Leverage private capital Build policy incentives for directing private finance to developing countries Create an investment-conducive environment Develop capacity building mechanism and knowledge sharing programs, Establish development and education strategies Provide incentive-based governance mechanisms to attract investors Developing green energy projects— Government should realize that the transition to a green pathway is becoming financially viable and there is a need to provide frameworks for green growth that can lower policy uncertainties—by fostering a favourable policy environment for investors. Solving Technical challenges— In integrating intermittent power generation via solar and wind, with conventional grids Grid-balancing needs to get smarter Requirement of smart solutions for net metering i.e., adjusting power bills to reflect RE generated and be put on the grid by the consumer Bridging the Skill Gap— High-quality and accessible certification programmes—reducing the need for and costs of on-site training Under Skill India, renewable energy training clusters could be located near ongoing solar energy projects. At least one prominent solar training institute could be established in each region projected to be a hub for major solar activity (e.g., Gujarat, Rajasthan, and Karnataka). Introduction of mobile training courses, where trainers move from one location to another, would add value The most challenging skills to find—basic construction and commissioning skills, including electricians and PV installation technicians for which training programmes focused on fundamental construction, commissioning and operations skills should be expanded across the country. The International Solar Alliance can establish certified training programmes and help to build common curricula in close consultation with the private sector, and make the workforce qualified for deployment within India and outside Connecting the Dots Write a short note on ‘mezzanine finance’ and its future in India. Are investment conditions for renewable energy in India appealing enough? Suggest the way ahead.   MUST READ Clear the air on FDI in retail Hindu Related Articles: The Big Picture – FDI in E-Commerce – whom will it Benefit? TLP – 2016   Sailing into the Indo-Pacific Indian Express   Benefits of digitising insurance Livemint   Can India capitalize on its digital advantage? Livemint   Post-legislative scrutiny to improve quality of laws Livemint   Bad loans and the end of good lending Business Line MIND MAPS   1. Army's Ammunition Depots