IASbaba’s Daily Current Affairs [Prelims + Mains Focus] – 05th November 2018

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China-Pakistan Ties

Part of: GS Prelims and Mains II – International Relations; India and its neighbours

In news:

  • China backs Pakistan’s efforts to resolve issues with India.
  • China also to support Pakistan on two other key topics — the expansion of the Nuclear Suppliers Group (NSG) and counterterrorism.

Do you know?

  • China is an observer at South Asian Association for Regional Cooperation (SAARC).
  • Pakistan urged China to play an “active” role in the SAARC platform where it is at present an observer.
  • SAARC has eight member countries (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri-Lanka) and eight observer status countries (China, the European Union, Iran, Japan, South Korea, Mauritius, Burma/Myanmar and the United States of America).
  • India-China Wuhan consensus focus on – Communication, Cooperation, Contacts, Coordination and Control.

Wildlife Sanctuary/Animal in news

Greater flamingoes at Hope Island after 25 years

Part of: GS Prelims and Mains III – Animal Conservation; Biodiversity

In news:

  • Flock of five greater flamingoes has been spotted along the coast of Hope Island, a part of the Coringa Wildlife Sanctuary in Andhra Pradesh.
  • Greater flamingoes are filter feeders and get their characteristic pink colour from their diet of brine shrimps and algae available in coastal wetlands.
  • Flamingoes being spotted along the coast can be considered as indicator of a healthy coastal environment.

About Coringa Wildlife Sanctuary (CWS)

  • The Coringa Wildlife Sanctuary (CWS) is a wildlife sanctuary and estuary situated in Andhra Pradesh. It covers an area of 235.7 square kilometers.
  • It is the second largest stretch of mangrove forests in India with 24 mangrove tree species and more than 120 bird species.
  • It is home to the critically endangered white-backed vulture and the long billed vulture.

Speedy trial through Special courts

Part of: GS Mains II – Good governance

In news:

  • Special courts have helped to deal with speedy trials.
  • Special courts for Protection of Children from Sexual Offences Act (POCSO) cases sets example with speedy trial. (After its set up in April, it has awarded conviction in 18 POCSO cases)

Important Additions

  • Justice delayed is justice denied is the corner stone in delivering justice, speedy trial is the essence of the criminal justice. If legal redress is available for a party that has suffered some injury, but is not forthcoming in a timely fashion, it is effectively the same as having no redress at all.
  • The state as guardian of fundamental rights of its citizens is duty bound to ensure speedy trial and avoid excessively long delays in criminal trial cases that could result in grave miscarriage of justice.

Water ATMs

Part of: GS Mains II – Government welfare policies and schemes; Good governance; Health issue

In news:

  • Government has started to accept small water enterprises — such as water ATMs and community purification plants — as an alternative solution to the safe drinking water challenge.
  • Water ATMs may help in bridging safe water gap.

Do you know?

  • India is ranked at 120 out of 122 countries on the Water Quality Index, said Niti Aayog, adding that 70% of the country’s water supply is contaminated.
  • A recent report by the Comptroller and Auditor General of India (CAG) pointed out that only 18% of the rural population has access to potable piped water, failing to meet the 2017 target of 50%.
  • To reach the government’s Har Ghar Jal target of 100% piped water by 2030, almost ₹5 lakh crore of infrastructure investment will be required, says government data.

Pic: https://d39gegkjaqduz9.cloudfront.net/TH/2018/11/05/DEL/Delhi/TH/5_07/927c2015_2506662_101_mr.jpg


Person in news: Vice-Admiral M.P. Awati (retd.)

In news:

  • Vice-Admiral M.P. Awati (retd.), who commanded a naval unit of the Eastern Fleet in the 1971 India-Pakistan war and whose actions led to the destruction of an enemy submarine, passed away.


INTERNATIONAL

TOPIC: General studies 2

  • Policies of developed and developing countries and their impact on India’s interests.
  • Bilateral and multilateral agreements and their impact on India’s interests

India and U.S.: How not to choose among allies

Background

  • In May 2012, U.S. secretary of state, on behalf of the Western countries negotiating the Joint Comprehensive Plan of Action (JCPOA), or the nuclear deal, with Iran, tried hard to convince India to cut its oil imports from Iran.
  • These cuts were to put pressure on Iran to return to the negotiating table for the six-party talks. Eventually, India agreed to cut its imports by only about 15%.
  • But cumulative global pressure had the desired impact on Iran, where inflation had risen more than 40% and oil exports declined from 2.5 million barrels of crude each day to about 1 million.
  • JCPOA negotiations that followed eventually led to a deal hailed by the United Nations.

Changed times

  • Again similar negotiations started between India and U.S., but with a completely different backdrop.
  • The sanctions that the U.S. now proposes and trying to ensure India adheres to, have been placed not in order to forge any deal, but because the Trump administration has walked out of the JCPOA.
  • In this, the U.S. has no support from any other country involved in the deal, and the UN has expressed grave misgivings about the decision.
  • The U.S. has given no evidence that Iran in any way violated the terms of the JCPOA.
  • The International Atomic Energy Agency’s June report concluded that Iran’s stockpile of uranium and heavy water as well as its implementation of additional protocols were “in compliance” with the agreement.
  • Unlike in 2012, the U.S.’s EU allies are now working closely with arch rivals like Russia and China to put a “special payments mechanism”, primarily with a view to supporting trade to Tehran to ensure that the Iranian regime does not walk out of the nuclear deal as well.
  • While the U.S. may succeed in squeezing Iran economically, it is increasingly isolated politically, as was evident at the most recent Financial Action Task Force meet in Paris where the U.S. proposed sanctions on Iran for terror funding.
  • Even so, the U.S. has continued on its unilateral path, without a care for the very “rules-based international order” that it so often invokes.

Impact of American sanctions on India

  • For India, the impact of the American sanctions plan would be manifold, regardless of the waiver.
  • First, Iran is India’s third largest supplier of oil. There are not only rising costs of oil to contend with, but also the added cost of having to recalibrate Indian fuel refineries that are used to process Iran’s special crude.
  • The second impact would be on India’s investment in the Chabahar port, which would face both direct and indirect sanctions.
  • Problem will only get more acute as sanctions kick in, threatening India’s $500 million investment in the port and its $2 billion plan for a railway line to circumvent Pakistan and reach Afghanistan and Central Asian trade lines.
  • Finally, there would be the impact on India’s regional security situation, which could see the Iranian-Arab divide deepen, Afghanistan’s choices dwindle and an angry Iran pitched closer into the China-Russia corner.

Waiver for Indian

  • Most worrying for India is that all of the above outcomes will follow regardless of whether the U.S. gives India a waiver for sanctions or not.
  • While the ‘waiver’ list, would stave off penalties and allow India to continue some of its trade with Iran, it will not restore the pre-2018 situation.
  • The U.S. is only issuing temporary waivers, and the waivers are strictly linked to the condition that countries receiving them keep cutting down their purchases from Iran.
  • Along with the JCPOA-linked sanctions, India continues to face sanctions linked to the Countering America’s Adversaries Through Sanctions Act, which puts more strictures on dealings with Iran, Russia and North Korea.
  • The waiver is therefore no magic wand to be wished for, as it only pushes the problems for India down the road.

Iran’s options

  • little thought has been given to Iran’s reaction if India keeps submitting to the U.S.’s sanctions regime against it.
  • With trade levels receding, the Iranian regime may well lose interest in the Chabahar option, and focus on its main port of Bandar Abbas instead, derailing India’s grander plans for regional connectivity.

Conclusion

  • Given the heavy costs and in the complete absence of any benefits, India should have been more vocal in its protest against the U.S.’s actions.
  • If India will not protest and the U.S. presses on with sanctions, it would be a marked failure of Indian diplomacy.
  • And if the waiver does come through, it will be no victory, but signify an abject submission to the sanctions themselves.
  • With no gains in the offing from a policy of ‘pragmatism’, India may have been better off sticking to principle instead.

Connecting the dots:

  • What is CATSAA? Critically analyse the U.S.’S sanctions and their impact on India’s geoploitical and economic relations.

ECONOMY

TOPIC: General studies 3

  • Indian economy; inclusive growth
  • Banking and credit facilities
  • Government policies and issues arising out of their design and implementations

Significance of MSMEs and recent steps taken by the Government

Introduction

  • The micro, small and medium enterprises (MSMEs) have been impacted adversely by the twin shocks of demonetisation and goods and services tax (GST).
  • Demonetisation made it difficult for these units to pay their contractual labour in cash and access credit, which is again largely through informal channels.
  • GST similarly led to an increase in compliance costs, apart from depriving them of the inherent advantages of doing business in cash without leaving a paper trail.
  • Th outstanding gross bank credit to MSMEs has shrunk — from Rs 4.71 lakh crore to Rs 4.69 crore between September 2014 and September 2018.
  • Despite refinancing schemes such as Pradhan Mantri Mudra Yojana, this shrunk is proof of formal lending institutions being unable to fill the void either.

Why MSMEs are important?

  • The MSME sector accounts for an estimated 30 per cent of the country’s GDP, 45 per cent of its manufacturing output and 40 per cent of merchandise exports.
  • MSMEs have contributed least to the banking system’s non-performing assets crisis, even while disproportionately bearing the brunt of demonetisation and GST.

Steps taken by government

  • The government announcing a 2 per cent interest subvention on both fresh and incremental loans taken by MSMEs having GST registration, besides launch of a portal enabling credit sanctions of up to Rs 1 crore “in just 59 minutes”.
  • GST, along with digitisation, allows for creation of a database of transactions, bank account statements and tax returns of all firms.
  • That should make it possible for assessing the creditworthiness of any applicant in a reasonably short period.
  • Whether this would work on the ground will, depend on the banks.
  • Central government has also promised that factory inspectors will be permitted to conduct visits through random computerised allotment, with compulsory publication of reports within 48 hours.
  • In addition, there would be only a single environmental approval for both air and water pollution. But the implementation here, too, is dependent mainly on the states concerned.

State of NBFCs

  • The state of non-banking finance companies (NBFCs) is another thing to worry.
  • NBFCs’ share in total formal credit to MSMEs has almost doubled from around 5.5 per cent in December 2015 to 10 per cent in March 2018.
  • With these institutions themselves now facing a liquidity squeeze, the danger of credit flows to MSMEs being further affected cannot be ruled out.

Conclusion

  • If demonetisation and GST ultimately leads to an ecosystem, wherein MSMEs are able to obtain better access to formal finance and without fear of harassment by tax/enforcement authorities, the short-term pains may still turn out to be worth having endured.

Connecting the dots:

  • Explain in brief the significance of MSMEs in Indian economy.

(TEST YOUR KNOWLEDGE)

Model questions: (You can now post your answers in comment section)

Note:

  • Featured Comments and comments Up-voted by IASbaba are the “correct answers”.
  • IASbaba App users – Team IASbaba will provide correct answers in comment section. Kindly refer to it and update your answers.

Q.1) Hope Island is under the administration of

  1. West Bengal
  2. Orrisa
  3. Andhra Pradesh
  4. Tamil Nadu

Q.2) The Coringa Wildlife Sanctuary (CWS) is located in which state?

  1. Andhra Pradesh
  2. West Bengal
  3. Jharkhand
  4. Manipur

Q.3) Which of the following fertilizers excessive use may be responsible for the presence of a toxic substance in groundwater?

  1. Nitrogen
  2. Phosphate only
  3. Potassium only
  4. Phosphate and Potassium

Q.4) The contamination of water by sewage is indicated by the presence of the cyst of

  1. Amoeba
  2. Pseudomonas
  3. Escherichia Coli
  4. Lactobacillus

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