IAS Baba

Nov 5, 2017 RSTV Video

RSTV- The Big Picture : Crisis for Indian Telecom Companies

Crisis for Indian Telecom Companies Archives TOPIC: General Studies 2 Government policies and interventions for development in various sectors and issues arising out of their design and implementation. The government is considering smoother exit for telecom providers at a broader policy level as part of revised mergers and acquisition roles. The ministry of telecommunications has said that the solution for aiding this sector would have to be done on policy level to keep sector alive. At present, telecom industry's debt to the banking sector is estimated at Rs 4 lakh crore. Operation around world There is no country in the world that has so many telecom operators where in circle in India, there is half a dozen telecom operators and typically the industry all over the world is that there are three players where two will have 40% of market share and other will have 20%. This is a natural sequence where the weak get swallowed by strong. If the weaker operators are not able to sustain by themselves, then mergers and acquisitions should be allowed. It should be allowed as business case. A booming industry seems to be in doldrums- The cost of inputs was made expensive vis-a vis spectrum and the cost of operations were high. There was continuing to extract the revenue upfront in terms of revenue charges and then continuing revenue share model. This was usually one or other but now it is both. The new entrant took top players off. Telecos asking for stimulus- The situation has not developed because of entry of new competitor only. It has been for over a long period of time. Most of the companies are highly debted as they had to first pay for spectrum which was a business decision at one point of time. The companies have invested in infrastructure. They have not invested in network. They have not upgraded the technology so the new entrant with new technology has wiped them out. So there are industry woes. Here the government should: Initiate spectrum fee waiver or adjustment Deal with the debt. The merger between reliance and aircel didn’t work because banks did not agree to the merger. This is because the merged entity would result in a larger write-off which will wipe out Rs. 25000 crore from the banks’ balance sheet. Ask the companies to divest their related investment including any property/real estate/ infrastructure before going in for debt restructuring. These companies have to agree to swap debt for equity which they are shying away from. Challenges of telecom sector Revolutionary change in technology Entrance of new operator has changed the game. Moving away from voice to data which can greatly expand the economies of scope. The data can provide with infotainment, entertainment, education. Data and broadband revolution will help enormous revenues increase. However, the broadband infrastructure has to be build more speedily and has to be sustained. The eternal mistakes Fault of business operator decisions, fault of government policy and fault of banks for recklessly lending has led to increase in telecom operators’ vulnerability. In 1998-99 when NDA government bailed out telecom operators and fault of telecom operators, there were astronomical voice prices in 1995. This sector was too critical to be allowed to fail and was thus bailed out. Later it led to absolute boom in the sector. Fall in average revenue per user. But that is to be made up by offering new services like infotainment. Money will be received from content, educational policies, telemedicine to help the consumers. Investing more in services than infrastructure will lead to key increase in revenues as well as fair competition. Increased expenditure The telecom service providers pay as much as 30% of their revenues in taxes and levies for spectrum and operating licences. Of this, around half was the tax component. Under the Goods and Service Tax regime (GST), this has gone up to 18%, making the services more expensive at a time when it should have been reduced. Essential services have either got a nil GST rate or the lowest slab of 5%. Overhang of the debt No country can borrow from any bank in India or foreign. They are not considered debt-worthy companies. What is government bailing out- a wrong business decision or its wrong decision? Government determined technology till 2014. When it gave spectrum, it said it must comply with GSMA standards. Then in 2014, it came up with re-bidding for the spectrum which led to astronomical prices. The supply was constrained, the people were bidding back for the existing spectrum. Then SC said there should be auction. Hence leading to fierce completion in limited supply. This decision was taken because the government saw that it was losing revenues. Spectrum was earlier taken for free, now needs to be bid for as it is a natural resource in that sense. Key takeaway The government cannot trigger consolidation of the sector. It can ease the process of mergers and acquisition. This is procedural issue. It will not change dynamics of the sector. The two bad telecom operators will not give one better telecom operator. The profitability will come when debt is restructured. For last seven years, telecom operators were in demand fulfilment mode. Most of these companies did not have a sales department, but a distribution department. They were distributing the sim cards and not selling services. To sell services, there is need to build services. Voice is commoditised. It was there for last 7 years but no one prepared for it. No new infrastructure and no new towers. Nowhere in the world, have the telecos owned infrastructure. They are owned by third parties into real estate business. After 4G and 5G, voice will become virtually free and money can be earned from VAS. They’ll have to deal with content providers, VAS providers, businesses who use their subscriber base, advertising. The monetisation of subscriber base for all these kinds of services not thought of before. Hence, now the focus of industry to invest in upgrading networks constantly. Connecting the dots: ‘Communication is critical to national security.’ In light of this statement, critically analyse the importance telecom sector in India.

Nov 4, 2017 RSTV Video

RSTV- The Big Picture : How Can India Revitalise its PSU banks?

How Can India Revitalise its PSU Banks? Archives TOPIC: General Studies 2 Government policies and interventions for development in various sectors and issues arising out of their design and implementation. India’s PSU banks have serious problems of non-performing assets (NPAs). Most of these flow from capital intensive infrastructure projects, primarily in the power sector. More recently, telecom is another sector where large amount of credit is involved. The total magnitude of NPAs, bulk of them is related to sectors where the government is major player. Normally, the problems may include errors in market, technology changes and the weak management, then the traditional methods of bankruptcy and takeover of assets works. But when the government is stakeholder and the amounts are very large, then there is a merit in argument that a sectoral approach of looking at the problems at the macro level for a particular sector would make more sense to solve the NPA crisis than going after the normal bankruptcy code proceedings, firm by firm. Bank loans have bad loans which are nearly 15-16% of total assets. For these to resolve, some of the options are: Take haircuts on many of these projects and then recapitalize by government in another way. However, this calls for political courage. It is true that economy cannot see revival of investment momentum without bank’s lending. If the bank’s capital is to be fund from outside the government, then there should be lower of government’s stake below 50%. This will encourage faster decision making power as well as work efficieny. There is lack of clarity of direction as to where the PSBs are headed. In the past three years, there have been number of initiatives to restructure debts and commit some amount of capital. However, the commitment to recapitalize from the government is not coming. There has been fast paced Asset Quality Review to clean up balance sheet of banks so that all NPAs are recognized upfront. However, there is an imbalance- the fast paced AQR has increased the magnitude of NPAs several times and at the same time, RBI has shifted large borrowers to the bond market. These are contributing to the weakening of the PSBs as they are demanding more provision of capital but shifting of AAA borrowers to bond market is hitting the income of banks. As per PJ Nayak committee report and Indradhanush plan, there would be banking board bureau and governance reforms. These are strengthening initiatives lagging behind which is causing lack of clarity of direction. Write-off of debt is not a sustainable option. If NCLT is seen to be a mechanism for promoters to recycle their own companies, they can get their company back minus the debt which is not good. This would be public funding of private profiteering. The IBC must bar original promoters from bidding for that asset again. At the same time, there are genuine cyclical problems, as in steel sector or power where there is government problem. Many state governments are refusing to honor their power purchase agreements, many state utilities are bankrupt and are not in shape to purchase power. Those who invested money in power plants find that there are no takers for it and suffer losses. These kind of issues are to be tackled separately as they are separate from pure mismanagement. The developed countries have 1-2% interest rates. If this money can be channeled into the fund which buys out these viable projects which are not working because of government problems, it can help the banks to resurface positively. But this also requires political initiative. Amidst these option, merging PSBs doesn’t fit and is not an option. Acquisitions and mergers are complex. There is added challenge in rigidity in government culture, their HR policies, compliances etc. Within the public sectors, mergers don’t work with ease as they work in flexible market economy like USA. However, consolidation option is being considered for a while but it is yet to be seen what steps are taken in future. Way forward For banks, the raw material is capital that comes from shareholders and right now the government is not much in position to provide capital. The focus should be completely on NPA problems right now. Policies should be made wherein long gestation sectors such as infrastructure sector should be ideally funded by debt market and not banks. The sum involved and the loans sanctioned is huge. Private players which have network as well as human talent should be encouraged to expand. There is a requirement of deep structural changes in the ownership and running of banks. Key words Indradhanush Plan- A2G Plan Appointments Bank Board Bureau Capitalization De-stressing PSBs Empowerment Framework of Accountability Governance Reforms P J Nayak Committee- Governance in Bank Boards Also Read: Bad Bank- A Bankable idea? All India Radio (AIR) : NPAs of Public Sector Banks Connecting the dots: Discuss various ways initiated by government to solve the NPA problem.

Nov 4, 2017 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 4th Nov 2017

IASbaba’s Daily Current Affairs – 4th Nov 2017 Archives NATIONAL TOPIC: General Studies 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Infrastructure: Energy, Ports, Roads, Airports, Railways etc Reforming Indian Railways Background: IR’s 7,000 trains carry three million tonnes of freight daily over an average distance of 620 km, sustaining its agriculture, industry and commerce; another 13,000 passenger trains transport 23 million travellers every day, knitting the country together. Although freight business has been crucial for IR’s financial health, it is passenger segment that directly impacts popular perception. Issues: An endemic shortage of supply. IR’s seven high-density corridors stretched over 10,500 km remain clogged; its stations and maintenance wherewithal over-stretched; train speeds remain low; and services far less than satisfactory. Passengers face hassles of ticketing, irksome access to large stations, unhygienic and unkempt platforms and coaches and unpunctual trains. Worse, unhygienic food cooked in dirty premises and filthy blankets for AC passengers. Each passenger train incurs a loss of as much as Rs. 487 (in 2015-16) per km. Resulting into hiking of freight charges and upper class, mostly AC, passenger fares. High freight charges have adversely impacted railway's business. With low cost air carriers looming large, it must refrain from raising AC train fares. The upper class segment aggregates just 145 million journeys in a year, only 1.8 per cent of IR’s overall riderships, but contribute more than 31 per cent ( Rs. 13,756 crore, in 2015-16) of total passenger earnings. Challenge: The number of air passengers, which constituted just about 1 per cent of ‘upper’ class rail passengers in 1950-51, now exceeds 75 per cent, and is poised to surpass the rail share sooner than 2020. Total rail riderships in 2016-17 was 8,219 million, a mere 0.84 per cent more than in 2015-16. As NHDP’s golden quadrilateral network progresses, high-capacity vehicles cover inter-city distances, posing a formidable challenge to IR. Again, in the context of UDAAN riding on the 2016 National Civil Aviation Policy, airlines are weaning away IR’s upper class medium and long haul travellers. Examples: After undergoing some serious pain, passenger traffic on British Rail has risen since 1995, aided by technological improvements in infrastructure and rolling stock, on-time runs, easier ticketing, friendly tariffs, and enhanced ambience of train travel. Chinese Railways separated passenger and freight businesses, increased service speeds, cut train halts, raised passenger fares, effectively discouraged short-distance passengers, and drastically reduced travel times. Things to do for Indian railways: Time-tabled freight trains running with credible service guarantees. Reserved accommodation on passenger trains available on demand. Average speed of freight trains to rise to 50 km/h (from less than 24 km/h now) and of Mail/Express trains to 80 km/h (from around 60 km/h). Semi-high speed trains running along the golden quadrilateral. High-end technology to significantly improve safety. Way forward: IR needs to keep its strategy for passenger business simple, to make a perceptible difference in pre-board facilities (booking and reservation, clean station platforms, uncluttered with parcels, vendors or kiosks) and on-board amenities (clean coaches and toilets, good food, besides trains running on time). It appears feasible to reduce travel time on selected routes straightaway by rationalising halts and easing some speed restrictions and saving substantial time by improving track curves and turn-outs. Unmanned level crossings can be replaced by overpasses, fencing vulnerable locations, and providing cab signalling, also for automatic train protection. Some trains can run end-to-end with minimum intermediate halts. As IR sincerely needs to view itself essentially as a commercial entity, pricing its passenger services rationally, it should run a few additional long-distance trains on some highly under-served popular route(s) for all intending passengers to get confirmed accommodation on demand. It may well mean good economics as much as good politics. Another important aspect IR needs to address on priority is to provide additional terminal facilities, including for maintenance of train sets, for major metros. Connecting the dots: Indian railways is facing multiple challenges form other modes of transportation. Discuss why. Also elaborate on much needed reforms which are long pending. ECONOMY TOPIC: General Studies 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. General Studies 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Focusing on tourism sector for job growth Case study: Quentin Jeremy Clerc and Marie Droz came to India to explore its rich history and partake of its storied culture. On October 22 what the Swiss couple experienced instead was the country’s dark underbelly. While on a visit to Fatehpur Sikri, near Agra, they were stalked, harassed and later, assaulted with sticks and stones by a group of locals. The unprovoked attack left Clerc with a fractured skull and Droz, a broken arm. Both of them want to leave India as quickly as possible. Increasing crimes: Media reports quoting home ministry data suggest that in 2014 there were 113 incidents of crime against foreign tourists in New Delhi alone. In 2015 it was higher, at 135. Such developments hurt India’s image and raise questions about our culture which teaches us to treat guests as God — Atithi Devo Bhava. Leveraging tourism for economic development: We are yet to fully recognise the role tourism plays in economic development and more so, in job creation. The government is yet to leverage tourism’s full potential and inculcating its benefits among the nation’s collective consciousness. Jobless growth: A million youngsters attain working age every month and as many as 100 million jobs need to be created between now and 2025 to avoid what experts are increasingly warning us about — a demographic catastrophe. The reasons being: lack of low-skilled job opportunities outside of agriculture even as skills mismatch and automation hurt the formal sector. Battling ‘jobless growth’, the government has chosen to focus on the employment guarantee scheme in rural India (allocation for MGNREGA has risen by 40 per cent between 2015 and 2018) and other flagship programmes elsewhere across the country such as ‘Make in India’, ‘Startup India’ and a fillip to affordable housing in the last three years. Tourism as a solution: Tourism offers the perfect solution. For every 30 tourists one core tourism job gets created which then helps add another 1.5 jobs in related sectors. A good portion of the jobs that get generated are low-skilled, for women and for first-time workers — the type of job opportunities that India presently needs. The sector also has the potential to create micro-entrepreneurs who in turn can employ more people. The multiplier effect it delivers is high. Global example: In fact, tourism helped Spain which receives over 68 million international tourists annually (India, in comparison, gets 8.80 million visitors) fight its recent economic downturn. Understandably, the sector accounts for 5.8 per cent of Spain’s GDP as against India’s 2 per cent. According to the World Tourism Organisation, the sector provides for 10 per cent of the world’s GDP, 7 per cent of the global trade and creates one in every 11 jobs worldwide. In 2015 tourism created 107 million jobs worldwide and supported 284 million other jobs. The International Labour Organisation estimates these numbers will grow to 136 million and 370 million respectively by 2026. Policymakers need to get their act together now if India has to corner a fair share of these jobs. Way ahead: As per the rankings of World Economic Forum’s Travel and Tourism Competitiveness Report, the Government need to focus on the not-so-good performance in following parameters: The country ranks a low 103 on presence of an enabling environment for tourism (even Rwanda, Iran and Algeria outrank us). It is 104 when it comes to how actively the Government promotes the sector. With regard to safety and security the performance is a low 114 (we have Colombia, Yemen, Nigeria, Lebanon and Pakistan for company). In health and hygiene, we are ranked 104 and in environment sustainability 134 (only Kuwait and Yemen are below us). Conclusion: It is time the Government gives the same importance to the World Economic Forum’s Travel and Tourism Competitiveness Report as it does to the World Bank’s Ease of Doing Business rankings. For the record, India jumped 12 places to rank 40th among 136 countries in the 2017 Travel and Tourism Competitiveness rankings (Spain topped the chart). Connecting the dots: A robust tourism sector can help overcome the challenge of job-less growth in India. Discuss. Also elaborate on reforms required in this regard. MUST READ The rise and rise of Xi Jinping The Hindu The Japanese pivot The Hindu Fixing accountability Indian Express Financial inclusion is good for banks too Business Line

Nov 3, 2017 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 3rd Nov 2017

IASbaba’s Daily Current Affairs – 3rd Nov 2017 Archives GOVERNANCE TOPIC: General Studies 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes The Swachh Bharat Mission-Gramin (SBM-G): An analysis Background: The momentum and scale of the Swachh Bharat Mission-Gramin (SBM-G) is unprecedented. Since the launch of the programme by the prime minister in October 2014, there has been an astonishing acceleration in the construction of toilets, with five crore built in three years. Issues: Technical realities and what people know: The preference for septic tanks remains deeply rooted and widespread. People believe they are better than the recommended more sustainable and economic twin pits because they are big and will take longer to fill, and, used sparingly, may even never have to be emptied. Due to widespread ignorance of technical details, many septic tanks are not built according to the guidelines, and end up contaminating the environment and damaging public health. New technology: Twin leach pits are much better. Human waste flows to the first pit. Once full, it is left to become manure while new waste is diverted into a second pit. The first pit is emptied and the cycle starts again. This technology allows time for the waste to compost and become harmless, odourless and valuable fertiliser. However, rapid investigations found many people who had had twin pits constructed for them without any explanation of how they work. They lacked a sense of ownership and believed the pits would fill up fast. In consequence, they were using them only some of the time, continuing open defecation (OD) even in villages with 100 per cent toilet coverage. This problem is acutely urgent. A recent rapid survey covering over a thousand households found that the proportion of twin pits being built in SBM is declining, and more and more unsustainable single leach pits are being built, especially among Scheduled Castes and Tribes. Solution: The solution is to empower people through knowledge. Few rural people are aware of technical details or convinced by the advantages of twin pits. Mason training can help, but the major thrust needed is a massive communication campaign to inform all villagers of the technical options and details, what they are entitled to demand in quality and quantity of materials, and how to ensure masons do a full job, so that they are never be short-changed with single pits or substandard construction. Water availability: A major issue especially in drier areas. Women are the main fetchers of water and cleaners of toilets. One flush of a toilet takes many times more water than does the lota for cleansing when defecating in the open. Gender plays a part too: Men are the main open defecators. There can be a macho element, a preference for the open air, and an element of chivalry. This is reinforced by conventional campaigns which stress women’s dignity and needs: Men are considerate if they leave the toilets to women, so also minimising water use and the rate at which the pit will fill. Challenges beyond ODF: children’s poor, handwashing. Rural faecal sludge management. Solid and liquid waste management. Toilets that need upgrading. Way ahead: SBM-G verifications and several studies indicate that in practice 70-90 per cent coverage is often taken as acceptable for a declaration of open defecation free (ODF). There should be definite evidence on thresholds for coverage and use. Often those without toilets are predominantly the marginalised and disadvantaged — OBC, SC, ST, the very poor, sick, disabled, aged and weak, or living in difficult or remote areas. For them, additional efforts and special policies and provisions are needed. One rapid study discovered effective ways of changing men’s behaviour — groups of older women influencing men to adopt toilets when they go for OD. The study suggests that similar gentle and positive approaches should be promoted. Rapid learning, sharing and adapting will be vital. f acted on effectively, it will speed progress and enhance sustainability. Conclusion: The scale and complexity facing the SBM-G make it more challenging than any other rural development programme in the world. The scale of the achievements and milestones passed over the past three years far surpass anything we believed conceivably possible. Driven forward with impressive leadership and dynamism, shortcomings are inevitable and rapid learning and adjustments vital and imperative for sustainable success. Connecting the dots: The momentum and scale of the Swachh Bharat Mission-Gramin (SBM-G) is unprecedented. Discuss the achievements and further challenges faced by the programme. NATIONAL TOPIC: General Studies 2: History of the world will include events from 18th century such as industrial revolution, world wars, redrawal of national boundaries, colonization, decolonization, political philosophies like communism, capitalism, socialism etc. - their forms and effect on the society. Social empowerment, communalism, regionalism & secularism. 100 years of Communism Background: The 100th anniversary of the Russian Revolution is to be celebrated this year. A hundred years ago, a group of Communist revolutionaries stormed the Winter Palace in St Petersburg to overthrow the first democratic government in Russian history. The new dawn they promised eventually became a nightmare for the millions of people who lived under Communist regimes. A group of European historians, in a book titled The Black Book Of Com\munism, estimated that 94 million people have been killed by Communist regimes around the world over the years. Communist ideology: The Communist ideology is derived, on the one hand, from the penetrating insights of Karl Marx on the contradictions of Victorian capitalism and, on the other, from the violent determination of Leninist regimes to impose their version of utopia on feudal societies. Failure: The few experiments with a more moderate version of Communism—in Yugoslavia under Josip Broz Tito or during the Prague Spring led by Alexander Dubček—were too insignificant to make a lasting impact. The liberal Menshevik regime in Georgia was crushed by an invading Bolshevik army in 1921. The spectacular collapse of Communism across Europe as well as the embrace of capitalism by the Chinese Communists destroyed the last remnants of credibility. Why Communism failed? Capitalism in the advanced countries softened its hard edges in response to the Communist challenge. The industrial proletariat that Marx hoped would be the driving force of historical transformation lost its political clout in economies where services became more important. The innate failure of planning agencies to replace the price system as the primary institution of economic coordination amid rapid technological change ensured that Communist countries lost the race for global dominance. Hope of the emergence of a new socialist man driven by political commitment rather than economic incentives such as higher wages or property rights proved to be vacuous. The totalitarianism of the international Communist movement snuffed out all fresh thinking, and intellectual movements such as the New Left, Eurocommunism and analytical Marxism were treated as heretical. Left parties on decline: Any modern society needs a left to articulate the needs of the poorest. The liberal consensus that has dominated the world since 1990, and which deserves at least some of the credit for the most spectacular decline in poverty in human history, is now being challenged by a resurgent nationalism in the developed countries. The working class in these countries has seen its incomes stagnate as industrial jobs were shipped abroad or lost to automation. This working class has veered towards nationalist parties rather than the traditional left to articulate its grievances. Left force in India: In India, the left no longer has any power or influence. Its opposition to economic reforms, its failure to grapple with the complexities of caste, its restricted base in pockets of labour aristocracy such as bank unions, its readiness to compromise with Muslim communalism in an attempt to oppose Hindu communalism, its loyalty to Stalinist methods—these are just some of the factors that have made it irrelevant. Conclusion: Socialism is desirable. But, the problem is that what is true of an intimate group of people need not be true of large populations. The rules of intimate groupings cannot be imposed on the extended order unless one is prepared to use extreme violence. This is the big lesson of 100 years of Communism. Connecting the dots: Discuss the concept of communism and the reasons behind its failure. Also discuss the concept in the context of present India. MUST READ Gathering the tribe The Hindu Trying politicians The Hindu Acting against torture The Hindu The people are ready for digital payments Indian Express Feeding India Indian Express What bank recapitalisation means? Livemint Further reforms are needed for the GST to succeed Livemint Bank recapitalisation is no magic bullet Business Line Pharma price controls hurt consumers Business Line

Nov 3, 2017 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs – 2nd Nov 2017

IASbaba’s Daily Current Affairs – 2nd Nov 2017 Archives ECONOMY TOPIC: General Studies 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. General Studies 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Improved World Bank’s Doing Business (DB) rankings for India In news: The World Bank’s Doing Business (DB) rankings for 2018 have just come out and India has made a very significant jump, improving its rank from 130th in 2017 to 100th. Not only has India improved its position in terms of rankings, which is relative, it has also made improvement in absolute terms, measured by the so-called “distance to frontier” metric. Even though the DB rankings may not be the sole determinant for attracting investment, the improvement is likely to boost investor confidence as it reflects the government’s commitment to reforms. Areas based on: The World Bank's rankings are based on the country’s performance in following areas: Starting a business. Dealing with construction permits. Getting electricity Registering property. Getting credit. Protecting minority investors. Paying taxes. Trading across borders. Enforcing contracts; and Resolving insolvency. Measures taken by the government: The improvement in rankings is the result of coordinated efforts made by the government over the past few years. According to the World Bank, India has adopted 37 reforms since 2003 and about half of them have been implemented in the last four years. The four parameters where there has been a quantum jump in rankings —resolving insolvency, paying taxes, access to credit and protecting minority investors — have all seen focussed efforts from the Centre both in terms of policymaking and in implementation. “Make in India” program. Simplification of tax procedures. Bankruptcy laws and so on. The rise in the insolvency ranking is directly attributable to the enactment of the Insolvency and Bankruptcy Code. The implementation of the bankruptcy code is a big boost, as it will help inefficient firms exit the market and improve overall allocation of capital. Access to credit has been facilitated by the licensing of new entities such as small finance banks and payments bank, not to forget the MUDRA scheme. One indicator that deserves special mention is the protection of minority investors. India is at the fourth position globally in this category. This is a huge achievement and the government and the securities market regulator deserve credit. The Securities and Exchange Board of India is constantly working to enhance investor confidence. Implementation of the recommendations made by the Uday Kotak committee on corporate governance will further augment minority shareholder confidence in the market. The DBP 2018 says: "India made dealing with construction permits less cumbersome by implementing an online system that has streamlined the process at the Municipality of New Delhi and Municipality of Greater Mumbai. The online system has streamlined the process of obtaining a building permit, thereby reducing the number of procedures and time required to obtain a building permit in India. On enforcing contracts- India made enforcing contracts easier by introducing the National Judicial Data Grid, which makes it possible to generate case measurement reports on local courts. Some of the biggest hurdles that businesses face such as in registering property or securing construction permits fall under the realm of States. While the Centre’s ranking of States on ease of doing business has exerted some pressure, what’s encouraging is that States themselves are undertaking reforms as they compete for investment. Way ahead: While the government deserves credit for this impressive improvement in the DB rankings, it should not lose sight of the distance India still needs to cover. For instance, despite all the effort, India’s rank in dealing with construction permits is 181 among 190 countries. The time taken for enforcing a contract has, in fact, worsened from what it was 15 years ago. Consequently, India’s rank in this category is a poor 164. Rather than depending only on the DB report, the government should understand the de facto situation faced by firms that wanted improvements in the country’s business environment. In reality, these reports do not provide an accurate picture of a country’s business environment. The de jure rules of business that are captured by the DB reports and the de facto reality differ significantly. In order to undertake effective policies to improve the business environment in India, we need to understand what causes it to be relatively good in some situations and poor in others. A recently concluded NITI Aayog-IDFC study throws light on some of the broad trends in the country’s business environment, but fails to provide a deeper understanding of its causes due to the lack of a conceptual framework to analyse the data. Policymakers should build on recent gains with an accelerated pace of reforms in areas such as land, labour and contract enforcement, which will help push investment and growth in the medium to long run. The World Bank report flags the areas where the country lags - local entrepreneurs need to go through 12 procedures to start a business in India's commercial capital, which is way higher than many high-income economies, besides cumbersome procedures for construction permits, registration of property and enforcement of contracts. To improve the score related to registering property we need measures like updating and digitising land records, improving titling and streamlining procedures on transfer of property. The kind of challenges that policymakers need to address includes- Lack of awareness related to the single-window facility for setting up a business. Labour- intensive sectors are constrained by labour market regulations. Finding skilled workers and dismissing employees are severe impediments. Firms still face power shortages. The implementation of the goods and services tax (GST) has not been accounted for in this year’s rankings. Therefore, if the problems associated with GST are addressed quickly, it is likely that the GST will help boost India’s ranking further next year. Conclusion: With its demographics, the size of the economy and a well-functioning capital market, India stands a real chance of projecting itself as a preferred destination for investments. The fact that China is likely to slow down further in coming years will also help India’s case. Clearly, the more difficult reforms lie ahead with the low hanging fruit, mainly those within the ambit of the Centre, already plucked. The process of improvement has to be continuous and there can be no let up. Both the Central and state governments will need to work in a number of areas to improve India’s competitiveness. Connecting the dots: While the government deserves credit for the impressive improvement in the Doing Business rankings for 2018, it should not lose sight of the distance India still needs to cover. Also read: "Ease of doing business" rankings: Critical analysis MUST READ The stimulus and after The Hindu The war on TB The Hindu Keep the army out of it Indian Express A bridge too many Indian Express Business reforms leaders and laggards Livemint A multi-track approach to railway reform Business Line Leverage tourism to reverse jobless growth Business Line

Nov 1, 2017 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs 1st Nov, 2017

IASbaba’s Daily Current Affairs – 1st Nov 2017 Archives NATIONAL TOPIC : General studies 2: Structure, organization and functioning of the Judiciary Improving the collegium system In news: Recently, the Supreme Court’s collegium published a resolution promising to hereafter make public, on the court’s website, its various decisions, including its verdicts on persons nominated for elevation as judges to the high courts, its choices of candidates for elevation to the Supreme Court, and its decisions on transfer of judges between different high courts. These results will be accompanied by the reasons underpinning the collegium’s choices. Salient move: The move strikes us as both necessary and important as- It will help bring transparency into a system that has been notorious for its opacity. The initiative adds a veneer of respectability to a mechanism that lacks any constitutional basis. Case studies: Lack of transparency In the cases of A. Zakir Hussain and Dr. K. Arul, candidates nominated for elevation to the Madras High Court, the collegium has verbatim published the following statement of rejection: “keeping in view the material on record, including the report of Intelligence Bureau [IB] he is not found suitable for elevation to the High Court Bench.” The details of what the IB’s reports might contain and the apparent materials on record remain concealed. The nomination of Vasudevan V.N., a judicial member of the Income Tax Appellate Tribunal, was not accepted saying “While one of the two consultee-colleagues has offered no views about his suitability, the other colleague has not found him suitable for elevation,” the report reads. Issue: The collegium, ever since its inception, following the Supreme Court’s judgment in what is known as the Second Judges Case (1993) has been enveloped by a sense of confusion. The present revelations, much opposed to their perceived objective, scarcely make the system more transparent. In Mr. Vasudevan’s case, for example, we don’t know which of the “consultee-judges objected to his elevation, and why the judge interviewed found him unsuitable. These issues concerning the system employed to appoint judges to the Supreme Court and the high courts are of particular salience. The judiciary was regarded by the Constitution’s framers as central to the social revolution that the document was meant to herald. The historian Granville Austin saw the judiciary as critical to “upholding the equality that Indians had longed for during colonial days, but had not gained”. Interpreting consultation: To ensure that judges would be insulated from political influence, the assembly agreed on a consultative process of appointing judges, a “middle course,” as B.R. Ambedkar described it. T The Constitution avoided the cumbersome process of legislative interference and the undemocratic provision of a veto to the Chief Justice, and vested in the President the power to both make appointments and transfer judges between high courts. The President, who would act on the advice of the council of ministers, was, however, required to compulsorily consult certain authorities, including the Chief Justice of India (CJI), and, when making appointments to a high court, the chief justice of that court. Sankalchand Sheth ’s case, 1977: When interpreting the word “consultation,” the Supreme Court ruled that the term can never mean “concurrence”. Hence, the CJI’s opinion, the court ruled, was not binding on the executive. But nonetheless the executive could depart from his opinion only in exceptional circumstances, and, in such cases, its decision could well be subject to the rigours of judicial review. This seemed like a perfectly sound balance. In 1981, in the First Judges Case, the court once again endorsed this interpretation. The Second Judges Case: The court overruled its earlier decisions. It now held that “consultation” really meant “concurrence”, and that the CJI’s view enjoys primacy, since he is “best equipped to know and assess the worth” of candidates. But, the CJI, in turn, was to formulate his opinion through a body of senior judges that the court described as the collegium. The Third Judges Case, 1998: The court clarified its position further. The collegium, it said, will comprise, in the case of appointments to the Supreme Court, the CJI and his four senior-most colleagues — and, in the case of appointments to the high courts, the CJI and his two senior-most colleagues. Additionally, for appointments to the high courts, the collegium must consult such other senior judges serving in the Supreme Court who had previously served as judges of the high court concerned. The court has been keen to hold on to this power. NJAC ruling: When the Constitution was altered, through the 99th constitutional amendment, and when the collegium was sought to be replaced by the National Judicial Appointments Commission — a body comprising members of the judiciary, the executive and the general public — the court swiftly struck it down. It ruled, in what we might now call the Fourth Judges Case (2015), that the primacy of the collegium was a part of the Constitution’s basic structure, and this power could not, therefore, be removed even through a constitutional amendment. Conclusion: The 2015 judgment also promised to “consider introduction of appropriate measures”, to improve the “collegium system”. The new resolution is an effort towards this end. Connecting the dots: Discuss the issues related to collegium system in India and elaborate how a recent resolution by the Supreme court in this regard is a step forward. Discuss the evolution of the collegium system in India along with its drawbacks. NATIONAL TOPIC: General Studies 2: Parliament and State Legislatures ‐ structure, functioning, conduct of business, powers & privileges and issues arising out of these. Establishing intra-party democracy In news: Recently, the Prime Minister Narendra called for a debate on levels of intra-party democracy in different political parties in India. He also stressed that the quality of a democracy ultimately depends on internal democracy (or the lack of it) in political parties. Importance of intra-party democracy in the success of a democracy: In its 170th report in 1999, the Law Commission of India underscored the importance of intra-party democracy by arguing that a political party cannot be a “dictatorship internally and democratic in its functioning outside”. Intra-party democracy is essential to sustain broader political democracy in a country. Reasons behind lacking intra-party democracy: The opacity of political financing necessitates “unhindered top-down control” and “absolute loyalty down the line”. The fear of party fragmentation—not uncommon in India; also drives the desire for centralized control. By making it mandatory for the legislator to vote along her party line, the anti-defection law has done immense damage to both intra-party democracy and the accountability of a legislator towards her constituency. It also skews the balance of power between the executive and the legislature. The legislator is no longer empowered to act as an effective check on the government of the day. Local area development schemes like MPLADS and MLALADS that vest an annual sum with the members of Parliament and legislative assemblies for development work in their constituencies skew the balance in favour of state and Central legislators at the expense of city- and village-level administrators. These schemes unjustly favour the incumbent representative and also exacerbate the problem of patronage politics. Patronage politics lies at the heart of dynastic succession in Indian politics—a result of control of political parties by an oligarchic elite. Dynastic succession also works as insurance against defections and fragmentation of political parties. Issue: Opacity in political financing, fear of fragmentation and unstable governments, dynastic succession, and lack of intra-party democracy are all mutually reinforcing variables. Example- In the Indian National Congress, the current leadership of Sonia Gandhi and Rahul Gandhi has systematically destroyed the regional leadership of the party. Way out: Unlike some countries like Germany and Portugal, India has no legal provision for enforcing internal democracy in a political party. There are some related provisions in the Election Commission guidelines but those are neither adequate nor enforceable. In its 255th report in 2015, the Law Commission had suggested some legislative redressal. Doing away with the anti-defection law, especially for those votes where the survival of the government is not at stake. Scrapping the MPLADS and MLALADS. Abolishing the MPLADS to finance the state funding of political parties A partial state subsidy to fund elections and political parties. Conclusion: There are many options. But all of these will require a willingness by the incumbent political authorities to give up some of their powers. They need to step up to the challenge. Connecting the dots: In its 170th report in 1999, the Law Commission of India underscored the importance of intra-party democracy by arguing that a political party cannot be a “dictatorship internally and democratic in its functioning outside”. Critically analyze. Discuss the reasons behind lack of intra-party democracy in India. Also suggest measures that would help make our politicla parties more democratic. 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Nov 1, 2017 Daily Prelims CA Quiz

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 73]

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 73] Archives Q.1) When CRR is increased by Reserve Bank of India, it will result into Centre will have less money to lend Commercial banks will have more money to lend Reserve Bank of India will have less money to lend Commercial banks will have less money to lend Q.2) Consider the following statements about Taiga Biome It is also known as Boreal forest In taiga, the vegetation is composed of dwarf shrubs, sedges and grasses, mosses, and lichens Select the correct statements 1 Only 2 Only Both 1 and 2 Neither 1 nor 2 Q.3) Consider the following statements about Green Climate Fund (GCF) It is a fund established within the framework of the UNFCCC to assist developing countries in adaptation and mitigation practices to counter climate change. It was established during the Cancun Summit Select the correct statements 1 Only 2 Only Both 1 and 2 Neither 1 nor 2 Q.4) What principle/law explains working of the hydraulic brakes in automobiles? Law of conservation of momentum Law of conservation of energy Pascal’s law Bernoulli’s principle Q.5) Consider the following statements about Economic and Social Council (ECOSOC) The UN Charter established ECOSOC in 1945 as one of the six main organs of the United Nations. The Council has 54 member states, which are elected by the United Nations General Assembly for overlapping three-year terms. Select the correct statements 1 Only 2 Only Both 1 and 2 Neither 1 nor 2 To Download the Solution – Click here All The Best IASbaba

Oct 31, 2017 IASbaba's Daily Current Affairs

IASbaba’s Daily Current Affairs 31st Oct, 2017

IASbaba’s Daily Current Affairs – 31st Oct 2017 Archives NATIONAL TOPIC: General Studies 1: Modern Indian history from about the middle of the eighteenth century until the present significant events, personalities, issues The Freedom Struggle - its various stages and important contributors /contributions from different parts of the country. Post-independence consolidation and reorganization within the country. Remembering Sardar Vallabhbhai Patel's contribution Introduction: Vallabhbhai Patel (1875-1950), was the keel that the boat of the freedom struggle needed so as never to tip over, the ballast that the ship of state required to stay steady, move safe. No country can ignore its heroes, the ones who shaped its destiny. Sardar Vallabhbhai Patel was one such iconic personality who shaped India’s destiny in a far-reaching manner. Preventing balkanisation of the country: After India attained Independence, Patel fashioned the country’s political integration with the swiftness of a military commander and the deftness of a visionary leader. Present-day India owes immeasurable debt to the vision, tact, diplomacy and pragmatic approach of the Sardar in preventing the Balkanisation of the country. He was instrumental in the merger of more than 560 princely states with the Union of India after the country’s partition. What makes this achievement very remarkable is that it was achieved without any bloodshed. Strategy adopted: Adopting different approaches, as warranted by the situation, Patel gave friendly advice in some cases, persuaded the rulers to see reason in others and even used force as in the case of Hyderabad. It is remarkable that he fashioned a unified country at a time when the rulers of the princely states were given the option of joining either India or Pakistan or remaining independent. The Nizam of Hyderabad nurtured ambitions of remaining independent of India and issued a firman to that effect. At the same time, he let loose razakars and even toyed with the idea of merging Hyderabad with Pakistan, although there was no geographical continuity between the two. Travancore also declared that it would remain independent and the Nawab of Junagarh announced accession to Pakistan. Sardar Patel secured the accession of Junagarh in a swift action code-named “Operation Polo”. Hyderabad was integrated with the rest of India in just four days. In a masterful display of statesmanship, Patel ensured the smooth integration of the troubled domains by not allowing the situation to deteriorate into civil unrest. There was neither bloodshed nor rebellion as he went about the task of building a strong India with a missionary zeal. He said, “the safety and preservation of these states as well as of India demand unity and mutual cooperation between its different parts. By common endeavour we can raise the country to a new greatness while lack of unity will expose us to fresh calamities”. Patel was the greatest unifier of India. There is, perhaps, no parallel in modern history to this achievement. Acknowledging the monumental contribution of Patel in nation building, Jawaharlal Nehru said, “History will call him the builder and consolidator of new India.” Creator of All India Patel Administrative Service: Patel was also instrumental in the creation of the All India Administrative Services which he described as the country’s “Steel Frame”. In his address to the probationers of these services, he asked them to be guided by the spirit of service in day-to-day administration. He reminded them that the ICS was neither Indian, nor civil, nor imbued with any spirit of service. His exhortation to the probationers to maintain utmost impartiality and incorruptibility of administration is as relevant today as it was then. “A civil servant cannot afford to, and must not, take part in politics. Nor must he involve himself in communal wrangles. To depart from the path of rectitude in either of these respects is to debase public service and to lower its dignity,” he had cautioned them on April 21, 1947. Leadership skills: His biggest asset was his down-to-earth disposition. He exemplified what the Father of the Nation had said about leadership: “I suppose leadership at one time meant muscles. But today it means getting along with people”. He was chosen by Gandhi to lead the Kheda campaign. “Many were prepared to follow me, but I could not make up my mind as to who should be my deputy commander. Then I thought of Vallabhbhai,” Gandhi said. The trust that Gandhiji reposed in Patel was not misplaced. Gandhiji’s trusted lieutenant not only became an organiser par excellence but also a people’s leader. He earned the title of “Sardar” after spearheading a no-tax campaign by peasants at Bardoli in Gujarat. He also led the relief and rehabilitation operations when Gujarat was ravaged by floods and worked tirelessly during a plague outbreak in Ahmedabad. Relevance today: The remarks Patel made during the Quit India Movement are also relevant today. He said: “We have to shed mutual bickering, shed the difference of being high or low and develop the sense of equality and banish untouchability. We have to live like the children of the same father”. It is unfortunate that there has been no proper recognition of Patel’s monumental contribution in unifying the country at its most critical juncture in history. Conclusion: The invaluable contribution of Sardar Patel in building a modern and unified India needs to be remembered by every Indian as the country marches ahead as one of the largest economies in the world. Connecting the dots: Discuss the contribution of Sardar Patel from unification of the country to creation of all India services. NATIONAL TOPIC: General Studies 3: Infrastructure: Energy Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Saubhagya scheme: Critical analysis Introduction: The government recently announced 100% household electrification scheme, Saubhagya. It aims to tackle the next link for electrification, where until now most efforts focused at the village or hamlet level. The objective of the Saubhagya scheme is to “provide energy access to all by last mile connectivity and electricity connections to all remaining un-electrified households in rural as well as urban areas to achieve universal household electrification in the country.” The Pradhan Mantri Sahaj Bijli Har Ghar Yojana (‘Saubhagya’) launched recently claims to ensure electrification of all willing households in the country. It promises to provide a free electricity connection to all willing Below Poverty Line households and to all others on a payment of ₹500 (which shall be recovered by the power distribution companies/power departments in 10 instalments along with electricity bills). Definition and the gap: The Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), launched in July 2015, aimed to electrify all un-electrified villages by May 2018. Under DDUGJY, the government managed to electrify 14,701 villages while 2,760 villages remain un-electrified; out of these, work is still in progress in a total of 2,611 villages. However, out of the 14,701 villages, only in 8%, i.e. 1,198 villages, do all households have connectivity. Even if we take into consideration the fact that so many villages have been “electrified”, the next point of contention is the definition used. According to the definition, a village is considered to be electrified if 10% households have an electricity connection and related basic infrastructure. Furthermore, even in these 10% of households, there is no promise of minimum hours of supply. Given that 90% of households may not have power supply and of those 10% with electricity not having a regular supply, we can't consider such a village to be electrified in a meaningful way. Benefits of Saubhagya scheme: Costs for wiring unconnected homes varies based on how far the user is from the grid, and, unfortunately, the last to be connected are likely to be the farthest away and most sparsely populated. Saubhagya averages at only about Rs4,000/home, inclusive of a metre and limited in-home wiring. The scheme can help plug the gaps and address the issues of entry barrier, last mile connectivity and release of connections. A free electricity connection may provide some relief as far as the financial burden is concerned. Issues: It expects the poor to pay the bills without providing any subsidy to ease their burden. Even to the best of their abilities the poor would often not be in a position to pay regular electricity bills, which in turn could result in disconnection. It can guarantee neither regular electricity supply nor continuation of those connections in case of non-payment. However, expecting poor households to bear the recurring burden of bills as per the prevailing tariff of DISCOMs is unimaginable. Even if all households are provided a connection, there would still be the problem of regular supply. Industry estimates suggest that this scheme would potentially require an additional 28,000 MW and additional energy of about 80,000 million units per annum, which is roughly 7% of India’s current installed power capacity. The problem is graver still in interior rural India. Considering the huge lapses as far as electricity availability is concerned, managing this additional demand would prove to be challenging. Such models of service provision, even for a public good, risk inefficient consumption. It also limits the provider’s ability or appetite to scale and sustain. Way ahead: Adding a wire to the home, as the scheme proposes, is only part of the issue being addressed. What one really needs is quality service (ideally 24x7) for meaningful electrification. This means we have to either strengthen or change the distribution companies (discoms) to ensure we meet this part of the social contract of electricity. The first need is to execute the physical wire to the homes. Hopefully there are enough skilled contractors to handle the enormity of the task—India’s 40 million unconnected homes is roughly triple the next two countries’, Nigeria and Ethiopia. Insufficient capital outlay can be supplemented by state budgetary support or special Central grants. Thinking holistically, there is money available. Instead of subsidizing (oil company’s under-recovery for) kerosene, the same money could progressively be re-allocated for rural electrification—a greater amount annually than the Saubhagya budget. Under Saubhagya, microgrids are perhaps the biggest theoretical loser, but better coordination can reduce such conflicts. They can be complementary instead of competitive, especially for remote locations. This requires serious discussions on microgrid designs. Discoms have historically been wary of adding “expensive” and non-remunerative consumers. Their worries needs to be addressed. Retail tariffs for residential users should be updated to meet the marginal costs of supply, to cover the incremental (mainly fuel) costs of generation procured by discoms. Conclusion: The policy statement echoes the commitment to facilitate economic growth and social development, but it only addresses the issue partly. There are many more reforms which must be brought in. Connecting the dots: What is the objective of Saubhaya scheme. Discuss it needs. Despite being ambitious, it solves the electricity problem of the country only partly. Critically analyze. MUST READ New equations in Indo-Pacific Indian Express The liberty to love Indian Express Extend and pretend Indian Express Entrepreneurship needs stable rules Livemint Disrupting climate change Livemint Towards an inclusive dialogue Business Line

Oct 31, 2017 Daily Prelims CA Quiz

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 72]

UPSC Quiz- 2017 : IASbaba's Daily Current Affairs Quiz [Day 72] Archives Q.1) Which of the following provided for a common currency for the member countries of European Community? Marrakesh Treaty Bonn Convention Basel convention Maastricht Treaty Q.2) Consider the following statements about Air Mass It is a large volume of air in the atmosphere that is uniform in temperature and humidity Air Masses are not formed over water Select the correct statements 1 Only 2 Only Both 1 and 2 Neither 1 nor 2 Q.3) "EU 3 + 3" is associated with Brexit Catalan Referendum Greek Bailout None of the above Q.4) The total liability of the monetary authority of the country is called as Monetary base High powered money Both (a) and (b) Dead Currency Q.5) What is Medecins Sans Frontieres (MSF)? A non-government organization which specializes in international humanitarian aid and emergency medical assistance. An agency formed by the International Olympic Committee (lOC) to check misuse of drugs by sportspersons. An organization to develop applications of nano-technology in medicine. An organization of medical practitioners funded by the European Union which carries out research against spread of AIDS. To Download the Solution – Click here All The Best IASbaba

Oct 31, 2017 RSTV Video

RSTV- The Big Picture : Indian, Pakistani & US Interests in Afghanistan

Indian, Pakistani & US Interests in Afghanistan Archives TOPIC: General Studies 2 India and its neighbourhood- relations. Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests The US which is the most significant foreign player in Afghanistan has a policy which is about restraining Pakistan in Afghanistan. The key lies in how to make Pakistanis change their policies and behavior in Afghanistan. Unless that happens, there is hardly any proper solution to move towards peace in Afghanistan. The Pakistanis through their proxies in Afghanistan are sending unmistakable message to Americans that unless their interest as they perceive are catered for, they will not cooperate. It is interesting that their pre-condition is that India’s role must be constrained in Afghanistan. Economically India can play a role but not politically or militarily. This is strange as what role India will play should be decided by Afghanistan and India. Pakistan has this perception because earlier, Americans used to say they are fighting war against global terror with Pakistan. Now, with the Aghan policy, India has been included in this war against terror. Pakistan is mattered by Drone attacks by US if sovereignty interest of US is getting compromised. US can choke funding whenever they want. Pakistan has nurtured Taliban to re-emerge in Afghanistan. If Indian are around, they have a threat to perform such functions Security situation in Afghanistan They have 34 provinces and 360 districts, Taliban controls 10% of the district and 40% of rural areas and also south and east Afghanistan. Afghan National Security Forces are in control of major towns and cities and are able to reinforce their positions every time districts are being overtaken by Taliban. This is an ongoing process. Neither the Afghan government, nor the Taliban are in the position to tactically or strategically alter the balance of military in significant manner. Thus the issue of peace is pushed behind. To complicate the situation, there is presence of ISIS in some parts of Afghanistan. So it is triangular battle- the Taliban are fighting ISIS and Afghan National Security Forces are fighting both. So the military situation is likely to remain volatile in future. ISIS is challenge which requires effort on part of everyone concerned with afghan situation. The foremost challenge is created by Taliban in Afghanistan. The composition of ISIS is Tehrik-e-Taliban of Pakistan and also Salafi elements from eastern Afghanistan. The Russians and the Chinese are worried about these threats due to getting closer to central Asian republics. US moving out? For lasting peace, the internal security situation of Afghanistan will have to improve. The outsider can hold for sometime by doing training. The technology, information systems, additional troops are going to help, but its more of message from US that it is not moving out of Afghanistan. The US is helping to upgrade the capability of Afghan Airforce as well as Afghan Special Forces. India’s role India should always act in Afghanistan as an independent power. The American intentions are good and shall be welcomed as long as there is coincidence of interest in Afghanistan. This new change in America is good for India as well as Afghanistan. India’s economic policy of engagement must continue. India-Afghan strategic partnership agreement, India should extend support to afghan in security field as much as possible unmindful of what anyone else thinks. This is a bilateral India-afghan relationship and that should be nurtured. However, by no means India shouldn’t send ground troops to Afghanistan. It should focus more on economic and infrastructural assistance. Though US prefer to have more direct input from India in the military endeavour in Afghanistan, India should limit its role of supplying older, Russian-origin military hardware for repair and replacement purposes. Currently, people and government of Afghanistan is positive of India because it helps Afghanistan in the areas it requires to develop such as education, health tourism and medical support. Conclusion Peace in Afghanistan is dependent upon security situation around Afghanistan. It also depends on American support and presence to close sanctuaries Under the financial action task force, they can squeeze the Pakistan’s international financial arrangement. Under this threat, Pakistanis took action against Hafeez Saeed recently. The current Afghan policy is a change of strategy was meant to be an “incentive for Pakistan to change” its course. If such a calculation is accepted it would mean that at some point down the road, the US, Afghanistan, Pakistan and India have to sit at a table. However, there is a long way ahead and critical steps being taken before such action is even thought of. Connecting the dots: Critically analyse India’s role in Afghanistan vis-à-vis presence of US and Pakistan.

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